In re Trust Estate of Wills
In In re Trust Estate of Wills, 8 Ariz. App. 591, 595, 448 P.2d 435, 439 (1968), a trustee refused to pay all of a lifetime beneficiary's medical expenses.
The trust gave the trustee discretion to make payments to the lifetime beneficiary in the event of sickness or hospitalization, in amounts the trustee deemed proper.
The trustee paid medical expenses only to the extent the beneficiary was unable to do so after using her own liquid assets. Id.
In assessing whether the trustee had abused its discretion, Wills relied on certain principles from the Restatement (Second) of Trusts 187 (1959). 8 Ariz. App. at 595, 448 P.2d at 439.
Comment d to Restatement 187 lists six factors pertinent to the determination:
(1) the extent of the discretion conferred upon the trustee by the terms of the trust;
(2) the purposes of the trust;
(3) the nature of the power;
(4) the existence or non-existence, the definiteness or indefiniteness, of an external standard by which the reasonableness of the trustee's conduct can be judged;
(5) the motives of the trustee in exercising or refraining from exercising the power;
(6) the existence or nonexistence of an interest in the trustee conflicting with that of the beneficiaries. Restatement 187 cmt. d.