In Re Augusta C. Farmer Family Trust

This appeal arises from an action to terminate a testamentary trust, the only assets of which were non-income producing real estate. The trial court ruled that the trust terminated by operation of law pursuant to the terms of the trust following the death of the primary beneficiary, the father of the residuary beneficiaries, and it ordered the clerk of the court to prepare a deed transferring the real estate to the seven beneficiaries. The trustees appealed, contending they have the sole discretion to determine the manner of distribution, which includes the option of selling the real estate to one of the trustees and then distributing the net proceeds from the sale to the beneficiaries. We affirm the trial court’s determination that the trust terminated by its own terms upon the death of the primary beneficiary. Although we agree with the trustees’ argument that they had the discretion to distribute the assets in kind or sell the assets and distribute the net proceeds to the beneficiaries, the record reveals they failed to do so in a timely manner. Because the trustees failed to “proceed expeditiously” to distribute the trust assets to the beneficiaries, as Tenn. Code Ann. § 35-15-817(b) requires, we affirm the judgment of the trial court.