Neyama

I. FACTS AND PROCEDURAL BACKGROUND

Janet and Flyer Tabata created the Tabata Trust in 1986 (the 1986 Trust). The 1986 Trust named Janet and Flyer as Trustors and Trustees. The 1986 Trust provided that, upon the death of the first trustor, the trustee was to divide the estate into three trusts: The Survivor’s Trust, the Marital Trust, and the Family Trust. The Survivor’s Trust was to contain the surviving trustor’s community and separate property. The value of the assets placed in the Family Trust was defined by “the maximum sum which can be allocated to a trust which does not qualify for the federal estate tax marital deduction to any extent, without producing any federal estate tax.” The Marital Trust was to contain “the balance of the Trust Estate.” The 1986 Trust provided that the surviving trustor would retain the power to amend the Survivor’s Trust, but the Marital Trust and the Family Trust would become irrevocable upon the death of the first trustor and could not be amended by the surviving trustor. The surviving trustor retained the power to dispose of the Survivor’s Trust upon the surviving trustor’s death. Upon the surviving trustor’s death, the Family Trust and the…