Facts: Husband and Wife divorced in 1975. Their marital dissolution agreement (MDA) required Husband to create an irrevocable life insurance trust to benefit their youngest child (“Child”) to equalize Child’s inheritance with that of Child’s four older siblings. Husband had to fund this trust with an amount equal to the average after-tax distributions received by the older children from four other trusts.

Husband did not create the trust. Years passed. In 2020, Child, who is now an adult, sued Husband to enforce the MDA’s trust provision. While the lawsuit was pending, Husband died. Husband’s Revocable Living Trust and Estate were substituted as defendants.

Husband’s Estate argued that the MDA’s trust obligation was too vague to be enforceable because the MDA did not specify key details like the amount of insurance or any deadline. They also argued that even if enforceable, Husband’s failure to fund the trust was a non-arbitrary disinheritance allowed by the MDA because the MDA said none of the five children would be “arbitrarily disinherited.”

The trial court agreed with Husband’s Estate and granted summary judgment for the Estate, ruling that the trust provisions were too indefinite to enforce and, alternatively, that Husband had valid reasons to disinherit Child. Child’s claims were dismissed.

In 2024, the Court of Appeals affirmed the trial court’s decision, leaving Child with nothing. You can read my post on that decision here.

Child sought permission to appeal to the Tennessee Supreme Court, which remanded the case back to the Court of Appeals to reconsider its decision given a subsequent Tennessee Supreme Court decision in Pharma Conference Education, Inc. v. State that changed how courts handle vague contract terms by emphasizing that even a seemingly vague promise can be enforceable if the agreement’s language, context, and objectives provide a meaningful way to determine each party’s obligation.

On Appeal: This time, the Court of Appeals changed its mind and reversed the trial court.

Under Tennessee law, an MDA is a contract, and contracts should be enforced if possible. Tennessee courts generally favor finding a contract sufficiently definite by considering the surrounding circumstances and parties’ conduct rather than voiding the agreement for uncertainty. In Pharma, a promise that an entity “will” produce as many programs “as is feasible” was held definite enough to enforce because “will” signified a mandatory obligation and “feasible” could be determined using objective criteria. The Supreme Court instructed courts to go further than simply declaring a term indefinite. Tennessee courts must strive to discern a reasonably certain meaning from the contract and the evidence.

Applying these principles, the Court of Appeals concluded that the MDA’s trust provision is enforceable. Although the MDA did not state an exact insurance amount or deadline, the Court found the term requiring an amount “equal to the average of the after-tax funds received” by the older siblings provides an objective formula that can be calculated with evidence. Husband’s failure to specify details in 1975 did not render the promise meaningless, as the missing details could be inferred from examining the financial records and the purpose of the trust, namely, to equalize the inheritances.

The Court further noted that Husband used the word “will” to describe his obligation to create and fund the trust, indicating a mandatory duty. With Pharma as guidance, the Court held the trust provision was not too vague to enforce, and it provided a clear basis to determine breach and a remedy:

Given that the amount of life insurance for [Child’s] trust can be computed, and that [Husband] was left to establish the terms of the irrevocable life insurance trust, we reach the conclusion that paragraph 3(b) of the MDA is not vague. The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.

Next, the Court addressed whether Husband’s failure to create the trust was allowed by the MDA’s non-arbitrary disinheritance clause.

The MDA stated that none of the five children would be “arbitrarily disinherited.” Husband’s Estate argued this allowed Husband to choose not to fund the trust if he had non-arbitrary reasons to disinherit Child. The Court of Appeals rejected that argument. It explained that paragraph 3(b) imposed a firm obligation on Husband to set up an irrevocable trust for Child’s benefit. Once created, an irrevocable trust could not be undone, so Husband could not later decide to disinherit Child from that trust. The general “no arbitrary disinheritance” clause did not nullify the specific trust requirement. Indeed, Husband showed he knew how to disinherit someone in a non-arbitrary way in other estate planning documents, e.g., he had amended his living trust in 2021 to limit Child’s inheritance for stated reasons, but he never wrote anything to disinherit Child from the MDA’s insurance trust. Because Husband had no legal excuse for failing to establish the required trust, the Court held that his failure was a breach of the MDA, not an allowable choice:

He wrote nothing to disinherit [Child] from the MDA life insurance trust. Moreover, the trial court found that he was obligated to create the irrevocable life insurance trust for [Child]. The trial court’s determination is consistent with paragraph 3(b)’s use of the word “will,” which is mandatory. An irrevocable trust cannot be undone, so paragraph 3(d) cannot apply to the paragraph 3(b) life insurance trust or any other irrevocable trust for the children….

Without a legal excuse for failing to create the trust, we must conclude that [Husband] breached the MDA.

For these reasons, the Court of Appeals reversed the trial court’s judgment. It held that Husband’s Estate is liable for breaching the MDA by failing to create and fund the life insurance trust. The case was sent back to the trial court to determine Child’s damages, i.e., the amount needed to equalize Child’s inheritance as promised in the MDA.

Concurring Opinion in Pharma: It should be noted that Justice Kirby filed a concurring opinion in Pharma to reiterate that extrinsic evidence is “incompetent and ineffective” to alter the terms of a written agreement.

K.O.’s Comment: Before the Pharma decision, a poorly drafted MDA clause like this might have been a lost cause. Courts would shrug and say, “no meeting of the minds,” leaving the promise unenforced. That’s precisely what happened at first in this case: the trial court (and then the Court of Appeals) threw up their hands at the missing details and let Husband’s Estate off the hook. But after Pharma, Tennessee law favors enforcing the agreement if there’s any reasonable way to figure out what was meant without resorting to inadmissible extrinsic evidence. Here, the Court of Appeals ultimately decided that an accountant with the siblings’ trust records can crunch the numbers to calculate what Husband owed to Child.

Source: Dunavant v. Dunavant Revocable Living Trust, No. W2023-01213-COA-R3-CV (Tenn. Ct. App. Sept. 29, 2025).

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