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Keywords

probatetrustwillcommon law

statutetrustwillcommon law

Related Cases

Fitchie v. Brown, 211 U.S. 321, 29 S.Ct. 106, 53 L.Ed. 202

Facts

George Galbraith died in Honolulu on November 5, 1904, leaving a will that was admitted to probate, which included provisions for a testamentary trust. The will specified that the residue of his estate was to be placed in trust for as long as legally possible, with annuities to be paid to certain individuals during their lifetimes. The will also included a codicil that modified some annuity amounts and added a bequest to the Kona Orphanage. Disputes arose regarding the validity of the trust and the distribution of surplus income after annuity payments.

The will gave some pecuniary legacies to a number of people, relatives and friends, and then provided that——‘The balance, residue, or remainder of my estate is to be placed in trust for as long a period as is legally possible, the termination or ending of said trust to take place when the law requires it under the statute.'

Issue

The main legal issues were whether the testamentary trust was valid and how the surplus income should be disposed of after the payment of annuities.

Upon the above facts several questions arose and were submitted to the court below, among them one which relates to the validity of the trust and another to the disposition of the surplus income remaining after the payments to the annuitants mentioned in the will.

Rule

The court applied common law principles regarding the validity of trusts, which require that trusts be limited by lives in being at their creation and for a period of twenty-one years thereafter.

It is conceded by all that the common law is applicable, and that there is no statute in Hawaii governing the subject, except the statute making the common law applicable there, and that the utmost extent of a trust at common law is limited by lives in being at its creation and for twenty-one years thereafter.

Analysis

The court analyzed the language of the will to determine the testator's intent regarding the trust's duration and the selection of lives for measuring the trust. It concluded that the trust was valid as it was intended to last as long as legally possible, and the lives of the annuitants were implicitly selected as the measuring lives. The court also determined that the surplus income should be accumulated until the time for distribution of the trust estate.

The whole trust, the testator has provided, shall continue as long as is legally possible, and it is not to be confined to any particular subdivision of the trust. The direction to hold and distribute is as imperative as the direction to pay annuitants until distribution is made.

Conclusion

The court affirmed the validity of the testamentary trust and ruled that the surplus income should be accumulated as part of the trust estate until distribution.

We therefore sustain the validity of the trust in this case, and the question remaining is as to the disposition of the surplus income arising during the payment of the annuities.

Who won?

The Hawaiian Trust Company prevailed in the case as the court upheld the validity of the trust and its authority to administer it.

The trustee contends that the whole trust is valid, and that the surplus income over the amount necessary for the payment of the annuities mentioned must be accumulated up to the time of the general distribution under the trust, as provided for in the will.

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Keywords

Related Cases

In re Estate of Ehrlich, 427 N.J.Super. 64, 47 A.3d 12

In re Estate of McCreath, 240 P.3d 413

McQuone v. Brown, Not Reported in Cal.Rptr.2d, 2001 WL 1447232

In re Mucci’s Will, 287 N.C. 26, 213 S.E.2d 207

Burton v. Irwin, 212 Va. 104, 181 S.E.2d 624