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trustwill
trustwill

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Lux v. Lux, 109 R.I. 592, 288 A.2d 701

Facts

Philomena Lux executed her will on May 9, 1966, leaving her residuary estate to her husband, who predeceased her. Upon his death, the will specified that the remainder of her estate, including real estate, was to be shared equally among her grandchildren. The will included provisions that the real estate was to be maintained for the grandchildren's benefit and not sold until the youngest grandchild turned 21. At the time of her death, Philomena owned real estate valued at approximately $35,000 and personal property totaling about $7,400. The grandchildren's ages ranged from two to eight, and the youngest was born after the will was executed.

Philomena Lux executed her will on May 9, 1966. She left her residuary estate to her husband, Anthony John Lux, and nominated him as the executor. Anthony predeceased his wife. His death triggered the following pertinent provisions of Philomena's will: ‘Fourth: In the event that my said husband, Anthony John Lux, shall predecease me, then I make the following disposition of my estate: … 2. All the rest, residue and remainder of my estate, real and personal, of whatsoever kind and nature, and wherever situated, of which I shall die seized and possessed, or over which I may have power of appointment, or to which I may be in any manner entitled at my death, I give, devise and bequeath to my grandchildren, share and share alike.’

Issue

Did Philomena Lux make an absolute gift of her real estate to her grandchildren, or did she place it in trust for their benefit?

Did Philomena Lux make an absolute gift of her real estate to her grandchildren, or did she place it in trust for their benefit?

Rule

A trust is created when legal title to property is held by one person for the benefit of another, and the intent of the testator must be ascertained from the language of the will and the surrounding circumstances.

It is an elementary proposition of law that a trust is created when legal title to property is held by one person for the benefit of another.

Analysis

The court analyzed the language of Philomena's will, particularly the provisions stating that the real estate 'shall be maintained' for the grandchildren and 'shall not be sold' until the youngest grandchild reaches 21. This language indicated that Philomena intended for the property to be held in trust rather than given outright. The court emphasized that the absence of specific words like 'trust' or 'trustee' does not negate the creation of a trust if the testator's intent can be discerned from the will's language.

From the record before us, we believe that Philomena intended that her real estate be held in trust for the benefit of her grandchildren. In reaching this conclusion, we must emphasize that there is no fixed formula as to when a testamentary disposition should be classified as an outright gift or a trust.

Conclusion

The court concluded that Philomena's will created a trust for the benefit of her grandchildren, and the real estate was not given to them in fee simple. The court's decision was based on the intent expressed in the will and the circumstances surrounding its execution.

We therefore hold that Philomena's will does create a trust on her real estate.

Who won?

The prevailing party was the interpretation that the real estate was placed in trust for the grandchildren, as the court found that this aligned with the testatrix's intent.

The guardian contends that the testatrix has vested in the grandchildren an absolute and unconditional title to her real and personal property and that any subsequent conditions which purport to limit such an estate are repugnant and void.

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