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Shenandoah Valley Nat. Bank of Winchester v. Taylor, 192 Va. 135, 63 S.E.2d 786, 25 A.L.R.2d 1104

Facts

Charles B. Henry, a resident of Winchester, Virginia, died on April 23, 1949, leaving a will that established a trust for the benefit of children in the first three grades of the John Kerr School. The trust directed the executor to divide the net income of the estate among these children, to be paid at Easter and Christmas, with the intention that the funds be used for their education. However, the will faced challenges from Henry's relatives, who argued that the trust was invalid as it violated the rule against perpetuities.

Charles B. Henry, a resident of Winchester, Virginia, died testate on the 23rd day of April, 1949. His will dated April 21, 1949, was duly admitted to probate and the Shenandoah Valley National Bank of Winchester, the designated executor and trustee, qualified thereunder.

Issue

Does the will create a valid charitable trust?

The sole question presented is: does the will create a valid charitable trust?

Rule

A charitable trust is valid only if the settlor properly manifests an intention to create such a trust, and it must benefit an indefinite number of persons. If the beneficiaries are specifically designated, the trust may be deemed a private trust and thus invalid if it violates the rule against perpetuities.

‘A charitable trust is created only if the settlor properly manifests an intention to create a charitable trust.‘ Restatement of the Law of Trusts, sec. 351, p. 1099.

Analysis

The court analyzed the language of the will to determine the testator's intent. It found that the explicit direction to pay each child their share of the income without any control or discretion over its use indicated that the trust was not intended for educational purposes. The court concluded that the payments were merely gifts to bring happiness to the children during holidays, which did not constitute a charitable trust.

In our opinion, the words of the will import an intent to have the trustee pay to each child his allotted share. If that be true, — and it is directed to be done in no uncertain language — we know that the admonition to the children would be wholly impotent and of no avail.

Conclusion

The court affirmed the lower court's ruling that the trust was void as it violated the rule against perpetuities and could not be upheld as a charitable educational trust.

No error is found in the decrees appealed from and they are affirmed.

Who won?

The heirs and distributees prevailed in the case, as the court upheld their argument that the trust was invalid due to its violation of the rule against perpetuities.

The cause was heard upon the bill and a demurrer filed by the executor and trustee. The demurrer was overruled and the contention of the heirs and distributees sustained.

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