Estates and Trusts Commons^™

Trusts-Power To Revoke Through Unrestricted Power To Amend, Alan P. Goldstein S.Ed.

Michigan Law Review

Plaintiff and defendant were the settlors and trustees of a twenty year trust created in 1945. Their wives were the beneficiaries. The settlors retained the unrestricted power to amend the trust, but reserved no power to revoke. In October, 1945 the trust was amended, giving to either trustee the power to terminate the trust at any time, upon notice to the other trustee. In 1947, plaintiff gave notice of revocation to the defendant, and when this notice was ignored, plaintiff petitioned for a decree of termination. A demurrer was sustained, and plaintiff appealed. Held, reversed. ''If the power to …

Future Interests-Rule Against Perpetuities-Application To Duration Of Private Trusts, R. L. Storms

Michigan Law Review

Testator devised the locus to his daughter, V, in fee. Thereafter he executed a codicil whereby the property passed to his son-in-law, in trust, to take possession of the real estate and hold it in trust for V during her life, and "in the event of the death of my daughter . . . rent the same . . . and the said rents so received . . . he shall use for the support, sustenance, education, and benefit of the children of my daughter . . . surviving her." Held: the trust the testator attempted to create …

Wills-An Exception To The Pennsylvania Mortmain Statute, Robert H. Frick

Michigan Law Review

Testatrix and her husband entered into an agreement that the survivor should devise property owned by them as tenants by the entireties to charities of the Catholic Church. Ten years later, testatrix, who had survived her husband, executed a will in accordance with the agreement, and died within thirty days thereafter. The lower court held that the bequest was not invalid under the Pennsylvania statute voiding religious or charitable bequests made within thirty days of death. On appeal, held, affirmed. Where a valid contract to make a will antedates the testator's death by more than the statutory period, the …

Trusts-Addition To Corpus By Will-Nature Of Bequest, Robert H. Frick

Michigan Law Review

Testator created an amendable inter vivos trust which he amended in 1938, 1940, and 1942. By a codicil to his will, executed in 1945, he left his residuary estate to the trustees of the inter vivos trust to be held according to the terms of that trust as amended. On certification from the probate court, held, the bequest to the trustees was valid, and it was not necessary for the trustees to give bond and account to the probate court as required of trustees of testamentary trusts by statute. In re York's Estate, (N. H. 1949) 65 A. …

Future Interests-Creation Of A Power By Exercise Of General Testamentary Power Held Valid, William R. Hewitt S.Ed.

Michigan Law Review

H in his will created a trust which provided for a life estate for his wife W. The trustee was directed to distribute the corpus of this trust after W's death "to such person or persons as she [W] may limit, nominate, and appoint by her last will and testament." At her death, W's will provided that part of the property over which she had a power of appointment was to continue in trust for S for life, with the power in S to dispose of the corpus absolutely by her last will. S, …

Future Interests-Contingent Construction Of Remainder Gift To Charity, Charles D. Bell S.Ed.

Michigan Law Review

Testator left property in trust to use the income, and such portions of principal as might be necessary, for the support, maintenance and education of his granddaughter during her life. Upon the death of the life tenant, the trustee was directed "to pay unto the Methodist Protestant University of Kansas City, Kansas, all the unexpended principal and interest thereof, if any, to have and to hold the same forever.'' Subsequent to the testator's death in 1904, but prior to the death of the life tenant, the remainderman assigned its interest to appellant's assignor, and then went out of existence. In …

Wills-Advancements-Joint Bank Deposit As Advancement To Child, James F. Gordy S.Ed.

Michigan Law Review

Decedent opened a joint bank account in the name of himself and his daughter. Only two deposits were made, both by him, and solely from his funds. Decedent died intestate before any withdrawals had been made. The administratrix of his estate contended that the funds remaining in the joint bank account constituted an advancement to the daughter, and sought to have them brought into hotchpot in determining the distributive shares of the other heirs. A Colorado statute provided, inter alia, that when such a joint deposit is made, it may be paid to any one· of the joint depositors whether …

Equity-Power To Rescind Conveyance For Fraud-Survival, Stephen A. Bryant

Michigan Law Review

Defendants obtained a deed from plaintiffs' testator shortly before he died. Plaintiffs, his residuary devisees, filed a bill seeking cancellation of the deed, alleging that it was procured by undue influence. Defendants demurred on the ground that undue influence is a species of fraud and the power to rescind a conveyance for fraud does not survive the grantor's death. The demurrer was overruled. On appeal, held, affirmed. The power to rescind was not extinguished by the grantor's death. Glojek v. Glojek, (Wis. 1948) 35 N.W. (2d) 203.

Future Interests-Effect Of Limited Power Of Revocation In Determining Validity Of Inter Vivos Trust Under Rule Against Perpetuities, Andrew W. Lockton, Iii S.Ed.

Michigan Law Review

Settlor created an inter vivos trust, reserving to himself the income for life plus an absolute, non-cumulative right to withdraw sums not in excess of $1500 per year. The trust was otherwise irrevocable. Measured from the date of the inter vivos transaction, some of the limitations clearly violated the rule against perpetuities; measured from the date of settlor' s death, all limitations would be valid. The trust fund, some twenty years after its creation, amounted to about $32,000. Held, the crucial date was that of creation. Ryan v. Ward, (Md. 1949) 64 A.(2d) 258.

Coming Into Equity With Clean Hands, Zechariah Chafee, Jr.

Michigan Law Review

The most amusing maxim of equity is "He who comes into Equity must come with clean hands." It has given rise ,to many interesting cases and poor jokes. The maxim has been regarded as an especially significant manifestation of the ethical attitude of equity as contrasted with the common law. Pomeroy, for instance, argues that the principle involved in this maxim is "merely the expression of one of the elementary and fundamental conceptions of equity jurisprudence." Pomeroy's theory is that chancery has power to force a defendant to comply with the dictates of conscience as to matters outside the strict …

Descent And Distribution - Widow's Statutory Share - Widow Allowed To Elect Against Husband's Inter Vivos Trust Of Promise Under Seal, David H. Armstrong S. Ed.

Michigan Law Review

Eleven years before his death, H executed his bond under seal for $20,000 payable one year after his death. He delivered the bond to a trustee to hold upon an irrevocable trust to collect and pay the proceeds to named beneficiaries. Upon H's death with a personal estate approximately equal to the amount of the bond, his widow elected to claim her statutory share in the estate, alleging that the bond was invalid. The trustee filed a bill alleging that the trust was sufficient to bar the widow, and the widow demurred. The demurrer was overruled by the trial …

Adoption - Right Of Inheritance In Absence Of Legal Adoption-Specific Performance Of Contract To Adopt And Other Remedies, James C. Mordy

Michigan Law Review

Adoption was unknown at common law. Modern statutes permitting adoption are largely derived from Roman ideas, which were introduced into this country first through the civil law of Louisiana and later by statutes, beginning with Massachusetts in 1851.

Under the English common law, the only persons capable of inheriting property were blood relations of the deceased. On the other hand, most modern adoption statutes permit inheritance by adopted children equally with natural children. Adoption being purely statutory, the early cases denied the right of inheritance by supposedly adopted children when the statute was not strictly followed. Though still purporting to …

Future Interests-Worthier Title Doctrine, David H. Armstrong S. Ed.

Michigan Law Review

Plaintiff created an irrevocable trust of $75,000, reserving the income to himself for life and directing distribution of the corpus upon his death to his heirs according to the California laws of succession in existence at his death. Later he sued to terminate the trust on the theory that since the worthier title doctrine prevented creation of a remainder in his heirs, he was sole beneficiary. The intermediate California appellate court held that the worthier title doctrine was inapplicable because of a California statute changing the word "heirs" from one of limitation to one of purchase. Therefore, the outstanding remainder …

Future Interests-Rule As To Remoteness Of Vesting In California, Howard W. Haftel S. Ed.

Michigan Law Review

T devised the income of a trust to his unmarried daughter for life. If at her death there were living issue of the daughter, the income was to be distributed to such issue until 24 years after T's death. The trust was then to terminate, unless issue, who had been living at T's death, should survive the 24-year period, in which event the income was to continue to be distributed until the death of such issue. It was further provided, "if my said daughter survives me, but at the time of her death leaves no issue of hers …

Taxation-Federal Estate Tax-Charitable Deduction-Certainity Of Amount Of Gift In Remainder To Charity When Corpus May Be Invaded For Life Tenant, Frank L. Adamson S. Ed.

Michigan Law Review

Testator left his estate in trust for the life of his mother, giving her a life income of $750 per month. The trustees were authorized to use the rest of the income and the principal for her "pleasure, comfort and welfare" and were instructed to care and provide for her as she might desire. A deduction for a gift to charity of a portion of the remainder was disallowed by the commissioner. The executor sued to recover the tax paid, alleging that the annual income from the estate exceeded the mother's fixed share by $6000, that she had independent investments, …

Trustor As Sole Trustee And Only Ascertainable Beneficiary, William F. Fratche

Michigan Law Review

The Circuit Court of Appeals for the Eighth Circuit, one judge dissenting, affirmed a decision of the Board of Tax Appeals holding that a profit arising from sale of the stock was taxable to the settlor individually because the declaration did not create a trust. The majority opinion argued that, although a trust may be created solely for the benefit of unborn or unascertained beneficiaries by a transfer to a third party as trustee, it cannot be done by a declaration of trust. The opinion suggested that a transfer in trust for unborn or unascertained beneficiaries creates only a resulting …

Taxation-Federal Estate Tax-Transfers Of Life Insurance In Contemplation Of Death, Ralph E. Hunt S. Ed.

Michigan Law Review

Insurance policies on the life of a decedent are ordinarily included in his gross estate according to the provisions of section 811 (g) of the Internal Revenue Code. Where the policy is payable to a beneficiary other than the executor, it is taxable under section 811(g)(2): (1) if the decedent paid premiums on the policy, in proportion to the amount of premiums paid by him in relation to the total premiums paid, or (2) if the decedent possessed at his death any of the incidents of ownership. However, these provisions are not exclusive; even though section 811 (g) is inapplicable, …

Future Interests - Powers-Fraud On A Special Power, Bernard L. Trott S. Ed.

Michigan Law Review

H was co-trustee under a trust agreement executed by his father which provided for payment of a specified monthly sum to H for life and after his death to his wife W. The trust was to terminate upon the death of the survivor of H and W, and thereupon the other trustee was to deliver 20% of the corpus to each of three named persons, A, B, and C. The trust instrument further provided that H was to have absolute power, with approval of the co-trustee, to prescribe that the distribution of this 60% of the …

Wills-Publication Of Will And Acknowledgment Of Signature, Robert W. Shadd

Michigan Law Review

Testatrix telephoned two friends, asking them to come to her home and witness her will. When they arrived, the document was lying on a table in testatrix' presence, and she declared, "Here is the pen, sign it." Both witnesses were positive testatrix did not sign in their presence. The evidence, while not conclusive, also tended to show that neither witness saw the signature, testatrix having signed on page seven while the document was opened to the attestation clause on page eight. The superior court admitted the will to probate over appellant's objection that testatrix had failed to meet the statutory …

Wills-Right Of Legatee To Renounce To Detriment Of Creditors, William R. Worth

Michigan Law Review

A judgment creditor of an insolvent residuary legatee commenced supplementary proceedings to reach the legacy. While these proceedings were pending, some ten months after the will was probated, and after testifying that he had a one-third interest in the residuary estate, the legatee filed a formal renunciation of his interest. In the proceeding by the executors for a final accounting, the Surrogate's Court and the Appellate Division ruled that the renunciation was effective to divest the judgment debtor of his interest under the will. On appeal, held, reversed, two judges dissenting. In re Wilson's Estate, 298 N.Y. 398, …

Illegal Conditions And Limitations: Effect Of Illegality, Olin L. Browder, Jr

Michigan Law Review

IN earlier articles the writer undertook to explore that miscellaneous and somewhat neglected field of law in which public policy is held to nullify the efforts of persons to impose certain types of conditions and limitations on dispositions of their property.' Such provisions most commonly take the form either of conditions subsequent or executory limitations, but occasionally appear as conditions precedent or special limitations. Unlike provisions which run afoul of the rule against perpetuities or the rules against restraints on alienation, the provisions in question usually prescribe conduct on the part of beneficiaries which is not directly related to the …

The Church And Spiegel Cases: A Reinterpretation Of The "Possession Or Enjoyment" Clause Of I.R.C. 811 ©, William J. Schrenk Jr., Richard V. Wellman

Michigan Law Review

Although federal tax statutes have provided for over thirty years that "transfers intended to take effect in possession or enjoyment at or after death" shall be included in the grantor's gross estate for estate tax purposes attempts to define precisely the scope of this language have not been outstanding for their success. In two recent decisions by the Supreme Court, Commissioner v. Church and Spiegel v. Commissioner, a further attempt at clarification has been made.

Wills-Validity Of Condition Against Contest-Contest By Minor, Roland E. Ginsberg

Michigan Law Review

Defendant, a minor, contested his mother's will which provided that if a beneficiary should make any effort to invalidate or alter the will, the provisions made for such person should be void. Defendant's father, who had been appointed guardian ad litem, filed notice of contest and petitioned the probate court that the general guardian be compelled to contest the will. After hearing, it was so ordered, and a will contest was held in the circuit court, in which mental incompetency and undue influence were alleged. The contest being unsuccessful, the will was admitted to probate. Plaintiff, as executrix and …

Trusts-Tentative Trusts-Effect Of Delivery Of Passbook, Alan P. Goldstein

Michigan Law Review

Anna Farrell, a confined incompetent at the time of this suit, had a savings bank deposit in her own name, "in trust for my daughter Lucy Farrell." Just prior to Anna's admission to the hospital, while still of sound mind, she handed a sealed envelope to Lucy and told Lucy to hold it for her. The envelope contained, among other papers, the pass book to the bank deposit. Thereafter, Lucy claimed the money in the account on the ground that she had, over the years, delivered the money in the account to her mother for safekeeping. Anna's guardian petitioned for …

Wills-Validity Of Devise To United States Government, Richard J. Brake

Michigan Law Review

A California testator bequeathed "all I own and possess to the United States Government." His heirs sought to have the disposition set aside, claiming the federal government could not be a beneficiary under the California probate statute which permitted testamentary dispositions to be made to the state, counties, municipal corporations and certain others. From the order denying their petition for distribution, the heirs appealed. Held, reversed. The word "state" as used in the probate statute does not include the United States. In re Burnison's Estate, (Cal. App. 1948) 196 P. (2d) 822.

Wills-Constructive Trust Imposed On All Heirs Where Some Interfered With Execution Of Will, Herhert E. Phillipson, Jr.

Michigan Law Review

Two heirs at law, by physical force or by creating a disturbance, prevented decedent from executing a will devising her property to plaintiff. Shortly thereafter, decedent lapsed into a semi-comatose condition from which she never recovered. Plaintiff asked the court to impose a constructive trust on the distributive shares of all heirs, six of whom were not parties to the fraud. The district court gave judgment for the plaintiff; the Court of Civil Appeals partially reversed, allowing the innocent heirs to take free of any trust. On appeal, held, judgment of district court affirmed. Since all heirs at law …

Future Interests-Construction Of "Surviving" In Substitutionary Gift Of Remainder, J. R. Mackenzie S.Ed.

Michigan Law Review

Testator's will provided that his property should go to his wife W for life, then in equal shares to his sister A and his brothers B and C. The language used was appropriate to create vested remainders in A, B and C. The will then provided, "And in case of the death of my said sister or either of my said brothers before the death of my said wife, the share that he or she would have taken shall be divided equally between his or her surviving children, by right of representation." A and B died before testator; …

Partnership -- Uniform Partnership Act--Right Of Surviving Partner To Purchase Partnership Property, Melvin J. Spencer

Michigan Law Review

Defendants, administrators of the estate of the deceased partner, agreed with the surviving partner to continue the partnership hotel business, with the approval of the probate court. After some operation, the surviving partner sued to compel the administrators to sell him the interest of the deceased at a value to be judicially determined. Defendants cross-complained, asking the court to liquidate the business and award them the amount of the interest of the deceased in the proceeds. Held, reversing the decree below, the assets of the dissolved partnership should be liquidated, in accord with defendants' prayer. Zach v. Schulman, …

Future Interests - Powers Of Appointment- Effect Of Bankruptcy Of Donee Of General Testamentary Power, Albert B. Perlin, Jr.

Michigan Law Review

By her will, X established a spendthrift trust, appointing Y and a trust company as co-trustees. In addition to receiving the income from the trust during his life, Y was given a general testamentary power to appoint the corpus; in default of appointment the corpus was to be divided equally among Y's issue. After X's death Y filed a voluntary petition in bankruptcy, listing the above interest as that of a beneficiary of a spendthrift trust, "value none." Before Y's death the trustee in bankruptcy purported to sell to plaintiff, who was not a creditor of Y …

Wills-Validity Of Attestation On Separate Sheet Of Paper Not Physically Attached To Will, Myron J. Nadler

Michigan Law Review

Testatrix drew an instrument consisting of a single sheet of paper, intending it as her will. In the presence of a notary public, three witnesses observed the instrument with testatrix' signature thereon and her acknowledgment of it as her will, but did not sign it. The document was then placed in an envelope. A separate instrument of attestation which referred to the will was prepared by the notary and signed by the testatrix and the attesting witnesses. This instrument and the envelope containing the will were both placed in another folder which was then deposited with the proper officials. Probate …