Estates and Trusts Commons^™

Trusts - Spendthrift Trusts - Beneficial Interest Held Not Attachable To Make Good Liability As Trustee, W. Wallace Kent

Michigan Law Review

Janet Jones was an inactive trustee and one of the beneficiaries of a spendthrift trust. Because of lack of good judgment on the part of her co-trustee, and without any moral fault on her part, Janet was charged with liability for a large sum. Her surety, who paid the succeeding trustee, took an assignment of the rights of the trust estate against Janet Jones and demanded that the trustee pay to it all the income, past, present and future, which the trust instrument gave to such beneficiary. The trustee brought this action for instructions. Held, as the trust estate …

Corporations - Transfer Of Stock - Liability To Remainderman For Absolute Transfer At Instance Of Life Tenant, James D. Ritchie

Michigan Law Review

X, life tenant of certain stock of defendant company under a will, endorsed the certificates as life tenant; Y Company guaranteed his signature and itself endorsed in blank. Defendant, with knowledge of X's limited interest, transferred the stock on the books and issued new certificates to Y Company absolutely. Learning of their interests after X's death, plaintiff-remaindermen demanded certificates for the stock from defendant, which refused. In their action for conversion, held, that defendant breached its fiduciary duty to plaintiffs in making an absolute transfer with knowledge that the transferee had only a life interest and …

Taxation - Federal Gift Tax - Cancellation Of A Power Todesignate New Beneficiaries Other Than The Settlor - Interrelationship Of Gift And Estate Tax, Robert M. Warren

Michigan Law Review

Before the enactment of the 1924 gift tax statute, decedent created a trust for the benefit of named beneficiaries, reserving to himself power both to revoke and to modify the trust. In 1919 the decedent made a surrender of the power to revoke the trust by a writing which reserved the power to designate new beneficiaries other than himself. This latter power was renounced in 1924 after the effective date of the gift tax statute. The Board of Tax Appeals and the Circuit Court of Appeals for the Third Circuit affirmed the commissioner's ruling that the gift became complete and …

Wills- Partial Intestacy-Effect Of Attempt To Disinherit An Heir Or To Limit His Share, James D. Ritchie

Michigan Law Review

Where testator bequeathed to one of his brothers "the sum of five dollars, this amount to be in full for any and all bequests I would leave him as a brother or heir," and certain property passed by intestate succession because of a void residuary clause, held, the share of the brother, an heir, was restricted to five dollars. LaMere v. Jackson, 288 Mich. 99, 284 N. W. 659 (1939).

Deeds - Construction - Executory Interests - Destructibility Rule, Michigan Law Review

Michigan Law Review

In 1883, the grantor conveyed by warranty deed to A for life, remainder to the heirs of B. A died in 1931; B died in 1935, leaving two children and one grandchild as his heirs-at-law. Claiming an undivided one-third through the grandchild, plaintiff started partition proceedings against B's children. Held, that the intent of the grantor must control, and he did not intend to create a contingent remainder in the heirs of B. The deed was a bargain and sale, adapted to a conveyance to uses. On the death of the life tenant, the fee was …

Executors And Administrators - Effect Of Testamentary Provisions On Executors' Fees, Michigan Law Review

Michigan Law Review

At the early English law an executor was entitled to the surplus of the personal estate after the payment of debts and legacies, but this practice nowhere prevails today. At common law the office of executor was regarded as honorary, to be performed without compensation unless the will expressly provided for compensation. It is doubtful if the common-law rule ever obtained in this country, where from a very early time it has been universally considered that executors are normally entitled to reasonable compensation not only to reward them for their time, labor and trouble, but also for the responsibility incurred …

Gifts - Marriage And Divorce - Restitution Of Gifts Given In Contemplation Of Marriage, Michigan Law Review

Michigan Law Review

Plaintiff became engaged to Loretta Burns in 1914 and gave her a diamond ring. This engagement was ended in 1917 and the ring returned. A period of estrangement followed. In 1921, plaintiff gave her a dinner ring, in 1926 a wrist watch, in 1927 an onyx ring, in 1928 a diamond ring. Each gift was given on Christmas Eve. Loretta died in 1935, leaving defendants as heirs and next of kin. Plaintiff filed a suit in replevin and later a declaration in trover and conversion for these gifts. Held, after concluding that the evidence warranted a finding of an …

Taxation - Jurisdiction To Tax - Multiple Taxation Of Intangibles, Richard Brawerman

Michigan Law Review

In two recent decisions of the United States Supreme Court, Curry v. McCanless, and Graves v. Elliott, a majority of the justices refused to adhere to the doctrine that the Fourteenth Amendment prohibits taxation of intangibles by more than one state, and subscribed instead to the view that control and benefit are together the only test of jurisdiction of the states to tax. In Curry v. McCanless, the decedent, a resident of Tennessee, had created a trust of intangibles, reserving control over the income during her life and power to revoke the trust by will. The trust …

Powers - Liability Of Appointed Property For Debts Of Donee - Validity Of Attempted Restriction Of Liability By The Donor, Ward P. Allen

Michigan Law Review

By the terms of the donor's will a spendthrift trust was set up for her three grandchildren for life, giving them a general testamentary power of appointment over that portion of the corpus from which their share of the income had been derived, "but in no event shall any part of said trust funds be liable for, or be paid or appropriated to or for any debts or liabilities of such grandchildren . . . . " There was a gift over to the issue of the donees in default of appointment. By will one of the donees exercised the …

Trusts - Right Of Trustee's Wife To Dower In Property Held Subject To Oral Trust - Effect Of Subsequent Memorandum - Dower Where Trustee Has Both Legal And Equitable Interest, Michigan Law Review

Michigan Law Review

Pursuant to an oral agreement and upon consideration furnished by them, A, B, and C procured land to be conveyed to A by a third party. Six days later A executed a self declaration of trust in the terms of the oral agreement; that he would operate it, and within a specified period sell the property and divide the proceeds between himself, B and C, as beneficiaries. A suit to remove A as trustee culminated in a judicial sale of the property to B and C. In this proceeding by B and C to quiet title, A …

Taxation-Income Tax -Jurisdiction -Trusts - State Tax On Resident Beneficiary's Net Income From Trust Established And Administered By Non-Resident Trustee, Allan A. Rubin

Michigan Law Review

The state of Virginia imposed an income tax upon the income received by a resident of Virginia as beneficiary of a discretionary trust established and administered in New York by a resident of New York, which state had levied and collected an income tax on the entire income of the trust fund. Petitioner protested the payment of the Virginia tax, alleging the taking of property without due process of law and the denial of equal privileges in contravention of the Fourteenth Amendment of the Federal Constitution. Held, that the tax was valid, since it was ascertained by the beneficiary's …

Legal Institute, Michigan Law Review

Michigan Law Review

A legal institute for practicing lawyers will be held at the Law School of the University of Michigan on June 22 to 24. The student dormitories in the classic Law Quadrangle will be open to those attending the Institute. Subjects to be discussed will include Taxation, Labor Law, and Wills and Trusts. Members of the law faculty and several practicing lawyers specializing in the topics to be considered will be the lecturers.

Charities - Indefiniteness - Construction Of Statute Validating Indefinite Trusts For Charity, John M. Ulman

Michigan Law Review

The testator's will contained a bequest of $10,000 to executors to be held in trust by them and paid out "to such corporations or associations of individuals as will in their judgment best promote the cause of preventing cruelty to animals in the vicinity of Asheville." A state statute provided that no charitable trust should be declared invalid by reason of any indefiniteness or uncertainty of the object or beneficiaries of the trust or because the trustee is given discretionary power in the selection and designation of the objects or beneficiaries of the trust or in carrying out the purpose …

Wills - Right Of Creditors Of Testamentary Donee To Set Aside His Renunciation - Right Of Surviving Spouse To Share In Intestate Property After Electing To Take Under Will In Lieu Of Her Distributive Share, D. M. Swope

Michigan Law Review

Testator left all his real and personal property to his wife for life, and the remainder to his son and daughter in equal shares. The widow elected to take under the will in lieu of dower and other legal rights in the estate. The daughter renounced any right under the will, and seven months later filed a petition for voluntary bankruptcy. Her trustee in bankruptcy instituted this suit in equity to annul the renunciation. Held, the daughter had the right to file an unconditional disclaimer of all benefits granted her under the will and her creditors cannot complain thereof; …

Trusts - Termination By Consent Of Beneficiaries - Who Are Beneficiaries - Acceleration Of Equitable Remainders, Richard S. Brawerman

Michigan Law Review

It is the purpose of this comment to consider the destructibility of trusts for successive beneficiaries where the settlor has not expressed his intention with respect to the matter. It will appear that two questions are involved: First, what is the settlor's purpose for the trust? Second, who are beneficiaries?

Deeds - Future Interests - Right Of Murderer To Acquire Property By Operation Of Condition Subsequent That Property Shall Revert On Grantee's Death, Russel T. Walker

Michigan Law Review

Grantor, who had been adjudged insane, conveyed a farm to grantee on condition that the farm would revert to grantor should grantee predecease him. Grantee was killed under circumstances tending to show that he was killed by grantor, who was insane at the time of the death of the grantee. Held, title to the land, under the deed, reverted to grantor upon grantee's death, in spite of the general rule in Missouri that a murderer cannot inherit realty from his victim. Eisenhardt v. Siegel, (Mo. 1938) 119 S. W. (2d) 810.

Appeal And Error - The Administrator As A Party Aggrieved By Probate Of Will, John H. Uhl

Michigan Law Review

In an action to prove the existence of a lost will executed by the deceased, judgment was rendered setting up the lost will and revoking the letters of administration which had been issued. The administrator appealed from this order, and the appellee moved to dismiss the appeal on the ground that the administrator had no such interest as entitled him to review. The governing statute permitted appeal by "any party aggrieved by any final order, judgment, or decree." Held, that the administrator who has qualified as such was entitled to appeal under the statute, as the party aggrieved by …

Rule Against Perpetuities - Testamentary Provision Making Gift Vest On Distribution Of Testator's Estate, Henry L. Pitts

Michigan Law Review

Testator devised and bequeathed the residue of his estate to four specified chair officers of a lodge who were to be "the four chair officers in office at the time of distribution of my estate." These officers were elected annually. The lower court found that the clause was void as in contravention of sections 715 and 716 of the Civil Code of California. The four individuals holding the named offices in the lodge appealed. Held, affirmed. In re Campbell's Estate, 94 Cal. App. Dec. 482, 82 P. (2d) 22 (1938).

Taxation-Income Tax-Discretionary Application Of Income Of Irrevocable Trust To Maintenance Of Settlor's Children-Taxability To Settlor, Benjamin H. Dewey

Michigan Law Review

Settlors, husband and wife, established certain irrevocable trusts with themselves and another as trustees, and the children of the settlors as beneficiaries. The income from the trust property was to be accumulated, and a certain percentage of the corpus and accumulated income was to be distributed to the beneficiaries as they respectively reached certain specified ages. The trust agreement further provided that the trustees should have the power to expend from the corpus or income such sums as they should deem necessary and advisable for the maintenance, education and support of the beneficiaries, or to defray expenses arising from sickness, …

Taxation - Federal Estate Tax - Inter Vivos Trust As Gift To Take Effect In Possession Or Enjoyment At Death, Edmund O'Hare

Michigan Law Review

On May 14, 1919, decedent set up six trusts, appointing life estates with remainders over. Each trust deed provided: "This Trust may, during the lifetime of the Grantor, be amended or revoked on the joint consent of the Grantor and the Trustees." The remainderman, who was the same person in each trust, was also one of the three trustees. Decedent died on September 4, 1928. The Board of Tax Appeals sustained the contention of the Commissioner of Internal Revenue that the value of the life estates should be included in the decedent's gross estate by virtue of section 302 (c) …

Wills - Construction - Meaning Of "Issue" In Testamentary Gifts, Daniel Hodgman

Michigan Law Review

Two recent cases illustrate a trend in the judicial construction of the word "issue" in wills which seems to be divergent from the view expressed in the older cases.

In Re Thompson's Estate there was a bequest to A and B for their lives and at the death of the survivor "one half thereof to the living issue of each daughter, if there then be such issue of each, whether of the first or succeeding generations." At the death of the survivor there were six children of A and two grandchildren, issue of living children, and there were two children …

Proceedings Of The Law Institute Part I, University Of Michigan Law School

Event Materials

Proceedings of the Law Institute held at the University of Michigan Law School, Ann Arbor, Michigan

Thursday, Friday, and Saturday June 22-24, 1939

The Widow's Right Of Election In The Estate Of Her Husband, Elbridge D. Phelps

Michigan Law Review

Reference has already been made to the difficulties arising when the widow has elected to take under the will, and for some reason or other, intestate property also remains to be disposed. Further difficulty arises in those cases where the widow elects to take against the will and yet claims to share in intestate property. Shall her claim be allowed under those circumstances?

Banks And Banking - Trusts - Special Deposits - Agreement Between Depositor And Bank, Robert E. Sipes

Michigan Law Review

During a period of widespread bank failures, plaintiff corporation ceased depositing its funds with the defendant bank. To maintain the public's impression that the plaintiff was a regular customer of the bank, an agreement was entered into by the bank and the plaintiff whereby the bank was appointed "agent" of the plaintiff to collect and remit promptly money due plaintiff. Branch offices of the plaintiff deposited money under this agreement to be transmitted to the plaintiff. When the bank failed with some of this money still in its hands, plaintiff sought to be allowed a preferred claim. Held, the …

Taxation - Income Tax - Settlement Of Will Contest As Taxable, Anthony L. Dividio

Michigan Law Review

Taxpayer commenced suit to contest the probate of his grandmother's will, by which she had made nominal bequests to her grandchildren, and had created a charitable trust with the large residue. The parties agreed upon a settlement, as a result of which taxpayer received $141,404.03, all of which the tax commissioner claimed was taxable income. Held, the amount received by taxpayer came to him because he was an heir and did not constitute taxable income. Lyeth v. Hoey, (U. S. 1938) 6 U. S. Law Week 421 (Dec. 6, 1938).

The Widow's Right Of Election In The Estate Of Her Husband, Elbridge D. Phelps

Michigan Law Review

Before launching into the discussion proper, and in order to avoid confusion and misunderstanding later on, it is deemed wise at once to mark out boundaries within which it is proposed to confine the treatment of the subject here involved. Accordingly, in that which follows, attention will be centered largely on the necessity for election by a widow under modern statutes which allow her to take against her husband's will, and on the effects of her election or non-election upon her interest in her husband's estate. In so far as a surviving husband has identical rights, they will be adverted …

Taxation - Federal Estate Tax - Gift In Contemplation Of Death, Edmund O'Hare

Michigan Law Review

Decedent, when eighty years old and while still in good health, set up an irrevocable trust of one-third of his property, with a life estate to his daughter and remainder over on the daughter's death to her children and descendants. Under the trust deed the income was to be accumulated and added to the principal until the donor's death. The Supreme Court found that decedent, who was thinking about speculating on the stock exchange, was anxious to insure adequate provision for his daughter and her descendants upon his death, and that he therefore determined to make an irrevocable disposition of …

Trusts - Reservation Of Life Income And Power Of Revocation In Settlor - Not Testamentary Within Mortmain Statute, Benjamin H. Dewey

Michigan Law Review

A settlor purported to set up a trust of certain of his property. In the trust agreement, the settlor reserved to himself the life income from the trust property, with such further amounts from the principal as the trustee, in his absolute discretion, should deem necessary for the settlor's proper maintenance and support; the power, with the approval of the trustee, to revoke or modify the trust; and the life use of the realty encompassed by the trust, on which he was to pay taxes. At the death of the settlor, certain of the trust property was to be administered …

Wills - Conveyances Conditioned On Grantor's Death - Contracts For Posthumous Performance, Charles Haines Jr.

Michigan Law Review

By an instrument entitled a lease, the owner of a country estate agreed with the Y.M.C.A. that the latter should have a lease of the land for his life in consideration of the payment of taxes and the maintenance and improvement of a boys' camp on the premises. Further, if at his death the lease were in good standing (a right of entry for condition broken having been reserved), then the Y.M.C.A. was to receive full title to the land. Pursuant to the agreement the camp was operated, and at the lessor's death the Y.M.C.A. was in possession in good …

Powers - Rule Against Perpetuities - Disposition Of Property Where Appointment Is Invalid - Enforcement Of Contract To Appoint, James H. Kilbourne

Michigan Law Review

The donor of the power bequeathed a fund to trustees to pay the income to the donee for the donee's life, and then to convey to such persons as the donee appointed by will. The donee appointed by will to trustees to pay the income to the donee's daughter for life; and then to convey the remainder to the daughter's surviving children and the surviving lawful descendants of any deceased child of the daughter, upon the death of the last surviving child or twenty-one years after the death of the last surviving child living at the donee's death, whichever event …