Estates and Trusts Commons^™

Powers-Exercise Of Power By Residuary Clause In Will-Admissibility Of Evidence To Show Donee's Intent

Michigan Law Review

Testator was the donee of general powers of appointment conferred upon him by his mother's deed and will. By the ninth clause of this will he gave to two named persons "all the rest and residue of my personal property . . . to be divided equitably among the members of said two families as they may in their uncontrolled discretion decide." Held, this did not exercise the powers of appointment. Evidence was admitted to show the testator's knowledge of the nature and scope of his property and of the fact that his estate was being diminished by the …

Trusts-Deviation From Terms Of Trust In Emergency

Michigan Law Review

In his will the testator made several specific legacies, including one to his widow, who was also to receive a specific devise of real estate. The remainder of the estate was given in trust, to pay the income to the widow during her life. It was also provided that in case there was not sufficient money to pay the bequests, the trustees "shall dispose of my real estate, but not for a period of three years after my decease, if they deem it necessary and proper" and payment of the bequests in that case was not to be made till …

Wills-Construction-"Personal Property" As Including Real Estate

Michigan Law Review

Testatrix, a German woman, not particularly familiar with the English language, drew a holographic will making certain specific bequests of money and bonds and concluding by giving all her "personal property" to three named beneficiaries. Testatrix died leaving both realty and personalty. Held, both realty and personalty passed under the term "all my personal property." "My personal property" was construed to mean "my own property." In re Olsen's Estate, (Cal. App. 1935) 50 P. (2d) 70.

Future Interests-Rule Against Perpetuities-Application To Estate Created Under Power Of Appointment By Will Only

Michigan Law Review

The testator died in 1872 leaving to testatrix in trust certain property over which she was given a general power of appointment by will. The testatrix died in 1928 leaving this property in a trust which was found to violate the rule against perpetuities. In discussing this, the question was raised whether in testing the validity of the estate created by the power of appointment, the period of the rule is calculated from the time of the creation of the power of appointment or from the time of its exercise. Held, that the permissible period is to be measured …

The Secured Creditor's Share Of An Insolvent Estate, Fred T. Hanson

Michigan Law Review

Liquidation proceedings destroy the creditor's independent right to enforce full payment of the debt or in any way obtain a new advantage over other creditors. This change in the normal incidents of property in a debt is necessary in order to distribute the limited fund equitably. But in applying this principle, previously acquired rights by way of lien upon specific property must be respected.

Wills - Precatory Gifts

Michigan Law Review

In the second item of the will testator gave to his wife all of his property "as her absolute property." In the third item the testator provided: "it is hereby directed that my sister [plaintiff in this case] . . . be given one hundred fifty and no/loo dollars monthly during her natural life and one hundred dollars monthly to my brother-in-law Charles E. McCarle . . . in the event that he survives his wife above mentioned." The fourth item provided that in case the testator's wife predeceased him, one hundred dollars monthly should be paid to each of …

Trusts - Constructive Trusts - Breach Of Fiduciary Relation Between Husband And Wife With Respect To Oral Agreement Concerning Land

Michigan Law Review

In her last illness, Mrs. Jackson desired to transfer realty to her married daughter, plaintiff herein. To prevent creditors of the daughter's husband from reaching the property, Mrs. Jackson conveyed the land to her husband, Mr. Jackson, with the parol understanding that "he would see that Cora got it." Jackson failed to transfer the land and upon his death it passed under an ante-nuptial settlement to defendant, his second wife. In an action to recover the land, the court stated that defendant was in the position of a bona fide purchaser for value, and held that the statute of frauds …

Trusts - Cy Pres Doctrine -Application To Charitable Trusts - Accumulations

Michigan Law Review

A bequeathed the residue of her estate to the Trustees of Bowdoin College in trust to apply two-thirds of the annual income to the purposes of the Medical School of Maine and to accumulate the other one-third with another fund left by A for the same purpose until the whole should reach $50,000, when all should be applied for the purposes of the Medical School of Maine. The Medical School ceased to function, and the trustees applied to the court for instructions. Held, that there was a general charitable intent, indicated by the use of the word "purposes," and …

Wills - Gift's - Construction Of Instrument

Michigan Law Review

Decedent had lived with plaintiff and her parents. In 1932, after telling plaintiff's parents that he had some money in the bank, decedent said, "I got a will here . . . I understand I have got to have two signatures." Both parents, at his request, signed the instrument below.

"Dear Carlotta

"I give to you my money in Live Stock Bank.

"Hans Larsen

"April 16, 1932

"Witness: Michael C. Kelley

"Mamie V. Kelley."

Decedent put the instrument in his bank book and took it into the other room where plaintiff was sitting. He said, "Carlotta, I will give you …

Deeds-Instrument In Form Of Contract For Sale Of Land As Gift

Michigan Law Review

Decedent executed and delivered to his sister, the petitioner, in a sealed envelope an instrument in the form of an executory contract for the sale of land by the terms of which the decedent promised to convey to the petitioner his undivided two-thirds interest in a certain building and lot. The execution of the instrument was not the result of any agreement and no consideration was paid, although receipt of payment in full was endorsed on the back of the instrument. After decedent's death the envelope was produced and the probate court under a statutory authority ordered a conveyance to …

Trusts-Accumulations-Effect Of Statutes Against Accumulation On The Validity Of A Charitable Trust For Accumulation

Michigan Law Review

S deposited in the Bank of Canby $ 1000 in trust for the city of Canby, with a direction to accumulate interest at 4 per cent compounded semi-annually, for 110 years, and then to pay the accumulated fund to the city. The settlor recommended that the city dispose of the fund "as may seem proper and for the best interest of the community." The bank failed, and the city, having received a pro rata payment, claimed a preference for the remainder. Held, plaintiff is entitled to a preference. Although it was to endure longer than the maximum period named …

Trusts--Reserved Powers Of Appointment-Creditor's Rights

Michigan Law Review

X, feme sole, in good faith transferred personalty to appellant in trust to pay the income therefrom to her for life and to transfer the principal and income to such persons as she might by will appoint, and in default of appointment then to her issue and if no issue survive her and the power be not exercised then to her next of kin. Subsequent creditors of X brought suit during her lifetime to compel payment out of the trust corpus. Held, the corpus was not subject to claims of subsequent creditors. Mercantile Trust Go. v. Bergdorf …

Trusts - Mortgage Participations As Trust Investments -Effect Of Invalidity

Michigan Law Review

The Commercial Savings Bank and Trust Company of Toledo, Ohio, in March 1931, executed an instrument called a Declaration of Trust, in which it recited that it had transferred to its trust department certain notes and mortgages for the purpose of issuing certificates of participation therein. The notes alone were physically transferred to the trust department, the mortgages being retained by the real estate loan department of the bank. The real estate loan department also collected the interest and principal on the notes transferred to the trust department. The Declaration of Trust expressly authorized the trust department to make substitutions …

Fraudulent Conveyances - Change Of Beneficiary Of Life Insurance Policy Formerly Payable To Insured's Estate

Michigan Law Review

An insurance company filed a bill of interpleader to determine disposition of the proceeds of a term policy on the life of one Fitzpatrick, now deceased. Claimants are the administrator, representing creditors, and the deceased's two sons. The policy had been issued payable to insured's estate, but reserved the right to change the beneficiary. A few days before his death (by suicide) deceased sent the company an application for change of beneficiary to his two minor sons. He was then hopelessly insolvent, and the administrator claims that the change of beneficiary was a fraudulent conveyance within the terms of the …

Future Interests - Rule In Shelley's Case - Where Remainder To Heirs Is "Contingent"

Michigan Law Review

A grantor conveyed premises to his daughter and her husband "For and during their lifetime, then to the heirs of the body of our daughter, Henrietta Ann Briegel, and if she leaves no child or children surviving her, then to her heirs according to law." Henrietta died without ever having had children and devised all her property to her husband, defendant herein. Plaintiff as heir at law of Henrietta brought suit for partition. Held, the remainders created were contingent with a double aspect. The rule in Shelley's case does not apply where the remainder in the heirs is contingent. …

Taxation - Power Of Appointment - Effect Of Refusal By Appointee Who Is Given Same Share In Default Of Appointment

Michigan Law Review

The donee of a power of appointment exercised it by will in favor of the persons who would have taken exactly the same interests in default of appointment, and who declared their election to decline the appointment and take by the provision in default of appointment in the will of the donor. Suit was brought for additional federal estate taxes covering the property to which the power applied, under a statute levying such a tax upon "any property passing under a general power of appointment exercised by the decedent . . . by will . . . . " Held …

Trusts - Constructive Trust As Device To Permit Tracing Of Plaintiff's Property In Action Of Rescission For Breach Of Warranty

Michigan Law Review

Defendant, in order to finance the purchase of a tract of land adjoining his farm, arranged to sell the oil and gas lease in the new tract to the plaintiff for $750. He took a conveyance of the new tract, giving a check to the vendor for $1,200, the entire purchase price. A few hours later he executed an oil and gas lease to the plaintiff who paid him $750, which defendant then deposited in his bank account together with $650 he had borrowed from the bank, thus covering the $1,200 check. Both parties understood that the money paid by …

Trusts-Possible Extension Of The Tentative Trust Doctrine

Michigan Law Review

The settlor established a trust for the plaintiff, his daughter, appointing a trust company as trustee. The trust deed expressed the purpose of adding to the estate, but no additional property was delivered to the trustee. Later the settlor rented a deposit box from the trust company in the name of the plaintiff by himself as agent and informed its officers that he was creating another estate for the plaintiff for her use later in life, that he would manage the estate, and that he did not want plaintiff to know about the box. From time to time he placed …

Wills - Statute Of Nonclaim As Bar To Contingent Claim

Michigan Law Review

Plaintiff, the receiver of an insolvent state bank, filed a claim against the estate of deceased who had been a stockholder in the bank. The estate had been closed for twelve years when the claim was filed, the bank not having become insolvent until eight years after the decedent's death. The state constitution provided double liability for the stockholders of the bank to its creditors. Defendant urged that the claim was barred by the statute of nonclaim. Held, the claim is not barred, for the constitutional liability was not a "claim or demand, contingent or absolute," against the stockholder's …

Taxation - Federal Income Tax - Discharge Of Legal Obligation By Creation Of Trust For Alimony As Basis For Taxation Of Settlor

Michigan Law Review

A trust estate was created by a husband in accordance with a divorce decree, the income therefrom being paid to the wife in lieu of alimony. Provision was made for reversion of the estate on death of the wife and for payment of surplus income to the husband during the duration of the trust. Held, that the benefit arising from the discharge of a legal obligation constituted sufficient basis for trucing the trust income to the settlor. Willcuts v. Douglas, (C. C. A. 8th, 1934) 73 F. (2d) 130.

Wills - Revocation By Change Of Circumstances

Michigan Law Review

The testator executed his will providing that a termination of the marriage relation would make the provisions for his wife null and void. Subsequently, they separated, and, in anticipation of a divorce they agreed upon and carried into effect a property settlement providing that the wife should receive certain real estate, stock, and money in consideration of her surrender of all her rights of dower, alimony, and claims of support. A short time thereafter the wife sued for a divorce, but the action was discontinued when, in accordance with the testator's wishes, she went to live with him until his …

Future Interests - When Is Child En Ventre Sa Mère Regarded As In Being

Michigan Law Review

How far will the courts go in regarding a child en ventre sa mere as in being for the purpose of determining the character of interests in property? This question is brought to the fore in Re Joicy, a recent decision of the English Court of Appeal. In that case, a will declared that certain property should be held in trust for all of the children of the testatrix who should survive her and attain the age of twenty-one years, and provided that if any such child should die within the period of twenty-one years "leaving any issue him …

Wills--Witnesses--Construction Of "In The Presence Of" The Testator

Michigan Law Review

Testator, ill in a hospital, signed an instrument as his will in the presence of the attending physician and nurse, and requested them to sign as witnesses. For convenience they signed the instrument around a slight jog in the corridor on a table which was about 30 feet from the testator's bed and out of his sight. Thereafter he examined the signatures and expressed his approval. Held, that the witnesses signed in the presence of the testator as required by the Michigan statute. In re Lane's Estate, 265 Mich. 539, 251 N. W. 590 (1933).

Descent And Distribution - Inheritance As Affected By Heir's Murder Of Deceased

Michigan Law Review

Albert Tarlo shot and killed his wife while she slept, then killed his daughter, and next killed himself. He survived the wife and daughter by a few hours. The daughter left no will, and by the statute of distribution her property went to the father. A statute provided in effect that no one who should be "finally adjudged guilty" of murder should be allowed to take as heir or next of kin of the person killed. Held, that the father's estate might take the daughter's estate by inheritance. In re Tarlo's Estate, 315 Pa. 321, 172 Atl. 139 …

Gifi's Causa Mortis - Validity Of Gift Of Entire Estate

Michigan Law Review

A donor, being in extremis, told by a doctor that he was dying, and having no near relatives, gave three bunches of keys to a donee with whose family he had lived for ten years, with the statement, "'If I am going to die, everything I have belongs to this woman." This was held to be a valid gift causa mortis of so much of decedent's property as was thereby made available. In re Elliott's Estate, 312 Pa. 493, 167 Atl. 289 (1933).

Executors And Administrators--Powers Of Co-Executors

Michigan Law Review

The powers of co-trustees are usually spoken of as "joint," while the powers of co-executors are commonly referred to as "joint and several." As it is fairly obvious that if executors have a several power they may also exercise it jointly, it might be preferable to refer to the powers of co-executors as "joint or several." For not all the powers of a co-executor are joint and several. Some are several, while others are only joint. The general rule is that a co-executor has the several power to bind the estate as to matters in the ordinary course of administration, …

Trusts - Change Of Circumstances As Basis For Variation Of Trust Instrument

Michigan Law Review

The testator left his estate to trustees with directions to pay the income to his widow and three sons in equal shares, the principal to vest in the sons upon his widow's marriage or death. The widow in addition was given the use of the family homestead or the use of a new home not to exceed the price of $25,000. The homestead, valued at $200,000, became undesirable for residential purposes due to the growth of the business center of the city. The widow petitioned the court to direct the trustees to pay her $15,000 a year from the trust …

Wills-Contract Not To Contest

Michigan Law Review

A testatrix left the bulk of her estate to the plaintiff whom she named as her executor. Defendant, dissatisfied with his bequest, threatened to contest the will. Thereupon, the parties entered into a contract whereby the plaintiff agreed to give the defendant a piece of land and a sum of money in addition to his legacy in consideration of defendant's promise not to contest the will. Shortly thereafter defendant joined relatives of the decedent in opposing probate. In an action in equity to specifically enforce the agreement, held, that the contract was valid and that the defendant be permanently …

Wills-Right Of Beneficiaries To Compromise So As To Defeat Provisions Of Will-Waiver Of Benefit

Michigan Law Review

Testator died leaving a valid will. The beneficiaries, who were also the heirs at law, presented a stipulation to the court, signed by all the parties in interest, agreeing that the will should not be admitted to probate; and the court refused the will. Later a dispute arose as to the settlement, and some of the beneficiaries brought a bill in equity to set aside the court order. Held, the agreement was supported by a valid consideration and is binding on the parties. Order of the court refusing probate upheld. In re Murphy's Estate, (Iowa 1934) 252 N. …

Future Interests - Federal Estate Tax - Admissibility Of Evidence Of Barrenness Of Devisee

Michigan Law Review

In an inquiry as to the value of an executory bequest to charitable institutions, conditioned on the death of the testator's daughter without issue surviving her, was evidence that at the time of the testator's death she had been rendered incapable of bearing children admissible for the purpose of determining the amount of a deduction from the federal estate tax? Held, that such evidence was admissible. United States v. Provident Trust Co., (U. S. 1934) 54 Sup. Ct. 389.