Prior to her marriage, settlor created a trust, reserving to herself a life estate, with general testamentary power of appointment over the corpus. The trust deed provided further that in default of appointment, "or as to any part of said estate as to which the appointment may for any reason fail to take effect," the property was to remain in trust to pay one-half the income to her fiancé for life, if he should survive her, the other half to her children who survived or the issue of deceased children, and to pay over the principal when the youngest taker living at her death became twenty-one. If her fiancé did not survive her, his half was to go with the other half to her issue, as provided above. She married and survived her husband, dying in I935, and appointed by her will the trust property to her residuary estate, which was to be held in two trusts, one for each of her daughters who survived her, to pay the income to the daughters for life, then to each of their children for life, remainder over to the latter or their issue per stirpes on the death of the last to die of settlor's grandchildren living at her death. However, the trust to Mabel, one of the daughters, provided that if she died with only one child, then half the corpus was to be held in trust for that child and the other half was to be paid into the trust for the other daughter, or if it were terminated at that time, then to be distributed in the same proportions as those in which that trust had been distributed. The will further provided that if either trust were held void as a violation of the rule against perpetuities, the principal was to be paid over to those at that time entitled by the provisions of the will to the income therefrom. At the settlor's death, the question was before the court whether the invalid limitation to the grandchildren brought the trust within the alternative stated in the will, so that the trust should be terminated and the principal paid to the two daughters, recipients at that time of the income. It was then held that the alternative provisions of the will referred only to the future interests which might be invalid, and since the life estates were valid, in that they necessarily vested within lives in being and were severable from the subsequent limitations, they should be enforced, and the validity of the future interests should not be determined at that time. Mabel is now dead, leaving one child, and this action is to determine the validity of the limitations subsequent to her life estate. The Auditing Judge found the primary limitation to Mabel's child void but upheld the secondary limitation of one-half of Mabel's share to her sister for life, on the ground that it was vested, subject to be divested, not later than the death of the settlor. Held, both the primary and the secondary limitations violate the rule against perpetuities, and the property should pass according to the terms of the original trust deed providing for an alternative in case the appointment failed. McCreary's Estate v. Pitts, (Pa. 1946) 47 A. (2d) 235.
Shubrick T. Kothe S.Ed.,
FUTURE INTERESTS-RULE AGAINST PERPETUITIES-CONTINGENT REMAINDERS IN THE ALTERNATIVE-RULE OF LODDINGTON v. KIME-POWER OF APPOINTMENT,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol45/iss3/11