TRUSTOR AS SOLE TRUSTEE AND ONLY ASCERTAINABLE BENEFICIARY

Authors

William F. Fratche, University of Missouri

Abstract

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 trust for the settlor until the beneficiaries come into being or are ascertained. This being so, a declaration of trust for unborn or unascertained beneficiaries creates only a resulting trust for the settlor-trustee. Thus he has legal title and the whole equitable title, which merge. Moreover, said the opinion, a trust cannot exist without someone in being entitled to enforce it. The opinion added that, in any event, a person cannot make an effective transfer to his own right heirs.

Recommended Citation

William F. Fratche, TRUSTOR AS SOLE TRUSTEE AND ONLY ASCERTAINABLE BENEFICIARY, 47 Mich. L. Rev. 907 (1949).
Available at: https://repository.law.umich.edu/mlr/vol47/iss7/3