Today’s class—trust creation. We’ve already seen that it’s simpler to create a trust than to execute a will—no need to satisfy the attestation and witnessing requirements of wills
288 A.2d 701 (R.I. 1972), p. 557Lux v. Lux
Did Philomena “intend that her real estate be held in trust for the benefit of her grandchildren”?
Jimenez v. Lee
547 P.2d 126 (Ore. 1976), p. 558
Mrs. Diercks makes $500 gifts to all three children, deposited in an account in names of children and Lee.
Plaintiff sues, seeking to recover proceeds or original gifts.
Paternal grandmother purchases $1000 bond for plaintiff, registered in names of plaintiff and plaintiff’s parents.
Lee cashes bond and closes bank account, purchasing stock with proceeds as “custodian” for his children.
Unthank v. Rippstein,386 S.W.2d 134 (Tex. 1964), p. 569Unthank v. Rippstein
Brainard v. Commissioner91 F.2d 880 (7th Cir. 1937), p. 572Brainard v. Commissioner
Stock trading is profitable. Brainard pays himself $10,000 as trustee and distributes profits among trust beneficiaries.
Brainard orally declares trust of expected profits from stock trading in 1928 for benefit of wife, mother, and minor children.
Beneficiaries declare trust income on 1928 income tax return
Did trust arise in 1927, with Brainard’s oral declaration, prior to making the profits?
No, according to the court, since the profits did not come into existence until they were earned. But why aren’t future profits a res?
Speelman v. Pascal,178 N.E.2d 723 (N.Y. 1961), p. 572
Pascal makes various attempts to produce show.
Pascal acquires exclusive rights to produce musical and film based on Shaw’s “Pygmalion.” License to expire in 1956.
Pascal promises, in writing, a portion of the profits of the (still unproduced) show to Miss Kingman (aka Miss Speelman).
Feb. 22, 1954
“Did the delivery of this paper constitute a valid, complete, present gift to [Speelman]…?”
I therefore give and bequeath to my trustees all my property embraced within the classification aforesaid in trust to make disposal by the way of a memento from myself, of such articles to such of my friends as they, my trustees, shall select.Clark v. Campbell
Clark v. Campbell133 A. 166 (N.H. 1926), p. 579
Must “the bequest for the benefit of the testator’s ‘friends’…fail for the want of certainty of the beneficiaries”?
Yes. One can designate relatives, or subsets thereof, but not “friends.”
In re Searight’s Estate embraced within the classification aforesaid in trust to make disposal by the way of a memento from myself, of such articles , 95 N.E.2d 779 (Ohio App. 1950), p. 582In re Searight’s Estate
“$1000 to be used…to pay Florence…for the keep and care of my dog as long as it shall live.”
“I give and bequeath my dog, Trixie…”
Ind. Code § 30-4-2-18
Estate of Fournier embraced within the classification aforesaid in trust to make disposal by the way of a memento from myself, of such articles 902 A.2d 852 (Me. 2006), p. 589Estate of Fournier (Slide 1)
$400,000 in trust for Fogarty
Estate of Fournier embraced within the classification aforesaid in trust to make disposal by the way of a memento from myself, of such articles , 902 A.2d 852 (Me. 2006) (2)Estate of Fournier (Slide 2)
Fournier asks Madores to hold $400,000 in secret, to be delivered upon his death to Fogarty because she “needed it more” than his other sister.
Note discovered with instructions that $400,000 be divided among Fogarty, Flanigan and King. Court holds oral trust was for benefit of all three residuary takers.
Fournier dies testate. Residue in equal shares to Fogarty, Flanigan, and King.
1998 or 1999
Fournier tells Flanigan of arrangement with Madores.
Fournier gives Fogarty a gift of $100,000.
Madores give $400,000 to Fogarty. Court finds oral trust of money for her benefit.
Olliffe v. Wells
130 Mass. 221 (1881), p. 593
But Restatement would treat semisecret trusts like secret trusts