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Court Determines Distribution of a Trust and Will Assets


In 1935, a trust fund was created by a mother in favour of her son which provides among others that in the event of the death of her son, the trust shall be divided in 6 equal parts and one of which shall be held in trust for her grandson. The trust also stated that should the grandson die, the trustee should distribute the remainder of the funds according to the will of the said grandson or the laws of intestacy should there be no will executed by the latter in favour of his heirs. The trust agreement was entered into between the mother and a trust company in New York which was also the domicile of the mother at that time.

The son who was the original beneficiary, died in 1962 while the grandson died in California in 1965 survived by his widow and a daughter as well as 5 children coming from the first marriage. The grandson had a will and it was admitted to probate in California since it was his domiciliary. The will of the grandson specifically directed that all his remaining trust fund be further divided into two trusts for the benefit of his spouse and daughter with a proviso that the trust for the daughter be terminated 21 years after the last survivor of his wife, his daughter, and the children of his daughter who were living at the time of his death, has died.

A New York Probate Lawyer said the original trustee in New York commenced a proceeding for the final accounting and settlement of the trust intended for the grandson. The executor of the grandson’s estate which was in California instituted a separate proceeding involving the issue of heirship at the Superior Court of California. The executor claimed that the will executed by the grandson should be construed in a manner that the trust should be terminated upon the death of the grandson’s daughter. The New York court from which the final accounting and settlement of the trust was filed, decided to hold further proceedings pending the determination of the California Superior Court of the issues brought to its attention.

In 1967, the Superior Court of California granted the motion by the grandson’s executor and declared that it is indeed the intent of the grandson/testator that the remaining trust be terminated in order to preserve the intention and validity of the will because to rule otherwise will violate the law against perpetuities. A Staten Island Probate Lawyer said the California court ruled that based on the provisions of the will, any residue coming from the original trust and still remaining 21 years after the death of the grandson’s wife should be terminated.

Based on the ruling of the California Superior Court, the children by the first marriage of the grandson appealed the court’s decision because they were supposed to share in the residual trust had it not been declared terminated by the court. They appealed 6 months after the decision was made on the estate litigation and argued that the decision was erroneous because it could not have been the intention of the testator to terminate the residual trust which was supposed to be distribute to the decedent’s heirs and that their failure to attend and contest the earlier court proceeding was due to excusable neglect, surprise, inadvertence, or mistake.

In affirming the decision of the California Superior Court which ordered the limitation of the trust’s duration so as not to be violative of the rule on perpetuities, the tribunal argued that since the appellants did not contest at the right time the proceedings in the California Court, they cannot now be allowed to question the validity of the ruling which has become final and executory. They had the chance to join the will contest proceedings before the court but they chose not to and just waited how the same will be determined. Long Island Probate Lawyers said failing to get a favourable ruling for their ideal estate administration desires, they cannot now be allowed another opportunity to disturb the California ruling which has become final and executory.

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