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CENNAMO v. AMERICAN SEC. & TRUST CO.
July 10, 1973
Ann Burrough (Donovan) CENNAMO, Plaintiff,
AMERICAN SECURITY & TRUST COMPANY et al., Defendants
Gasch, District Judge.
The opinion of the court was delivered by: GASCH
This matter came on for consideration on plaintiff's Motion for Summary Judgment and Motion to Terminate Trust Under Will of Dorothy H. Burrough, oppositions thereto filed by other parties to the suit, and argument by counsel in open court. Plaintiff also filed a "Motion for Clarification of Payment of Attorney's Fee from Estate of Deceased," which the Court finds premature at this time; it can be ruled on later by the Court to which jurisdiction over probate matters is transferred.
By stipulation in open court on May 24, 1973, plaintiff agreed to withdraw all attacks on the will of Dorothy H. Burrough, dated March 5, 1969 (as modified by a codicil dated April 24, 1969) except for her claim regarding the alleged invalidity of its trust provisions. Specifically plaintiff contends that the common law rule against perpetuities and a District of Columbia statute regarding suspension of the power of alienation render invalid any and every trust created under Item Ninth of the will as modified by the codicil. Alternatively plaintiff contends that if this Court finds that Item Thirteenth of the will (the so-called "saving clause") does modify Item Ninth, then the Court must also find that Item Thirteenth requires the immediate termination of the life trust of which plaintiff, the only daughter of the testatrix, is the sole beneficiary. Upon termination, plaintiff asserts, the trust property should be distributed "to those persons entitled to the income therefrom." Plaintiff's motions are opposed by all of the other parties, namely, the defendant American Security & Trust Company as trustee, defendant Janet Reiche,
and the guardians ad litem for the class beneficiaries of the trust remainder. (Hereafter, for the sake of brevity, the parties will be referred to as plaintiff and defendants.) For the reasons that follow, the Court will deny both of plaintiff's motions.
The portions of the will cited by the parties as being particularly relevant to the issues before the Court are Item Ninth, which creates the trusts in question, Item Eleventh (cited by plaintiff as sustaining her view of the testatrix's intent), and Item Thirteenth, which defendants cite as sustaining their position regarding the validity of trusts created under the will. These portions of the will provide as follows:
NINTH: I give, devise and bequeath all the rest, residue, and remainder of my property, both real and personal, wherever situated, whether owned by me at this time or hereafter acquired by me and all property over which I may have power of appointment and can dispose of by will to the Trustee hereinafter named, IN TRUST, for the uses and purposes hereinafter set forth:
A. If my daughter, ANN BURROUGH DONOVAN, survives me, then during her lifetime my Trustee shall distribute to my said daughter, or for her benefit, at least as often as quarterly, all of the net income of this trust. In addition to such income, in the event my said daughter remarries and if during the period of such marriage she desires to purchase a home to be used as her residence, my Trustee is hereby authorized and directed to pay to my daughter, or for her benefit, the sum of Five Thousand ($5,000.00) Dollars from the principal of said trust to be used as a downpayment, or a portion thereof on the purchase of such residence and my Trustee is fully authorized to pay such amount even though my said daughter and her spouse may elect to take title to such residence in their joint names. My Trustee shall also distribute to my daughter, or for her benefit, such amounts of the principal of the trust which may be necessary or advisable, in the sole discretion of my Trustee, to meet the medical, educational and emergency needs or any other unusual living expenses of my said daughter or any of her children.
B. Upon the death of my said daughter or upon the receipt of the trust fund by my Trustee if she does not survive me, this trust shall terminate and my Trustee shall divide the entire trust property and estate then held by it hereunder, together with any accrued and undistributed income into equal separate shares as hereinafter provided and shall distribute said trust fund, free of trust, to the following individuals who survive both my daughter and myself:
(1) One share shall be distributed to each child of my daughter, ANN BURROUGH DONOVAN, or to their then living descendants, per stirpes, if any child of my said daughter does not survive both my daughter and myself; and
(2) One share shall be divided among all of the then living descendants of my niece, JANET T. REICHE in equal portions of said share, per stirpes, and each of said portions of said share shall be distributed to each of said then living descendants.
Notwithstanding the foregoing, if any of the above beneficiaries is under the age of thirty 30 DB years at the time of the distribution hereinbefore described, I direct my Trustee to hold the share of such beneficiary in further trust with all the rights, powers and discretion herein conferred upon it, applying such portion of the income from such beneficiary's share for the support, health, education and general welfare of such beneficiary as the Trustee in its sole discretion shall deem advisable, adding any unused income to the trust principal of such beneficiary, and distributing all property and assets remaining in said share to such beneficiary of such share upon beneficiary attaining the age of thirty 30 DHB years or upon his death prior to attaining such age. In the event of the death of any of the beneficiaries prior to such distribution, my Trustee shall thereupon distribute all property and assets held in trust by it to such beneficiary's then living descendants, in equal shares, per stirpes, or in the event there are no such then living descendants, my Trustee shall thereupon distribute all property and assets held in trust by it in accordance with the terms and provisions of this Will as if such deceased beneficiary predeceased both my daughter and myself leaving no then living descendants. Provided, however, that if any assets or property are then being held in trust under this subparagraph B for any person who shall become entitled to a part or all of such distribution, his or her share of such distribution shall be added to the assets or property held in trust for such person hereunder and shall be governed by the terms hereof applicable to such other assets or property.
C. If any beneficiary who shall at any time become entitled to a portion of any trust created hereunder is under the age of twenty-one (21) years at the time of such distribution, I direct my Trustee to hold such beneficiary's share in further trust for such beneficiary, with all rights, powers and discretion herein conferred upon it, applying such portion of the income thereof for the support, health, education and general welfare of such beneficiary as the Trustee in its discretion shall deem advisable, adding any unused income to the trust principal, and distributing all property and assets remaining in said share to such beneficiary upon the attainment of the age of twenty-one (21) years by such beneficiary. In the event of the death of such beneficiary prior to attaining the age of twenty-one (21) years, my Trustee shall distribute all property and assets remaining in such share to such beneficiary's executor or administrator.
ELEVENTH: It is not my intention that the assets of any trust created hereunder be conserved for the benefit of remaindermen. On the contrary, my primary purpose in creating such trusts, is to provide for my daughter, ANN BURROUGH DONOVAN and the other income beneficiaries. The rights and interest of remaindermen are subordinate and incidental to that purpose. Nor is it my intention, however, in creating these trusts to relieve the fathers of any minor beneficiary or the husbands of any female beneficiary of their responsibility to support such beneficiary.
THIRTEENTH: If any trust created hereunder shall violate any applicable rule against perpetuities, accumulations or any similar rule or law, my Trustee is hereby directed to terminate such trust on the date limited by such rule or law and thereupon the property held in such trust shall be distributed to the persons then entitled to share the income therefrom in the proportions in which they ...
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