Cook v. Horn

104 S.E.2d 461 (1958)

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Nature of the Case

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Facts

O.J. created a revocable inter vivos trust by transferring to D certain insurance policies. O.J. retained the right to add to the trust from time to time and relieved the trustee from any obligation to pay the premiums on the policies and agreed to keep them in force. O.J. could amend or revoke the trust agreement in whole or in part by written instrument filed with the trustee. On O.J's death, D was to pay the income from the trust to O.J.’s wife for life and that on her death the principal was to be divided into as many shares as O.J. had children then living and deceased children whose issue were then living; the income from the share of each living child was payable to him for life and at his death the principal distributable to his issue, provided that the share of any such issues under 21 should be retained in trust until such issue reached 21. If the wife was to die before O.J., the same plan would be executed just without the wife having a life estate. Ps, O.J.'s children, petitioned for the termination of the trust. Ps contend that the instrument in question violates the rule against perpetuities, and that, since the limitations beyond Ps are void, they are entitled to have the property delivered to them. D demurred. The lower court held that Ps took a life interest in the corpus of the trust estate with remainders to their issue, and the trusts are executory since the remaindermen will not be determined until Ps die. Ps contend the instrument took effect at the time it was executed and delivered. Hence, there was a possibility at that time that O.J. would have additional children born to him thereafter, by whose life duration the trust would be limited. The court disagreed and held that the rule was to run from the time of O.J.’s death. Ps appealed.