Brief Fact Summary. In 1929, O.J. Massee, Jr., (Deceased) created a revocable inter vivos insurance trust, the income from which was to be payable to Deceased’s wife for life and at her death, the principal to be paid to Deceased’s children and grandchildren. Appellant children of Deceased (Appellants) seek termination of the trust, claiming that it violates the Rule Against Perpetuities.
Synopsis of Rule of Law. So long as the settlor of an inter vivos trust has the absolute right to revoke or terminate a trust for his own exclusive personal benefit, there is no violation of the Rule Against Perpetuities.
Issue. Does a future interest created by a revocable trust violate the Rule Against Perpetuities?
Held. No. The Appellants are not entitled to the trust corpus because each took a life interest with the remainder payable to their issue. The trusts were executory because the remaindermen were indeterminate until the Appellants’ death. The trust took effect when it was created and not when it was delivered at Decedent’s death. This is because Deceased retained the right to destroy the trust at any time. From the time of Deceased’s death, the trust did not violate the Rule Against Perpetuities because all interests will vest within twenty-one years after the death of Appellants. Therefore, the lower court’s judgment is affirmed and the trust interests are deemed not to violate the Rule Against Perpetuities.
Discussion. Here the Court found that the Rule Against Perpetuities was not violated because the trust was deemed effective at the date of execution, and under this interpretation, all interests will vest within twenty-one years after the death of the Appellants plus the usual period allowed for gestation.