Estate of Holt

Brief Fact Summary. Appellant Guardian ad Litem (Appellant) of unascertained or yet unborn trust beneficiaries challenges a lower court judgment entered for Appellee Trustee (Appellee) in Appellee’s petition seeking instructions to determine the correct termination date of the trust.

Synopsis of Rule of Law. When a gift is made in a will to heirs of a designated person, the word “heirs” means persons who succeed to the property of such designated person under the law which governs intestate succession.

Facts. Testator Father (Testator) established the trust at issue with income payable to his widow for life and, after her death, to pay the income to all of Testator’s heirs in equal shares per stirpes. At his death, Testator had eleven children. At the death of Testator’s widow, all eleven children were still living. Some deaths occurred after this point.
A previous case regarding the will held that the interest belonging to a married son with an adoptive daughter was not an estate of inheritance. Therefore, despite the sons’ will, the interest went to his adoptive daughter. In this case the court ruled that the testator’s heirs were designated by the law governing intestate successions. Although these heirs differed from time to time due to death, the court did not rule that any of the grandchildren alive at Testator’s widows death were measuring lives for the Rule Against Perpetuities. Instead, the measuring lives were those of the eleven children who were alive at the creation of the trust.
In this case, Appellant challenges a lower court judgment entered for Appellee in Appellee’s petition seeking instructions to determine the correct termination date of a trust. The lower court held that in order to avoid violating the Rule Against Perpetuities, the trust must terminate within twenty-one years after the death of the last survivor among Testator’s eleven children. Appellant argues that the trust should not terminate until twenty-one years after the death of the last survivor of Testator’s grandchildren who were alive at the time of Testator’s death.

Issue. Was the word heir to be limited to Testator’s children rather than including persons who were his heirs from time to time as the income accrued?

Held. Yes. The word heir is to be limited to the children alive at Testator’s death. When a gift is made in a will to heirs of a designated person, the word “heirs” means persons who succeed to the property of such designated person under the law which governs intestate succession. Heirs of a designated person are ordinarily determined as of the date of death of such person, unless the testator shows a contrary intent. Where a gift to heirs is postponed until the termination of a preceding estate a contrary intent is shown and the heirs will be determined as of the date of the termination of the preceding estate. The common law Rule Against Perpetuities provides that no interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest. Courts have generally held that if an explicit termination date is lacking, but specific beneficiaries are named in the trust instrument, then such beneficiaries are the applicable measuri
ng lives for a calculation of legal trust duration under the Rule Against Perpetuities. At the time of the death of Testator’s widow, Testator’s eleven children were alive and these children comprised Testator’s heirs and the measuring lives for estate purposes. Because the last of Testator’s eleven surviving children died in 1986, the lower court correctly found that the instant testamentary trust terminates twenty-one years after 1986, in the year 2007.

Discussion. This case comprises a complicated example of the definition of the term “heir.” As the Court mentions, the term heir means those individuals who, at the death of an individual, are entitled to inherit the estate of this individual as a matter of law.