Sears v. Coolidge

Brief Fact Summary. Petitioners, the trustee and numerous other people interested in Testator Jeffrey Collidge’s (Testator) trust estate (Petitioners), appeal a lower court ruling that the remainder interests of Testator’s trust violated the Rule Against Perpetuities.

Synopsis of Rule of Law. As applied to the exercise of a power of appointment the words of the rule against perpetuities are satisfied if it appears that in the light of facts as to relationship and longevity existent when the appointment is existent when the appointment is exercised, the estate created in truth will vest and take effect within the period limited by the rule, although this might not have been certain at the death of the power.

Facts. Testator’s trust provided that the capital of the trust was to be distributed upon the occurrence of the first of two separate events: (1) the death of the last survivor of the Testator’s children, grandchildren, and great grandchildren who were living at the Testator’s death, or (2) the attainment of 50 years by the youngest surviving grandchild of the Testator’s who was living at the Testator’s death. The second even occurred when the youngest grandchild, William A. Coolidge, reached 50 years in 1951. Appellants argued that because the second event occurred, the Rule Against Perpetuities was not violated.

Issue. As applied to the exercise of a power of appointment are the words of the rule against perpetuities satisfied if it appears that in the light of facts as to relationship and longevity existent when the appointment is existent when the appointment is exercised, the estate created in truth will vest and take effect within the period limited by the rule, although this might not have been certain at the death of the power?

Held. Yes. As applied to the exercise of a power of appointment the words of the rule against perpetuities are satisfied if it appears that in the light of facts as to relationship and longevity existent when the appointment is existent when the appointment is exercised, the estate created in truth will vest and take effect within the period limited by the rule, although this might not have been certain at the death of the power. Appellants argue that because the second of the two events did actually occur, the Rule was not violated. Other courts have held that where a trust instrument contains two alternative conditions, of which the first might be too remote and the second, which actually occurs, is not too remote, the Rule Against Perpetuities is not violated. Appellees argue that it is not permissible this to qualify the clause regarding the two conditions, and for the present purposes we agree that this phrase could not have intended to necessarily restrict grandchildren born af
ter the execution of the instrument. However, in this situation, we treat the reserved power to amend the trust as akin to a power of appointment. Because the trust could be altered, there is no reason to not to advantage of facts known at the moment when the power ceased to be exercisable. Because of this, we are unwilling to apply the Rule Against Perpetuities to invalidate the trust instrument. The decrees are reversed and the causes are remanded to the Probate Court for the entry of decrees in accordance with this opinion.

Discussion. The Rule Against Perpetuities says that an interest must vest within 21 years plus the period of gestation since the time that the interest was created. In the past courts strictly applied the rule. Modern courts tend to find means through which to lighten the severity of the rule.