Brief Fact Summary. Action brought by plaintiffs for a decree approving a compromise agreement that would terminate a testamentary trust. The Superior Court of Fairfield County found the agreement invalid and plaintiffs appeal.
Synopsis of Rule of Law. A testamentary trust that is created in clear and unambiguous language may only be terminated by a decree of a court of equity, notwithstanding any stipulation by all parties in interest.
The function of the court with reference to trusts is not to remake the trust instrument, reduce or increase the size of the gifts made therein or accord the beneficiary more advantage than the donor directed that he should enjoy, but rather to ascertain what the donor directed that the donee should receive and to secure to him the enjoyment of that interest only.View Full Point of Law
Issue. Whether the court should approve the compromise agreement made by plaintiffs even though it is contrary to the terms of the trust and would in effect terminate the trust?
Held. No. Judgment affirmed.
Conditions precedent which should occur in order to warrant termination of the trust by judicial decree are 1) all parties in interest seek the termination, 2) that every reasonable ultimate purpose of the trust’s creation and existence has been accomplished and, 3) that no fair and lawful restriction imposed by the testator will be nullified or disturbed as a result.
The basic objectives of the testatrix were to provide 1) income for life for Foeppel and, 2) at her death an intact corpus to New York Association for the blind. These are reasonable objectives and to abolish the trust and turn over a fraction of the corpus outright to the life beneficiary defeats the objective of the trust. If the testatrix intended to entrust the life beneficiary with the handling of any part of the corpus, she would have provided so by an outright gift.
Discussion. The basic effect of the compromise agreement, if approved by the court, would be to terminate the trust. The underlying rationale of the rule is the protection of any reasonable, properly expressed, testamentary desire of a decedent.