In re Estate of Brown

Brief Fact Summary. Andrew J. Brown created a trust to pay for the education of his nephew’s children and thereafter, to support the lifestyle of his nephew and his wife so that they could live a life in the style and manner as they wish for the remainder of their lives.

Synopsis of Rule of Law. A support trust is created where the trustee is directed to se trust income or principal for the benefit of an individual, but only to the extent necessary to support the individual. An active trust may not be terminated, even with the consent of all the beneficiaries, if a material purpose of the settlor remains to be accomplished.

Facts. Brown created a trust to be used for the education of the children of his nephew, Woolson S. Brown. After the accomplishment of the educational trust purpose, Brown directed the income of the trust to be used for the care, maintenance, and welfare of his nephew Woolson S. Brown and his wife Rosemary Brown, so that they would be able to live in the style and manner to which they were accustomed.

Issue.
Whether a trust is a support trust where the trustee must distribute all of the remainder income to specified beneficiaries after the initial purpose of the trust is fulfilled?

Whether the material purpose of a trust was fulfilled after the education of the settlor’s nephew’s children?

Held.
No. The trustee must pay an amount to the remainder beyond the extent necessary for their support. The trustee must pay the amount of the remainder of the trust income to Woolson and Rosemary Brown as is as needed for them to live in the style and manner to which they are accustomed for the remainder of their lives.

The material purpose of a trust that provides for the education of a beneficiary’s children ,and then for the beneficiary and his wife to live in a lifestyle to which they were accustomed, is not satisfied after the beneficiary’s child’s education is complete. The settlor did not merely name successive beneficiaries, but expressed intent to provide for the lifelong income of the beneficiaries. Therefore this the second purpose is material

Discussion. The purpose of a trust will be inferred wherever the settlor has expressed that a distribution be made for a specific purpose, more than just for specific beneficiaries.