Kingsmill wrote a will that
put the residue of her estate into a trust that provided income to Pringle
and Foeppel for life, and then passed to the New York Association for the
Blind.
Pringle predeceased
Kingsmill so Foeppel got the entire life estate.
Kingsmill died. Her heirs at
law (two brothers and a sister) contested the will.
During Probate, Foeppel, the
Association, and the heirs at law came to a settlement to divvy up the
money.
The executor (Link) refused to
pass the money out to the various beneficiaries. They appealed.
Link argued that the
settlement agreement would abolish the trust, which frustrated
Kingsmill's intent.
Link was getting fees for
administrating the trust, so if the trust was terminated, he'd lose
money.
The Trial Court refused to
approve the agreement. The beneficiaries appealed.
The Appellate Court affirmed.
The Appellate Court found
that a testamentary trust can only
be abolished by a court, regardless of the preferences of the beneficiaries.
The Appellate Court found
that there were three requirements to abolish a trust:
All the parties of interest
unite in seeking termination.
Every reasonable ultimate
purpose of the trust has been accomplished.
No fair and lawful
restriction imposed by the settlor
will be nullified.
The Appellate Court found
that two purposes of the trust were to provide income for like to
Foeppel, and to provide 100% of the intact principle to the Association.
Splitting the money three
ways did not insure that Foeppel would have income for life, nor did it
give 100% of the principle to the Association.
Therefore the second
requirement to abolish the trust was not met.
