Some guy died. He left a
valid will that basically said that he had a lot of personal possessions
and probably wouldn't be able to give them all away individually.
Therefore, he bequeathed all his possessions to a newly created testamentary
trust with instructions to the
trustees to give them away to his friends as the trustees see fit. The
stuff that isn't given away should be sold and added to the residual
estate.
The casebook didn't give the
name of the decedent.
A testamentary trust is one created in a will and doesn't begin
until the creator (aka settlor)
dies.. The opposite is an inter vivos trust that is starts runnning while the settlor is still alive.
The New Hampshire Supreme
Court was asked whether or not this was an enforceable clause.
The New Hampshire Supreme
Court found the trust was not enforceable.
The New Hampshire Supreme
Court noted that under the common law, a person cannot make a bequest to
an 'indefinite person'.
This principle also applies
to private trusts, but not to public
trusts or charitable
trusts.
A private trust is one where the beneficiaries are the settlor's family and friends.
The Court found that based
on common law, courts have never sustained a gift where the testator has attempted to delegate to a trustee the
arbitrary selection of the beneficiaries of his bounty through means of a
private trust.
It is possible to make a class
gift that would go to unnamed
parties, possibly even parties unknown to the testator at the time the will was executed.
It is also possible to
apportion gifts to relatives according to the discretion of a trustee.
But that is because terms like 'relatives' have a legal definition.
'Friends' does not have a legal definition can could be construed to
include pretty much anyone.
The Court ordered that the
entire estate be put into the residual estate and distributed that way.
The trustees get no discretion.
The basic rule is that with a
will or a trust, you have to be definite about who is getting what. You
cannot delegate the authority to a trustee.
The reason is that there is
no way that you could monitor what the trustee was doing. The trustee
could give all the money to his girlfriend and you wouldn't be able to
argue that the money was not going to the people that the decedent wanted
it to go to.
