Kaiser v. Gibson

CHRISTIAN, J.

In a holographic will, Ronald Kennedy left half the residue of his estate to his widow, Alice; the other half was left in trust for his daughter, Kathleen, upon the following terms:

1. The corpus was not to be delivered to Kathleen until 10 years after testator’s death;

2. During the 10-year period the income of the trust was to be paid to

Kathleen;

3. In the event of Kathleen’s death during the 10-year period, it was provided that the trust assets should vest in testator’s widow,

Alice;

4. The will provided that the trustee shall “have full power to manage said trust estate as the best interests of the beneficiary thereof seem, the said Trustee shall have full power to settle all questions arising hereunder with respect to the execution of said trust

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and the determination of said Trustee in said matters shall be binding upon all parties interested therein. ”

[321]

The will was executed in 1930; testator died in 1955, and the following year appellant Dorothie

Z.

Kaiser was appointed trustee and received in distribution from testator’s probate estate one-half the residue thereof made up largely of corporate stocks. Under the trust provisions we have reviewed above, appellant held the securities, paying the income to Kathleen periodically. During Kathleen’s lifetime, but before the expiration of the 10-year period during which the trust was to be continued in effect, two corporations whose stock comprised most of the assets held in trust were liquidated. Appellant, thereupon received, on various dates in 1961 and 1962, sums totaling $508,606.23.

Kathleen died on November 27, 1962, before the 10-year period expired. Her will named appellant executrix and sole beneficiary. The widow Alice survived; accordingly, appellant presented to the probate court a final account as trustee, and petition for distribution, reciting that the liquidation proceeds and certain other assets constituted the trust corpus; distribution to Alice as the surviving remainderman was prayed. The account was prepared for appellant and presented to the court by her attorney, Maurice B. Gibson, who is the respondent before us. He took the precaution of serving upon appellant in her capacity as executrix of Kathleen’s estate a copy of the account, and a notice of hearing. The court approved the account, found that $521.08 held by the trustee was income accrued during Kathleen’s lifetime and was hence an asset of her estate, and directed that after payment of certain costs the remainder of the trust estate be vested in Alice because it was trust corpus which had never passed to Kathleen in view of her death before the end of the 10-year period during which her enjoyment of the trust was postponed.