Argued April 11, 1968. —
Decided May 7, 1968.
APPEAL from judgment of the county court of Dane county: CARL FLOM, Judge. Affirmed.
For the appellants there was a brief and oral argument by Gene J. Fleming of Madison, guardian ad litem.
For the respondent Bank of Madison there was a brief by Lawrence E. Hart of Madison, and for the respondents Harold Lampert, Sr., Harold Lampert, Jr., and Barbara Lampert Fenster by Beatrice Lampert of Madison, and oral argument by Mr. Hart and Mrs. Lampert.
The only question on this appeal is whether, under the circumstances, the renunciation of the income of a trust by a life tenant accelerates the distribution so that the remaindermen are presently entitled to their share of the trust corpus.
The settlor of the trust was Gladys Lampert Reynolds. Her will left a residue of approximately $106,000 in trust. Her dispositive scheme was to give her brother, Harold Lampert, Sr., the income from the trust during his lifetime, and upon his death the corpus was to be distributed to Harold's children. This expected plan was disrupted when Harold Lampert, Sr., renounced his interest in his rights that arose under the will and in the trust created by that will. After the filing of that renunciation, Harold Lampert, Jr., who was to receive three fifths of the corpus upon the termination of the life estate, and Barbara Lampert Fenster, who was to receive two fifths, petitioned for the immediate distribution of the corpus to them.
The relevant terms of the will are:
". . .
"2. The trustee shall pay the net income of the trust to or for the benefit of my said brother, Harold Lampert, St., so long as he shall live . . . .
"3. The trust shall terminate upon the death of my brother, Harold Lampert, St., and the trustee shall distribute the remaining assets of the trust, including any undistributed income, as hereinafter provided:
"(a) If my nephew, Harold Lampert, Jr., is living upon the termination of the trust, the trustee shall distribute three-fifths of the remaining assets of the trust to my said nephew.
"(b) If my nephew, Harold Lampert, Jr., is not living upon the termination of the trust, the trustee shall distribute three-fifths of the remaining assets of the trust to his then living children in equal shares by right of representation.
". . .
"(d) If my niece, Barbara Lampert Fenster, is living upon the termination of the trust, the trustee shall distribute two-fifths of the remaining assets of the trust to my said niece.
"(e) If my niece, Barbara Lampert Fenster, is not living upon the termination of the trust, the trustee shall distribute two-fifths of the remaining assets of the trust to her then living children in equal shares by right of representation.
". . .
"1. If my brother, Harold Lampert, St., does not survive me, but my nephew, Harold Lampert, Jr., does survive me, I give, devise and bequeath three-fifths of the, residue of ray estate to my said nephew.
". . .
"4. If my brother, Harold Lampert, Sr. does not survive me, but my niece, Barbara Lampert Fenster, does survive me, I give, devise and bequeath two-fifths of the residue of my estate to my said niece."
Prior to any determination in the probate court, a guardian ad litem was appointed to represent the interests of the six infant children of Harold Lampert, Jr., who would, together with the possible, though nonexistent, children of Barbara Lampert Fenster, be precluded from the opportunity to take if a present distribution were ordered. The guardian ad litem has appealed from the order of the probate court directing an immediate distribution.
The general rule is set forth in Restatement, 2 Property, p. 961, sec. 231, wherein it is stated:
"When an attempted prior interest fails because the person to whom it is limited renounces it, succeeding interests are accelerated except when (a) the terms and circumstances of the limitation manifest a contrary intent . . . ."
"`Where the enjoyment of possession by the remainderman is postponed until after the determination of the particular estate and for no other purpose, and such tenant elects to take against the will, the remainderman enters into enjoyment at once. This principle is called acceleration of the remainders. Renunciation by the particular tenant is said to be equivalent to his death with reference to the remainder's taking effect in possession.'"
This quotation from Page presently appears in 5 Page, Wills (Bowie-Parker Rev. 1962), pp. 684, 686, sec. 47.45.
The appellant herein stresses that the right to have the terms of a will carried out is a sacred obligation of the court and that to permit the acceleration of the remainders would defy the testator's intent. Wisconsin cases, and the texts generally, give preeminence to the intent of the testator, and it is universally held, even in those jurisdictions permitting the acceleration of the remainder distribution, that such can be permitted only when it is consonant with the testator's intent.
In Will of McIlhattan, supra, page 117, we said:
"It is a general rule of law that the election of the widow has the same effect as her death, and accelerates the remainders so that the beneficiaries enter directly into enjoyment thereof. [Citing cases] This general rule of law does not apply if the terms of the trust expressly otherwise provide; that is, the intent of the testator must prevail if that intent is manifest from the will itself."
While there is substantial authority to the contrary in other jurisdictions, we are satisfied that the Wisconsin law permits the acceleration of the remainder under the circumstances of the instant case.
Matter of Graham (1932), 145 Misc. 628, 260 N.Y. Supp. 585; Walsh v. Hulse (1952), 23 N.J. Super. 573, 93 A.2d 230; Matter of Bauer (1959), 19 Misc.2d 707, 192 N.Y. Supp.2d 252; Sueske v. Schofield (1941), 376 Ill. 431, 34 N.E.2d 399; Ajax Electrothermic Corp. v. First Nat. Bank of Princeton (1951), 7 N.J. 82, 80 A.2d 559.
Our statute (sec. 231.23) provides that, "When the purposes for which an express trust shall have been created shall have ceased the estate of the trustee shall also cease."
It would appear that, since the purpose of the trust — to assist in the support of Harold Lampert, Sr., — ceased to exist upon his renunciation, the only purpose for which the trust was created has ceased to exist, and, under the statutes, the trust should be terminated unless it is determined that such termination is contrary to the testatrix's intent.
The Restatement, 2 Property, p. 554, sec. 157, comment p, would also permit the acceleration of the remainder where the remaindermen are ascertainable at the time the prior interest is renounced. Hence, since both Harold, Jr., and Barbara are living and constitute the entire class of remaindermen designated in the will, under the Restatement rule the trust should be terminated and the remainders accelerated.
Perhaps the most satisfactory rationalization of the acceleration of remainders appears in Simes and Smith, The Law of Future Interests (2d ed.), pp. 273-275, sec. 796.
"When the prior interest is renounced, this unanticipated event frustrates the dispositive scheme of the testator. It would seem that if he has clearly indicated a condition precedent which must occur before the next interest takes effect in enjoyment, the court would merely be adding to the disruption of the dispositive scheme by ignoring the express condition precedent. Hence, it would seem that as a starting point in the analysis, one should assume that a contingent remainder will never be accelerated. Yet, where the renunciation is unanticipated, this rule may work out unjustly if we were to apply the ordinary rules of construction in deciding whether the remainder is contingent. Nearly all of the cases in which remainders which appear to be contingent have been accelerated fall into the same class. They are remainders in which the apparent condition precedent is survivorship of the life tenant. Thus, suppose property is devised to the widow for life, and on her death to the children of the testator then surviving. Even though we concede that the gift to the children can be regarded as an executory interest, the accepted doctrine of property law would lead us to say that the children cannot take until the widow actually dies and they are left surviving. Yet the context of the will may indicate that the testator postponed the gift to the children solely to make adequate provision for his widow, and that, the moment she is otherwise provided for, it would be reasonable to assume that the testator wished his children to take. It is true he used the word `surviving,' but that may be because he did not wish heirs or issue to take, although he had no intention of requiring his children actually to survive his wife if they could take before that time without injury to her. Hence in this situation many courts have said, and some have held, that the children who survive the widow's renunciation take a present interest on that event. What they really are doing is construing the will in the light of the widow's renunciation so that the limitation in remainder reads: To my children living at the termination of the life estate.
"It is believed, therefore, that although the courts may state that contingent remainders are accelerated they are likely to do so only in circumstances when it is reasonable to conclude that the particular condition precedent was not important to the testator in the light of the unanticipated renunciation. Such a conclusion is most likely to be reasonable when the expressed condition precedent is survival of the life tenant."
Applying this test, we conclude that the distribution of the remainder by the use of a trust was postponed solely to take care of Harold Lampert, St., during his lifetime, if he so desired.
This conclusion is borne out by the fact that the will provided for outright distribution of all of the residue of the estate to Harold, Jr., and Barbara in the event Harold, Sr., predeceased the testatrix.
It is thus apparent that the testatrix postponed the gift to Harold, Jr., and Barbara, her niece, only to assure that provision was made for her brother, Harold, St. Under the circumstances, it is reasonable to assume that the testatrix wished the remaindermen to take once the object of the trust had been fully accomplished. Since the trust is now without purpose, it is reasonable, to paraphrase the words of Simes, to construe the will to read: "To Harold Lampert, Jr., and Barbara Lampert Fenster at the termination of the life estate."
We conclude that under the circumstances the mere holding of the residue in trust until Harold, St., should at last die was unimportant to the testatrix, and her testamentary intent is better carried out by affirming the trial judge's order accelerating the remainder.
By the Court. — Judgment affirmed.