In re the Succession of Baker

417 So. 2d 1260, 1982 La. App. LEXIS 7671
CourtLouisiana Court of Appeal
DecidedJune 29, 1982
DocketNo. 14941
StatusPublished
Cited by2 cases

This text of 417 So. 2d 1260 (In re the Succession of Baker) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Succession of Baker, 417 So. 2d 1260, 1982 La. App. LEXIS 7671 (La. Ct. App. 1982).

Opinions

COVINGTON, Judge.

The Trustee, Murphy W. Bell, has appealed1 the judgment of the district court which held the trust created by Tracy E. Baker, the Settlor, terminated by its terms on the death of the Settlor, and that all properties held by the Trustee belong to and are a part of the succession of Tracy E. Baker, who died intestate on January 19, 1979.

Ruth Addie Baker McQuillon, a sister of the decedent, alleging that she is the closest living relative and sole heir of the decedent, opposes the trust. The basis for her contention is the failure of the trust instrument to comply with the requirements of the Louisiana Trust Code, and, in particular, the failure of the Settlor to designate or identify the beneficiaries in the trust instrument.

At issue in the instant case is the legal efficacy of a purported revocable inter vi-vos trust executed by Tracy E. Baker, as Settlor, on December 20, 1967.

The trial court, in a well-reasoned written opinion, held that the trust was valid, but that it terminated or failed at the death of the Settlor since it failed to name a principal or income beneficiary after the death of Miss Baker. In his written reasons for judgment the trial judge stated:

“On December 20, 1967, Miss Tracy E. Baker, as Settlor, executed a Revocable Inter Vivos Trust. In this proceeding, the administratrix of the Succession of Tracy E. Baker, Ruth Addie Baker McQuillon, seeks a declaration that the trust instrument is invalid and without force and effect. Alternatively, she seeks to have the trust instrument declared as having failed at the death of Miss Tracy E. Baker, and that the properties transferred to the trustee, Mr. Murphy W. Bell, belong to and form part of the estate of the decedent.
“The matter now before the Court involves only a matter of law. The trust instrument in question is in the record, and there is no dispute as to its authenticity. The dispute centers around the interpretation of the trust instrument as it relates to the requirements for a Revocable Inter Vivos Trust as set out in the Louisiana Trust Code. As there are no [1262]*1262questions of fact for the Court to determine, it was agreed by and between counsel that the case would be submitted to the Court for decision by briefs filed on behalf of the Administratrix, and on behalf of the Trust and Murphy W. Bell, Trustee. The Court has received said briefs and has given them careful consideration in the formation of its decision in this matter.
“The Administratrix bases her argument that the purported Trust is invalid, or in the alternative that it failed on the death of the Settlor, on three provisions of the Louisiana Trust Code: La.R.S. 9:1802, La. R.S. 9:1803, and La.R.S. 9:1971. These three provisions provide that a beneficiary must be designated in the trust instrument, that said beneficiary must be in being and ascertainable on the date of the creation of the trust, and that the interest of a principal beneficiary is acquired immediately upon the creation of the trust.
“It is the position of the Administratrix that the Trust executed by Tracy E. Baker fails to state a principal beneficiary, and therefore, under the above cited statutes, is in contravention of the Trust Code of Louisiana. The Administratrix argues that the Settlor is identified as the sole income beneficiary during her lifetime, but that no principal beneficiary is clearly named. In the alternative, the administratrix argues that even if the Trust could be interpreted to provide that the Settlor intended herself to be both income and principal beneficiary during her lifetime, and that this ■ interest as principal beneficiary would shift at her death, such a provision would be invalid as the Trust Code prohibits the substitution of principal beneficiaries.
“In response, the Trust and Murphy W. Bell, Trustee, argue that the Trust executed by Miss Baker conforms to the provisions of the Louisiana Trust Code, and more particularly, to the requirements of La.R.S. 9:1802, La.R.S. 9:1803 and La.R.S. 9:1971 that the beneficiary be designated, in being and ascertainable by standards stated in the trust instrument. Further, the Trust and Mr. Bell, as Trustee, assert that the trust instrument affects a disposition of the trust property as it imposes upon the trustee the obligation of making certain dispositions.
“It is clear from the trust instrument itself that no specific principal beneficiary was named by the Settlor during her lifetime. It is equally clear from the language of the trust instrument itself that the Settlor names herself as the sole income beneficiary during her lifetime. (Paragraph 4.1 of the trust instrument) The Court does not accept the argument of counsel for the Trust and Mr. Bell, Trustee, that the instrument names the Israel Universal Divine Spiritual Churches of Christ as the principal beneficiary during the lifetime of the Settlor. The Court is of the opinion that the language of the trust instrument is not clear enough to establish that it was the intent of the Settlor to name said religious organization as the principal beneficiary during her lifetime.
“Having found that the trust instrument names the Settlor herself as the income beneficiary during her lifetime and that there is no principal beneficiary during her lifetime designated, the Court now reaches the question of whether the trust instrument fails ab initio in the absence of a named principal beneficiary during the lifetime of the Settlor. It is the opinion of the Court that the trust instrument executed by Miss Tracy E. Baker on December 20, 1967, and entitled Revocable Inter Vivos Trust is not invalid, illegal, null, and void and of no force or effect for failure to specifically name a principal beneficiary during the lifetime of the Settlor.
“La.R.S. 9:1802 requires that a beneficiary be designated in the trust instrument. It does not require that both a principal beneficiary and income beneficiary be named. As pointed out by counsel for the Trust and Mr. Bell, as Trustee, Comment (c) of the Louisiana Civil Law Institute under said statute states that if the trust instrument designates either a [1263]*1263beneficiary of income or of principal, the trust does not fail.
“The Court must now address the contention of the Administratrix that the trust failed at the death of Miss Baker because of a failure of the trust instrument to name an income beneficiary after the death of the Settlor. It is the opinion of the Court that the language of the trust instrument which purports to establish certain income and/or principal beneficiaries after the death of the Settlor is not sufficient to make a disposition of the property included in the trust instrument. It is further the opinion of the Court that the language of Paragraph 5.1 is merely a precatory suggestion on the part of the Settlor and is not legally enforceable. “The Court agrees with counsel for the Administratrix that the trust instrument attempts to transfer certain property upon the death of the Settlor to a trustee who is not bound as to the use of the principal and income or the beneficiaries of said principal and income. Such a disposition is prohibited by Louisiana Law, specifically by Louisiana Civil Code Article 1573.
“Accordingly, for these written reasons assigned, it is the judgment of the Court that although the Revocable Inter Vivos Trust executed by Miss Tracy E.

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Related

In re the Succession of Baker
422 So. 2d 422 (Supreme Court of Louisiana, 1982)

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Bluebook (online)
417 So. 2d 1260, 1982 La. App. LEXIS 7671, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-succession-of-baker-lactapp-1982.