Kirkland, Committee v. Mercantile-Safe Deposit and Trust Company of Baltimore, Trustee, 218 Md. 17

Summary

The Maryland Court of Appeals considered whether a trust could be terminated at the request of the committee of an incompetent beneficiary. The court held that the trust's spendthrift provisions and material purpose of preserving income for the beneficiaries prevented premature termination, either partially or entirely. The decree dismissing the bill was affirmed.

Holdings

1. The will required a single distribution of the corpus upon the death of the last survivor of the testatrix's husband and daughters; the power of appointment did not cause an immediate distribution of a fractional share upon the death of one daughter.
2. A beneficiary of a spendthrift trust may not compel termination of the trust, in whole or in part, when termination would defeat the settlor's material purpose of restraining alienation and preserving the trust income.
3. The general rule permitting termination by all beneficiaries does not apply when one or more beneficial interests are subject to a spendthrift restraint; unanimous beneficiary consent cannot terminate the trust in that circumstance.

Questions Presented

1. Whether the power of appointment granted to each daughter caused a portion of the trust corpus to vest and become distributable immediately upon the death of one daughter.
2. Whether a beneficiary who was both a life tenant and a purported vested remainderman could compel partial or complete termination of a spendthrift trust.
3. Whether the trust could be terminated because all living beneficiaries consented and no persons unborn had a prospective interest.

Disposition

affirmed