Anna P. Hatch v. The Riggs National Bank
361 F.2d 559, 1966 U.S. App. LEXIS 6085, 124 U.S. App. D.C. 105 (1966)
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Rule of Law:
The doctrine of worthier title is not part of the law of trusts in the District of Columbia. A grant of a remainder interest to a settlor's own heirs in an inter vivos trust creates a valid remainder in the heirs, not a reversion in the settlor, making their consent necessary for the trust's modification or revocation.
Facts:
- In 1923, a settlor created an irrevocable trust.
- The trust directed trustees to pay all income to the settlor for her life under a spendthrift provision, preventing her from alienating or charging the income.
- Upon the settlor's death, the trust corpus was to be distributed as she appointed by her last will and testament.
- If the settlor failed to exercise her testamentary power of appointment, the trust corpus was to be distributed to her next of kin as defined by District of Columbia intestacy laws.
- The trust instrument did not expressly grant the settlor the power to revoke or modify its terms.
- The settlor later sought to modify the trust to allow the trustees to pay her an additional $5,000 per year from the trust's principal.
Procedural Posture:
- The settlor filed an action in the U.S. District Court for the District of Columbia seeking to modify an irrevocable trust.
- The settlor argued that under the doctrine of worthier title, she was the sole beneficiary and therefore entitled to modify the trust.
- The District Court granted summary judgment for the appellees (the trustees), denying the request for modification.
- The settlor appealed the grant of summary judgment to the U.S. Court of Appeals for the District of Columbia Circuit.
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Issue:
Does the doctrine of worthier title apply in the District of Columbia to treat a trust's grant of a remainder to the settlor's 'next of kin' as a reversionary interest in the settlor, thereby allowing the settlor to unilaterally modify the trust as the sole beneficiary?
Opinions:
Majority - Leventhal, Circuit Judge
No. The doctrine of worthier title is not part of the law of trusts in the District of Columbia, either as a rule of law or as a rule of construction. A provision in a trust that grants a remainder to the settlor's heirs creates a valid remainder interest in those heirs, preventing the settlor from unilaterally modifying or revoking the trust without the consent of all beneficiaries. The court reasoned that the feudal origins of the doctrine are obsolete and that retaining it as a rule of construction is pernicious, often defeating the settlor's actual intent and generating a 'morass' of confusing and unpredictable litigation. By rejecting the doctrine, the court promotes certainty, predictability, and conceptual integrity in trust law, ensuring that words like 'remainder to my heirs' are given their plain meaning. While this makes the trust irrevocable by the settlor alone, the court noted that modification is still possible with the consent of all beneficiaries, including living heirs and potential unborn heirs represented by a court-appointed guardian ad litem.
Analysis:
This decision represents a significant modernization of trust law in the District of Columbia by explicitly abolishing the doctrine of worthier title. The ruling shifts the legal landscape from a default presumption of a reversion (favoring the settlor's control) to a literal interpretation of the trust instrument that protects the interests of heirs as designated remaindermen. This enhances certainty for estate planners and settlors, as the language they use will be enforced as written. Furthermore, the court's endorsement of appointing a guardian ad litem to represent unborn and unascertained heirs provides a crucial procedural mechanism, offering a path to modify otherwise irrevocable trusts without completely extinguishing the rights of future beneficiaries.
