Linkous v. Candler
98 Fulton County D. Rep. 3786, 508 S.E.2d 657, 270 Ga. 284 (1998)
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Rule of Law:
An intent to prohibit the acceleration of a remainder interest in a trust upon the renunciation of a preceding life interest can be implied from the trust instrument's provisions, particularly where the class of remaindermen is subject to change or cannot be ascertained until the natural death of the life beneficiaries.
Facts:
- On June 3, 1961, C. Howard Candler, Jr. and Ruth O. Candler created an irrevocable trust in full settlement of Howard Candler’s support obligations to Ruth Candler during their pending divorce.
- The trust provided Ruth Candler with a life estate in the net income of the trust assets.
- Upon Ruth Candler’s death, the net income was to be distributed among the then-living children of Howard and Ruth Candler, with a per stirpes distribution to the issue of any child who pre-deceased Ruth Candler.
- Upon the death of the “last survivor” of Howard and Ruth Candler’s children, the trust was to be divided equally among the “then living” grandchildren, with the issue of any then deceased grandchild taking per stirpes its deceased parent’s share.
- At the time the trust was created, Howard and Ruth Candler had four living children: C. H. Candler III, Samuel O. Candler, Ruth C. Lovett, and Flora G. Candler Fuller.
- Ruth C. Lovett died in 1964, before either of her parents, leaving three children.
- Howard Candler died in 1988, and Ruth Candler died on September 2, 1996, survived by three of her children: C. H. Candler III, Samuel O. Candler, and Flora G. Candler Fuller.
Procedural Posture:
- On March 4, 1997, the surviving children of Howard and Ruth Candler filed a petition in superior court (trial court) requesting construction of the 1961 trust agreement and direction to the trustee regarding its obligations.
- The superior court appointed William J. Linkous, Jr., as guardian ad litem to protect the interests of unrepresented descendants of Howard and Ruth Candler.
- Petitioners (the surviving children) then filed a written instrument, pursuant to OCGA § 53-2-115, seeking renunciation, release, and termination in full of their interests in the trust.
- On September 17, 1997, the superior court entered a final order, concluding there was no language in the trust agreement indicating an intent to prohibit acceleration and that the petitioners’ renunciation produced the same result as if they had predeceased Ruth Candler. The court ordered the trustee to distribute the trust to Howard and Ruth Candler’s 13 grandchildren.
- The guardian ad litem (appellant) appealed the superior court's decision.
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Issue:
Does a trust agreement indicate an implied intent to prohibit the acceleration of remainder interests when the class of remaindermen is not fully ascertainable until the natural death of the life beneficiaries?
Opinions:
Majority - Thompson, Justice
Yes, the trust agreement does indicate an implied intent to prohibit acceleration, and the superior court erred in ruling otherwise. The common law principle allows acceleration of a remainder interest upon renunciation of a preceding life interest, unless the donative instrument manifests a contrary intent. Citing Wetherbee v. First State Bank &c. Co., the Court reaffirms that such contrary intent need not be express but can be implied from the trust's provisions and language. In the Candler trust, the language stipulating that the trust would be divided among the "then living" grandchildren upon the death of the "last survivor" of the children, and including provisions for issue of deceased grandchildren, demonstrates an intent to prohibit acceleration. This language establishes that the class of remaindermen (grandchildren and their issue) is subject to change (by birth or death of a grandchild) and cannot be fully ascertained until the death of the last child. Accelerating the trust would be contrary to the Candlers' intent and could potentially deprive future class members of their rightful share. This approach aligns with other jurisdictions where a substitutionary gift or an unascertainable class of remaindermen indicates an intent against acceleration.
Analysis:
This case reinforces the principle that while acceleration of remainder interests is generally permitted upon renunciation of a life estate, it is not an absolute right. It clarifies that a testator's intent to prohibit acceleration can be implied from the trust's language, even when that intent is not explicitly stated but is discernible from provisions regarding survivorship or contingent beneficiaries. The ruling emphasizes the court's commitment to upholding the settlor's intent, providing a critical guideline for trust drafters and beneficiaries regarding the limitations on accelerating future interests, especially when beneficiary classes are dynamic.
