Opinion ID: 2199561
Heading Depth: 1
Heading Rank: 1

Heading: Payment of Income

Text: In posing the second issue, the trustees point out that the provision in the fourth clause which permits them to distribute the income to the beneficiary contains no direction as to the frequency with which these payments should be made. They therefore inquire from us as to whether they must pay the income annually or at more frequent intervals, or can withhold income payable to the beneficiary for a period in excess of one year. Intertwined inextricably with this question is the eligibility of the trust created by clause fourth to qualify under the Internal Revenue Code for the marital deduction. One of the conditions which must be fulfilled before a trust can so qualify is that income from the trust must be payable annually or at more frequent intervals. [3] The tax savings to the estate, should this trust so qualify, are admittedly substantial. The widow urges that in giving proper effect to her husband's dominant intent to create a valid marital trust we should rule that trustees shall pay the net income to her more than once a year. She points out that A.T. & T, dividends have been paid quarterly since 1893. We believe that in effect we are being asked to declare that the testator has established a valid marital trust under the pertinent provisions of the Internal Revenue Code. This, we believe, is not within our power and clearly beyond the scope of our authority. We will not so rule. We will, however, declare what the law of Rhode Island is regarding when income from a trust is to be paid to a beneficiary in the absence of clear instructions by the testator pertaining thereto. We first set forth this rule in Butler v. Butler, 40 40 R.I. 425, 101 A. 115, and it has been reaffirmed several times since then. [4] When no time for payment of income is fixed and there is no direction for its accumulation, income is payable to the beneficiary as it accrues. In affirming this long-standing rule we also point out that we will not infer any power in a trustee to withhold the payment of income once it accrues. Rhode Island Hospital Trust Co. v. Proprietors of Swan Point Cemetery, supra. This rule shall govern the trustees in their administration of the fourth clause trust. To say any more would serve no purpose, or to hold as the widow would wish to have us rule would be tantamount to remaking the testator's will. This, as we said in Industrial Nat'l Bank v. Austin, R.I., 219 A.2d 389, we are without the authority to do. The parties may present a judgment to the court in chambers in accordance with this opinion. JOSLIN, J., did not participate in the decision in this case.