Opinion ID: 1855904
Heading Depth: 1
Heading Rank: 3

Heading: were the beneficiaries of the trust sufficiently certain?

Text: Appellant, Vickie Coe, contends that the beneficiaries of the trust were uncertain because Herbert Coe never chose who should take from the class. Her contention is without merit. Vickie Coe bases her argument upon the provisions of the dispositive portion of the trust. It provides in relevant part: At my death, I direct my trustee to make payment of claims against my estate, then to distribute the entire sum then held in trust as I may subsequently appoint by my Will or a Codicil to my Will among any person or person from the following class: Lyle Boerner, El Riad Shrine, Mildred Coe Elerding, Leonard Konvalin, Max Kreinbuhl, Herman Schroeder, Jr., William Schroeder and Irene Vanneman. Such appointment may be made for life or such other estate as I may determine, in trust or otherwise, and it may be made subject to lawful spendthrift provisions. It is my intention that any such Last Will or Codicil be executed by me only in the presence of my attorneys and a trust officer of the Farmers State Bank and immediately thereafter filed with the Circuit Court in supervision of this trust to be kept confidential in all respects. The day after Herbert Coe signed the trust, attorney Tom Tobin sent him a letter urging Herbert to draw up a will as soon as possible in which he would name the persons from the class who would be beneficiaries of the trust residue. Herbert Coe never drafted a will naming beneficiaries of the trust. The trial court held that the class of beneficiaries was sufficiently definite and that because Herbert Coe failed to select among the class of beneficiaries, the trust property should be divided in equal shares among the members of the class living when Herbert Coe died. We affirm. Restatement (Second) of Trusts § 120 (1959) provides: The members of a definite class of persons can be the beneficiaries of a trust. Comment c to § 120 adds that this is true even though the trustee or another person is authorized to select which of the members of the class shall take and in what proportions. Comment a to § 120 provides a complete answer to Vickie Coe's contention: A class of persons is definite within the meaning of the rule stated in this Section if the identity of all the individuals comprising its membership is ascertainable. No problem with identity exists here. Each member of the class was clearly identified by name. Identity problems arise only when the language of the trust is so nebulous in naming beneficiaries that the beneficiaries are unascertainable, and the trust, as a result, violates statutory restraints on the alienation of property. SDCL ch. 43-5. We hold the members of the class of beneficiaries were clearly ascertainable. Vickie Coe contends that even if the beneficiaries were ascertainable, the trust fails because Herbert Coe failed to name anyone from the class of beneficiaries to receive the trust property. This contention is also without merit. If the trustee or other person having a power of selection among the members of a definite class fails to exercise it, the trust property will be divided in equal shares among the members of the class, as determined at the time of the expiration of the power, unless the transferor properly manifested a different intention. Restatement (Second) of Trusts § 120, comment e (1959). We believe this statement of the law applies to the trustor, Herbert Coe. Therefore, all members of the class, living at Herbert Coe's death, share equally in the trust property. Vickie Coe contends alternatively that in his will, Herbert Coe selected beneficiaries from the class and designated the property they were to take. In the will, Herbert Coe made specific bequests to certain beneficiaries of the trust. Vickie contends that the remainder of the trust reverts to the estate and passes under the will. This contention also fails. Herbert Coe clearly stated in his will an intention to revoke the trust. To hold that he selected beneficiaries to take under the trust would be inapposite to his stated intention to revoke the trust. Bequests made in the will pass under the terms of the will and property covered by the will. All property placed in trust passes under the terms of the trust.