Clark v. Campbell
82 N.H. 281, 133 A.166 (1926)

  • Some guy died. He left a valid will that basically said that he had a lot of personal possessions and probably wouldn’t be able to give them all away individually. Therefore, he bequeathed all his possessions to a newly created testamentary trust with instructions to the trustees to give them away to his friends as the trustees see fit. The stuff that isn’t given away should be sold and added to the residual estate.
    • The casebook didn’t give the name of the decedent.
    • A testamentary trust is one created in a will and doesn’t begin until the creator (aka settlor) dies.. The opposite is an inter vivos trust that is starts runnning while the settlor is still alive.
  • The New Hampshire Supreme Court was asked whether or not this was an enforceable clause.
  • The New Hampshire Supreme Court found the trust was not enforceable.
    • The New Hampshire Supreme Court noted that under the common law, a person cannot make a bequest to an ‘indefinite person’.
      • This principle also applies to private trusts, but not to public trusts or charitable trusts.
        • A private trust is one where the beneficiaries are the settlor’s family and friends.
    • The Court found that based on common law, courts have never sustained a gift where the testator has attempted to delegate to a trustee the arbitrary selection of the beneficiaries of his bounty through means of a private trust.
      • It is possible to make a class gift that would go to unnamed parties, possibly even parties unknown to the testator at the time the will was executed.
      • It is also possible to apportion gifts to relatives according to the discretion of a trustee. But that is because terms like ‘relatives’ have a legal definition. ‘Friends’ does not have a legal definition can could be construed to include pretty much anyone.
    • The Court ordered that the entire estate be put into the residual estate and distributed that way. The trustees get no discretion.
  • The basic rule is that with a will or a trust, you have to be definite about who is getting what. You cannot delegate the authority to a trustee.
    • The reason is that there is no way that you could monitor what the trustee was doing. The trustee could give all the money to his girlfriend and you wouldn’t be able to argue that the money was not going to the people that the decedent wanted it to go to.