By Fred Franke
The Law Office of Frederick R. Franke, Jr. LLC
In probably the last decision before the “new” Maryland Trust Act fully kicked in, the Court of Appeals addressed how courts traditionally determined settlor’s intent under the Maryland common law. Vito v. Grueff, No. 75, September Term, 2016 (filed May 22, 2017).
Although the Vito court seemed to rely on the trust construction rules that governed testamentary trusts, the trust in question was an intervivos trust established by a father of four children. The trust granted a seemingly broad power of appointment exercisable by a majority of the children. Three of the children exercised the power of appointment to terminate the fourth child’s rights in the trust.
Essentially, the court looked at the trust as a whole – not just the clause granting the power of appointment – to determine that the settlor intended to benefit all four of his children. Accordingly, the broad power of appointment could not be interpreted to authorize terminating one beneficiary’s interest in the trust regardless of how that particular clause was written. [Read more…]