Lissette has been gone for over a year. She read in the paper that Dad died; in fact he was murdered. Distraught Lissette returned home to find that Dad has left the mountain house for her in his will. She was happy, but she thought she already owned the house, as she had lived their for 25 years.

She went to the mountain house to find Travis, who was still living there. She told him, "Oh! Travis let's get married. We will take the title as JT with right of survivorship." They got married and took the title that way.

Unknown to Lissettee, Travis's Stepdad has left a trust fund for him, instructing the trustee to "pay the monthly income from the Lakeview house to Travis for life, but if he marries Lissette, then to my favorite Salmon Charity." Travis didn't want to loose his monthly income and kept his marriage a secret and told Lissette to do the same. So, no one knew they were married.

Unfortunately, Travis died in a hunting accident. Lissette went and demanded the monthly income from the trustee, as she is his wife, and according to California Community property law, she inherits all his assets. This is the first time the trustee found out that Travis had been married to Lissette all along. The Salmon charity claims that they are now the beneficiary.

A few months later, Lissette was arrested and convicted for killing her Dad a year ago.

Who owns the Mountain House?
Who owns the Trust Fund?
Who ownes the Lakeview home?

Mountain House: If Lissette inherited her interest in the house by Dad’s will, she may have lost every interest she had in the house since she killed Dad. Dad’s successor in interest will own the house. However, if she got her interest by adverse possession, her interest is still good. If the later assumption were correct, the house is owned by Lissette since as co- tenant in title, she survived Travis. Again, going by California community property law the house was a community house.

The Trust Fund: The trust fund was to be paid to Travis for life, and if he married Lissette, to Salmon Charity. The charity will then have a “shifting” pur autre vie interest in the fund. The implication is that if Travis married Lissette (which he eventually did), the Salmon Charity would have and interest in the Trust fund for the life of Travis. Stepdad and his heirs have reversionary interest in the income at the death of Travis. Salmon Charity may try to regain from Lissette, the monthly income, from the date of their marriage to the death of Travis.

The Lakeview house: This house remains the interest of stepdad and his successors in interest because he did not change the ownership status. He only gave out the monthly income from the house.

Very good analysis MeThink!
But, I would add that the trust fund could have never been created, as it was created for an illegal purpose - "can not restrain a marriage." Stepdad restricted Travis's marriage to Lissette.

DaVinciCode

Thanks a lot. I really did not know that you cannot do that (i.e. make a gift dependent on restraint of marriage)

I don't see how the charity gets an income interest "pur autre vie"...there is nothing in the fact pattern that states that the Salmon Org gets the income interest for the life of Travis.

This may not be a restraint on marriage because T has a choice. If he chooses to marry L then he loses the trust. But he can still marry L as long as he knows the consequences. That's not a restraint on marriage.

The trust purpose must be valid - one of the requirements for validity is based on public policy. It is against public policy to create a trust with a condition that a person could not marry, or could not marry a particular person, or must divorce his wife in order to be a beneficiary of the trust.

Yes, Travis has a choice to marry whomever he pleases. But, here they had to keep their marriage a secret in order to get the monthly income; it would be against public policy to have such a restrain in a faily life a trust would create. I am not sure if a trustor, a trustee and a beneficiary could agree to such a condtion and create a valid trust.

If in this case a trust did get created, and they found out later that Travis married her, there could be a resulting trust, with or without his death. Not sure what claim The Salmon Charity would have.

how do you determine that there exists a reversionary interest in the income of the property?