Jenkins v. Donahoo
Florida Supreme Court
231 So. 2d 809 (1970)
- Written by Liz Nakamura, JD
Facts
Josephine Jenkins, decedent, created a testamentary trust naming her three sons as income beneficiaries. The trust stated that the principal of the trust would be distributed to Josephine’s sons’ lineal descendants as remainder beneficiaries after all three sons died. The trust expressly stated that Florida statutory law controlled the determination of whether trust assets constituted income or principal. At the time of Josephine’s death, Florida statutory law stated that dividends from corporate shares held by a trust were (1) treated as income if payable as cash; but (2) treated as principal if payable in shares of the corporation. After Josephine’s death, Florida law was amended to add an additional provision stating that all dividends from mutual funds held by a trust, regardless of form, should be treated as principal. Approximately three years after Josephine’s death, the testamentary trust’s trustees invested in mutual funds and subsequently received $200,000 in cash dividends. The trustees petitioned for a declaratory judgment about how to treat the $200,000 in mutual-fund dividends. Henry and Joseph Jenkins (plaintiffs), two of Josephine’s sons, argued that the $200,000 in mutual-fund dividends should be treated as income pursuant to Florida law in effect at the time of Josephine’s death. John Donahoo (defendant), one of the remainder beneficiaries, challenged, arguing that the $200,000 in mutual-fund dividends should be treated as principal pursuant to the law as amended after Josephine’s death. The trial court held that the $200,000 in mutual-fund dividends should be treated as principal pursuant to statutory law in effect at the time the trustees received the dividends. The district court upheld the trial court’s decision, and Henry and Joseph appealed to the Florida Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Boyd, J.)
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