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Ladysmith Rescue Squad, Inc. v. Newlin

Supreme Court of Virginia
694 S.E.2d 604 (Va. 2010)


Facts

Miller Hart Cosby died on March 17, 2004. His will created a charitable trust that named Donald H. Newlin and William J. Howell (defendants) as trustees. The trust language named four individuals as income beneficiaries who were to receive income payments for their lifetime. Their interests in the trust were insulated from creditors by a spendthrift provision and they were not permitted to withdraw from the trust corpus. Upon the deaths of all four income beneficiaries, the trust assets were to be divided evenly and distributed to the Upper Caroline Volunteer Fire Department (Upper Caroline) and Ladysmith Volunteer Rescue Squad (Ladysmith) (plaintiff). As of April 2009, two income beneficiaries remained. The beneficiaries and Upper Caroline brought a motion in a case that had previously been initiated. They sought a court order authorizing Newlin and Howell to divide the trust into two trusts, the Upper Caroline Trust and the Ladysmith Trust. They also sought an order authorizing Newlin and Howell to terminate the Upper Caroline Trust and pay out the income beneficiaries and Upper Caroline immediately. The circuit court granted both motions. Ladysmith appealed on grounds that granting the motion would frustrate Cosby’s intent.

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Holding and Reasoning (Russell, J.)

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