Waterbury v. Munn

Carrie Munn, decedent, executed a will in 1913 that was subsequently amended by a 1914 codicil. Under Paragraph Seventh of the 1913 will, Carrie devised her Wellington Hotel Property to a trust under which her five children were named beneficiaries and would each receive lifetime distributions from the trust’s income. After the last of Carrie’s five children died, the trust corpus would be distributed to Carrie’s grandchildren. Two of Carrie’s children, Charles and Gurnee (defendants), were named trustees. Paragraph Seventh also included a spendthrift provision preventing either the beneficiaries, or creditors of the beneficiaries, from reaching the income distributions payable to each beneficiary until such payment was distributed from the trust to the beneficiary. The 1914 codicil amended the terms of Paragraph Seventh of the 1913 will in two ways: (1) it granted each of Carrie’s five children an equal share in the future sale proceeds from the Wellington Hotel Property; and (2) it gave Charles and Gurnee, as trustees, the right to sell the Wellington Hotel Property in their discretion for the purpose of distributing the proceeds to the beneficiaries. Several years after Carrie’s death, Charles and Gurnee each assigned their lifetime income benefit from the trust to their sister, Carrie Waterbury (plaintiff). Subsequently, a dispute arose as to whether those assignments were invalidated by the spendthrift provision in Paragraph Seventh of the 1913 will. Waterbury petitioned to have the assignments validated. The circuit court ruled that the spendthrift provision of the 1913 will was not revoked by the 1914 codicil and that the assignments were therefore invalid. Waterbury appealed.