In re Searight's Estate
87 Ohio App. 417, 95 N.E.2d 779 (1950)
Searight died with a valid
will that created an honorary trust
to take care of his dog Trixie.
The will put $1k into an
account and gave 75 cents a day to someone named Hand to care for the
dog. Once the dog died, the money still in the account would go equally
to several named persons.
Trixie was estimated to be
worth about $5, not withstanding the honorary trust.
The Probate Court calculated
how much estate taxes needed to be paid.
The Probate Court found that
Trixie was taxable.
However, the $1k in the
trust was not taxable, at least not yet.
When Trixie died and the
remainder of the trust passed to the humans named in the will (aka the remaindermen), that money would be taxable at that time.
The Ohio Department of
Ohio argued that the $1k
was a fee paid to Hand to look after the dog, and as such it should be
Ohio also argued that the
trust was invalid because it violated the rule against perpetuities.
The Appellate Court affirmed.
The Appellate Court looked
to Ohio State law, which said that tax should be levied whenever property
passes to a "person, institution, or corporation."
The Appellate Court found
that a dog was none of those things. Therefore, no tax should be paid
until the $1k actually passed to the remaindermen when Trixie died.
The Appellate Court found
that the trust did not violate the Rule Against Perpetuities.
To violate the rule, you'd
have to show that there was a possibility that the remainder would not
get paid out more than 21 years after the death of everyone mentioned in
In theory, if Trixie lived
a hundred years, the remaindermen
wouldn't get paid until then.
Because there was only $1k
in the trust, and it was paying out 75 cents per day, the trust couldn't
possibly last longer than 4 years.
Some States do not recognize honorary
trusts or gifts in favor of animals.
In these States, a trust
with provisions to maintain a pet or an inanimate object is usually
The theory is that the
beneficiary holds equitable title and needs to be diligent in enforcing
the obligations of the trustee, but Trixie's grasp of investment
strategies isn't high enough to ensure that the trustee is investing the
To get around this, a testator can bequeath the pet to a human and can make
an inter vivos trust to the
human conditional on them taking care of the pet.
An honorary trust is not a charitable trust, and so it is covered by the Rule
Against Perpetuities. That means that
the trust cannot have any conditions that go further than 21 years past
the life of all lives in being
at the time the instrument is executed.
In theory, an honorary
trust to benefit a pet (like a giant
tortoise) could last a really long time. In this case the trust was
designed to provide money to the dog as a life estate, and then give the
remainder to someone else. Since the dog could theoretically live longer than 21 years past the death of the
last life in being, this
trust could violate the Rule Against Perpetuities because the condition giving out the remainder
might not come into effect until after the 21 year limit.
However, the trust looked
at the fact that the trust is bled 75 cents per day and so will be gone
in about 4 years. Therefore the trust couldn't possibly last for longer
than 21 years, so there is no violation of the Rule Against
If the Court had decided
that the trust could violate the Rule
Against Perpetuities, then it is
invalid immediately. The money in the trust goes with the remainder of
the testator's estate.
Some States have specific
Statutes eliminating this Rule Against Perpetuities problem for honorable trusts.