Caseflicks

Court of Appeals of South Carolina • 1995

Abrams v. Templeton

465 S.E.2d 117 | 320 S.C. 325 | 1995 S.C. App. LEXIS 145

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Takeaway

In short, this case shows that South Carolina’s statutory reformation provision allows courts to save a perpetuities-violating gift by rewriting it as narrowly as necessary to carry out the testator’s plan and avoid intestacy.

Background

Mary Ann Taylor Ramage executed her will in 1914 and died in 1915. She left two family branches: her son, Albert Ramage, and the children of her predeceased daughter, Alma Templeton. The will gave substantial property to the Templeton branch and devised a separate 160-acre tract to Mary Ann’s husband, Frank, for life; then to Albert for life; then to Albert’s children for their lives; and, at each child’s death, to that child’s children.

The trial court concluded that the final gift to Albert’s grandchildren—the testator’s great-grandchildren—violated the common-law rule against perpetuities because it was an open class gift. Applying S.C. Code Ann. § 27-6-60(B), the court inserted a savings clause limiting the relevant children of Albert to those alive when the testator died. It then ordered that the interests associated with Albert’s children who died childless would augment the shares of the lines of Albert’s children who had children.

The Templeton heirs appealed. They argued that the offending gift should be void, causing the property or the shares of childless grandchildren to pass by intestacy to Mary Ann’s heirs at law, including the Templeton branch.

Issues

Issue #1

Whether the gift over to Albert Ramage’s grandchildren violated the common-law rule against perpetuities and therefore had to be reformed under S.C. Code Ann. § 27-6-60(B).

Holding

Yes. The open-class gift to Albert’s grandchildren violated the rule against perpetuities, and § 27-6-60(B) required judicial reformation rather than invalidation of the gift.

Reasoning

The will gave Albert’s children successive life estates and then provided that, upon each child’s death, that child’s interest would pass to his or her children. This final gift was a class gift to the testator’s great-grandchildren. For perpetuities purposes, an open class gift is treated as nonvested until the class membership is finally fixed.

The class could remain open because Albert could have had another child after the testator’s death, and that later-born child could have had a child more than twenty-one years after the deaths of all relevant lives in being. Thus, the great-grandchildren’s interests might vest too remotely under the common-law rule against perpetuities.

Because the interest was created before July 1, 1987, but its invalidity was determined in a later judicial proceeding, § 27-6-60(B) applied. The statute directs a court, on petition of an interested person, to insert a savings clause that both complies with the applicable perpetuities rule and preserves the transferor’s distributive plan as closely as possible.

Issue #2

Whether the perpetuities violation required the gift to Albert’s descendants to fail and the property, or the interests of Albert’s childless children, to pass by intestacy to the testator’s heirs at law.

Holding

No. The court preserved the gift to Albert’s family line, but modified the trial court’s savings clause to provide expressly that a childless grandchild’s interest passes to the lines of Albert’s children who had children.

Reasoning

The evidence of testamentary intent showed that Mary Ann meant to benefit her two family branches roughly equally. She gave the Templeton branch substantial land and personal property, while the disputed 160-acre tract was structured to remain in the Ramage branch through Albert, his children, and their descendants.

Declaring the gift over void would produce the drastic result that § 27-6-60(B) was designed to avoid. South Carolina law disfavors forfeitures and intestacy and favors constructions that uphold a will’s validity. The statute therefore called for reconstructing the disposition, not allowing the Templeton heirs to obtain the tract through intestate succession.

The trial court’s limitation to Albert’s children alive at the testator’s death supplied valid measuring lives and cured the perpetuities defect. But that language did not dispose of the interests of Albert’s four children who died without children; those interests were left floating rather than vested in anyone.

To make the trial court’s intended distribution legally complete and faithful to Mary Ann’s plan, the Court of Appeals added a further clause: if any of Albert’s children died childless, that child’s interest would be divided among those of Albert’s children who had children. This avoided an intestate reversion while ensuring that the entire tract remained with Albert’s descendants.