Parsing "to my issue in equal shares per stirpes" in trust instruments

Charles E. Rounds, Jr.

The phrase “to my issue per stirpes” in a trust instrument, at least in the typical fact pattern, will call for the creation of a constellation of shares not all of which are of equal value. Thus, the phrase “to my issue in equal shares per stirpes” is unfortunate. How the courts, the legislatures, and the restatements have been making sense of the conjoining of the two contradictory phrases is taken up in §5.2 of Loring and Rounds: A Trustee’s Handbook [pages 311 to 313 of the 2018 Edition]. The relevant content of §5.2 is reproduced in its entirety below. Here is how one Texas court only last year (December 2017) rationalized such a conjoining: “We reverse and remand because the trust instrument’s distribution of the trust estate upon termination ‘in equal shares per stirpes’ contemplates a distribution to the remainder beneficiaries based on their deceased ancestors’ shares. Because the beneficiaries descend from three siblings, the trust instrument directs that the trust estate initially must be divided into three shares: the beneficiaries shares are computed based upon the 1/3 interest of each of the three siblings from whom the beneficiaries descended.” In other words, for computation purposes the initial division is into three shares that are equal in value. See Archer v. Moody, No. 14-15-00945-CV, 2017 Tex. App. LEXIS 11642 (Tex. App.--Houston [14th Dist.] December 14, 2017, no pet. history).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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