## Facts

- In 1969, Katie B. Deiss and her husband, Rudolph V. Deiss, owned a residence and several parcels of farm land in Illinois (including McLean, Logan, and Mason Counties) and in Kansas (Jewel County).
- On January 29, 1969, Katie and Rudolph created an irrevocable inter vivos trust to govern management and later distribution of the real estate among their four sons: Orville, Rudolph Jr., Merle, and LeRoy.
- The trust named Orville Deiss as trustee and authorized him to manage the properties, lease farm land (including leasing some parcels to himself and leasing other parcels to his brothers), and handle financing matters related to the trust property.
- The trust directed the trustee to pay mortgages and other encumbrances from income generated by the farm operations and to distribute any net income to the donors during their joint lives.
- After the death of either donor, the trust required that all income be paid to the surviving donor.
- The trust provided that it would continue until (1) Katie’s death and (2) all mortgages on the trust property were paid in full, after which the corpus and accumulated income would be divided among the four sons as life estates, with remainder interests passing to each son’s children or other descendants (per stirpes).
- Rudolph died in 1973, and thereafter Katie became the sole income beneficiary under the trust’s survivor provision.
- In 1987, Katie filed a declaratory-judgment action seeking to have the trust declared void as violating the common-law Rule Against Perpetuities, arguing that distribution was tied to events (including full mortgage payoff) that might occur beyond the permissible perpetuities period and that the remainders to descendants were therefore impermissibly remote.
- Merle, LeRoy, and Katie’s living grandchildren and great-grandchildren opposed the request, contending that the relevant future interests were vested (at most subject to divestment) and therefore outside the Rule Against Perpetuities.
- The circuit court denied Katie’s petition and upheld the trust, and Katie appealed.

## Issues

1. Whether the trust violated the Rule Against Perpetuities because the ultimate division of the corpus was postponed until Katie’s death and until all mortgages on the trust property were paid.
2. Whether the interests given to the sons and their lines were contingent future interests that might vest too late, or vested interests (including vested remainders subject to divestment) not subject to invalidation under the Rule Against Perpetuities.

## Decision

- The Appellate Court of Illinois, Fourth District, affirmed the circuit court’s judgment denying declaratory relief.
- The court held that the trust did not violate the Rule Against Perpetuities because the interests created for the sons and their descendants were vested (at most subject to divestment), not contingent interests whose vesting could occur outside the perpetuities period.
- The court treated the mortgage-payoff requirement as affecting the timing of distribution and the value of what would be received, rather than as a condition that postponed vesting for Rule Against Perpetuities purposes.

## Legal Principles

- The Rule Against Perpetuities applies to future interests that are not certain to vest (if at all) within lives in being at the creation of the interest plus 21 years; vested interests generally do not present a perpetuities problem.
- A remainder is vested when the takers are identifiable and there is no condition precedent to vesting other than the natural termination of the prior estate; an interest can be vested even though it may later be defeated (vested subject to divestment).
- A provision that delays enjoyment, possession, or distribution does not necessarily delay vesting; postponement of distribution for administrative reasons, or because debts and mortgages must be paid, typically concerns the amount or value ultimately received rather than whether the interest has vested.
- Courts interpret trust language, when reasonably possible, in a manner that avoids a construction producing a Rule Against Perpetuities violation.

## Conclusion

Deiss v. Deiss upheld a family inter vivos trust against a Rule Against Perpetuities attack, concluding that the sons’ life estates and the remainders for their children or descendants were vested interests when the trust was created, and that the requirement to pay off mortgages before final division postponed distribution and affected value but did not postpone vesting.


Deiss v. Deiss, 536 N.E.2d 120 (1989)