## Facts

- An Arizona domiciliary executed a will leaving the residue of her estate (all personal property) to a New Mexico bank as trustee.
- The trust directed the trustee to distribute funds to the testatrix’s brother during his lifetime as he requested for his needs, without trustee accountability for such disbursements.
- The will provided that, on the brother’s death, the remaining trust property would pass to “Alcoholics Anonymous of San Antonio, Texas,” with directions that half be used for rehabilitation-related living facilities and half as the organization chose.
- The testatrix died in 1969; primary probate occurred in Arizona and ancillary proceedings occurred in New Mexico.
- The brother (life beneficiary and sole heir) died in 1970; his estate’s administrator challenged the charitable remainder.
- The trustee filed a New Mexico declaratory judgment action to determine the remainder beneficiary’s rights.
- The trial court found the named “Alcoholics Anonymous” to be an unincorporated association lacking capacity to take, but upheld the remainder under Texas law in favor of a related Texas charitable entity (Alcoholics Foundation of San Antonio).
- The administrator appealed, arguing Arizona law governed and would invalidate the remainder gift.

## Issues

1. Which state’s law governs the validity of a testamentary trust of personal property: the settlor’s domicile (Arizona) or the law implied by the trust’s connections and intent (Texas).
2. Whether the charitable remainder could be upheld under the governing law despite the will’s designation of an entity alleged to lack capacity to receive a bequest.

## Decision

- The New Mexico Supreme Court affirmed the judgment awarding the trust remainder to the Alcoholics Foundation of San Antonio, Texas.
- The court held that Texas law governed validity of the charitable remainder.
- Applying Texas law, the court sustained the charitable disposition notwithstanding problems with the named beneficiary’s legal status.

## Legal Principles

- For a trust of movables, validity is governed by (a) the law designated by the settlor, or (b) absent designation, the law of the state with the most significant relationship to the trust’s validity and administration.
- The settlor’s manifested intent and objective trust contacts (including place of charitable performance and related administration factors) may support an implied choice of law.
- Charitable dispositions are construed to carry out charitable intent where possible; technical defects in naming or capacity of the initially named recipient do not necessarily defeat the gift if a proper charitable entity can take under the governing law.

## Conclusion

The court applied a modern choice-of-law approach for trusts of personalty, looking to the settlor’s intent and the state most closely connected to the charitable remainder, and upheld the testamentary charitable gift under Texas law despite capacity objections to the named beneficiary.


Farmers & Merchants Bank v. Woolf, 86 N.M. 320, 523 P.2d 1346 (N.M. 1974)