## Facts

- In 1923, Anna P. Hatch created an inter vivos trust and transferred the property to Riggs National Bank as trustee, stating the conveyance was “irrevocably.”
- The trust required the trustee to pay Hatch all trust income for life “for her own use and benefit,” and included a spendthrift clause barring her from anticipating, alienating, or charging that income.
- On Hatch’s death, the trust directed distribution of principal according to Hatch’s appointment by will; if she failed to exercise that testamentary power of appointment, the principal was to pass to “such of her next of kin” as would take under District of Columbia intestacy law in effect at her death.
- The trust did not reserve to Hatch any power to revoke, alter, amend, or modify, and did not authorize appointment of the corpus by deed.
- Roughly forty years later, Hatch sought to revoke or modify the trust to obtain $5,000 per year from principal, citing increased expenses and a desire to maintain her accustomed standard of living.
- Hatch did not request consent from her two sisters, who were her only heirs at law at the time; instead, she sued the trustee and other interested parties.
- Hatch argued that the doctrine of worthier title treated the “next of kin” limitation as leaving a reversion in her, making her both settlor and sole beneficiary and allowing unilateral revocation or modification.
- The district court granted summary judgment for the defendants, relying on Liberty National Bank v. Hicks, and rejected Hatch’s attempt to modify the trust.
- Hatch appealed to the U.S. Court of Appeals for the District of Columbia Circuit.

## Issues

1. Whether District of Columbia law applies the doctrine of worthier title to construe a remainder to the settlor’s “next of kin” (in default of testamentary appointment) as a reversion in the settlor.
2. If the “next of kin” take a remainder interest, whether the settlor of an irrevocable spendthrift trust who retained only a life income interest and a testamentary power of appointment may revoke or modify the trust to invade principal without the consent of all beneficiaries.

## Decision

- The D.C. Circuit affirmed summary judgment for Riggs National Bank and the other defendants.
- The court declined to adopt or apply the doctrine of worthier title in this setting and treated the default gift to Hatch’s “next of kin” as creating a remainder interest in that class, not a reversion in Hatch.
- Because Hatch was not the sole beneficiary and the trust reserved no power to revoke or amend, she could not unilaterally revoke or modify the trust to receive annual principal payments.

## Legal Principles

- District of Columbia courts will not use the doctrine of worthier title to convert an express gift of the remainder to the settlor’s “heirs” or “next of kin” into a retained reversion in the settlor.
- A trust provision distributing corpus to the settlor’s next of kin under intestacy law, if a testamentary power of appointment is not exercised, can create a genuine contingent remainder in that class.
- When a settlor transfers property “irrevocably,” retains only a life interest in income, and reserves only a testamentary power of appointment, the settlor has no unilateral power to revoke, amend, or invade principal unless the instrument grants that authority.
- Modification or termination of an irrevocable trust generally requires the consent of all beneficiaries, including contingent or unascertained remaindermen; the presence of a spendthrift clause strengthens enforcement of the trust’s stated limits.
- Prior D.C. Circuit authority (including Liberty National Bank v. Hicks) is consistent with treating default takers under “heirs” or “next of kin” language as beneficiaries whose interests block unilateral alteration by the settlor.

## Conclusion

Hatch held only a life income interest and a testamentary power of appointment under an expressly irrevocable spendthrift trust; the D.C. Circuit refused to treat the “next of kin” remainder as a reversion under worthier title and, because other beneficiaries held remainder interests, held that Hatch could not revoke or modify the trust to obtain annual payments from principal without obtaining the consent of all beneficiaries.


Hatch v. Riggs National Bank, 361 F.2d 559 (1966)