## Facts

- Charles Vartan Walker died in 2000 leaving a holographic will naming Frost National Bank as independent executor.
- Article V directed the executor to sell a specified tract of land and invest the proceeds in “safe and secure” tax-free government or insured municipal bonds to form the “James Madison Fund.”
- The will contemplated long-term accumulation until the fund could provide $1,000,000 to every U.S. citizen age 18 or older, without exclusion based on race, religion, marital status, sexual preference, or wealth.
- Walker estimated the accumulation would take approximately 346 years.
- The will further contemplated that, once sufficiently large, the fund would be turned over to the President, Vice President, and Speaker of the U.S. House as trustees.
- Frost sought a declaratory judgment construing Article V and determining whether it created a valid trust.
- The heirs contended Article V attempted a private, noncharitable trust that violated the rule against perpetuities (RAP).
- The Texas Attorney General intervened, asserting Article V created a charitable trust not subject to the RAP.
- The probate court upheld the provision as a valid charitable trust; the heirs appealed.

## Issues

1. Whether Article V created a charitable trust exempt from the rule against perpetuities, or a noncharitable private trust subject to the RAP.
2. If the disposition violated the RAP, whether Tex. Prop. Code § 5.043 authorized reformation or construction to approximate the testator’s general intent within RAP limits.

## Decision

- The court of appeals held Article V did not create a charitable trust.
- The court held the arrangement was a noncharitable trust that, as written, violated the RAP.
- The court held Tex. Prop. Code § 5.043 permitted reformation or construction to carry out the testator’s general intent as nearly as possible while complying with the RAP.
- The court reversed the probate court’s charitable-trust ruling and remanded for further proceedings on reformation.

## Legal Principles

- Whether a trust purpose is “charitable” is a question of law; charitable purposes are evaluated against recognized categories (including “other purposes beneficial to the community”).
- A gift that primarily provides financial enrichment to individuals, without a qualifying public-benefit purpose, is not charitable merely because it benefits a broad segment of the public.
- A noncharitable interest that may vest outside the permitted period violates the rule against perpetuities under Tex. Prop. Code § 112.036.
- When a disposition violates the RAP, Tex. Prop. Code § 5.043 authorizes a court to reform or construe the interest within RAP limits to effectuate the transferor’s general intent as nearly as possible.

## Conclusion

The appellate court concluded that Walker’s long-term “James Madison Fund” plan was not charitable because it sought to distribute wealth to individuals rather than accomplish a legally charitable public purpose; as a noncharitable disposition it violated the rule against perpetuities, requiring reversal and remand for the probate court to consider statutory reformation under Tex. Prop. Code § 5.043 to approximate Walker’s general intent within RAP constraints.


Marsh v. Frost Nat'l Bank, 129 S.W.3d 174 (Tex. App.—Corpus Christi–Edinburg 2004, pet. denied)