## Facts

- In 1930, John Ward created an inter vivos trust by deed, transferring securities to a trustee.
- Ward reserved (1) trust income for life and (2) a right to withdraw up to $1,500 per year from principal; the trust corpus at his death was about $32,500.
- The deed also included a broader power to revoke or modify the trust, but it was exercisable only upon specified future events involving the original trustee.
- Upon Ward’s death (about six months later), income was payable to his son, Frank F. Ward, for life.
- After Frank’s death, income was payable to Frank’s lineal descendants per stirpes until the death of Frank’s last surviving child; then the trust would terminate and corpus would pass to designated remaindermen.
- Frank died about 17 years later, survived by his widow, Olive Ward, and three children; Frank’s will left his estate to Olive.
- A substituted trustee petitioned an equity court to construe the trust and determine the validity of the limitations under the Rule Against Perpetuities and the proper distribution after Frank’s death.
- John J. Ryan, as guardian ad litem for minor and unborn descendants, appealed; Olive cross-appealed.

## Issues

1. For Rule Against Perpetuities analysis, is the measuring date the execution/delivery of the trust deed or the settlor’s death because of retained revocation/withdrawal powers?
2. Do the post-Frank limitations (income to lineal descendants until the last surviving child dies, then remainder to named remaindermen) violate the Rule Against Perpetuities?
3. If a later remainder is void for remoteness, may earlier, separable interests (including certain interests of Frank’s children) be preserved?

## Decision

- The court held the Rule Against Perpetuities is applied as of the execution and delivery of the deed; the reserved revocation power did not shift the measuring date to the settlor’s death.
- The court affirmed that the ultimate gifts over to the designated remaindermen were void for remoteness under the Rule Against Perpetuities.
- The court held certain interests for Frank’s children were valid and could stand despite the invalidity of the remote remainder.
- The decree below was affirmed, sustaining the trust to the extent of the valid interests and striking the invalid remainder.

## Legal Principles

- For an inter vivos trust created by deed, perpetuities validity is tested at the time of execution and delivery, even if the settlor retains a power of revocation that becomes exercisable only upon a future contingency.
- An interest is void under the Rule Against Perpetuities if it might vest outside lives in being at the effective date plus the permissible period.
- Invalid remote limitations may be severed so that distinct, independent, and otherwise valid interests are preserved, so long as they can operate consistently with the settlor’s dispositive plan.

## Conclusion

The court measured perpetuities from the trust deed’s execution, invalidated a remainder that could vest too remotely, and preserved separable, valid beneficial interests for Frank Ward’s children notwithstanding the failure of later gifts.


Ryan v. Ward, 192 Md. 342, 64 A.2d 258 (Md. 1949)