Summary
In Central National Bank v. McMunn, supra, there was a complicated and ambiguous will in which no express provision was made for the exact event which occurred.
Summary of this case from Howland v. FoundationOpinion
No. 689952
Decided July 27, 1967.
Trusts — Annuity payable therefrom — Death of beneficiary — Accrued income apportioned — Passes to beneficiary's estate — Gifts by implication — Intestate property.
1. An annuity payable out of a trust estate is apportioned where the annuitant dies in the interval between the payment dates.
2. When general intention of testator is clear, but he has failed to make express provision for a certain contingency which occurs, courts will not hesitate to imply a gift in order to effectuate his intent.
3. A person may be said to die intestate as to that part of his property which he does not dispose of by his will.
Messrs. Squire, Sanders Dempsey for plaintiffs, Central National Bank of Cleveland and Ernest C. Dempsey, Trustees.
Messrs. Thompson, Hine Flory for defendants, Brooks Gifford, Executor of the estate of Louis A. Pierrong, deceased, and Jeanne Milner Pierrong. Messrs. McAfee, Hanning, Newcomer, Hazlett Wheeler for defendants, Arthur Fuller Smith and Antoinette Fuller McMunn.
Messrs. Arter, Hadden, Wykoff Van Duzer for defendant, Antoinette Virginia Pierrong Wood.
Messrs. Nixon, Hargrave, Devans Doyle for defendant, Michelle Pierrong Hawks.
Messrs. Kiefer, Waterworth, Hunter Knecht for defendants, F. Estelle Howard, Mae M. Kaplow, Teresa R. Noack, Paul H. Mead, Carl Kaplow, Carole Lou Kaplow, Angela M. Noack, Guardian of Gary Noack and Todd Noack, minors, Mercedes F. Deiz, agent for the heirs of John C. Mead, deceased, and Joshua B. Waterworth.
This is an action for construction of the will of Horace A. Fuller, and for a declatory judgment relating thereto. The action is brought by the successor trustees under Item V of Mr. Fuller's will.
Mr. Fuller executed his will on September 26, 1921. He died on February 28, 1924. He was survived by his widow, Alice I. Fuller; by his daughter, now Mrs. Antoinette Fuller McMunn; and by her three children (the testator's grandchildren), Elizabeth Fuller Pierrong, Louis Almon Pierrong, Jr., and Antoinette Virginia Pierrong Wood. He was also survived by an adopted daughter, since deceased, but her heirs and legatees have no present or potential interest in the trust estate which is the subject matter of this action.
On May 13, 1925, a second son, Arthur Fuller Smith, was born to Antoinette Fuller McMunn (then Smith). He is the only child born to her after the execution of Horace A. Fuller's will and after his death.
Alice I. Fuller, the testator's widow, died on October 13, 1952.
The only part of Mr. Fuller's will with which we are concerned is Item V, by which he created a trust of the residue of his estate for the immediate benefit of his wife, daughter, and grandchildren.
In the year 1950 the present plaintiffs brought an action in the Court of Common Pleas of Cuyahoga County (No. 650,589) to construe certain parts of Mr. Fuller's will. A journal entry in that action was filed on October 6, 1954, and no further proceedings were taken. Where pertinent, the findings and decree in that action are binding on the parties to the present action.
The present controversy arises by reason of the death on November 30, 1965, of Elizabeth Fuller Pierrong, domiciled in the County of Los Angeles, California. She never married, and died without issue, leaving a will.
I
Under Mr. Fuller's will, as implemented by the journal entry of the Court of Common Pleas in 1954, the trustees set aside a one-fourth part of the residuary trust estate for the benefit of Elizabeth Fuller Pierrong. From the income of this "share" in the trust estate, she was entitled to receive $7,500 per fiscal year during her lifetime, the balance of the income to be paid to her mother, Antoinette McMunn. The fiscal year commenced on October 13, 1952, the date of Mrs. Fuller's death. Income payments to Elizabeth were to be made in monthly or quarterly installments as determined by the trustees. See Items V(c) and V(f) of the will; findings (4) and (5) in the journal entry; and paragraph (4) of the decree contained in the journal entry.
Plaintiffs allege that they have made the income payments as specified.
Elizabeth having died on November 30, 1965, plaintiffs want to know what amount of income from Elizabeth's trust is due her estate for the fiscal year commencing October 13, 1965.
Had Elizabeth been a life beneficiary of all or a fractional part of the income from her trust, her estate would be entitled to the net income (all or fractional) accruing from the date of the last payment to the date of her death. See 3 Scott, Trusts (2d ed.) Section 238; 1 Restatement 2d, Trusts, Section 238 and Comments a and b thereof.
However, in the case of an annuity, such as the $7,500 per annum, this is not the proper computation.
Indeed, there is even authority for the view that if the annuitant dies between payments, his estate is not entitled to any part of the annuity accruing after the last previous payment; in other words, that there can be no apportionment in case of death between payment dates. 1 Restatement 2d, Trusts, Section 238, Comment c and Illustration 3.
The harshness of this view has been mitigated in many states by statute. Moreover, as pointed out by Professor Scott, whatever may be the rule as to annuities created by contract, there is no good reason why an annuity payable out of a trust estate should not be apportioned. In Professor Scott's words:
"Surely it would be more in accordance with the purpose of the settlor in creating the trust to permit apportionment where the annuitant dies in the interval between the payment dates." 3 Scott, Trusts (2d ed.), Section 238, page 1855.
I agree with Professor Scott and hold that the annuity should be apportioned. The $7,500 per fiscal year constitutes the annual rate of the annuity.
Since forty-nine days of the fiscal year had elapsed at the time of Elizabeth's death, her estate is entitled to forty-nine three hundred and sixty-fifths of $7,500, which, according to my computation (confirmed by others), is $1,006.85.
There is no justification for a contention that her estate is entitled to more than this proportionate share.
II
From what has been said, it is apparent that Elizabeth's right to $7,500 per year was to continue only during her life. Indeed, in finding number (4), the Court of Common Pleas states expressly that Elizabeth has a life interest in the income from her share of the trust estate to the extent of $7,500 per fiscal year during the lifetime of Mrs. McMunn.
It is rather puzzling, therefore, to find that in paragraph (4) of its decree, the Court of Common Pleas directs the trustees to pay to Elizabeth, while she is living, "or to her * * * successors, heirs, legatees or assigns," the aforesaid $7,500 per fiscal year. Plaintiffs want to know what this means. Who are these "successors, heirs, legatees or assigns"?
There is no contention that Elizabeth ever assigned all or part of her right to this income, so we may dismiss the word "assigns." Turning to the word "heirs," there cannot be an heir to a life estate, because when the life beneficiary dies, the life estate ends. For the same reason, it is impossible for a person having only a life estate to bequeath it by will. This eliminates the word "legatees." As will be shown, Elizabeth had no power of appointment; consequently, she could not dispose of either principal or income by that means, assuming that the word "legatee" includes the donee of a power.
We are left, then, with the word "successors." Had Mr. Fuller's will provided that after Elizabeth's death, the $7,500 per fiscal year should be paid to some other person, such person might properly be called a successor to Elizabeth's right to this income. Whether the will did so provide will be considered in connection with the next division of this opinion, which will deal with the disposition of the principal and income of Elizabeth's trust as a whole. For the purpose of the present issue, it is sufficient to state that Mr. Fuller's will does not designate a successor to the $7,500 per year received by Elizabeth during her life.
For the above reasons, I hold that there are no "successors, heirs, legatees or assigns" entitled to receive this $7,500 per year after the death of Elizabeth. This part of the income loses its identity as a separate gift and becomes absorbed in the income as a whole.
III
Thirdly, plaintiffs ask instructions as to the person or persons entitled to receive the principal of the trust held under Item V for the benefit of Elizabeth Fuller Pierrong when such trust terminates and becomes distributable, which plaintiffs assume is not until the death of Antoinette Fuller McMunn, testator's daughter.
At this point a brief outline of certain parts of the will and the 1954 journal entry will be helpful.
I have already noted that a one-fourth part of the residuary trust property was set aside for Elizabeth's benefit. Similarly, a one-fourth "share" was set aside for each of the other grandchildren. Originally, in Item V(c) of the will, the testator named only his three grandchildren then living, Elizabeth, Louis, and Antoinette Virginia. This item deals with the $7,500 per year net income for each of these grandchildren, as explained in connection with Elizabeth's share of the trust estate. Item V(d) added another $7,500, and no more, to be held for any other child or children of testator's daughter, Antoinette, born subsequently but before the attainment by Louis of age twenty-five. Arthur Fuller Smith is the only grandchild in this category.
In each of the shares, net income in excess of the $7,500 per fiscal year was to be paid to Antoinette (Mrs. McMunn) during her lifetime, with the exception stated hereinafter.
By Item V(e), upon Louis' reaching twenty-five, one-half of his share of the trust estate was to be transferred to him as his own property, and at thirty-five, the other half. This has been done.
This item also provided that the entire net income from the one-half retained in trust between ages twenty-five and thirty-five should be paid to Louis. Hence, from the time Louis reached twenty-five, his mother no longer received any income from Louis' share of the trust. And when he reached thirty-five, the share was completely terminated.
In its finding number (3), the Court of Common Pleas held that Arthur had a vested interest in his one-fourth share of the principal, subject to postponement of possession and to the continuance of the trust during the life of his mother. Upon her death, said the court, he will be entitled to possession of his share, since his trust is a "dry" one and thus terminable.
In finding number (4), the Court of Common Pleas held that the principal of each granddaughter's share was to be held in trust during her lifetime. In paragraph (5) of its decree, the court stated that it was refraining from making any order with respect to the distribution of the principal of the trusts for these granddaughters after their respective deaths and the death of their mother.
We are now ready to look at the portions of the will dealing directly with the distribution of the principal of Elizabeth's share in the trust estate.
The first sentence of Item V(g) of the will provides that in the event of the marriage of a grandchild, testator authorizes such grandchild to dispose of his or her entire interest in the trust estate, both income and principal.
Counsel concede that an unmarried grandchild has no power of appointment, and this appears to me to be the only possible interpretation of the sentence. Inasmuch as Elizabeth did not marry, she had no power of appointment over her share in the trust estate, and it cannot pass by her will even though she intended to include it.
The next sentence of clause (g) is equally inapplicable. It provides that if a grandchild dies leaving issue, the share shall vest in the issue.
Immediately following the above is the first paragraph of Item V(h), stating that if either granddaughter dies "intestate and without issue," one-half of the share of such deceased granddaughter is to be paid to Louis directly. (Had Louis' trust still been in existence, the one-half share would have been held in trust for Louis.)
Because of Louis' death on February 15, 1966, his interest, if any, in Elizabeth's share will become a part of his estate, which is being administered in the County of Santa Barbara, California.
Clause (h) continues:
"The remaining one-half (1/2) of said trust estate of such deceased granddaughter shall continue to be held by the said Trustees * * * for the benefit of my surviving granddaughter and the income therefrom paid to her in accordance with the terms and conditions of this will governing her share of said trust estate."
We are faced, then, with the question whether Elizabeth, who died without issue, died "intestate."
As stated previously, she left a will. For that reason, argue counsel for Arthur Fuller Smith and Mrs. Antoinette McMunn, she cannot be said to have died intestate. Opposing counsel argue that even a person who leaves a will may be considered as dying intestate as to property undisposed of by the will. I have no difficulty in going along this far with opposing counsel. See Estate of Baird (1955), 135 Cal.App.2d 333, 287 P.2d 365; companion case, 120 Cal.App.2d 219, 260 P.2d 1052 (1953); In re Terwilligar's Will (Surr.Ct. 1929), 237 N. Y. Supp. 390, at 408; Bradford v. Leake (1911), 124 Tenn. 312, 137 S.W. 96; Foreman v. Medina County Nat. Bank (1928), 119 Ohio St. 17, 162 N.E. 42; 17 Ohio Jurisprudence 2d, Descent and Distribution Section 21. The cases of Smith v. Hunter (1912), 86 Ohio St. 106, 99 N.E. 91, and Sommers v. Doersam (1926), 115 Ohio St. 139, 152 N.E. 387, cited by counsel, are not to the contrary.
When Mr. Fuller made provision for a share of the trust estate in the event of intestacy, he must have meant intestacy as to that share.
Admitting, then, that a person may be said to die intestate as to that part of his property which he does not dispose of by his will, may we go further and say that he dies intestate as to property concerning which he has neither ownership nor a power of appointment?
Counsel for Arthur Smith and Mrs. McMunn state that they have found no case stretching the word "intestate" that far, and that to so hold would, in effect, be amending the testator's will. They argue further that clauses (g) and (h), construed together, show that the testator did not contemplate the possibility that one of his granddaughters might die without ever being married.
As a consequence, counsel argue, the situation actually existing in Elizabeth's case was not provided for in the will, for which reason Commerce National Bank v. Browning (1952), 158 Ohio St. 54, 107 N.E.2d 120 applies. In that case, as in the present one, the residue was divided into a number of shares. The particular portion of the residue in issue consisted of a trust. Whether by mistake or design, the testator made no provision for disposing of the trust remainder under the factual situation which arose, although he made such provision in the event of other contingencies. Recognizing that by the weight of authority a failure to dispose of part of the residuary estate in a certain contingency which has occurred results in its passing as intestate property, the Supreme Court ruled that, instead, it should pass pro rata to the other residuary beneficiaries. This is still the law of Ohio. The syllabus does include, however, the following exceptions:
"* * * except as provided by statute and in the absence of provisions of the will or surrounding circumstances justifying the conclusion that the testator expressed a different intention."
Counsel next state that the application of the rule announced in Browning would be relatively simple if the separate trust estate established for Louis were still held in trust. In such event, they maintain, the rule would require that Elizabeth's trust estate be divided equally among, and added to, the separate trust estates established for Louis, Antoinette Virginia Pierrong Wood, and Arthur Fuller Smith, subject to the life interest of their mother, Mrs. McMunn. But Louis' trust has long since been terminated and the property turned over to his guardian. Nevertheless, counsel contend, the one-third of Elizabeth's trust estate of which Louis is to be the beneficiary should continue to be held in trust for him, or (by reason of his death) his successors in interest, until Mrs. McMunn's death. This is because of her life interest in the trust estate. After her death, counsel say, the corpus of the one-third of Elizabeth's trust estate set apart for Louis, should be distributed to his successors in interest.
If, as counsel claim, the factual situation existing at the time of Elizabeth's death has not been covered either expressly or impliedly by Mr. Fuller's will, then I agree that the Browning decision applies. I agree, too, that the word "intestate," considered alone and out of context, does not cover a situation like Elizabeth's, where she neither owned the corpus of her trust share nor had a power of appointment over it.
But I have deemed it necessary to make an investigation of the law of gifts by implication to see whether the present situation calls for the application of that doctrine.
The creation of future interests by implication is the subject of chapter 27 in the authoritative treatise by Professors Simes and Smith, entitled "The Law of Future Interests" (2 Ed.).
In section 841 the authors point out the two conflicting policies facing the court when the issue of a gift by implication is raised. On the one hand is the desire of the court to carry out what it believes is the subjective intention of the testator. On the other hand, there is the natural reluctance to guess at the testator's intention when he has made no specific provision for the contingency which has arisen.
The presence of facts leading to an inference that the gap in the disposition occurred through inadvertence appears to be a matter of significance. Although in most of the cases, say the authors, the implication of a gift will prevent intestacy, later sections of the work and the cases themselves, show that this is by no means essential. Besides, when Mr. Fuller made his will in 1921, as of which time we consider his intention, the weight of authority would have resulted in an intestacy. And an analogous situation occurs even under Browning, because the disposition is made by law and not by the will.
Section 844 of the Simes and Smith treatise deals with the implication of gifts to complete the "general plan" of the testator. I quote from the section:
"The cases in which the courts have gone furthest in supplying language for the testator are those in which the gift is implied for the avowed purpose of carrying out the `general plan' of the testator. These cases do not fall readily into any pattern, and it is hardly possible to draw any general conclusions from them. The fact situations and the language of the wills may contain almost infinite variations. Nevertheless, a substantial number of cases may be found in which the court has supplied a missing link to complete the disposition of the property in a situation which was not provided for in the will."
I will not burden this opinion by referring to many of the cases cited by the authors. However, a couple of quotations will be enlightening.
"When the reading of a whole will produces a conviction that the testator must necessarily have intended an interest to be given which is not bequeathed by express and formal words, the court will supply the defect by implication, and so mould the language of the testator as to carry into effect as far as possible the intention which it is of opinion that he has on the whole sufficiently declared." Boston Safe-Deposit Trust Co. v. Coffin (1890), 152 Mass. 95, 25 N.E. 30.
Earlier in the opinion the Massachusetts court observed that although courts must not make wills for testators or ascertain their meaning by mere conjecture, "the true meaning of words used is to be arrived at by considering them not only in their relation to the clause immediately in question, but to the whole will." Id., 25 N.E. at 31.
And the fifth headnote in the case of In re Brooks' Estate (Surr.Ct. 1952), 114 N.Y.S.2d 342, reflecting the court's language, reads:
"When general intention of testator is clear, but he has failed to make express provision for a certain contingency which occurs, courts will not hesitate to imply a gift in order to effectuate his intent."
In the Brooks case, the testator made provision for the remainder of a testamentary trust if the life beneficiary was survived by children, but made no express provision in the event of the death of the life beneficiary unsurvived by children. Nevertheless, the court looked at the general scheme inherent in the will, and implied a gift of the corpus.
In a very recent case, the Supreme Court of Ohio has implied a gift for the purpose of completing the general plan of the testator. Casey v. Gallagher (1967), 11 Ohio St.2d 42.
The pertinent part of the case relates to the income from a testamentary trust. The income was divided into three parts, each part payable to a named child of the testator. In case of the death of any of the children leaving a child or children, such child or children took the share of their parent. One of the children died, leaving two children, Angus and John. Subsequently, John died, without issue but testate. Testator's will (the original testator, not his son John) provided that if any of his children died leaving no child or children, his share of the income would go to testator's other children. But testator made no provision at all for the death without issue, prior to the termination of the trust, of a grandchild who had survived his parent.
At page 55, the court stated that the implication to be drawn from the omission is the question:
"Did the testator intend thereby to indicate that each of his grandchildren should take an indefeasible, descendable, devisable interest in income until the termination of the trust, or did he merely fail to foresee and, therefore, fail to provide specifically for this contingency? If the latter, can his intention as to what should happen in this situation be gathered nevertheless from the rest of the will?"
The fifth paragraph of the syllabus gives the rule adopted by the court.
"When a testator's will clearly reveals a general plan or intention as to the disposition of his property, and a situation arises that is not within the express language of the will, such general plan may be regarded as existing but incompletely expressed, and the failure to provide for the situation inadvertent rather than intentional, and a gift may be implied for the purpose of completing the general plan."
See also Teague v. City National Bank Trust Co. (Com. Pl. 1957), 76 Ohio Law Abs 417, 146 N.E.2d 762.
In Item V(h) of his will, Mr. Fuller provided that if either granddaughter died intestate and without issue, one-half of her share would be paid to Louis and one-half held in trust for her surviving sister. Clearly, this provision would apply in the case of a married granddaughter who did not exercise her power of appointment, and thus died intestate as to her share of the trust estate. Is it logical to think that Mr. Fuller intended a different disposition of the trust share merely because the granddaughter was unmarried and therefore had no power to dispose of her share? Certainly he made no different provision for such an eventuality. And it is significant that in this and other similar paragraphs of Item V(h), no one except the three named grandchildren (Elizabeth, Antoinette, and Louis) who were alive when Mr. Fuller made his will, is mentioned as a beneficiary. Grandchildren born after the execution of the will (Arthur Fuller Smith being the only one) are noticeably absent from these provisions.
It appears to me that the testator intended to make the same disposition of a granddaughter's share whether she was married but failed to exercise her power of appointment (thus being technically intestate as to her share) or unmarried and thus without the power to dispose of it. In either event, her share was undisposed of, and that, I believe, is the key to the testator's plan for its disposition.
There is no reason to believe that the testator intentionally omitted to make any provision at all in the contingency which arose but was content to let the law take its course. I think that any gap in this part of the will was inadvertent; that his intention was clear; and that the gap should be filled by applying the doctrine of gifts by implication. I therefore hold that Elizabeth's share of the trust estate shall be disposed of in the same manner as if she had died intestate in the technical sense.
The disposition called for by Item V(h) is that one-half of Elizabeth's share of the trust estate shall be paid to Louis directly (he having received his own share after reaching thirty-five), and that the other half shall continue to be held by the trustees for the benefit of Elizabeth's sister, Antoinette Virginia Pierrong Wood.
However, as indicated previously, counsel for Mrs. McMunn claim that by reason of her life interest, the share which Louis inherited in Elizabeth's trust should continue to be held in trust for him, or, by reason of his death, for his successors in interest, as long as Mrs. McMunn lives.
There is nothing in Item V (h) justifying counsel's position. The language is unambiguous. It is: "shall be paid to him direct in accordance with the terms and provisions of this will governing his share of said trust estate and at the times therein fixed." Those terms are that at thirty-five he becomes the owner of all the property in his share. Thus, according to Item V (h), his estate is now entitled outright to the one-half of Elizabeth's share. Had the testator intended Louis' half of a deceased granddaughter's share to be held in trust, he could very easily have said so, as he did with respect to the other half, and, for that matter, with respect to Louis' half in the event that Louis' own trust estate had not yet been terminated and transferred to him outright.
After carefully studying Item V, I can see nothing in it to offset the above definite provision in favor of Louis.
True, provision is made for payment to Mrs. McMunn, during her lifetime, of the excess income (over the $7,500) from each of the three shares remaining after transfer to Louis of his share at thirty-five. But the definite provisions of Item V (h) have put an end to one-half of Elizabeth's trust share and directed its transfer to Louis as absolute owner.
In so far as the journal entry of 1954 is concerned, it does contain findings that Mrs. McMunn is entitled, during her lifetime, to the aforesaid excess income from the three trust shares, and paragraph (4) of the decree directs the trustees to hold these three shares during the life of Mrs. McMunn, and to pay the excess income to her during her lifetime.
It is apparent, however, that the situation which is before us, namely, the death of a granddaughter while Mrs. McMunn is still alive, was not in issue before the Court of Common Pleas in the 1950 action; and the judgment of that court, regardless of its language, should not be interpreted as embracing the issue before us or binding us with relation to it.
I hold, therefore, that one-half of Elizabeth's share in the residuary trust estate should be transferred to the executor of the estate of Louis Almon Pierrong, Jr.
According to Item V (h), the other half of Elizabeth's trust estate "shall continue to be held by the said Trustees * * * for the benefit of my surviving granddaughter and the income therefrom paid to her in accordance with the terms and conditions of this will governing her share of said trust estate."
As we have seen, the terms and conditions of the share of the surviving granddaughter, Antoinette Virginia Pierrong Wood, are that the first $7,500 per fiscal year of the net income from that share are payable to her and the balance to Mrs. McMunn. After Mrs. McMunn's death, all the net income is payable to Mrs. Wood. The phrase "and the income therefrom paid to her" may be slighty misleading, but taken in connection with the rest of the sentence, becomes clear.
There is no reason to believe that Mr. Fuller intended that during Mrs. McMunn's life any grandchild should receive more than $7,500 per year of net income. Thus, Mrs. Wood is not entitled, during Mrs. McMunn's life, to any greater amount of the net income merely because more trust property is being held for her benefit.
I refrain from any opinion as to what disposition of income or principal is to be made if Mrs. Wood predeceases Mrs. McMunn, as this matter is not "ripe" for decision.
CONCLUSIONS OF LAW
1. The estate of Elizabeth Fuller Pierrong, deceased, is entitled to $1,006.85 out of the net income for the fiscal year commencing October 13, 1965, and ending on October 12, 1966, from the separate trust held for her benefit by plaintiffs as trustees of the residuary trust established under Item V of the will of Horace A. Fuller.
2. Elizabeth Fuller Pierrong was entitled, during her lifetime, to $7,500 per fiscal year out of the net income from the said separate trust held for her benefit. This right ended with her death, and there are no "successors, heirs, legatees or assigns" entitled to it. It therefore loses its identity as a separate part of the trust income.
3. Upon the death of Elizabeth Fuller Pierrong, one-half of the principal of the separate trust held for her benefit became the property of Louis Almon Pierrong, Jr., as absolute owner, and shall now be transferred to the executors of his estate.
4. The other one-half of the principal of the said separate trust previously held for the benefit of Elizabeth Fuller Pierrong shall continue to be held by plaintiffs as trustees, for the benefit of Antoinette Virginia Pierrong Wood, subject to the rights of Antoinette Fuller McMunn, as hereinafter set forth.
5. Except for the fiscal year commencing on October 13, 1965, and ending on October 12, 1966, which will be dealt with in Conclusion of Law No. 6, so long as Antoinette Fuller McMunn and Antoinette Virginia Pierrong Wood are both alive, the entire net income from this one-half of the principal of said separate trust previously held for the benefit of Elizabeth Fuller Pierrong, will be payable to Antoinette Fuller McMunn, in accordance with the provisions of Item V of the will relating to income payments to her. After the death of Antoinette Fuller McMunn, the entire net income thereof will be payable to Antoinette Virginia Pierrong Wood. No opinion is expressed as to what disposition should be made of the income or principal if Mrs. Wood predeceases Mrs. McMunn.
6. For the fiscal year commencing on October 13, 1965, and ending on October 12, 1966, after the payment of $1,006.85 out of the net income of said separate trust previously held for the benefit of Elizabeth Fuller Pierrong, as directed in Conclusion of Law No. 1, one-half of the balance of the net income for said fiscal year shall be paid to the executors of the estate of Louis Almon Pierrong, Jr.; and one-half to Antoinette Fuller McMunn, in accordance with the provisions of Item V of the will relating to income payments to her.
7. Except as provided in Conclusion of Law No. 6, one-half of any net income of said separate trust previously held for the benefit of Elizabeth Fuller Pierrong, accruing since the date of death of Elizabeth Fuller Pierrong, belongs to the estate of Louis Almon Pierrong, Jr., and shall be paid to the executors of that estate along with the one-half of the principal, as provided in Conclusion of Law No. 3.
8. In accordance with paragraph 9 of the Stipulation of Facts, decision has been withheld on the subject of certain alleged assignments by Antoinette Fuller McMunn and Arthur Fuller Smith. These matters are now ready for consideration and may have some effect on the distributions adjudged in the previous Conclusions of Law.