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22. If the court rules for the daughter, it will be because
The stepson brought an appropriate action against the daughter to determine who was entitled to the net trust estate and thus to Blackacre.
The man died 30 years ago survived by his wife and son. The man had not revoked or amended the trust agreement. A few years after the man's death, his wife remarried. She then had a daughter, was widowed for a second time, and then died last year. Her will contained only one dispositive provision: «I give my entire estate to my daughter, and I intentionally make no provision for my stepson.» The daughter is now 22 years old. The common law Rule Against Perpetuities is unmodified by statute in the jurisdiction. There are no other applicable statutes.
A man's estate plan included a revocable trust established 35 years ago with a bank as trustee. The principal asset of the trust has always been Blackacre, a very profitable, debt-free office building. The trust instrument instructs the trustee to pay the net income to the man for life, and, after the death of the man, to pay the net income to his wife for life; and, after her death, to distribute the net trust estate as she may appoint by will, or in default of her exercise of this power of appointment, to the man's son (her stepson).
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A is incorrect. The wife does not have merger because the man's trust instrument specifically provided that his son (the wife's stepson) would receive the net trust estate after his wife's death if she did not exercise her power of appointment to devise it away from him. The wife only had a life estate in the trust income and a general power of appointment over the net trust estate upon her death.
B is incorrect. All rights in this case vest at the later of the man's death or his wife's death. Since we need not wait longer than any lives in being for all rights to vest, there is no RAP violation. The trust reserves joint life interests in the income of the trust. Even though this is a revocable trust, the interest of husband and wife to the trust income vested at the time the trust was created (subject to revocation by the man while he was alive). When the man died, his power to revoke terminated and the wife's right to appoint Blackacre in her will to whomever she chose became vested. This interest is not vulnerable to RAP because we will know with certainty whether she properly uses her power to appoint in her will (or not) at the time she dies. Thus all interests will vest at the time the wife dies. [If the husband outlives the wife, the power to appoint in her will would be determined to vest or fail at that earlier time unless he revoked the trust. Even if he revoked the trust, the disposition of Blackacre would be decided upon his death (through his will or intestate) if he had not earlier conveyed it].
D is incorrect. The question asks why, as a legal matter, daughter prevails if the court finds in her favor. The outcome of the court is not predicated on the wife's desires, except insofar as those desires amount to the legal exercise of her power to appoint under the trust. If daughter prevails it is because the power to appoint was lawfully exercised by the wife in her will.