Part III: Five by Five Clause

Kenneth appealed the trial court's decision stating that Margaret Cairns' intent was to prevent Grant from waiting until "after the close of a year to 'catch up.'" Accordingly, for each year the distribution demand must "be made before the end of the year," and distributions "cannot be 'added to' later."

The Court of Appeal was called upon to interpret the language of the five-or-five provision of the Trust. The Court believes that "the intent of the decedent as expressed in the language of the provision was to authorize Grant to exercise his right to demand principal distributions at any time after the end of a calendar year as long as his demands within the calendar year thereafter do not exceed the specified five-or-five maximum." Therefore, Grant "must make his demands for distributions before the end of the next calendar year after the determination of the value of the principal of the Trust to avoid the ban against non-cumulative distributions "in any calendar year." Based on this interpretation, the Court determined that Grant made a timely and valid request in 2008 for a distribution of Trust principal for the calendar year 2007. Accordingly, the trial court's judgment was affirmed and the costs on appeal was awarded to respondents.

*This blog entry was not written by an Attorney and should not be construed as professional legal advice.

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