Virginia Gibbons, et al. v. Dawn Royston Cole, et al.

Trust Distribution - On 31 December 1935, John Gibbons, Sr. ("Gibbons") created an irrevocable inter vivos trust for the benefit of his wife, Virginia Ware Gibbons, their four children, and "their successors." The trust provisions directed the trustee Wachovia Bank to distribute income to Gibbons' wife and their children during their lives. The trust further created a contingent remainder interest in the trust principal to those surviving "issue" or "descendants" of Gibbons' children per stirpes at the time of final termination and distribution of the trust. The trust instrument provided that the trust would terminate and the principal would be distributed to the surviving "issue" or "descendants" after the death of the "last survivor of Grantor's wife and children hereinabove named and when the youngest living grandchild of the Grantor shall attain the age of twenty-one (21)years." The trust instrument made no mention of adopted children or grandchildren. In 1947, one of Gibbons' daughters, Virginia Gibbons Royston, adopted defendants Dawn Royston Cole and Philip Royston. According to plaintiffs, after Virginia adopted Cole and Royston, Gibbons gave "a substantial gift of stock" to Virginia for the benefit of Cole and Royston. Gibbons died on 27 December 1962. All of Gibbons' grandchildren, natural and adopted, reached 21 years of age and Gibbons' last surviving child died on 2 February 1998, triggering termination of the trust. On 20 November 1997, Gibbons' four natural grandchildren filed a declaratory judgment action, requesting the court to enter an order declaring that the adopted grandchildren, defendants Cole and Royston, are not entitled to share in the distribution of the trust. Defendants Cole and Royston moved to dismiss, requested judgment on the pleadings, and moved to strike the portions of plaintiffs' complaint that referred to the alleged gift of stock to Virginia Gibbons Royston. Defendant trustee Wachovia Bank agreed not to distribute the trust corpus until the trial court determined whether defendants were entitled to share in the distribution.

Defendant's Verdict - The trial court granted defendants' motions to strike and for judgment on the pleadings, concluding that they were entitled to share in the distribution of income and principal of the trust. Additionally,the trial court entered a final order granting defendants' attorneys fees motion.

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Affirmed in part and vacated and remanded in part by the Court of Appeals of North Carolina. See 834 S.E.2d 834 (N.C.App. 1999). Note that the above cited date is the date of the appellate decision and not the trial date. Reported by C.H.