Getty

This is an appeal by Gordon Peter Getty (Gordon), one of the beneficiaries of an inter vivos spendthrift trust created in 1934, from a judgment in favor of his father, J. Paul Getty, the sole trustee and major income beneficiary of the trust, and the other beneficiaries. The case presents a question of first impression as to whether certain stock dividends were properly allocated to the trust corpus; Gordon also asserts that the ratio of trust assets to which J. Paul Getty’s waiver of income applies was 36 percent of the stock in the corpus of the trust rather than the 20.70776 percent decreed by the court in the settlement of the trustee’s accounts.

We shall set forth the facts relating to each question separately so that the judgment and our basis for affirming it may be more easily understood.

Gordon’s first contention on appeal is that the stock dividends should have been allocated to income. He asserts that: 1) J. Paul was not a trustor; 2) J. Paul’s waiver of the “entire net income” included the stock dividends; and 3) under the Pennsylvania rule in effect in this state at the time of the creation of the trust, stock dividends were to be treated as income.

The…