
93 S.E.2d 607 (1956)
244 N.C. 345
Paul H. RIDGE, as Executor of the Estate of Lottie Rascoe McMillan Ivey,
v.
Virginia Fitch BRIGHT and Investors Mutual, Inc.
No. 738.
Supreme Court of North Carolina.
June 26, 1956.
*610 Long, Ridge, Harris & Walker, Graham, for appellant.
Sanders & Holt, Burlington, for appellee Virginia F. Bright.
Brooks, McLendon, Brim & Holderness, Hubert B. Humphrey, Jr., Greensboro, for appellee Investors Mutual, Inc.
DENNY, Justice.
It is not contended that the instrument under consideration was executed in the manner required by law so as to be valid as a testamentary disposition of the shares of stock involved. Consequently, the question to be determined is whether the instrument created a valid inter vivos trust which entitled Virginia Fitch Bright to the stock upon the death of the settlor-trustee, Lottie Rascoe McMillan Ivey. However, in making this determination we must consider (1) whether upon the execution of the so-called trust instrument, the defendant, Virginia Fitch Bright, acquired an interest in the subject matter of the trust; or (2) whether the settlor retained such control over the subject matter of the trust as to render it invalid as a trust but only an attempted testamentary disposition.
The appellant contends that the instrument under consideration is invalid because under our decisions, Speight v. Speight, 208 N.C. 132, 179 S.E. 461, Nixon v. Nixon, 215 N.C. 377, 1 S.E.2d 828, and Woodard v. Clark, 236 N.C. 190, 72 S.E.2d 433, a limitation over, after a life estate, in personal property is void. While we do not concede that these cases are controlling on the facts in this case, it is well to note that the restriction upon the right to create a remainder in personal property after a life estate by deed, or other written instrument, has been eliminated by Section 1, Chapter 198 of the Session Laws of 1953, codified as G.S. § 39-6.2, which reads as follows: "Any interest or estate in personal property which may be created by a last will and testament may also be created by a written instrument of transfer."
In creating an inter vivos trust, the creator and the trustee may be one and the same person. Bogert on Trusts and Trustees, Volume 1, section 41, page 270; Scott on Trusts, Volume 1, section 18, page 143; Restatement of the Law on Trusts, Volume 1, section 18, page 68; 90 C.J.S., Trusts, § 210b, p. 137; 54 Am.Jur., section 116, page 101. Likewise, in creating a trust inter vivos, "where there is a completely executed voluntary contract to establish a trust and nothing further remains to be done by the grantor to transfer the title, the relation of trustee and cestui que trust is established and the equitable rights growing out of such conveyance in trust, although made without consideration, will be recognized and enforced, since it is considered as an executed gift, needing no consideration." 89 C.J.S., Trusts, § 28, p. 746 et seq. "Consideration is not necessary to the creation of a trust, or, in other words, consideration is not necessary to a trust that is executed in the sense of being perfectly created, whether by declaration or transfer." 54 Am.Jur., Trusts, section 41, page 51, et seq.
In Bogert on Trusts and Trustees, Volume 1-A, section 202, page 254, et seq., it is said: "The modern law is clearly to the effect that the existence of consideration is not necessary to the establishment of a trust, either by the transfer to a trustee of real or personal property, or by way of declaration of a trust of real or personal property. In order that the trust be enforceable, it is not necessary that there be any transaction which would amount to the giving of consideration if the trustee were treated as a promisor under a contract. *611 It is not an essential feature of the trust creation that the settlor has received a benefit from the trustee, cestui, or another, or that benefits have moved from the settlor, cestui, or another, to the trustee. * * * If the settlor has otherwise effectively completed the trust, the fact that he has received nothing in return for the transfer of the equitable or legal and equitable property interest is immaterial. * * *"
Moreover, when the owner of personal property, in creating a trust therein, constitutes himself as trustee, it is not necessary as between himself and the beneficiary that he should part with the possession of the property. Warner v. Burlington Federal Savings & Loan Ass'n, 114 Vt. 463, 49 A.2d 93, 168 A.L.R. 1265; Cohen v. Newton Savings Bank, 320 Mass. 90, 67 N.E.2d 748, 168 A.L.R. 1321.
As to the reservation of the power to revoke or modify a trust, the general rule in this respect is stated in section 57.1, Scott on Trusts, Volume 1, page 336, et seq., as follows: "It is well settled that the reservation by the settlor of a power to revoke the trust does not of itself make the trust testamentary. It is also settled * * that the reservation by the settlor of a life interest does not make the trust testamentary. Does the reservation of a life interest together with a power of revocation have any greater effect? It seems clear that it does not. If the owner of property transfers it in trust to pay the income to the settlor for life and on his death to pay the principal to others, the settlor reserving also power to revoke the trust at any time as long as he lives, it is held that the trust is not testamentary." The foregoing view is supported by almost countless decisions, among them we cite: Becker v. St. Louis Union Trust Co., 296 U.S. 48, 56 S. Ct. 78, 80 L.Ed. 35; United Bldg. & Loan Ass'n v. Garrett, D.C., 64 F.Supp. 460; Cleveland Trust Co. v. White, 58 Ohio App. 339, 16 N.E.2d 588, affirmed 134 Ohio St. 1, 15 N.E.2d 627, 118 A.L.R. 475; Cohen v. Newton Savings Bank, supra; National Shawmut Bank of Boston v. Joy, 315 Mass. 457, 53 N.E.2d 113; Farkas v. Williams, 5 Ill.2d 417, 125 N.E.2d 600; Pinckney v. City Bank Farmers Trust Co., 249 App.Div. 375, 292 N.Y.S. 835; In re Sheasley's Trust, 366 Pa. 316, 77 A.2d 448; In re Shapley's Deed of Trust, 353 Pa. 499, 46 A.2d 227, 164 A.L.R. 877; Goodrich v. City National Bank, 270 Mich. 222, 258 N.W. 253; In re Brunswick's Estate, 143 Misc. 573, 256 N.Y.S. 879; Witherington v. Herring, 140 N.C. 495, 53 S.E. 303; Annotation 32 A.L. R.2d 1270 et seq.
In the last cited case, Clark, C. J., said [140 N.C. 495, 53 S.E. 304]: "`A power of revocation may, however, be reserved and is perfectly consistent with the creation of a valid trust. If never exercised during the lifetime of the donor and according to the terms in which it is reserved, the validity of the trust remains unaffected.' 28 A. & E. Enc. (2 Ed.), 900, 950; Stone v. Hackett, 12 Gray (Mass.) 227; Kelley v. Snow, 185 Mass. 288, 70 N.E. 89; 1 Beach, Trusts, § 81, and cases cited." Waldroop v. Waldroop, 179 N.C. 674, 103 S.E. 381; Shannonhouse v. Wolfe, 191 N.C. 769, 133 S.E. 93; King v. Richardson, 4 Cir., 136 F.2d 849.
Also in the case of Farkas v. Williams, supra, the Supreme Court of Illinois held the identical declaration of trust which is involved in this appeal, to be a valid inter vivos trust.
It is further said in the above cited section in Scott on Trusts, that "It is immaterial whether the settlor reserves simply a power to revoke the whole trust at one time or whether he reserves also a power to revoke the trust as to any part of the property from time to time." Bear v. Millikin Trust Co., 336 Ill. 366, 168 N.E. 349, 73 A.L.R. 173; Jones v. Old Colony Trust Co., 251 Mass. 309, 146 N.E. 716; Goodrich v. City National Bank Leahy v. Old Colony Trust Co., 326 Mass. 49, 93 N.E.2d 238, 18 A.L.R.2d 1006.
It seems to be the generally accepted view, however, that where the settlor or *612 creator purportedly transfers property in trust, and reserves not only a life estate therein but also the power to control the trustee as to the details of the administration of the trust, the purported trustee is a mere agent of settlor and there is no valid inter vivos trust, and the disposition insofar as it is intended to take effect after his death, is testamentary and is invalid unless the requirements of the statutes relating to the execution of wills are complied with. Restatement of the Law on Trusts, Volume 1, section 57(2), page 175; Application of Cerchia, 279 App.Div. 734, 108 N.Y.S.2d 753; In re Tunnell's Estate, 325 Pa. 554, 190 A. 906; Burns v. Turnbull, 266 App.Div. 779, 41 N.Y.S.2d 448; Atlantic Nat. Bank of Jacksonville, Fla. v. St. Louis Union Trust Co., 357 Mo. 770, 211 S.E.2d 2.
The appellant insists that the case of Application of Cerchia, supra, is on all fours with the case under consideration. We do not so construe it. While the opinion does not contain a copy of the writing interpreted by the New York Court, the Court does state, "The writing relied upon as creating a trust of the securities does not accomplish that purpose. It manifests no intention on the part of the settlor to impose any enforceable duties upon himself as trustee. In the absence of such an intention no trust is created. Restatement, Trusts, Sec. 25." We interpret section 25 of the Restatement of the Law on Trusts, Volume 1, page 76, et seq., which is the only authority cited in the opinion, to mean that mere precatory words, generally speaking, are not sufficient to manifest an intention to create a trust.
There can be no doubt about the intention of the settlor, Lottie R. McMillan, to create a trust with her niece Mrs. Virginia F. Bright as the beneficiary thereof. She caused the certificate representing the stock to be issued by the defendant corporation, Investors Mutual, Inc. to herself as trustee for the named beneficiary. She then declared the terms and conditions upon which she would hold the stock and any additional stock resulting from reinvestment of cash dividends upon such original or additional shares. The terms and conditions do not provide for her to hold title to the securities individually as settlor, but as trustee. Farkas v. Williams, supra. We think this trust instrument, when rightly construed, means (1) that during her lifetime as trustee she was to pay to herself individually, for her own personal account and use, the cash dividends paid on the stock. However, if she, as trustee, purchased additional stock by reinvesting the case dividends, such stock was to become a part of the principal of the trust and subject to its terms; (2) that upon her death, the legal title to all stock held in the trust was to pass to the beneficiary; (3) that during her lifetime she reserved to herself not individually but as trustee, the right to vote, sell, redeem, exchange, or otherwise deal in or with the stock subject to the trust, and upon the sale or redemption of such stock or any part thereof, the trust was to terminate as to the stock sold or redeemedthat is, such stock was to be free of the trust and she was to have the right to retain the proceeds from the sale or redemption thereof for her own personal or individual account or use; and (4) the settlor reserved the right to change the beneficiary or revoke the trust. But no change of the beneficiary or revocation of the trust, except the death of the beneficiary before the death of the settlor, was to be effective as to the Company for any purpose unless or until written notice thereof in such form as the Company might prescribe was delivered to the Company at its Minneapolis office.
It is stipulated that the settlor never changed the beneficiary, withdrew, sold, redeemed, exchanged or otherwise dealt with the trust property (except to receive and use the cash dividends paid on the stock and possibly exercise voting rights), or revoke or otherwise terminate the trust unless the execution of her last will and testament constitutes a revocation.
The fact that the legal title to the stock held in trust was not to pass to the beneficiary until the death of the settlor, did not make the instrument testamentary. *613 The view generally accepted with respect to such reservations as those outlined above is stated by Bogert on Trusts and Trustees, with numerous supporting authorities, in Volume 1, section 103, page 481, et seq. as follows: "The grantor frequently provides that he shall be entitled to possession of the res for his life, or shall be a life beneficiary of the trust created, and reap the profits through the trust. Neither of these clauses shows an intended will. While they express desire that the ultimate cestuis shall not possess and enjoy until after the death of the grantor, they do not exclude the immediate transfer of a nonpossessory interest.
"Neither the reservation of a power to revoke the trust and take back the res, nor the retention of a power to modify the trust and change the beneficiaries, makes the document testamentary (citing among other cases Thompson v. McDonald, 22 N.C. 463). These clauses are held to show merely that the present interest passing to the cestuis is subject to divestment at the hands of the grantor. They do not prove that no interest passes immediately to the cestuis.
"A trust is not made testamentary by the coupling together of a life interest in the settlor and a power in him to revoke or by the joinder to these two factors of the power to alter the trust."
We concede that in a trust where the settlor is also thetrustee, it is difficult to determine whether the trustee is acting as an individual or as trustee in determining when to sell or redeem the stock held in the trust or any part thereof. Even so, if it be conceded that the settlor and not the trustee was the movant in causing the exercise of such power, had the power been exercised, such action would not represent any greater reservation of power in the settlor than the unqualified power to revoke the trust. Cramer v. Hartoford-Connecticut Trust Co., 110 Conn. 22, 147 A. 139, 73 A.L.R. 201; Wilson v. Fulton Nat. Bank, 188 Ga. 691, 4 S.E.2d 660; Bear v. Millikin Trust Co., supra; Jones v. Old Colony Trust Co., supra; In re Shapley's Deed of Trust, supra; National Shawmut Bank of Boston v. Joy, supra. And, as heretofore pointed out, such latter reservation is not fatal to an inter vivos trust.
The facts in the case of Wescott v. First & Citizens Nat. Bank, 227 N.C. 39, 40 S.E.2d 461, 463, cited by the appellant, are distinguishable from those in the instant case. There, this Court held, and properly so, that "there was no evidence of a transfer or assignment of a present beneficial interest in the fund deposited in the defendant Bank."
It is further contended that the last will and testament of Lottie Rascoe McMillan Ivey revoked the trust involved herein. We do not concur in this view. In the absence of the reserved right to revoke an inter vivos trust by will, the mere fact that the settlor makes a will and devises or bequeaths property to the beneficiary of the trust, the will does not revoke the trust. A will does not become effective until death, while ordinarily the power to revoke a trust, unless the trust instrument provides otherwise, must be exercised before the death of the settlor. Witherington v. Herring, supra; Leahy v. Old Colony Trust Co., supra; Gray v. McCausland, 314 Mass. 743, 51 N.E.2d 441, 149 A.L.R. 1059; National Shawmut Bank of Boston v. Joy, supra; Brown v. International Trust Co., 130 Colo. 543, 278 P.2d 581; In re Lyon's Estate, 164 Pa.Super. 140, 63 A.2d 415; Mayer v. Tucker, 102 N.J.Eq. 524, 141 A. 799.
We hold the instrument under consideration created a valid inter vivos trust, and upon the death of the settlor the 234.742 shares of the capital stock of Investors Mutual, Inc., became the absolute property of the beneficiary, Mrs. Virginia F. Bright, she being one and the same person as the defendant Virginia Fitch Bright.
The judgment of the court below is affirmed.
Affirmed.
