Exercising Limited Power of Appointment in Bad Faith

Surviving spouse, with a limited power of appointment over marital trust, exercised such appointment to the exclusion of one of her three children, to which the excluded child objected, because the surviving spouse had acted in bad faith and did not have the power to exclude her; the court examined PA case law and concluded that a donee (surviving spouse) exercising a limited power of appointment need only act within the language of the power conveyed, which the surviving spouse had.  Zucker Estate, 4 Fid. Rep. 3d 369 (O.C. Montgomery 2014) (Opinion by Ott, J.), aff’d, 122 A.3d 1112, 2015 PA Super 190 (9/8/2015).

[The disposition of this case by the Superior Court is somewhat unusual.   The Superior Court initially affirmed the trial court in a non-precedential opinion, No. 2727 EDA 2014 (Pa. Super 8/5/2015).   On 8/19/2015, one of the prevailing parties, Soctt R. Zucker filed an “Application for Publication of Memorandum Decision.”   On August 25, 2015, the application was granted, and an order entered that the “Memorandum filed August 5, 2015, will be withdrawn and refined as an Opinion in accordance with Superior Court Operating Procedure 65.37(B).”   The resulting opinion was published on 9/8/2015. ]

Trust Modification to Remove Trustee Denied

In denying a petition by the beneficiaries of a trust to modify the trust to allow the beneficiaries to remove and replace the trustee, Judge Herron has confirmed that the provisions of 20 Pa.C.S. § 7140.1 allowing modification of trusts cannot be used to remove a nonconsenting trustee, and that the requirements of 20 Pa.C.S. § 7766 must be satisfied to remove a trustee.  Edward Winslow Taylor, Intervivos Trust, No. 3563IV of 1939 (O.C. Phila. 8/18/14), rev’d, 2015 PA Super 199, No. 2701 EDA 2014 (9/18/2015).

Rule Against Perpetuity and Measuring Lives

The Superior Court, sitting en banc, has reversed the Orphans’ Court of Delaware county in deciding which was the measuring life for purposes of the rule against perpetuities as applied to a 1931 trust under the will of George McFadden.  Finding that the language of the trust was ambiguous, the Superior Court, in a 6-3 decision, decided that the intent of the testator was to perpetuate the trust for as long as then-current law provided.  (The law had changed in 1929.)  The language in question is:

“for the period of twenty-one years after the death of the last survivor of the children and issue of deceased children of mine living at the time of my death.”

Both the Orphans’ Court and the Superior Court found the language to be ambiguous.  The Orphans’ Court concluded that a grandchild could only be a measuring life if the grandchild’s parent (a child of the testator) had predeceased the testator.  All of the testator’s children were alive at his death (although he had two living grandchildren), so the measuring life was the last to die of the testator’s children.  The Superior Court came to the opposite conclusion, meaning the last to die of the grandchildren was the measuring life.  Estate of George McFadden, 2014 PA Super 203 (Super. 2014) (Opinion by Wecht, J., joined by Ford Elliott, P.J.E., Bowes, J., Allen, J., Ott, J., and Stabile, J).

The dissent in the case found the language to be unambiguous, because only issue of deceased children could be measuring lives, and all children survived the testator.  Estate of George McFadden, 2014 PA Super 203 (Super. 2014) (Dissent by Shogan, J., joined by Bender, P.J.E. and Jenkins, J.)

The original three-judge panel of the Superior Court had issued an opinion on December 31, 2013, affirming the Orphans’ Court (the opinion of the Orphans’ Court is attached to the opinion of the Superior Court).  Estate of George McFadden, No. 2872 EDA 2012 (Pa. Super. 2013) (Opinion by Shogan, J., joined by Colville, J.; Wecht dissenting).

 

Challenge to Undated Will Denied

An appeal from the probate of an undated will was denied without prejudice to the filing of a new petition when a later will has been discovered. Williams Estate, 4 Fid.Rep.3d 344 (O.C. Phila. 4/21/2014).

Lack of Standing to Make Claim to Estate

Preliminary objections upheld, because a party who has been held to lack standing to contest a will also lacks standing to claim an interest in estate assets.  Ciuccarelli Estate, 4 Fid.Rep.3d 335 (O.C. Phila. 5/21/2014), aff’d 1251 EDA 2014 (Pa.Super. 12/12/2014) (non-precedential).

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Estate Administration for 18 Years Approved

Surcharge for administration of estate for 18 years denied when real property held by estate was farmed and productive, there was litigation over condemnation of part of the property, there were disagreements among the beneficiaries over whether to sell or distribute the property, and the objectant failed to take action to expedite or compel the conclusion of the estate.  Objections to legal fees and fiduciary fees were also dismissed.  Eiswert Estate, 4 Fid.Rep.3d 323 (Lycoming Co. O.C. 2014).

Change of Situs of Testamentary Trust

Change of situs of a testamentary trust was denied under 20 Pa.C.S. § 7708(c) when all qualified beneficiaries and one trustee consented to the change but one trustee did not consent, but change approved under § 7708(g) when the court found that the changes was “necessary or desirable for the property administration of the trust” because real property owned by the trust was in the other county, the situs of related trusts was in the other county, issues needed to be resolved relating to the administration of all of the trusts, and only the corporate trustee objected to the change.  Warriner Trust, 4 Fid.Rep.3d 317 (O.C. Montg. Co. )

Testamentary Trust of Life Insurance

Person designated as “executor of my estate and insurance” was the trustee who was the life insurance beneficiary described as “trustee(s) or successor(s) as provided in last will” when the will included specific bequests of life insurance proceeds even though the will did not use the words “trust” or “trustee.”  Thomas Will, 4 Fid.Rep.3d 345 (O.C. Phila. 5/12/2014).