Trustees not Modified Even with Settlor’s Consent

The Superior Court has affirmed a decision of the Orphans’ Court holding that a trust modification that allowed the beneficiaries to remove and replace trustees was ineffective even with the consent of the settlor. Garrison Trusts, 10 Fid.Rep.3d 189 (Montgomery O.C. 2020), aff’d 1429 EDA 2020 (Pa. Super. 9/27/2021) (non-precedential), pet. for appeal, 587 MAL 2021, 588 MAL 2021, and 589 MAL 2021 (Pa. 10/27/2021).

[DBE Comment: These decisions make no sense, because even a material purpose of a trust can be modified, or an otherwise irrevocable trust can be terminated, with the consent of the settlor and all beneficiaries. Both courts thought that they were following the Supreme Court’s decision in Trust under Agreement of Edward Winslow Taylor, 164 A.3d 1147 (Pa. 2017), and a Uniform Law Comment to what was enacted as 20 Pa.C.S. § 7740.1, but the issue in Taylor was an attempted modification by the beneficiaries under subsection (b) and not a modification with the consent of the settlor under subsection (a), and the UTC comment addresses subsection (b) and not subsection (a).]

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