Appeal for Denial of Trust Modification

The Pa. Supreme Court is allowing an appeal from a decision of the Superior Court on the following issue (as stated by the petitioner):

Did the Superior Court err by not enforcing modifications to trusts under 20 Pa. C.S.A. §7740.1(a), which were agreed to by both the settlor and all beneficiaries to allow for the replacement of trustees by a majority of beneficiaries after the death of the settlor?

Trust under Deed of Walter R. Garrison, 587 MAL 2021, 588 MAL 2021589 MAL 2021 (5/18/2022).

The Superior Court had 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 Super. 9/27/2021) (non-precedential).

[DBE Comment: As previously noted, the decisions made 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, 640 Pa. 629, 164 A.3d 1147 (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).]

[1/27/2023 Update: The Supreme Court reversed the Superior Court. In re: Trust under Deed of Walter R. Garrison, ___ Pa. ___, ___ A.3d ___, 61 MAP 2022, 62 MAP 2022, and 63 MAP 2022 (1/19/2023).]

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