Beneficiary’s Child Support to be Paid from Estate

A beneficiary’s court-ordered child support arrearage should be paid from the estate, notwithstanding the spendthift clause in the will, and the children’s mother had no standing to object to the administration of the estate or seek removal of the executor.  A claim for counsel fees was also denied because the attorney failed to perform services in a timely manner.  Estate of Roy A. Creamer, Deceased, No. 911 DE of 2012 (Phila. O.C. 9/30/2014) (audit memorandum of Herron, J.).

Approval of Nonjudicial Settlement Agreement Denied

Judge Herron of the Philadelphia Orphans’ Court has denied approval of a nonjudicial settlement agreement, stating that:

“The intent of this section [7710.1] is to give all beneficiaries and trustees flexibility in the administration of certain trust matters. Seeking court approval of such a nonjudicial agreement would encumber this option. Because there is no need to extend court approval to the proposed nonjudicial settlement agreement, this court declines to do so.”

The failure of the parties to attach a copy of the agreement to their petition also contributed to the judge’s decision.

However, the judge approved the resignation of the trustee and the appointment of a new trustee under 20 Pa.C.S.A. § 7765(a) and 7764(c).

Testamentary Trust of John B. Conti, Deceased, O.C. No. 464 ST of 1982 (Phila. O.C. 9/22/2014)

Vague and Undated Codicil

Decedent executed a will in 1996, consisting of 9 words, date, and signature leaving everything to his mother.  Following his death, another document is found consisting of 12 words (“At the time of my death, the house goes to Sandy Munro”), which is signed but undated, and mother appeals from probate.  Court finds that the additional document is a codicil and that the house refers to the only home or real estate the decedent owned, because decedent and Sandy did not know each other until 2003, meaning the putative codicil was drafted after the will and not vice versa.  Basner Will, 4 Fid. Rep. 3d 375 (OC Chest. 2014) (Opinion by Tunnell, J.)

Objections of Obdurate Beneficiary Dismissed and Costs Assessed

Auditor’s report was affirmed, and objections dismissed, that (a) approved the trustees’ liquidation of some family businesses, notwithstanding precatory language expressing desire that businesses continue under the management and control of testator’s immediate family, (b) relied upon previous findings of fact because objectant was collaterally estopped from relitigating factual issues previously decided, (c) correctly interpreted the pecuniary marital deduction formula in the will, (d) allowed the legal fees incurred by the executors and trustees, including legal fees incurred in recovering assets misappropriated by the objectant, which were not unreasonable given the size of the estate and the complexity of the business interests held by the estate, (e) dismissed an objection to an alleged failure to account for a tractor that was purchased, and (f) assessed half of the attorney’s fees and costs against the “obdurate” and “litigious” objectant.  Mumma Estate, 4 Fid. Rep. 3d 384 (O.C. Cumberland Co. 2014) (Opinion by Oler, J.)

Exhumation for Paternity Testing

Petitioner presented sufficient evidence to show reasonable cause to believe that genetic testing would assist in a determination of paternity, and expert testimony to establish that exhumation of the decedent would provide viable tissue samples for DNA testing.   Fox Estate, 4 Fid. Rep. 3d 380 (O.C. Luzerne Co. 2014)

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).