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BENSON ESTATE (12/20/71)

decided: December 20, 1971.

BENSON ESTATE


Appeal from decree of Court of Common Pleas, Orphans' Court Division, of Montgomery County, No. 69453, in re Estate of Mary Pew Benson, deceased.

COUNSEL

Stephen H. Hutzelman, Attorney, Tax Division, with him Meyer Rothwacks, Crombie J. D. Garrett, Attorneys, Tax Division, Johnnie M. Walters, Assistant Attorney General, Barry W. Kerchner, Assistant United States Attorney, and Louis C. Bechtle, United States Attorney, for appellant.

Cuthbert H. Latta, with him M. Paul Smith, Stanley B. Cooper, Smith, Aker, Grossman & Hollinger, Drinker, Biddle & Reath, and Waters, Fleer, Cooper & Gallager, for appellees.

Bell, C. J., Eagen, O'Brien, Roberts, Pomeroy and Barbieri, JJ. Opinion by Mr. Justice Roberts. Mr. Chief Justice Bell took no part in the decision of this case. Mr. Justice Jones took no part in the consideration or decision of this case. Dissenting Opinion by Mr. Justice Pomeroy. Dissenting Opinion by Mr. Justice Barbieri.

Author: Roberts

[ 447 Pa. Page 64]

A controversy concerning the provisions of the deed of trust of Joseph N. Pew, Jr., presents us with the narrow but always perplexing question of whether the trust instrument created vested or contingent interests in each of the settlor's four children if and when they attained the age of thirty-two. We hold the interests vested.

Joseph N. Pew, Jr., created several inter vivos trusts on June 1, 1932, which he funded with 42,000 shares of the common stock of the Sun Oil Company. The settlor, inter alia, directed the trustees to hold 30,000 shares for the benefit of his wife, Alberta H. Pew, during her lifetime.*fn1 Mrs. Pew was to receive a guaranteed annual income of $30,000, and if the net income from the trust was insufficient, other action was to be undertaken to ensure Mrs. Pew the requisite amount of income.

The remainder interest subject to Mrs. Pew's life estate was described in the trust instrument as follows:

"3. Upon the death of my said wife, Alberta H. Pew, I order and direct said Trustees to divide the said

[ 447 Pa. Page 65]

Thirty thousand (30,000) shares of the Common Stock of said Sun Oil Company, or such other stocks, money or securities which shall be derived from the sale, exchange or investment of any proceeds received from the sale or exchange of said stock, or such other stock or securities, into four equal parts or shares, one such equal part or share to be held for my daughter, Mary Caven Pew [the decedent, Mary Pew Benson], one such equal part or share thereof to be held . . . [for each of the settlor's other three children] under the terms and conditions herein set forth.

"As to the shares or parts herein directed to be held for my daughter, Mary Caven Pew, my son, Joseph Newton Pew, 3rd, my daughter, Alberta Hensel Pew and my daughter, Eleanor Glenn Pew, I order and direct said Trustees to pay over for his, her or their support, maintenance and education any and all cash dividends or interest when and as the same shall be received from their respective shares or parts until each respectively shall attain the age of twenty-four years, and when he or she shall attain the age of twenty-four years to pay over to him or her Twenty percentum (20%) of the principal of his or her share or part, absolutely, and thereafter to pay over unto him or her any and all cash dividends or interest from the balance of his or her share or part until he or she shall attain the age of twenty-eight years, and when he or she shall attain the age of twenty-eight years to pay over to him or her Thirty percentum (30%) of his or her share or part, absolutely, and thereafter to pay any and all cash dividends or interest from the balance thereof until he or she shall attain the age of thirty-two years, and when he or she shall attain the age of thirty-two years to pay over to him or her the balance or Fifty percentum (50%) of the principal of his or her said share or part, and any accumulated income, absolutely. If either of

[ 447 Pa. Page 66]

    my said children, Mary Caven Pew, Joseph Newton Pew, 3rd, Alberta Hensel Pew or Eleanor Glenn Pew, shall die before attaining the age of twenty-four years, twenty-eight years or thirty-two years, as the case may be, leaving child or children him or her surviving, then during the minority of his or her child or children, I order and direct said Trustees to pay over, in equal shares, for the support, maintenance and education of his or her child or children as shall be living, any and all cash dividends or interest on such portion of the fund as their parent would have been entitled to receive the cash dividends or interest therefrom, if living, and upon his or her child or children attaining the age of twenty-one years to divide in equal shares and pay over the principal and any accumulated income thereof to and among his or her child or children as shall then be living, absolutely. If either of my said children, Mary Caven Pew, Joseph Newton Pew, 3rd, Alberta Hensel Pew or Eleanor Glenn Pew, shall die before he or she shall attain the age of twenty-four years, twenty-eight years or thirty-two years, as the case may be, leaving no child or children him or her surviving, then his or her share or the balance thereof shall be equally divided between all of my children, Mary Caven Pew, Joseph Newton Pew, 3rd, Alberta Hensel Pew, or Eleanor Glenn Pew, as may then be living, or their survivor or survivors, and shall form part of his or her share of said principal of said Trust, and any and all cash dividends or interest and the principal thereof shall be paid to him or her in the same manner as the cash dividends or interest and principal of his or her share of said principal shall be paid, as herein provided."

The settlor's daughter, Mary Pew Benson, died on November 28, 1964, at the age of forty-seven. Her will directed that her estate be divided into three equal shares and distributed to her husband, Richard Benson,

[ 447 Pa. Page 67]

    and her two daughters, Mary Benson Booth and Ethel Benson Wister. The will was probated on December 8, 1964.

After the filing of the original inventory listing assets valued at approximately $2,420,000, the Internal Revenue Service asserted the decedent's gross estate also included a vested remainder interest in the trust created by her father. The executor consequently filed a supplementary inventory listing the remainder as an asset of the estate and also submitted a first and final account in which he charged himself with the remainder interest. The decedent's daughters took exceptions to both the inventory and the account. The United States and the Commonwealth of Pennsylvania intervened respectively on January 23, 1969 and March 28, 1969.*fn1a

Preliminarily, the United States*fn2 filed objections challenging the jurisdiction of the orphans' court which were dismissed on May 23, 1969. See Benson Estate, 19 Fiduc. Rep. 417 (Mont. Co. O.C. 1969). An appeal was taken to our Court but later was withdrawn before argument.

The issue concerning the nature of the decedent's interest in the Pew Trust was then passed upon by the orphans' court on September 24, 1970. Stressing that the decedent had achieved the age of thirty-two and ...


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