Irving M. Green, Green, Kriss & Ceraso, New Kensington, for appellant.
G. Donald Gerlach, Reed, Smith, Shaw & McClay, Pittsburgh, for appellee.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Roberts and Nix, JJ., concur in the result. Manderino, J., filed a dissenting opinion.
On June 12, 1961, Oliver M. Kaufmann, Jr., created a revocable insurance trust in favor of his children. He amended the distributive article of the trust agreement on August 19, 1963 and again named his children as the principal beneficiaries. Oliver also executed a second amendment on September 18, 1963, to fulfill an obligation which he had undertaken in a divorce settlement agreement with his first wife, Joan Kaufmann. This second amendment required that periodic payments agreed to in the divorce settlement would, to the extent necessary, be satisfied from trust income and assets in the event of Oliver's death. The second amendment further provided that no future amendment or rescission of the paragraph which gave Joan Kaufmann the first claim to the trust income and corpus, would be effective without her prior written approval.*fn1 The remainder of the 1961 trust as amended on August 19, 1963, was reaffirmed. As required by the original trust agreement, Oliver signed and delivered both the first and second amendments to the trustee who accepted them.
Oliver subsequently married Maria M. Kaufmann in 1965. In June, 1969, at Oliver's request, his attorney prepared and forwarded a proposal for a restated insurance trust agreement which contained a marital trust benefitting Maria.
On August 17, 1969, prior to a business trip,*fn2 Oliver drafted, signed and dated the following holographic instrument:
"To who [sic] it may concern I consider the Wills and Trust Agreement drawn by Reed Smith & McClay as Valid even though not signed should anything happen to me."
Oliver prepared this instrument at his home in Palm Beach, Florida. At the time, the proposed agreement was readily accessible to him. Upon returning to Palm Beach, Oliver took the draft agreement and the statement executed on August 17, 1969, to his place of business. There they remained until Oliver's sudden death in an automobile crash on November 20, 1969. The draft agreement remained unsigned despite written inquiries by Oliver's attorney on October 1, 1969.
Pursuant to the trust agreement of June 12, 1961, as amended by the first and second amendments, the trustees received the insurance proceeds and distributed them to separate trusts for Oliver's two children. From December 1969 until March 1972, the trustee disbursed monthly payments to Joan Kaufmann in accordance with the second amendment of September 18, 1963.
On March 28, 1972, the Mellon Bank & Trust Co. as trustee filed two first and partial accounts for the trusts created for Oliver's two children. On May 2, 1972, Maria Kaufmann, the widow of Oliver Kaufmann, Jr., filed exceptions to both accounts. A hearing ...