No. 80-3-807, Appeal from Decree of Court of Common Pleas of Montgomery County, Orphans' Court Division, entered on October 31, 1980, at No. 58077
Joseph A. O'Connor, Jr., Philadelphia, for appellant.
L. Pierre Teillon, Jr., Philadelphia, for appellee.
William C. Bullitt, Raymond K. Denworth, Jr., Philadelphia, for Thom. King Flagg.
Roberts, C.j., and Nix, Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ.
At issue on this appeal is the intended scheme of distribution of income from a marital deduction trust over which testatrix Dorothy King Flagg exercised a testamentary power of appointment. As did the auditing judge, we find that testatrix clearly intended the income from this trust, when combined with the income from the residuary trust established in her husband's will, to benefit each of her children's lines equally. Accordingly, we affirm.
Testatrix's husband, S. Griswold Flagg, died on September 14, 1953, leaving a will dated December 15, 1952. In Item Sixth of the will he established a marital deduction trust for the benefit of his wife, giving her a general testamentary power of appointment over the principal. In Item Seventh he created a residuary trust for his wife and, after her death, for his issue. Testatrix and her husband had three children: David H.K. Flagg, who died in 1961, unmarried and without issue; Dorothy Mary Flagg, who died in 1968 survived by one child, appellee Thomas King Flagg; and S. Griswold Flagg, Jr., who died in 1978 survived by three children, appellants Michael Flagg, Carol Flagg Stevens, and William D. Flagg.
Testatrix died on August 5, 1973, leaving a will dated April 8, 1960. In Item Fourth of the will she exercised her power of appointment over the marital deduction trust, directing her trustees
"(b) To pay over and distribute the net income from said trust in quarterly installments to and among such of my issue living upon each distribution date in such shares and amounts as my Trustees may in their sole discretion deem fair and equitable after taking into consideration the income payable under Item Seventh (c)(1) of the Will of my husband, in order to achieve the maximum equality among my three children while living, and, following their respective deaths, among the survivors and descendants of such of my children as may be deceased, it being my intention to achieve, through the addition of the income of this separate trust to the income of the trust established under Item Seventh (c)(1) of the will of my late husband, equality of distribution among my three children and their descendants upon the principal [sic] of representation, and I direct that any distribution made by the Trustees in their discretion shall be conclusive and binding upon my beneficiaries. I direct further that nothing herein shall affect the distribution to my daughter-in-law, ELIZABETH NICHOLS FLAGG, of her share of my husband's estate, it being my intention hereby to provide solely for my children and their descendants.
(c) Upon the expiration of twenty-one (21) years after the date of death of the last survivor of my children and all of my children's issue living at the date of my said husband's death, this trust shall terminate and the principal thereof ...