No. 2215 Philadelphia 1982, Appeal from the Order of the Court of Common Pleas of Montgomery County, Orphans Division, at No. 61682.
Charles E. Donohue, Deputy Attorney General, Philadelphia, for appellants.
Adam B. Krafczek, Reading, for participating parties.
Cercone, President Judge, and McEwen and Hoffman, JJ.
[ 322 Pa. Super. Page 141]
This Commonwealth appeal arises from the lower court's decision to permit the directors of a charitable trust to dissolve the trust in favor of contingent beneficiaries entitled to share the remainder of the donor's estate in the event of such dissolution. Finding no merit in the Commonwealth's several contentions, we affirm the order of the court below.
In 1955, the decedent, Foster C. Hillegass, incorporated The Hillegass Foundation, a non-profit trust, with an initial $1,000 contribution, to provide scholarships for needy students. In May, 1956 he executed a will which was in effect at the time of his death in 1960. In Item Second of his will, the decedent bequeathed his entire estate to his wife, Florence Hillegass, "for and during the term of her natural life, with full power to consume as much of the principal . . . as may be necessary for [her] care, maintenance, comfort and support . . . and upon her death, provided that the Corporation known as THE HILLEGASS FOUNDATION shall not have been earlier dissolved, I give, devise and bequeath the same unto THE HILLEGASS FOUNDATION . . . ." The will also provided that if the Foundation "should fall by virtue of [its] dissolution," then one-half of the estate would go to the church decedent attended and the remaining half to a group of named relatives. In April, 1961, decedent's
[ 322 Pa. Super. Page 142]
widow renounced her "power to consume" the principal (except so far as needed for a marital deduction). In early January, 1979, Mrs. Hillegass, as head of the Foundation's Board of Directors, petitioned to have the American Bank and Trust Co. of Pennsylvania (American Bank) appointed as the Foundation's trustee. The petition was granted and a subsequent audit of the estate, the first since the Foundation's establishment, was performed. At the time of the audit, Mrs. Hillegass and Charles Hillegass,*fn1 surviving directors of the Foundation, filed a second petition stating that they were
of the opinion that The Hillegass Foundation can best more firmly establish itself and continue to exist as an operating charitable foundation with a separate identity as part of the Community Foundation known as Central Montgomery County Foundation . . . .
[it is] the desire of your petitioners that there shall never be a dissolution of the Hillegass Foundation within the meaning of Item Second of the Will of Foster C. Hillegass.
Before the filing and granting of the petition, the contingent beneficiaries and the Attorney General, among others, received copies of the petition and a letter from the Foundation, stating, "It is not anticipated that any assets of the estate will ever pass to the church or to any of the individuals named as contingent beneficiaries." In February, 1979, Judge Taxis granted the petition authorizing the transfer of the present assets*fn2 and the remainder interest of The Hillegass Foundation to the Central ...