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In Re: Kelsey Lauren Miller

September 28, 2011

IN RE: KELSEY LAUREN MILLER, A MINOR UNDER THE AGE OF FOURTEEN YEARS APPEAL OF: KRISTI L. GEORGE


Appeal from the Order of the Superior Court entered July 14, 2009, at No. 1022 WDA 2008, affirming the Order of the Court of Common Pleas of Beaver County entered May 16, 2008, at No. 04-07-1299. The opinion of the court was delivered by: Mr. Justice McCAFFERY

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, ORIE MELVIN, JJ.

ARGUED: October 19, 2010

OPINION

The issue presented in this case is whether a parent has legal standing to challenge the appointment of a guardian for her child's estate. We hold that a parent does have standing, and so we reverse.

Kelsey Lauren Miller was born on June 26, 1998, the sole child of the marriage of Appellant, Kristi L. George (hereinafter "Mother"), and Wesley D. Miller (hereinafter "Father"). After the parents divorced, they shared joint legal custody of Kelsey until Father died in April 2007. Although Father had died intestate, he had designated Kelsey as the sole beneficiary of his Federal Employee Group Life Insurance Policy, valued at $356,000. Father's sister, Pamela A. Wahal (hereinafter "Appellee"), served as the administratrix of his estate.

On December 27, 2007, Appellee, as the "next friend" of Kelsey, filed a petition for the appointment of a limited guardian of Kelsey's estate,*fn1 asserting that Kelsey lacked the "necessary knowledge and maturity to manage the funds to which she is entitled following her father's death." Petition for the Appointment of a Limited Guardian of the Estate of a Minor Under the Age of Fourteen Years, filed 12/27/07, (hereinafter the "Petition") at ¶ 10. Appellee proposed that her attorney, Thomas J. Dempsey, Jr., Esquire, be appointed to serve as the limited guardian. Id. at ¶ 13. Pursuant to the petition, the primary role of the proposed limited guardian would be "to marshal and place in an appropriate trust the assets to which [Kelsey] is entitled," i.e., the life insurance proceeds from Father's estate. Id. at ¶11 and page 2. Attached to the petition as Exhibit A was a proposed Kelsey Lauren Miller Irrevocable Trust Agreement (hereinafter the "Trust"), pursuant to the terms of which Kelsey could withdraw portions of principal at ages 25, 30, and 35. Trust at 2. Mr. Dempsey was the settlor of the proposed Trust, Appellee was named as the "Family Trustee," and Irwin Bank and Trust Company, as the "Corporate Trustee." Trust at 1.

The court held a hearing on January 22, 2008.*fn2 On February 1, 2008, Mother filed a response to Appellee's petition, denying the need for the appointment of a limited guardian of Kelsey's estate, and opposing the proposed appointments of Appellee and the Irwin Bank and Trust Company as, respectively, family trustee and corporate trustee. Response to Petition for the Appointment of the Estate [sic] of a Minor Under the Age of Fourteen Years, filed 2/1/08, (hereinafter "Mother's Response to Petition") at ¶¶ 11, 16. Mother also objected to the proposed appointment of Mr. Dempsey as limited guardian of Kelsey's estate "if he intends to transfer said funds to a trust in Irwin Bank." Id. at ¶ 16. Mother represented that the life insurance funds had already been transferred to an account solely in Kelsey's name, and she objected to the formation of a trust as too expensive and too risky. Id. at ¶¶ 16, 21-22. In addition, Mother contended that Appellee's petition had not been filed in accordance with Orphans' Court Rule 12.5 ("Appointment of a guardian for the estate or person of a minor"). Pursuant to Rule 12.5, when a petition for the appointment of a guardian for the estate or person of a minor is filed by someone other than the minor's parents, it must set forth that the parents consent to the petition or the reason why they do not consent. It is undisputed that Appellee's petition did not include any statement as to Mother's consent or lack thereof. Mother further asserted that Appellee, in her role as administratrix of Father's estate, was not acting in Kelsey's best interest, in particular with regard to mortgage payments on Father's residence and the handling of Father's remains. Mother's Response to Petition at ¶¶ 18, 19. Finally, Mother requested that the court "resume the hearing held on January 22, 2008, to take testimony on the allegations" set forth in her response to Appellee's petition. Id. at ¶ 26.

On February 4, 2008, the court issued an order appointing Mr. Dempsey as the limited guardian of Kelsey's estate and directing that all assets to which Kelsey is or may be entitled by reason of Father's death be placed in the Trust.

Mother filed timely exceptions to the court's February 4, 2008 order in which she asserted, inter alia, that the court had no jurisdiction to place Kelsey's assets in a trust, nor to restrict Kelsey from withdrawing her assets when she reached 18 years of age. Mother's Exceptions to February 4, 2008 Order of Court, filed 2/22/08, at 2, (hereinafter "Mother's Exceptions") ¶¶ 9, 10, 14. Mother did not take issue with that portion of the court's order "appointing legal counsel as a limited guardian for the purpose of collecting assets for Kelsey that she legally is or may be entitled to as the result of the death of her father." Id. at ¶ 14. Mother specifically sought the following relief:

Wherefore, Petitioner [Mother] prays for this Court to enter an Order partially reversing itself and directing that all assets (except real property) that Kelsey is or may legally be entitled to as a result of her father's death be placed in an interest bearing federally insured account and marked "Not to be Withdrawn until the Minor Reaches Eighteen (18) year of age or Further Order of Court." Id. at ¶ 16.

Appellee filed an answer and new matter wherein she claimed (1) that Mother had waived any objection to the jurisdiction of the court by failing to file preliminary objections to Appellee's original petition and by consenting to participate in the guardianship proceeding; and (2) that Mother was "not a party in interest in the instant proceeding and lack[ed] standing to pursue the relief sought by her exceptions." Appellee's Answer and New Matter to Exceptions, filed 4/2/08, at ¶¶ 15, 16.

Following oral argument on the exceptions and new matter, the orphans' court issued the following order:

Following Argument and consideration of the Exceptions filed to this Court's Order of February 4, 2008, as well as a second review of the terms and conditions of the Irrevocable Trust Agreement entered into and funded by the Limited Guardian, and because the situs of the Trust remains under the jurisdiction of this Court for the purpose of administration pursuant to the provisions of the Uniform Trust Act (20 Pa.C.S.A. § 7701, et seq.), the Court finds the grounds raised in the New Matter to be persuasive and controlling and, therefore, the Exceptions as filed by the mother of the minor child are hereby dismissed.

Order of the Orphans' Court, filed 5/16/08.

Mother filed an appeal to the Superior Court, and the orphans' court then directed Mother to file a statement of matters complained of on appeal pursuant to Pennsylvania Rule of Appellate Procedure 1925(b). Mother complied, asserting the following: (1) the orphans' court did not have jurisdiction to place Kelsey's assets from her deceased Father in a trust; (2) the orphans' court did not have jurisdiction to restrict Kelsey from withdrawing those assets once she reaches eighteen years of age; and (3) the orphans' court erred as a matter of law by not recognizing that Kelsey is entitled to all of Father's life insurance proceeds as well as all assets from Father's estate "free and clear" when she reaches eighteen years of age. More Concise Statement of Matters Complained of on Appeal, filed 6/27/08, at ¶¶ 2, 4, 5, 6, 7. Mother acknowledged that the court did have jurisdiction to appoint a limited guardian of Kelsey's estate, but she asserted that the role of such guardian would be to assist in collecting and securing Kelsey's assets until she reaches eighteen years of age. Id. at ¶ 3.

The Rule 1925 opinion of the orphans' court first addressed the issue of whether Mother, "not being a named party in this matter, has standing to bring this appeal." Orphans' Court's Rule 1925(a) Opinion, filed 8/5/08, at 2. The court concluded that Mother was "not a party in interest and lack[ed] standing to pursue the relief sought by way of her appeal." Id. The court urged denial of Mother's appeal based on her failure to establish standing. Id.

The Superior Court, in a non-published memorandum opinion, affirmed the order of the orphans' court, specifically concluding that Mother did not have standing to contest the February 4, 2008 order that appointed Mr. Dempsey guardian of Kelsey's estate and directed all of Kelsey's inheritance to be placed in the Trust. In re K.L.M., 981 A.2d 942 (Pa.Super. 2009) (Table). The Superior Court expressly rejected Mother's argument that she had standing in this matter by virtue of her status as Kelsey's mother. Relying on the distinction between a guardian of a minor's person and a guardian of a minor's property or estate, the Superior ...


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