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Estate of Edward Winslow Taylor Inter Vivos Trust

Superior Court of Pennsylvania

August 23, 2017

ESTATE OF: EDWARD WINSLOW TAYLOR INTER VIVOS TRUST APPEAL OF: CHARLES CRESSON WOOD AND URQUHART A. WOOD

         Appeal from the Decree June 27, 2016 In the Court of Common Pleas of Philadelphia County Orphans' Court at No(s): No. 3563 IV of 1939

          BEFORE: LAZARUS, J., OTT, J. and FITZGERALD, J. [*]

          OPINION

          OTT, J.

         Charles Cresson Wood and Urquhart A. Wood ("Appellants") appeal from the Decree entered June 27, 2016, in the Court of Common Pleas of Philadelphia County, denying their request for the issuance of a citation on their petition for declaratory judgment concerning the termination date of a trust established by Edward Winslow Taylor, in 1928, as amended on September 25, 1930.[1] Appellants claim the orphans' court erred (1) in finding that the orphans' court's December 7, 2009 Adjudication foreclosed their petition, (2) in refusing to issue a citation, and (3) in failing to award the relief requested by the petition for declaratory judgment. Based upon the following, we affirm.

         Appellants are the Executors of the Estate of Anthony T. Wallace, Deceased (Decedent), who died on January 15, 2015.[2] Decedent was the great-grandson of Edward Winslow Taylor. Appellants filed their petition for declaratory judgment on May 18, 2016, requesting a citation be issued to all interested parties to show cause why the court should not issue a declaratory judgment invalidating the 1930 supplement ("1930 Amendment") to the Edward Winslow Taylor Inter Vivos Trust ("Taylor Trust"), and an order compelling distribution of one quarter of the Taylor Trust to the Estate of Anthony T. Wallace.

         The orphans' court summarized the background of this case, as follows:

         Introduction

The executors of the Anthony T. Wallace Estate ("executors") are appealing this court's refusal to issue a citation on their petition for declaratory judgment concerning the termination date of a trust established by decedent's great-grandfather, Edward Winslow Taylor, in 1928, as amended in September 25, 1930 ("1930 Amendment"). Prior to his death, Anthony Wallace had been an income beneficiary of this trust and had entered into a Family Agreement dated August 12, 2009 and approved by this court's December 7, 2009 adjudication. With their Family Agreement, the trust beneficiaries unanimously agreed that the trust would continue until it terminates in 2028 pursuant to the 1930 Amendment. The executors nonetheless seek to reopen this issue by seeking an interpretation of the trust document of 1928 and its 1930 Amendment to assert that the trust terminated in 2008. Because the issue raised in the executor[s'] petition has been definitively settled by the Family Agreement approved by the 2009 adjudication under the provisions of the Pennsylvania Uniform Trust Act, their petition is without merit. It was properly denied as raising a moot issue. ….

         Factual Background

On August 12, 2009, Wachovia Bank, as trustee of the Edward Winslow Taylor Trust ("Taylor Trust"), filed an account of its administration of the trust covering the period May 23, 1980 through May 4, 2008. Its reason for filing the account was the death of Edward Taylor's only grandchild, Frank R. Wallace, Jr., who was the income beneficiary of the trust as well as its individual co-trustee.1 In filing the account, Wachovia set forth its interpretation of the dispositive terms of the trust that Edward Winslow Taylor established on February 9, 1928, for the initial benefit of his daughter Anna Taylor Wallace. It noted that the Trust Agreement was amended on April 20, 1928, on September 25, 1930 and on March 20, 1933. According to the Trustee, the dispositive terms of the Trust are set forth in paragraph 3 of the September 25, 1930 trust amendment. It noted that the net income was to be distributed to the settlor's daughter, Anna Taylor Wallace, for her lifetime. Upon her death, the net income was to be distributed among the persons she chose to appoint under her will. Anna Wallace exercised this power of appointment in her will by providing that her only child, Frank R. Wallace, should receive all the net income during his lifetime. The trustee noted that the Trust is "to terminate 20 years after the death of the last survivor of the Settlor, Anna Taylor Wallace, Frank Rich Wallace (Anna Taylor Wallace's husband) and Frank R. Wallace, Jr." With the death of Frank R. Wallace, Jr. on May 4, 2008, the trustee concluded that the Trust will terminate on May 4, 2028.2 Until that termination date, the income of the trust was to be distributed to the four surviving children of Frank R. Wallace, Jr.:
Anthony T. Wallace
Elise W. Carr
W. Sewell Wallace
Christopher G. Wallace
None of these issue was given a power of appointment by the Taylor trust documents. Only the settlor's daughter, Anna Taylor Wallace, was granted the power to appoint the net income of the trust by her last will.3
1 8/12/2009 Edward Winslow Taylor Account (hereinafter 2009 Account), Petition for Adjudication, ¶ 10.
2 2009 Account, Petition for Adjudication, Attachment to Paragraph 9.
3 1928 Deed of trust, Paragraph SECOND; 1930 Amendment, Paragraph 3(b).
As an issue for adjudication, the trustee in 2009 sought court approval of a Family Agreement to modify the trust pursuant to the Pennsylvania Uniform Trust Act, 20 Pa.C.S.A. section 7740.1(b). In so doing, the trustee characterized the Family Agreement as seeking "to divide the Trust, as permitted with Court approval under Section 7740.1(b) of the UTA, into four separate equal Trusts - one Trust of each of the surviving children of Frank R. Wallace, Jr. and to appoint each of the children as a Co-Trustee with Petitioner of his or her separate Trust until each Trust terminates on May 4, 2028, 20 years from the death of Frank R. Wallace Jr."4
4 2009 Account, Petition for Adjudication, Attachment to Paragraph 13 (emphasis added).
A copy of the 2009 Family Agreement was presented with the Account. It was signed by all parties in interest, who were the four children of Frank R. Wallace, Jr. In addition, it was signed by all of Frank Wallace Jr.'s grandchildren. The Family Agreement specifically states that "paragraph 3 of the September 25, 1930 supplement of the Trust provides for the disposition of the income and principal of the Trust."5 It also specifies that the Trust terminates on May 4, 2028 which is 20 years after the death of Frank R. Wallace Jr.6
5 8/12/2009 Family Agreement, ¶ A(2).
6 8/12/2009 Family Agreement, ¶¶ A(2).
No objections were filed to the account. This court therefore confirmed the account by adjudication dated December 7, 2009 ("2009 Adjudication") and approved the Family Agreement. In so doing, this adjudication twice reiterated that the trust terminates on May 4, 2028. The adjudication in addition approved the distribution of principal as follows to the following four trusts:
Trustees of the Anthony T. Wallace Trust ...

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