IN RE: ROSEMARY C. FORD INTER VIVOS QTIP TRUST APPEAL OF: ROSEMARY C. FORD
from the Order August 25, 2016 In the Court of Common Pleas
of Montgomery County Orphans' Court at No(s): 2014-X2918
BEFORE: LAZARUS, J., SOLANO, J., and STEVENS, P.J.E.
Rosemary C. Ford appeals from the en banc order of
the Orphans' Court Division of the Court of Common Pleas
of Montgomery County that dismissed for lack of standing her
exceptions to the order entered by the orphans' court on
April 7, 2016. That order confirmed the account dated
November 3, 2015, of the Rosemary C. Ford Inter
Vivos QTIP Trust, as prepared by her former husband,
Appellee George Ford, as trustee. We affirm the orphans'
court's holding that Rosemary does not have standing to
require George, as trustee, to make the Trust's property
January 18, 2007, during the parties' marriage, Rosemary
created the Rosemary C. Ford Inter Vivos QTIP
Trust ("the Trust") through a Trust
Agreement that named George as trustee. See Trust
Agreement, 1/18/07, at 1. The Trust holds two commercial
properties located on East Mermaid Lane in Wyndmoor,
Montgomery County ("the East Mermaid Properties"),
which are leased to a family business, George Ford &
Sons, Inc., and operated by George's son, Tom Ford.
Id. at 20, Schedule "A." According to the
Pennsylvania Department of State's Corporations Bureau,
George Ford & Sons, Inc. is an active and operating
business. The main dispute in this case concerns production
of income (rent) from these properties.
Paragraph III, the Trust Agreement makes George the
Trust's primary beneficiary, but it contains provisions
making Rosemary a contingent beneficiary. Paragraph III
states, in relevant part:
(A) During the lifetime of [George]:
(1) Trustees shall pay over the net income, if any, to
[George], in quarterly or more frequent periodic
installments. . . .
(3) [George] may at any time by written notice, require [the]
Trustees either to make any non-productive property of this
trust productive or to convert such non-productive property
to productive property within a reasonable time.
(B) Upon the death of [George], survived by [Rosemary], then
the remaining trust assets shall constitute a separate trust
for the benefit of [Rosemary], to be administered as follows:
. . .
(1) Trustees shall pay over the net income, if any, to
[Rosemary], in quarterly or more frequent periodic
installments. . . .
(3) [Rosemary] may at any time by written notice, require
[the] Trustees either to make any non-productive property of
this trust productive or to convert such non-productive
property to productive property within a reasonable time.
Id. at 1 ¶ III(A)(1), (3) & (B)(1), (3).
The Trust is irrevocable. Id. at 13 ¶ X. It
contains a Spendthrift Provision that prevents a creditor of
an individual beneficiary from accessing the income and
principal of the Trust. Id. at 4 ¶
January 22, 2009, Rosemary filed a divorce action against
George. Orphans' Ct. Op., 4/7/16, at 2. On April 2, 2009,
she filed a separate action for support.
5, 2009, Rosemary and George entered into an Agreement in
Principle for a "temporary resolution" of the
support action. The Agreement provided in Paragraph 2 that
"[George] shall pay to [Rosemary] one-half of the net
rental income from the [East Mermaid Properties] less
[George]'s mortgage payment on the marital residence,
which will come off the top.'" Agreement in
Principle ¶ 2. The Agreement further provided that the
parties would use Michael Fingerman as an arbitrator
"for any issues that they cannot resolve, including but
not limited to the amount of support that should be
paid." Id. ¶ 6. On June 9, 2009, the trial
court entered an order making the Agreement in Principle an
order of the court.
October 4, 2010, the parties resolved their divorce action by
an arbitration conducted by Mr. Fingerman. In a lengthy
document called "Arbitration Conclusions/Award, "
Mr. Fingerman summarized various matters relating to the
parties and then set forth an award relating to division of
the parties' property, alimony, and counsel fees. His
arbitration award was then incorporated into the parties'
divorce decree dated January 21, 2011. Orphans' Ct. Op.,
4/7/16, at 2.
arbitration document made reference to the parties' equal
division of net income from the East Mermaid Properties under
the Agreement in Principle in the support action, and it said
that the parties had agreed to arbitrate "all issues
relating to the dissolution of the parties'
marriage." Arb. Concl./Award at 1-2 (Concl. §
I.C.2., D.1). In a summary of the parties' "Net
Marital Assets, " Mr. Fingerman noted that the East
Mermaid Properties were listed as having a fair market value
for insurance purposes of more than $2 million and that net
income was being used to pay off a home equity line of credit
on the marital residence, with the balance being divided
between the parties pursuant to the Agreement in Principle.
He also noted that rent due under a consumer price index
inflator clause in the Properties' lease had not yet been
paid. Id. at 6-7 (Concl. § II.A.4.).
section of the arbitration document titled "Award,
" Mr. Fingerman first included a section titled
"Property Division" in which he said that "the
net marital assets shall be divided between the parties as
follows." He then listed various assets, including the
Real Estate . . .
East Mermaid Lane (income/in-kind)
Concl./Award at 18 (Award § 1.A.). Under a section
called "Effectuation, " he said that "the
foregoing distribution shall be effectuated as follows"
and included this paragraph regarding the East Mermaid
East Mermaid Lane/QTIP Trust/Rent: [George]
shall continue to pay [Rosemary] one-half (1/2) of all rental
income received on account of [the] East Mermaid
[Properties], provided, however, that commencing with the
first monthly rental payment received following the date of
this Award, [George] shall no longer deduct any amounts paid
by him on account of the home equity line of credit on [the
parties' former marital residence]. In the event [George]
pre-deceases [Rosemary], all such rental income shall be paid
to [Rosemary] pursuant to the QTIP Trust, and in the event
[Rosemary] pre-deceases [George], all such rental income
shall be paid to [George] pursuant to the QTIP Trust.
Promptly following the date of this Award, [George] shall
obtain any retroactive rental due on account of the Consumer
Price Index (CPI) adjustment set forth in the lease on East
Mermaid Lane, and any such retroactive income shall be
divided equally between the parties. All future rent,
including appropriate CPI adjustments, shall be divided
equally between both parties until either party's death
as set forth above.
Id. at 21 (Award, § I(B)(1)(d)). There was no
section of the Award addressing support. The section of the
Award dealing with "Alimony" stated:
In consideration of all factors including, without
limitation, the equal division of net income received from
East Mermaid Lane, the potential rent available to [Rosemary]
from [other properties], and [George]'s earned income,
perquisites and excess social security income, commencing on
the first (1st) day of the month following the
date of this Award, and on the first (1st) day of
each month thereafter, [George] shall pay to [Rosemary], as
alimony, the sum of $1, 750 per month ("Alimony
Amount"). . . . [George]'s obligation for payment of
the Alimony Amount shall cease upon the first to occur of (1)
[Rosemary]'s death; (2) [George]'s death; (3)
[Rosemary]'s remarriage; (4) [Rosemary]'s
cohabitation as then ...