ESTATE PLANNING- REMOVAL OF CORPORATE TRUSTEE DUE TO A NO-FAULT “SUBSTANTIAL CHANGE OF CIRCUMSTANCE” WHEN THE TRUST LACKS PORTABILITY CLAUSES
The Law Firm of Pozzuolo Rodden, P.C., Philadelphia Estate Planning Attorneys, are pleased to release the following estate planning/trust update.
In the recent decision of the Superior Court of Pennsylvania, namely , Appeal Of: Jane D. McKinney, 2013 PA Super 123 , the Superior Court granted the beneficiaries’ petition to remove the current Pennsylvania Corporate Trustee and replaced it with a Corporate Trustee closer to their financial advisors in Virginia. This case is unique because the beneficiaries filed the Petition even though the trust lacked portability clauses permitting the settlor or beneficiaries the power or authority to change the corporate trustee. The beneficiaries filed the petition based on the 2006 “no-fault’ amendment to the Pennsylvania Probate, Estates , and Fiduciaries Code allowing a trustee to be changed due to a “substantial change of circumstances. 20 Pa. C.S.A. 766(b)(4). Thus, the court was called upon to assess the interplay between the contemporary world of corporate banking and Pennsylvania’s law of trusts. Namely, “Here, the question arises whether a family’s movement over time from northwestern Pennsylvania to the Tidewater region of Virginia, coupled with the fact that the original trustee institution has gone through approximately six corporate mergers leading to entirely different bank officers involved in administering the trusts , represents a change of circumstances substantial enough to come within the no-fault provisions.” In a 26 page opinion, the Appellate Court ruled that “The series of mergers not only caused a change in the character of service provided by the trustee, but also weakened the family ties to the original trustee to the point of dissolution. When viewed in conjunction with the fact that Appellant and all of her children reside in and engage in financial planning in Virginia,, this constitutes a substantial change in testimony. “
In conclusion, the Court allowed the removal and replacement despite the trust lacking portability clauses.
Contact our Philadelphia Business & Estate Planning law firm with your questions, comments or concerns.