Husband As An Intended Beneficiary Does Not Lacked Standing To Bring Cause Of Action Against Scrivener Of Wife’s Will
In the estate and wills, trust and estate litigation case of Begley v. Rhodes & Simon, LLP, PICS Case No. 15-0453, the Honorable Jack A. Panella, writing on behalf of the Pennsylvania Superior Court, ruled that the trial court erred in finding that husband’s estate lacked standing as an intended third party beneficiary of the attorney/client relationship between wife and defendants.
Leslie Sinon Powell was the lifetime income beneficiary of a trust settled by her mother and known as the Leslie Sinon Powell Trust. Under this trust, Leslie also had the power to appoint the assets of the trust by specific reference in her will.
In 2009, Leslie executed a will, prepared by defendants, Rhodes & Sinon LLP, Stanley Smith and Sherill Moyer, which bequeathed the residue of her estate, including a general reference to the power of appointment, to her husband, William Powell. However, the will did not specifically reference the power of appointment contained in the trust.
Leslie’s mother died on Feb 19, 2010. Defendants Smith and Moyer, as executors and attorneys for the estate of Leslie’s mother, contacted William and Leslie to discuss the estate. At the some time, William and Leslie retained Smith and Moyer for their own estate planning needs.
On March 9, 2010, the parties met to discuss the distribution of Leslie’s mother’s estate. According to the complaint, Smith and Moyer never alerted Leslie of the fact that her will did not adequately exercise the power of appointment contained in the LPS Trust.
On March 12, 2010, William asked defendants to prepare a codicil to Leslie’s will that specifically exercised the power of appointment in his favor. Five days later, William notified defendants that Leslie was not well and asked that the codicil be deemed an urgent matter. Defendants indicated that the codicil would be ready for review “early next week.”
Shortly thereafter, Leslie fell into a coma from which she never recovered and significant assets in the LSP Trust were not appointed to William. William and Leslie’s estates filed a writ of summons. William passed away before a complaint could be filed. Thereafter, the executors of William’s and Leslie’s estates were substituted as parties.
The estates then filed a complaint asserting that defendants failed in their duty to draft a will for Leslie that effectuated her testamentary intent. In Guy v. Liederbach, the Pennsylvania Supreme Court developed a stringent test for determining standing to bring such a claim: the estate of the testator had no standing, as the estate suffered no harm.
As such, the trial court granted defendants’ preliminary objection challenging the parties’ standing. On appeal, the Superior Court noted that the trial court did not err in granting the preliminary objections to any claims asserted by Leslie’s estate. However, in Guy, the Supreme Court held that certain intended beneficiaries of a will had standing to raise such a claim against the will’s drafter.
The court found that the first Guy requirement was satisfied as the complaint alleged that Leslie bequeathed the residue of her estate to William, including all property subject to Leslie’s powers of appointment. Therefore, William was a named legatee. The court found that it was reasonable to infer from the complaint that Leslie intended William to receive the assets from the LSP Trust.
According to the complaint, Leslie was unaware that her will was insufficiently specific to legally exercise her power of appointment under the LSP Trust until William noticed the issue in early 2010. The complaint also alleged that Leslie expressed her desire to leave almost all her assets to William.
Therefore, the trial court erred in finding that William’s estate lacked standing as an intended third party beneficiary of the attorney/client relationship between Leslie and defendants, though it did not err in finding that Leslie’s estate lacked standing to bring such a claim. Accordingly, the court affirmed in part and reversed in part.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly 38 PLW 302 (March 31, 2015)
Filed Under: Wills; Third Party Beneficiary; Standing, Estate Administration; Wills; Trusts and Estate Litigation
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