Estate of Thomas
39 Pa. D. & C.5th 103
| Pennsylvania Court of Common P... | 2014Background
- Decedent Elaine B. Thomas died in December 2012 leaving a will dated July 18, 2012, and an OFEGLI life insurance policy that named as beneficiary: "trustee(s) or successor(s) as provided in last will."
- Article 1 of the will appoints granddaughter Ashley Super "as executor of my estate and insurance."
- Article 3 expressly addresses the life insurance policy, specifying numerous directed disbursements and creation of several trust accounts (e.g., Walnut Lane Maintenance Fund, specified amounts held until minors reach 18, monthly distributions until exhaustion).
- MetLife (OFEGLI administrator) denied Ashley Super’s claim, asserting the will "did not name a trust or appoint a trustee" and therefore paid under statutory order to decedent’s children.
- Ashley Super petitioned Orphans’ Court to declare the will-created trust a valid beneficiary under the policy; decedent’s daughter Keenya Banks-Bryant opposed, arguing no trust was created and that the will could not change policy beneficiary.
- Court analyzed the will as a whole, applying Pennsylvania precedent and the Uniform Trust Act criteria, and concluded the will created a testamentary trust with Ashley Super functioning as trustee for distribution of the insurance proceeds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether decedent’s will created a trust that qualifies as the beneficiary named by the policy phrase "trustee(s) or successor(s) as provided in last will" | Super: The will, read as a whole, creates a testamentary trust and appoints Super to administer insurance proceeds per Article 3 | Banks-Bryant: The will did not create a trust or name a trustee; decedent’s will cannot alter the designated beneficiary absent insurer procedures | Held: Will did create a trust; Super has duties and is the proper trustee/administrator for the policy proceeds per Article 3 |
| Whether the absence of the words "trust" or "trustee" prevents trust creation | Super: Magic words not required; duties and powers imposed establish trust | Banks-Bryant: Emphasizes lack of explicit "trust/trustee" language | Held: Words not necessary; courts look to intent and duties to determine trust (citing precedent) |
| Whether statutory provisions on insurance beneficiaries (e.g., 20 Pa.C.S. § 6108) preclude treating a will-created trust as beneficiary | Super: §6108 expressly contemplates trusts under wills receiving insurance proceeds and being administered testamentarily | Banks-Bryant: Argues beneficiary designations are non-testamentary and cannot be changed by will | Held: §6108 permits payment to a trust under a will; decedent’s designation to "trustee(s) as provided in last will" is effective when the will creates a trust |
| Whether trustee duties are sufficient (vs. mere conduit) to constitute a trust | Super: Article 3 imposes specific duties (create accounts, hold funds until age 18, make monthly payments) | Banks-Bryant: Relies on cases addressing termination or improper testamentary trusts where trustee had only ministerial role | Held: Duties are substantive and ongoing; trust is valid (Wood’s Estate and similar cases were distinguishable) |
Key Cases Cited
- In re Hirsh’s Estate, 334 Pa. 172 (polestar is testator's intent; interpret will as a whole)
- Estate of McClain, 435 Pa. 408 (absence of the words "trust" or "trustee" does not preclude creation of a trust)
- Sheets' Estate, 52 Pa. 257 (no particular form of words required; executor may serve as trustee when duties imposed require it)
- Ranney v. Byers, 219 Pa. 332 (words "trust" or "trustee" not essential if intent is clear)
- In re Wood's Estate, 261 Pa. 480 (distinguished — addresses termination/settlement of trusts where trustee's role is ministerial)
- Estate of Sauers, 613 Pa. 186 (context on preemption and life insurance proceeds generally cited)
- Alkhafaji v. TIAA-CREF, 69 A.3d 219 (changes to beneficiaries require compliance with plan rules — distinguished as not controlling here)