McKean Estate

71 Pa. D. & C. 429, 1950 Pa. Dist. & Cnty. Dec. LEXIS 457
CourtPennsylvania Orphans' Court, Philadelphia County
DecidedJune 9, 1950
Docketno. 2490 of 1949
StatusPublished

This text of 71 Pa. D. & C. 429 (McKean Estate) is published on Counsel Stack Legal Research, covering Pennsylvania Orphans' Court, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McKean Estate, 71 Pa. D. & C. 429, 1950 Pa. Dist. & Cnty. Dec. LEXIS 457 (Pa. Super. Ct. 1950).

Opinion

Hunter, J.,

The question before the court is whether a surviving spouse, by an election under section 11 of the Estates Act of April 24, 1947, P. L. 100, 20 PS §301, may treat a revocable deed of trust as a testamentary disposition, the deed having been executed March 14, 1947, and settlor husband having died July 30, 1949, after the effective date of the act.

Briefly recited, the deed is by Thomas McKean to Fidelity-Philadelphia Trust Company, trustee. It directs the payment of $416.66 per month out of income to his divorced wife, Catherine Radford McKean, until her death or remarriage, the balance of the income to settlor for life, and after his death to his second wife, Virginia. Marshall McKean (who has filed this election) , and after her death to Radford McKean, settlor’s son by the first marriage, and upon the son’s death the

[435]*435principal to the son’s descendants, and if none, to pay the income in perpetuity to Princeton University, St. Paul’s School, Concord, N. H., and the Church of Good Shepherd, Rosemont, Pa.

The law as it existed prior to the Estates Act of 1947 is that a revocable deed vests present interests in the beneficiaries, and not mere expectancies, and it is not rendered testamentary in character because settlor reserves a beneficial life estate, and in addition, a power to revoke or modify in whole or part: Dickerson’s Appeal, 115 Pa. 198; Lines v. Lines, 142 Pa. 149; Dolan’s Estate, 279 Pa. 582; Shapley Trust, 353 Pa. 499; Lyon Trust, 164 Pa. Superior Ct. 140.

The adjudication contains a clear exposition of this rule of law, and nothing need be added in this respect to what the auditing judge has said.

The widow, exceptant, contends that the Estates Act of 1947 is applicable to the present trust, because the conveyance did not become effective as to the surviving spouse until the death of her husband which occurred after the date of the act; that the interest of one spouse in the property of the other is inchoate, and only on the death of one does the survivor have a vested right.

We cannot follow this reasoning. The right which the act gives to the surviving spouse is not under the conveyance but against it. Certainly, the Estates Act did not contemplate that a conveyance has more than one effective date. All interests were created in the beneficiaries of the deed at the date of its execution, as appears by the rule of law first above stated, and not at the date of settlor’s death, or successively when each beneficiary came into possession and enjoyment.

The act, in section 21, provides:

“This act shall take effect on the first day of January, one thousand nine hundred forty-eight and except as set forth in Section 3 hereof, shall apply only to con[436]*436veyances effective on or after that day. As to conveyances effective before that day, the existing laws shall remain in full force and effect.”

Thus, the act is prospective in all its provisions, except those contained in section 3, which relate to releases and disclaimers and not to the present controversy.

The suggestion is made that “effective” has the meaning of “operative”, and as the conveyance continued in operation it was effective both on its date and thereafter.

Section 21 makes a distinction between conveyances “effective on or after that day [the effective date of the act],” and conveyances “effective before that day”. As to the latter “the existing laws shall remain in full force and effect.”

The contention made would destroy that distinction, and make both classes of conveyances subject to the new act, contrary to the express mandate of the act that it shall not so apply. The effectiveness of a conveyance refers to the interests, of the beneficiaries named therein, and the time when the title passed from settlor to them. This conveyance became effective, within the meaning of the act, at the date of the deed and its delivery to the trustee, and as to it existing laws control.

Research discloses but two decisions upon the new act.

In Mornes v. Lawrence Savings and Trust Co., 8 Lawrence 163 (1949), a revocable deed of trust was executed prior to the effective date of the act, and settlor died thereafter. His widow attacked the deed as in fraud of an antenuptial agreement. Judge Braham mentioned the fact that such a deed is now circumscribed by section 11, and then said: “The Estates Act relates, however, only to transactions after its date and does not affect the present case.”

[437]*437In Black Estate, 122 L. I. 407, Judge van Roden of the Orphans’ Court of Delaware County granted a surviving spouse a share of a tentative trust in a savings deposit, citing comment “cc” (1948 supplement) of A. L. I. Restatement of the Law of Trusts §58, which reads as follows:

“Surviving Spouse of Depositor. Although the surviving spouse in claiming his or her statutory distributive share of the estate of the decedent is not entitled to include in the estate property transferred during his lifetime by the decedent in trust for himself for life with remainder to others, even though the decedent reserved a power of revocation (see §57 Comment c), the surviving spouse of a person who makes a savings deposit upon a tentative trust can reach the deposit.”

The court decided that while the Act of 1947 was not applicable, it was of some value in determining the state of the common law as to tentative trusts prior to its enactment where the common law had not been expressly pronounced by the courts of the Commonwealth. The court said with respect to the nonapplication of the act:

“It has been suggested by counsel for the widow that it is not the date of the deposit, but rather the date of the death of the depositor which must be considered in determining whether this new Act is applicable. With this contention we cannot agree. Section 1 (2) of the Estates Act of 1947 defines ‘conveyance’ as ‘an act by which it is intended to create an interest in real or personal property whether the act is intended to have inter vivos or testamentary operation.’ It seems obvious, therefore, that the date of the deposit is the governing date with respect to the applicability of the Act.”

A construction favoring a retroactive operation of the Estates Act would raise grave constitutional questions. Existing decisions have consistently treated the [438]*438rights of beneficiaries under deeds of trust as vested interests, notwithstanding the possibility of their being divested by the exercise of a power of revocation, and it is not within the power of the legislature to take the property of one person and give it to another: Wilcox v. Penn Mutual Life Insurance Co., 357 Pa. 581; Crawford Estate, 362 Pa. 458; Borsch Estate, 362 Pa. 581.

The exceptions are dismissed and the adjudication is confirmed absolutely.

Ladner, J.,

June 9,1950. — Section 11 of the Estates Act of April 24, 1947, P. L. 100, 20 PS §301.11, reads as follows:

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71 Pa. D. & C. 429, 1950 Pa. Dist. & Cnty. Dec. LEXIS 457, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mckean-estate-paorphctphilad-1950.