spendthrift clause in Pennsylvania

2014See In re Stewart’s Estate, 334 Pa. 356, 365 , 5 A.2d 910, 914 (Pa. 1939)(a wife is “entitled to recover on a decree for maintenance and support entered by a court of competent jurisdiction” against “her husband’s interest in the trust even though it contains a spendthrift clause”); In re Morehead’s Estate, 289 Pa. 542 , 137 A.802 (Pa. 1927) (court order requiring husband to make support payments to wife were enforceable against his spendthrift trust).

1937The spendthrift clause of the trust provides that ‘so far as may be permissible in law’ the income and principal of the *581 trust ‘shall not be in any way or manner subject or liable to......anticipation, sale, pledge, debts, contracts, engagements or liabilities, and shall not be subject or liable to attachment or sequestration under any legal or equitable or other process.’ ” The court reviews the contention that the case is governed by the case of Everhart v. Everhart, 87 Pa. Superior Ct. 184 , and then proceeds to discuss Moorehead’s Estate, 289 Pa. 542 , 137 A. 802 ; Thomas v. Thomas, 11

1937The consent of all parties in interest to terminate the trust is ineffectual because of the existence of the spendthrift clause: Moser’s Estate, 270 Pa. 217 ; Rehr v. Fidelity-Philadelphia Trust Co., 310 Pa. 301 ; Harrison’s Estate, supra. The exceptions are dismissed and the adjudication is confirmed absolutely.

1935One of the latest cases in the Supreme Court where a refusal to terminate a trust was based upon the existence of a spendthrift clause is Rehr v. Fidelity-Philadelphia Trust Co., 310 Pa. 301 .

1963In Neal v. Black, 177 Pa. 83 (1896), the court stated, page 98: “When a young man, soon after coming of age, makes a voluntary deed giving away his estate, or relinquishing a right in favor of another, and especially if he be of weak mind and inexperienced, the transaction should be carefully considered in view of all the circumstances.” And at page 101: “At the first blush it would seem that one who was compos mentis and sui juris, who has made a voluntary deed for his own benefit, and by it granted no vested right to another, should have the power to control his own affairs and revoke the tr

1940The law now regards a settlor who trustees his own property for his own benefit, with a spendthrift clause, as a ward of the court: Neal v. Black et al., 177 Pa. 83 (1896).

1952The words “anticipation”, “sale”, “contracts”, and “engagements” are sufficiently broad to cover the assignment or conveyance which exceptants argue was made by settlor in his deed: Mehaffey’s Estate, supra. Spendthrift trusts are favorites of the Pennsylvania courts, and are given special protection by them: Stambaugh’s Estate, 135 Pa. 585 (1890), and Schmidt’s Estate, 5 D. & C. 470 (1924).

1933This is a very different case from that in which principal is paid out to a life tenant protected by a spendthrift clause: Stambaugh’s Estate, 135 Pa. 585 .

1948The court said (p. 222) : “The spendthrift clause protecting the income, incidentally protected the corpus during the period of the trust from execution or passing by assignment, Siegwarth’s Est., 226 Pa. 591 , as there could be no income without the trustee’s possession of the corpus.

1915The spendthrift clause protecting the income, incidentally protected the corpus during the period of the trust from execution or passing by assignment, Siegwarth’s Est., 226 Pa. 591 , as there could be no income without the trustee’s possession of the corpus.

1937The consent of all parties in interest to terminate the trust is ineffectual because of the existence of the spendthrift clause: Moser’s Estate, 270 Pa. 217 ; Rehr v. Fidelity-Philadelphia Trust Co., 310 Pa. 301 ; Harrison’s Estate, supra. The exceptions are dismissed and the adjudication is confirmed absolutely.

1935It is always to be remembered that consideration for the beneficiary does not even in the remotest way enter into the policy of the The existence of a spendthrift clause prevents a merger of a life estate with a legal remainder: Wharton’s Estate, 15 D. & C. 175; Moser’s Estate, 270 Pa. 217 .

1937The spendthrift clause of the trust provides that ‘so far as may be permissible in law’ the income and principal of the *581 trust ‘shall not be in any way or manner subject or liable to......anticipation, sale, pledge, debts, contracts, engagements or liabilities, and shall not be subject or liable to attachment or sequestration under any legal or equitable or other process.’ ” The court reviews the contention that the case is governed by the case of Everhart v. Everhart, 87 Pa. Superior Ct. 184 , and then proceeds to discuss Moorehead’s Estate, 289 Pa. 542 , 137 A. 802 ; Thomas v. Thomas, 11

1936In support of this contention the garnishee reliés upon the case of Everhart v. Everhart, 87 Pa. Superior Ct. 184 , decided in 1926, in which a nonresident wife brought an action in foreign attachment upon an order for support obtained against her husband in the State of New York, and attached his interest in a spendthrift trust in this jurisdiction.

2020The Superior Court approved of the Orphans’ Court’s finding that the arbitration award was an equitable distribution award, not a support order that would have imbued [Rosemary] with the status of a creditor with standing to bypass the spendthrift clause under 20 Pa. C.S.A. 7743(b)(2).5 The Superior Court also noted the trust gave the husband alone the right to compel the trustee to make the properties productive and stated that: Because the terms of the trust deprive Rosemary of any right to require the ... properties to be made productive during George’s lifetime, we agree with the orphans’

2020In accordance with Ford, 176 A.3d at 1000 , such an order would have bestowed upon Barbara the status of a creditor with standing to bypass the spendthrift clause in Paragraph 8.04 of the Gertrude Testamentary Trust pursuant to 20 Pa.C.S.A. § 7743(b)(2) (“A spendthrift provision is unenforceable against … any other person who has a judgment or court order against the beneficiary for support or maintenance, to the extent of the beneficiary’s interest in the trust’s income”).

2020Even if she had a liquidated claim against Norman at this time, she would have no standing to complain about the trustees[] not making payments to him from the Gertrude Testamentary Trust because of the spendthrift clause in Article Eight, paragraph 8.04.[5] Barbara cites In re: Francis Edward McGillick Foundation, 537 Pa. 194 , 642 A.2d 467 (Pa. 1994) and In re: Milton Hershey School, 590 Pa. 35 , 911 A.2d 1258 (Pa. 2006) for the propositions that one need not be a beneficiary or creditor to have standing to object to the actions of a trustee and one merely need show he is aggrieved by showin

2020Even if she had a liquidated claim against Norman at this time, she would have no standing to complain about the trustees[] not making payments to him from the Gertrude Testamentary Trust because of the spendthrift clause in Article Eight, paragraph 8.04.[5] Barbara cites In re: Francis Edward McGillick Foundation, 537 Pa. 194 , 642 A.2d 467 (Pa. 1994) and In re: Milton Hershey School, 590 Pa. 35 , 911 A.2d 1258 (Pa. 2006) for the propositions that one need not be a beneficiary or creditor to have standing to object to the actions of a trustee and one merely need show he is aggrieved by showin

2020Even if she had a liquidated claim against Norman at this time, she would have no standing to complain about the trustees[] not making payments to him from the Gertrude Testamentary Trust because of the spendthrift clause in Article Eight, paragraph 8.04.[5] Barbara cites In re: Francis Edward McGillick Foundation, 537 Pa. 194 , 642 A.2d 467 (Pa. 1994) and In re: Milton Hershey School, 590 Pa. 35 , 911 A.2d 1258 (Pa. 2006) for the propositions that one need not be a beneficiary or creditor to have standing to object to the actions of a trustee and one merely need show he is aggrieved by showin

2020Even if she had a liquidated claim against Norman at this time, she would have no standing to complain about the trustees[] not making payments to him from the Gertrude Testamentary Trust because of the spendthrift clause in Article Eight, paragraph 8.04.[5] Barbara cites In re: Francis Edward McGillick Foundation, 537 Pa. 194 , 642 A.2d 467 (Pa. 1994) and In re: Milton Hershey School, 590 Pa. 35 , 911 A.2d 1258 (Pa. 2006) for the propositions that one need not be a beneficiary or creditor to have standing to object to the actions of a trustee and one merely need show he is aggrieved by showin

1990More specifically, in the instant case, there is no express statement of record as to amounts “actually excluded or deducted as retirement funding for Federal income tax purposes” pursuant to the requirement of 42 Pa.C.S. §8124(b)(l)(viii). 8 This same deficiency was presented to the district court in Surfbelt Inc., 532 F.Supp. at 730 .

1990The only reference to the spendthrift clause is contained in the answers to interrogatories which, apparently, merely paraphrase the language of the policies themselves.” Id. at 109 , 257 A.2d at 273 .

1990The only reference to the spendthrift clause is contained in the answers to interrogatories which, apparently, merely paraphrase the language of the policies themselves.” Id. at 109 , 257 A.2d at 273 .

1975It is true that if all parties who are, or may be, beneficially interested are in existence and sui juris and give their consent, and if there is no ultimate purpose requiring continuance thereof, a trust may be terminated by a court of equity; it is equally well established, however, that if the purpose of the creator of the trust has not been accomplished and such settlor is deceased and, therefore, cannot consent, then the trust may not be terminated even though all beneficiaries desire that it should be: Bosler Estate, 378 Pa. 333, 336-37 , 107 A. 2d 443 (1954); and see Cannistra Estate, 3

1975It is true that if all parties who are, or may be, beneficially interested are in existence and sui juris and give their consent, and if there is no ultimate purpose requiring continuance thereof, a trust may be terminated by a court of equity; it is equally well established, however, that if the purpose of the creator of the trust has not been accomplished and such settlor is deceased and, therefore, cannot consent, then the trust may not be terminated even though all beneficiaries desire that it should be: Bosler Estate, 378 Pa. 333, 336-37 , 107 A. 2d 443 (1954); and see Cannistra Estate, 3

1975Interestingly enough, all sides have cited Sproul-Bolton v. Sproul-Bolton, 383 Pa. 85 , 117 A. 2d 688 (1955), in support of their respective positions.

1975Interestingly enough, all sides have cited Sproul-Bolton v. Sproul-Bolton, 383 Pa. 85 , 117 A. 2d 688 (1955), in support of their respective positions.

1975It is true that if all parties who are, or may be, beneficially interested are in existence and sui juris and give their consent, and if there is no ultimate purpose requiring continuance thereof, a trust may be terminated by a court of equity; it is equally well established, however, that if the purpose of the creator of the trust has not been accomplished and such settlor is deceased and, therefore, cannot consent, then the trust may not be terminated even though all beneficiaries desire that it should be: Bosler Estate, 378 Pa. 333, 336-37 , 107 A. 2d 443 (1954); and see Cannistra Estate, 3

1975It is true that if all parties who are, or may be, beneficially interested are in existence and sui juris and give their consent, and if there is no ultimate purpose requiring continuance thereof, a trust may be terminated by a court of equity; it is equally well established, however, that if the purpose of the creator of the trust has not been accomplished and such settlor is deceased and, therefore, cannot consent, then the trust may not be terminated even though all beneficiaries desire that it should be: Bosler Estate, 378 Pa. 333, 336-37 , 107 A. 2d 443 (1954); and see Cannistra Estate, 3

1966In Morgan’s Estate (No. 1), 223 Pa. 228 , it was held that where an income beneficiary had the right to terminate a trust and pay the principal as he should appoint, a spendthrift clause had no effect.

1966In Hall’s Estate, 248 Pa. 218 , it was held that the principal in a spendthrift trust became attachable on the very day it became payable to the remainderman, even though the property was still in the hands of the trustees, for “There [was] nothing in the will . . . which indicat [ed] an intention [of the testator] to subject the principal to [a] spendthrift trust”, nor any “provision for protection of the corpus ... in transmission to the beneficiaries at the end of the trust. . . .” This was the issue involved in Sproul-Bolton v. Sproul-Bolton as well, and the court there held that there was

1962In terminating the trust, Judge Shoyer of this court stated on page 650: “Where there is a gift of income for life plus a gift to the life tenant of a testamentary power of appointment plus a gift to the life tenant’s heirs in default of appointment, the life tenant is the sole party in interest and may, in the absence of a spendthrift clause, terminate the trust and capture the principal.” (Citing Dodson v. Ball, supra).

1962This is allowing, by indirection, that which this Court has consistently forbidden to be done directly. . . .” In Grote Trust, 390 Pa. 261 , the court, speaking per Mr. Justice (now Chief Justice) Bell, stated at page 270, et seq.: “However, the lower Court was in error in holding that Ludwig’s sale of his right to future spendthrift trust income created an acceleration of the remainder interests and justified the termination of the Trust Estate.” . . .

1959Mogridge’s Estate, 342 Pa. 308 , 20 A. 2d 307 (1941); Restatement, Trusts §156, comment (c) ; 2 Scott, Trusts §156 (2d ed. 1956).

1959Mogridge’s Estate, 342 Pa. 308 , 20 A. 2d 307 (1941); Restatement, Trusts §156, comment (c) ; 2 Scott, Trusts §156 (2d ed. 1956).

1955In Keeler’s Estate, 334 Pa. 225 , 3 A. 2d 413 , a trust in the nature of a spendthrift trust was created by the testator in favor of his granddaughter for her support and education, the trust to end and the principal to be paid to her upon her attaining the age of twenty-one if her father were then dead, but not until the death of her father no matter how old she might then be.

1955In Keeler’s Estate, 334 Pa. 225 , 3 A. 2d 413 , a trust in the nature of a spendthrift trust was created by the testator in favor of his granddaughter for her support and education, the trust to end and the principal to be paid to her upon her attaining the age of twenty-one if her father were then dead, but not until the death of her father no matter how old she might then be.

1950On January 17, 1949, the Supreme Court of the United States in Commissioner v. Estate of Church, 335 U. S. 632 , decided that, where a settlor created a trust prior to March 3, 1931, with retention of a life estate, the trust principal would be includable for estate tax purposes on the death of settlor.

1948There is nothing in the will or in the codicil which indicates an intention to subject the principal to spendthrift trust.” It is suggested that the ease of Rowland v. Martin, 230 Pa. 518 , is in point.

1941To the extent that Patrick v. Smith, 2 Pa. Superior Ct. 113 , conflicts with the views here expressed, it is disapproved.

1937The garnishee argues, however, that, since the plaintiff wives in Moorehead’s Estate, supra, and Thomas v. Thomas et al., supra, were residents of Pennsylvania, while the wife in the Everhart case, which denied access by foreign attachment to a spendthrift trust, was a non-resident, the exact point here raised has never been decided, that the latter case governs the one before us, and that such trusts are still valid in Pennsylvania as to non-resident wives.