Statutory Share for Surviving Second Wife Trumps Intervivos Trust Formed before Marriage
The Superior Court addressed a novel question in Trust under Deed of David P. Kulig, 2015 PA Super 271 (December 24, 2015), a dispute between the second wife of a decedent and the children of his first wife. The decedent David Kulig formed a revocable trust while married to his first wife Joanne, providing that his children would receive the principal balance of the trust upon his death if Joanne predeceased him. Mr. Kulig outlived his first wife Joanne. He did not sign a prenuptial agreement, or amend his will or trust when he married his second wife Mary Jo. Mr. Kulig died while he was married to Mary Jo, who survived him.
The trust’s assets were worth more than $3 million, and the probate estate was worth more than $2 million. Mary Jo, the second wife, claimed an intestate share that included the trust assets, claiming that her statutory share overrode the trust under 20 Pa.C.S. §§ 2507(3) and 7710.2. The children of the first wife petitioned to declare the trust to be effective. The trial court held that the trust was not effective, and awarded one-half of all assets to Mary Jo.
Section 2507(3) of the Probate Code grants a share to the surviving spouse of a decedent who leaves a will if the will was made prior to marriage and does not make provision for the surviving spouse that is greater than the survivor would have received if the decedent had died intestate. Notably, this statute affects only “wills” and testamentary trusts that are created by wills. However, Section 7710.2 provides that “rules of construction that apply . . . [to] testamentary trusts also apply as appropriate to the provision of inter vivos trusts.”
The Probate Code contains a similar provision at § 2507(2) that invalidates a will or testamentary trust in favor of an estranged spouse after a divorce action has been commenced (under certain circumstances).
The trial court in Kulig held that Section 2507(3) granting a statutory share to the survivor of a decedent who made no provision for his spouse in a premarital will, would equally apply to a premarital grantor trust. The children of Mr. Kulig’s first wife complained that it was judicial activism, unwarranted by the statute and decades of precedential law.
Without getting deeply into probate law, the children of Mr. Kulig argued that the Probate Code contains detailed rules of constructions for various categories of property, such as probate estates, testamentary trusts, revocable grantor trusts, and irrevocable trusts. Imposing the interpretation of the trial court in this case would alter the statutory scheme without evidence of legislative intent. Section 7710.2 contains the phrase “as appropriate,” giving the courts discretion to apply the statutory share only in certain circumstances.
The surviving spouse and trial court relied upon the legislative comments under § 7710.2, which refer to the Uniform Trust Code and its comments. The UTC Comment to § 7710.2 notes that revocable inter vivos trusts are commonly used as a will substitute, and this “functional equivalence” is why the rules of construction for wills should also be applied to revocable inter vivos trusts.
These comments were convincing, in the eyes of the Superior Court. In the interest of consistency, the Court held that § 2507(3) of the Probate Code should override the provisions of a premarital inter vivos trust to the same extent as it would a premarital will or testamentary trust. The phrase “as appropriate” grants discretion only when the express language of the instrument is unclear, or intervening circumstances render it unclear. The Court then examined the holdings reached in other states where this issue was considered. No cases were found to be on point. The trial court’s decision was affirmed.