Opinion ID: 2338288
Heading Depth: 1
Heading Rank: 1

Heading: Background Facts and Trial Court Decision

Text: Florence Chavin and her husband had two sons, I. Favel and Leslie. Favel, also had two sons, Kenneth and Jeffrey. As part of their estate plan, Florence and her husband created revocable trusts. In 1998, after both her husband and Favel had died, Florence revised her trust and executed a new will, which together divided Florence's estate roughly evenly between Leslie and the two grandchildren, free of any trust. In addition, Florence made testamentary gifts totaling $9,500 to ten people, including a $1,000 gift to Harlan Miller, her husband's great nephew. Florence died on May 7, 1999, leaving an estate valued at approximately $2 million. Her son, Leslie, who was a long time resident of Brazil, was murdered in Rio de Janeiro on August 21, 1999. Leslie, who was unmarried and had no children, left his estate to Harlan. PNC Bank, Delaware, is the administrator of Leslie's estate, the executor of Florence's estate, and the trustee of her trust. Kenneth and Jeffrey filed this declaratory judgment action against PNC Bank and Harlan seeking a determination that they are the residuary beneficiaries of the trust. The trust provides, in relevant part: ITEM XIII.    Section 4. ... [U]pon the death of Settlor, Trustee shall pay over, transfer and convey whatever remains of the trust estate, discharged of the trust, to Settlor's son, LESLIE S. CHAVIN, if he shall then be living. If Settlor's son shall then be deceased, to Settlor's then living issue, per stirpes. The grandchildren contend that the phrase if he shall then be living refers to the time when the trustee pays over the trust estate to the beneficiary. PNC Bank and Harlan argue that the phrase refers to the Settlor's date of death. John M. Amalfitano, Esq., the attorney at PNC Bank who drafted the revised trust, provided the only evidence of Florence's dispositive intent. In his deposition, Amalfitano recalled that the most significant issue for Florence was whether she would continue to retain the assets in trust or give the assets to the beneficiaries outright. Leslie, who was visiting his mother and met with Amalfitano, told them both that he would prefer to receive the assets free of the trust, and Florence ultimately honored that preference. Amalfitano did not discuss with Florence the possibility that Leslie might survive her, but die before receiving the trust assets. He did acknowledge, however, that Leslie and the two grandsons were the only three beneficiaries that were in the picture. Amalfitano also stated his belief, based on the discussions he had with Florence, that she would have given more of her estate to her grandsons if she had known that Leslie would die when he did. The Court of Chancery found that the phrase if he shall then be living refers to the date of the settlor's death. The court viewed this as the most plausible construction because it refers to a date certain and because it results in early vesting of the estate. In addition, the trial court found its construction to be consistent with Florence's intent. The court apparently concluded that, because Florence decided to terminate her trust upon her death, she did not intend the estate assets to stay within the immediate family.