Court Opinion

ID: 3165618
Source: CourtListenerOpinion
Date Created: 2015-12-24 21:06:36.720281+00
Date Added: 2024-06-11T12:13:36.149845
License: Public Domain

J-A25017-15

                                  2015 PA Super 271

IN RE: TRUST UNDER DEED OF DAVID P.               IN THE SUPERIOR COURT OF
KULIG DATED JANUARY 12, 2001                            PENNSYLVANIA

APPEAL OF: CARRIE C. BUDKE AND
JAMES H. KULIG

                                                      No. 2891 EDA 2014

                  Appeal from the Decree September 12, 2014
                 In the Court of Common Pleas of Bucks County
                     Orphans’ Court at No(s): No. 2013-0179

BEFORE: DONOHUE, J., MUNDY, J., and FITZGERALD, J.*

OPINION BY MUNDY, J.:                             FILED December 24, 2015

        Appellants Carrie C. Budke and James H. Kulig, children of David P.

Kulig (hereinafter Decedent or Settlor), appeal from the September 12, 2014

decree in a declaratory judgment action awarding Mary Jo Kulig, surviving

spouse of Decedent, a one half share of the assets in the revocable “Trust

Under Deed of David P. Kulig.” After careful review, we are constrained to

affirm.

        The essential facts of this case were presented to the orphans’ court as

a stipulation of the parties and can be summarized as follows. Settlor, on

January 12 2001, executed a revocable deed of trust (the Trust), with

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*
    Former Justice specially assigned to the Superior Court.
J-A25017-15

himself as trustee, for the benefit of himself and his then spouse, Joanne C.

Kulig (Joanne), and their issue.          Joanne died on August 15, 2010.   On

December 13 2010, Decedent executed a last will and testament.              On

December 30, 2011, Decedent married Appellee, Mary Jo Kulig (Mary Jo).

Although recommended by his attorney, Decedent opted not to enter into a

prenuptial agreement prior to his marriage to Mary Jo.       The parties agree

that the December 13, 2010 will was not made in contemplation of

Decedent’s subsequent marriage to Mary Jo. Decedent died on February 3,

2012.     His wife, Mary Jo, and his two children from his marriage with

Joanne, Carrie C. Budke and James H. Kulig (the Kulig Children) survived

Decedent.

        Upon the death of Settlor, Pasquale Hamel, succeeded as trustee of

the Trust and was appointed executor of Decedent’s estate. The terms of

the Trust provided that upon Settlor’s death, if Joanne predeceased him, the

principal balance in the Trust would be held in trust for the Kulig Children or

their issue and eventually distributed according to the terms of the trust. As

of the date of Settlor’s death, the value of the assets in the Trust was

$3,257,184.74. The estimated gross value of Decedent’s probate estate is

$2,106,417.26.1

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1
  Mary Jo also received a qualified benefit plan payment of $1,500,000.00
pursuant to the Employee Retirement Income Security Act ERISA, 29
U.S.C.A. §§ 1001-1461. Other assets not claimed by Mary Jo, and therefore
not at issue in this appeal, include two irrevocable trusts valued at
(Footnote Continued Next Page)

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      Mary Jo claims her intestate share of Decedent’s estate pursuant to 20

Pa.C.S.A. § 2507(3), which she avers includes the principal of the Trust by

virtue of 20 Pa.C.S.A. § 7710.2.            The Kulig Children concede Mary Jo is

entitled to an intestate share of the probate estate as a pretermitted spouse

under Section 2507(3), but dispute the same applies to the corpus of the

Trust.2 Accordingly, the Kulig Children, on March 15, 2013, filed a petition

for declaratory judgment before the orphans’ court of Bucks County

Pennsylvania, for a determination of whether Mary Jo is entitled to any share

of the Trust. Following completion of the pleadings, the parties submitted a

“Joint Stipulation of Facts” on June 11, 2014.           The parties subsequently

submitted memoranda of law in support of their respective positions.          On

September 12, 2014, the orphans’ court issued judgment in favor of Mary

Jo. The decree provides as follows.

             AND NOW, this 12th day of September, 2014, upon
             consideration of the Petition for Declaratory
             Judgment filed by Carrie C. Budke and James H.
             Kulig, the Answer with New Matter filed by
             Respondent Mary Jo Kulig in opposition thereto, after
             a hearing held before the undersigned on June 11,
             2014, and after the submission of briefs from
             Petitioners, Respondent, and Pasquale Hamel,
                       _______________________
(Footnote Continued)
approximately $5,500,000.00 and an IRA valued at approximately
$1,100,000.00. Orphans’ Court Memorandum Opinion, 9/12/14, at 3 n.2. A
second declaratory judgment action pertaining to a trust created by Joanne,
was ruled in favor of the Kulig Children, and is not a subject of this appeal.
2
  A pretermitted heir is defined as “[a] child or spouse who has been omitted
from a will….” BLACK’S LAW DICTIONARY 742 (8th ed. 2004).

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              Executor of the Estate of David P. Kulig, deceased
              and Successor Trustee of the above-captioned trust,
              it is hereby ORDERED and DECREED that pursuant to
              the Declaratory Judgments Act, 42 Pa.C.S. § 7531,
              et seq., declaratory judgment is entered as follows:

                     1.   Pursuant to 20 Pa.C.S. § 2507(3), Mary
              Jo Kulig, surviving spouse to David P. Kulig, is
              entitled to receive the share of her late husband’s
              estate that she would have been entitled to had he
              died intestate.

                   2.     Pursuant to 20 Pa. C.S. § 2102(4), Mary
              Jo Kulig is entitled to receive one-half of her late
              husband’s estate.

                    3.    The assets held in the revocable Trust
              Under Deed of David P. Kulig, dated January 12,
              2001, are subject to 20 Pa.C.S. § 2507(3), as
              provided in 20 PA. C.S. § 7710.2, and the legislative
              comments thereto.

                    4.     Mary Jo Kulig, surviving spouse to David
              P. Kulig, is entitled to receive a one-half share of the
              assets in the Revocable Trust Under Deed of David P.
              Kulig, dated January 12, 2001.

Orphans’ Court Decree, 9/12/14, at 1-2. The Kulig Children filed a timely

notice of appeal on October 2, 2014.3

       On appeal, the Kulig Children raise the following issue for our

consideration.

              As a matter of law, is a revocable trust that was
              created and funded by the settlor before his second
              marriage, and was intended to benefit the settlor’s
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3
 The Kulig Children and the orphans’ court have complied with Pennsylvania
Rule of Appellate Procedure 1925. In its Rule 1925(a) opinion, the orphan’s
court incorporated its September 12, 2014 memorandum opinion as
containing its reasons for its contested ruling.

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             first spouse and children from his first marriage and
             not the settlor’s second spouse, “subject to 20
             Pa.C.S. § 2507(3), as provided in 20 Pa.C.S.
             § 7710.2, and the legislative comments thereto” and
             thereby subject to a pretermitted spouse’s share,
             notwithstanding that the provisions of the cited
             statutes do not state as much and such
             interpretation reverses Pennsylvania law regarding
             property rights of surviving spouses?

Kulig Children’s Brief at 3.

      In addressing this question, we first note the applicable standard and

scope of our review. “When the Orphans’ Court arrives at a legal conclusion

based on statutory interpretation, our standard of review is de novo and our

scope of review is plenary.” In re Trust Under Agreement of Taylor, ---

A.3d ---, 2015 WL 5474319, at *2 (Pa. Super. 2015) (citation omitted).

“The object of all interpretation and construction of statutes is to ascertain

and effectuate the intention of the General Assembly.” 1 Pa.C.S.A.

§ 1921(a).

             When a statute is not explicit, we consider a variety
             of factors to ascertain the legislative intent, including
             the object of the provision and the consequences of
             different interpretations.       Absent a definition,
             statutes are presumed to employ words in their
             popular and plain everyday sense, and popular
             meanings of such words must prevail.

In re Vencil, 120 A.3d 1028, 1034-1035 (Pa. Super. 2015) (citations

omitted).

             It is only when the words of a statute are not explicit
             that a court may resort to other considerations in
             order to ascertain legislative intent. Consistently
             with the Statutory Construction Act, this Court has

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              repeatedly recognized that rules of construction are
              to be invoked only when there is an ambiguity.

Taylor, supra (citation omitted). “Statutory provisions relating to the same

subject must be read in pari materia.” Pilchesky v. Lackawanna Cnty.,

88 A.3d 954, 965 (Pa. 2014), citing 1 Pa.C.S.A. § 1932.

       “Statutes uniform with those of other states shall be interpreted and

construed to effect their general purpose to make uniform the laws of those

states which enact them.” 1 Pa.C.S.A. § 1927. “Official comments are to be

given weight in the construction of statutes.”   Lessner v. Rubinson, 592

A.2d 678, 680, n.4 (Pa. 1991) (citations omitted). However, to the extent a

comment conflicts with the text of a statute, the text controls. 1 Pa.C.S.A.

§ 1922.4

       At issue in this case is the proper interpretation and application of

Section 7710.2 of the Uniform Trust Act (UTA), enacted by our legislature
____________________________________________
4
  The prefatory comments to Chapter 77 of the Probate, Executor, and
Fiduciary Code (PEF Code) at issue in this appeal, reiterate this principle.

              The comments provided throughout this chapter
              were reproduced from the April 2005 Joint State
              Government Commission’s Report of the Advisory
              Committee on Decedents’ Estates Laws, proposing
              the Pennsylvania Uniform Trust Act, as edited by the
              Commission to reflect legislative amendments during
              the process of enactment. These comments may be
              used in determining the intent of the General
              Assembly. See 1 Pa.C.S. § 1939 and In re Martin’s
              Estate, 365 Pa. 280, 74 A.2d 120 (1950).

20 Pa.C.S.A., Ch. 77, Refs & Annos.

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effective November 6, 2006, as it pertains to the rights of a pretermitted

spouse. This raises a question of first impression in this Commonwealth. As

noted above, the facts of this case are not in dispute. The parties agree the

facts establish that neither the December 13, 2010 will nor the January 12

2001 Trust include any provision for Mary Jo, or were executed in

contemplation of Decedent’s marriage to Mary Jo, thus qualifying her as a

pretermitted spouse.   Kulig Children’s Brief at 6-7; Mary Jo’s Brief at 3.

Section 7710.2 provides that “[t]he rules of construction that apply in this

Commonwealth to the provisions of testamentary trusts also apply as

appropriate to the provisions of inter vivos trusts.” 20 Pa.C.S.A. § 7710.2.

One such rule of construction applicable to testamentary trusts is found at

Section 2507(3).

           § 2507. Modification by circumstances

           Wills shall be modified upon the occurrence of any of
           the following circumstances, among others:

                                     …

           (3) Marriage.--If the testator marries after making
           a will, the surviving spouse shall receive the share of
           the estate to which he would have been entitled had
           the testator died intestate, unless the will shall give
           him a greater share or unless it appears from the will
           that the will was made in contemplation of marriage
           to the surviving spouse.

                                     …

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20 Pa.C.S.A. § 2507(3).5

       The parties dispute whether Section 7710.2 operates to include an

inter vivos trust into the assets distributable as an intestate share for the

purposes of Section 2507.            The orphans’ court ruled that it does and

awarded Mary Jo one-half of the value of Decedent’s estate had he died

intestate including the assets held in the Trust.         Orphans’ Court Decree,

9/12/14, at 1-2.      The Kulig Children claim this was error.      “By altering a

statutory scheme that had developed for nearly 70 years, the Orphans’

Court erroneously made new law regarding pretermitted spouses, which was

neither intended by the General Assembly nor supported by the statutory

provisions at issue in this appeal.”           Kulig Children’s Brief at 12.   We

disagree.

       In support of their position, the Kulig Children carefully outline the

framework and legislative history of the portions of the PEF Code relating to

inter vivos trusts, decedents’ estates and spousal rights.        Kulig Children’s

Brief at 20-29. Specifically, the Kulig Children cite past precedent holding

that inter vivos trust assets are not considered part of a decedent’s probate

or intestate estate and were not available for distribution to a pretermitted

spouse under Section 2507.            Id. at 14, citing 20 Pa.C.S.A. § 2101(a);

Brown Trust, 26 Fid. Rep. 2d 379 (O.C. Phila. 2005).            They further note
____________________________________________
5
  The intestacy provisions of the PEF Code provide that Mary Jo’s intestate
share as surviving spouse, where there are surviving issue of decedent’s
prior marriage, is one half of the intestate estate. See 20 Pa.C.S.A. § 2102.

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that Section 2203 of the PEF Code establishes a right in a surviving spouse

to elect a share of a decedent’s probate estate and certain categories of

other property passing upon decedent’s death, including revocable inter

vivos trusts.   Id. at 22.   “Probate estates, testamentary trusts, revocable

inter vivos trusts, and irrevocable inter vivos trusts are different entities, and

it is important to distinguish among them.        [T]he General Assembly has

developed clear categories of property and detailed legal structures

regarding a surviving spouse’s rights, if any, to each.” Id. at 15. The Kulig

Children suggest that the application of Section 7710.2 to Section 2507(3),

as ruled by the orphans’ court, represents a radical change to this existing

and longstanding statutory scheme and fails to consider these provisions in

pari materia.    Id. at 30, 34.     The Kulig Children maintain that Section

7710.2 does not demonstrate a sufficiently clear and unequivocal intent by

the Legislature to warrant such an interpretation. Id. at 34.

      The Kulig Children emphasize Section 7710.2’s limiting phrase “as

appropriate” for application of the rules of construction to inter vivos trusts.

Id. at 35. The Kulig Children maintain that this limitation precludes reliance

on the comments to the Section absent direct support in its text. Id. at 36.

“Section 7710.2 applies only ‘as appropriate’ so the mention of Section 2507

in the comment cannot be interpreted to mean that Section 2507 is simply

imposed upon inter vivos trusts without qualification or limitation.” Id. The

Kulig Children posit that application of Section 2507(3), construing a

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decedent’s intent in the event of a divorce subsequent to the signing of a

will, to inter vivos trusts would be “appropriate” under Section 7710.2.    Id.

at 45-46.

      The Kulig Children contrast other sections of the UTA that specifically

reference sections of the PEF Code in the text of the sections as examples

where they claim such legislative intent to incorporate the PEF Code

provisions is clear.   Id. at 36, citing 20 Pa.C.S.A. §§ 7755 (dealing with

creditor claims), 7799.2 (dealing with accountings). The Kulig Children also

contrast sections of the UTC where the comments make a clear statement

that the provision constitutes a change in Pennsylvania law. Id. at 39, citing

20 Pa.C.S.A. § 7752(a) (addressing revocability, and including the Joint

State Government Commission Comment noted, “[a]dopting the position of

the UTC, subsection (a) reverses prior Pennsylvania law…”). Because of the

perceived lack of clear legislative intent, and applying the “as appropriate”

limiting language, the Kulig Children conclude that the comments to Section

7710.2, upon which the orphans’ court relied, are insufficient to support a

conclusion that the Legislature intended for inter vivos trusts to be subject to

the rules of construction applicable to testamentary trusts relative to Section

2507(3). Id. at 51.

      We conclude the orphans’ court was correct to refer to the comments

to Section 7710.2 to discern our Legislature’s intent.        See 1 Pa.C.S.A.

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§ 1927.   This Court has recently noted the relevance of the Uniform Law

Comments to the UTA.

            Of some use is the prefatory comment to Chapter 77
            of the PEF Code, which states that Chapter 77 is
            based upon the Uniform Trust Code [“UTC”]. 20
            Pa.C.S.A., Ch. 77, Refs. & Annos. (2005). However,
            not all sections of the UTC were adopted into the PEF
            Code. Id. Further, several PEF Code provisions,
            while based upon the UTC, were substantially
            rewritten by our General Assembly. Id. Sections of
            the chapter that are substantially similar to their
            equivalent provisions contained in the UTC are
            indicated as such by a reference to the relevant UTC
            section number in the PEF Code section headings.
            Id. For these provisions, the General Assembly has
            indicated that “the UTC comments are applicable to
            the extent of similarity.” Id.

In re McKinney, 67 A.3d 824, 831 (Pa. Super. 2013) (construing Section

7766(b)(4) relative to removal of a trustee). Section 7710.2 references UTC

112 in its section heading, hence the UTC comments are relevant here.

Additionally, the Joint State Government Commission provided a comment

with specific reference to Section 2507.

      The 2005 Joint State Government Commission Comment to Section

7710.2 notes that Section 7710.2 “imports 20 Pa.C.S. §§ 2507, 2514 and

2517 and other statutory and judicial rules of interpretation that apply to

trusts under wills.” 20 Pa.C.S.A. § 7710.2, cmt. (Jt. St. Govt. Comm.-2005)

(emphasis added). The Uniform Law Comment pertaining to Section 7710.2

explains some of the reasons for equating rules of interpretation between

inter vivos and testamentary trusts.

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             The revocable trust is used primarily as a will
             substitute, with its key provision being the
             determination of the persons to receive the trust
             property upon the settlor’s death.           Given this
             functional equivalence between the revocable trust
             and a will, the rules for interpreting the disposition of
             property at death should be the same whether the
             individual has chosen a will or revocable trust as the
             individual’s primary estate planning instrument. …
             Rules of construction can also concern assumptions
             as to how a donor would have revised donative
             documents in light of certain events occurring after
             execution. …

Id. cmt. (Uniform Law Cmt.).

      Based on these comments and the plain unambiguous text of Section

7710.2, we conclude our Legislature intended the rule of construction

employed to ascertain a decedent’s intent in connection to a pretermitted

spouse be applied to inter vivos trusts.       The text unambiguously applies

existing rules of construction employed for testamentary trusts to the

interpretation of inter vivos trusts. See 20 Pa.C.S.A. § 7710.2.

      The Kulig Children’s emphasis on Section 2203’s spousal election as

the means for a spouse to receive assets from a revocable inter vivos trust is

misplaced.    In contrast to Section 2507(3), the Section 2203 spousal

election provision is not a rule of construction. The former is a construction

applied in the absence of contrary intent to provide for a surviving spouse

based on the presumption that a decedent did not intend to omit the

surviving spouse from his or her testamentary decisions.          The latter is a

right of a surviving spouse available notwithstanding any contrary intent of

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the decedent to protect against disinheritance.          In recognition of the

“functional equivalency” between inter vivos trusts and testamentary

dispositions, the Legislature in adopting Section 7710.2 merely sought to

impose consistency on the construction of such instruments.          Accordingly,

there is little reason to treat a decedent’s presumed intent differently when

considering his will or his inter vivos trust. The fact that surviving spouses

retain other rights independent of that intent is irrelevant. Therefore, it is

unnecessary to read Section 7710.2 in pari materia with Section 2203,

because they relate to different concerns. “Statutes or parts of statutes are

in pari materia when they relate to the same persons or things or to the

same class of persons or things.”      Commonwealth v. Brown, 741 A.2d

726, 733 (Pa. Super. 1999) (en banc), citing 1 Pa.C.S.A. § 1932, appeal

denied, 790 A.2d 1013 (Pa. 2001).

      The Kulig Children’s suggestion that the 2005 Joint State Government

Commission Comment to Section 7710.2, importing Section 2507, when

read with the “as appropriate” language of the text should result in a

selective incorporation of only certain subsections of Section 2507 is

similarly   misplaced.   We   agree     with   the   orphans’   court’s   following

observation.

             Although [the Kulig Children] contend that it is not
             appropriate to apply Section 2507(3) to revocable
             inter vivos trusts, they admit that “[i]t must be
             appropriate for Section 2507 to apply to inter vivos
             trusts in some regard; otherwise, the comment to
             Section 7710.2 would be meaningless as it relates to

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              Section 2507.” … We note that the Pennsylvania
              Comment references Section 2507 in its entirety.
              We perceive that the General Assembly intended to
              permit the modification of an inter vivos trust in the
              event of a pretermitted spouse and, therefore, we
              believe that Petitioners’ claim is without merit.

Orphans’ Court Opinion, 9/12/14, at 11-12 (citation omitted).          Rather, we

consider the “as appropriate” language to indicate that application of rules of

construction should be used, as in any case, only when the express language

of the underlying instrument is unclear or the intent is made unclear through

intervening circumstances. “[I]t is well established that resort to the rules

of statutory construction is to be made only when there is an ambiguity in

the provision.” Oliver v. City of Pittsburgh, 11 A.3d 960, 965, (Pa. 2011)

(citation omitted).     The aim of Section 7710.2 is to impose uniformity in

interpretation of testamentary dispositions and inter vivos trusts, it is not an

invitation to a court to impose ad hoc considerations that would result in

non-uniform applications.

        Our review of our sister states that have enacted all or portions of the

UTC, has disclosed no case directly on point. The Kulig Children cite to Bell

v. Estate of Bell, 181 P.3d 708 (N.M. Ct. App. 2008) in support of their

position. Kulig Children’s Brief at 40-41, citing 1 Pa.C.S.A. § 1927. In Bell,

without any reference or discussion of its version of UTC Section 1126, the

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6
    The New Mexico statute provides as follows.

              § 46A-1-112. Rules of construction
(Footnote Continued Next Page)

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Court held that a pretermitted spouse’s share of the decedent’s assets would

not include his inter vivos trust.          Bell, supra at 716.   The pretermitted

spouse statutory rule of construction in Section 45-2-301 differs from our

Pennsylvania provision. In New Mexico, a qualifying pretermitted spouse will

receive an intestate share of the probate estate assets, only after excluding

any bequest to decedent’s children that are not also children of the

pretermitted spouse. Id. at 712. The interlocutory issue before the Court in

Bell was whether a bequest to a revocable inter vivos trust created to

benefit decedent’s children was equivalent to a direct bequest to the children

when determining a pretermitted spouse’s share.            Id. at 711.   The Bell

Court held it was not. Id. at 712. It went on, sua sponte, to advise that on

remand the assets already in the trust would not be included with the assets

available to calculate the pretermitted spouse’s share. Id. at 713. It did so

without any reference or discussion of its version of the UTC Section 112,

Section 46A-1-112. Id. The Kulig Children suggest that this lack of mention

was a tacit recognition that the rule of construction did not apply to an inter

                       _______________________
(Footnote Continued)
             The rules of construction that apply in this state to
             the interpretation of and disposition of property by
             will also apply as appropriate to the interpretation of
             the terms of a trust and the disposition of the trust
             property.

N.M. STAT. § 46A-1-112.

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vivos    trust   when    considering     a     deceased   settlor’s   intent   toward    a

pretermitted spouse. Kulig Children’s Brief at 43.

        We conclude that Bell is unpersuasive.             We again agree with the

orphans’ court’s observations.          “Unlike enactments of the UTC in other

jurisdictions such as New Mexico, our iteration of the rules of construction

includes a directive from the General Assembly to import protections to

pretermitted spouses. Compare, 20 PA.C.S. § 7710.2 with N.M. STAT.

§ 46A-1-112.” Orphans’ Court Opinion, 9/12/14, at 11.

        In sum, we conclude that the plain language of Section 7710.2,

consistent with the legislative comments appended thereto, reveals the

intention of the Legislature to make rules of construction consistent whether

interpreting testamentary dispositions or inter vivos trusts.              See Taylor,

supra. The use of such rules will occur only “as appropriate,” as when there

exists an ambiguity in an instrument’s terms or in a decedent’s intent. See

Oliver, supra.       In the instant case, an ambiguity relative to Decedent’s

intent arose relative to his surviving pretermitted spouse. Accordingly, we

conclude the orphans’ court did not err by applying Section 2507(3) to

Decedent/Settlor’s will and Trust, as directed by Section 7710.2.                       We

therefore affirm the orphans’ court’s September 12, 2014 decree.7

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7
  Whether the result achieved by this decision is just under the facts of this
case, where the surviving spouse receives approximately $120,000.00 for
each day of her marriage to Decedent is not for us to opine. The Legislature
is free to revisit and refine its clear directive as it sees fit. Further, we
(Footnote Continued Next Page)

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      Decree Affirmed.

      Judge Donohue joins the opinion.

      Justice Fitzgerald concurs in the result.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/24/2015

                       _______________________
(Footnote Continued)
express no opinion relative to the effect of Section 7710.2 on irrevocable
inter vivos trusts.

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