Pennsylvania Court Rules Beneficiaries Can’t Unilaterally Change Trust’s SitusPennsylvania Court Rules Beneficiaries Can’t Unilaterally Change Trust’s Situs
Doing so would undermine the grantor’s intent.
In the case of In re Dille Family Trust (26 WDA 2023 J-A06027-24 (May 16, 2024), an unreported decision, the Pennsylvania Superior Court affirmed the rulings of the Pennsylvania Orphans’ Court and concluded that the beneficiaries of a trust couldn’t unilaterally remove the trustee and change the trust’s situs.
A California couple established the Dille Family Trust in 1979. The trust was governed by California law. It became irrevocable after the grantors’ deaths. After a series of trustee and situs changes, Pennsylvania attorney Louise Greer was accepted as trustee in 2011. After Louise became trustee, the trust was governed by Pennsylvania law. For various reasons, eight years later, the beneficiaries wanted to remove Louise as trustee and change the trust’s situs back to California. They notified Louise that she was no longer trustee and then filed various petitions in California courts to terminate the trust and transfer situs. Louise contested these actions, filing a petition in the Pennsylvania Court arguing that the beneficiaries had no authority to remove her under the trust document or move the trust’s situs while she was acting as trustee. In the meantime, a third party purported to be the trustee and filed various motions in California, including to terminate the trust.
The court agreed with Louise and determined that the beneficiaries had no right under the trust to unilaterally remove her (or any other trustee). Additionally, while the beneficiaries had the power under the trust instrument to “transfer the Trust situs to a more convenient jurisdiction,” such power wasn’t unlimited. As Louise remained the trustee in Pennsylvania, the situs couldn’t be moved to California because California courts have no jurisdiction over her and couldn’t oversee the administration of the trust. Without trustee consent or court approval, the ability of the beneficiaries to unilaterally change the situs of the trust would allow them to undermine both the grantors’ intent and the authority of the courts. This wasn’t allowed.
