Is Williamson Estate still good law?
On August 24, 2009, the PA Superior Court filed its opinion in Wachovia Bank, N.A.'s appeal in The Estate of Anna Fridenberg . See 2009 PA Super 164.
The case arose on Objections to the Account of Wachovia Bank, N,A, as the Trustee of a perpetual charitable trust. Wachovia's corporate predecessor served as executor of the will of Anna Fridenberg and received commissions on principal for services as Executor. The same corporate predecessor then served as trustee of the trust under the will. The Attorney General of the Commonwealth objected to payments of Trustee's commissions on principal.
The Philadelphia Orphan's Court held for the objectant against Wachovia, N.A. because such payments are barred by decisions in the matters of Williamson Estate, 368 Pa. 343 (1951); Scott Estate, 418 Pa. 332 (1965); and, Ehret Estate, 427 Pa. 584 (1967). See the Court's opinion here. The Orphan's Court held that it would be unconstitutional under the Fourteenth Amendment of the United States Constitution, to apply retroactively any statute which repeals the prohibition on the same individual receiving commissions on principal as both executor and trustee, which prohibition existed under the 1917 Act. The Orphan's Court held that former Section 7185 (b) of the PEF Code, as amended by the Act of February 18, 1982, P.L. 45, No. 26, and, Section 7768 of the Uniform Trust Act, as enacted by the Act of July 7, 2006, P.L. 625, No. 98, may not be applied retroactively to permit the challenged payments of Trustee's commissions on principal.
The Orphans’ Court rejected the argument that case law had been superseded by the numerous legislative amendments, concluding: “The Legislature could not do in 1982 and 2006 what it was constitutionally prohibited from doing in 1945 and 1953.”
The Superior Court reversed the Philadelphia Orphan's Court. See their opinion here.
Justice Klein filed a dissent where he says:
"Although I agree that the majority’s outcome is both logical and preferable in light of the duties required of a trustee/executor, I cannot agree that In re Ehret’s Estate , 235 A.2d 414 (Pa. 1967), has effectively rendered In re Williamson’s Estate, 82 A.2d 49 (Pa. 1951), and In re Scott’s Estate, 211 A.2d 429 (Pa. 1965), obsolete. Therefore, I believe that our Supreme Court’s rule is still in effect. If a person or entity took a principal commission as executor dual commissions, that person or entity is barred from taking a principal fee from the trust although the rule changed before the fee against the trust principal was claimed. "
Stay tuned. If this case is appealed, as many Superior Court fiduciary law decisions are, we predict that the PA Supreme Court will adopt the position of the dissenting Justice Klein. Many fiduciary law cases have to go the extra mile to the Supreme Court.