In re DiBiasio

Brief Fact Summary. Defendant Heirs at Law (Defendants) appealed a lower court ruling that upon the death of Testator Vincent Fiore (Testator), the rest, residue, and remainder of Testator’s trust vested in the nephew trustee, Joseph A. DiBiaso (Trustee), and the remainderman designated in his will.

Synopsis of Rule of Law. A testator’s omission of any substitute beneficiary who would take upon a trustee’s death evidences an intent to grant an indefeasibly vested remainder interest to the trustee and his estate.

Facts. Defendants appeal a lower court ruling that upon the death of Testator, the rest, residue, and remainder of Testator’s trust vested in the nephew Trustee, who was the remainderman designated in Testator’s will. Defendants argue that the trial court erred as a matter of law in failing to follow Testator’s clear testamentary intentions. Testator had executed a will in which he created a trust and named his nephew as trustee. The trust was to provide for the proper care, support, maintenance, education, and welfare of Testator’s surviving sisters and brother. Upon the death of Testator’s last sibling, certain cash legacies were to be distributed free and clear of the trust to Testator’s heirs. After these payments, the trust was to be paid and distributed to Trustee for his sole use and benefit. Trustee died prior to all of the trust’s life beneficiaries. At the death of Trustee, Trustee’s son filed a complaint to be named successor trustee. Defendants counterclaim, and argue tha
t the testamentary language indicates Testator’s intent to create a contingent remainder whereby Trustee’s interest in the residue of the trust was dependant on his outliving Testator’s siblings.

Issue. Did the Superior Court err in holding that a bequest of the rest, residue, and remainder of Deceased’s trust, subject to a beneficial life estate, vests in the remainder beneficiary upon Deceased’s death and should the Superior Court have instead found that the trust res reverts to the estate if the remainderman predeceases the life tenants?

Held. No. The Superior Court properly held that a bequest of the rest, residue, and remainder of Deceased’s trust, subject to a beneficial life estate, vested in the remainder beneficiary upon Deceased’s death. The Superior Court was correct in holding that the trust res does not revert to the estate if the remainderman predeceased the beneficiary life tenants of the estate. If the Testator had desired a reversion of the remainder in the event that he predeceased the life tenants, then he could have clearly indicated this with language in the will or a codicil. The Testator did not do this. The Testator stated that after specific distributions from the trust, the Trustee was to use the rest, residue, and remainder of the estate “individually for his sole use free and clear of Trust.” This language indicates the Testator’s clear intent that upon vesting of Trustee’s interest, he would no longer be merely the trustee of the property, but its outright owner. The Testator’s omission of a
ny substitute beneficiary who would take upon the trustee’s death evidences an intent to grant an indefeasibly vested remainder interest to the trustee and his estate.

Discussion. The goal of the Court is to determine testamentary intent. Here the Court relies upon the principle favoring immediate vesting of remainders and determines that the language of the will that refers to the “individual” use of the trust for the “sole” and “free” benefit of Trustee indicates an intention not to create a contingent remainder.