Steinhof v. Murphy

• Decision Date: 27 July 2007
• Docket Number: C.A. No.: 2006-0463
• Parties: DAVID L. STEINHOF, MICHAEL E. STEINHOF, GREGORY E. STEINHOF, EDWARD J. STEINHOF, and JODY LOUSIE FEDELE v. MICHELLE J. MURPHY, Heir at Law Of Alice Bouchard and the Executrix of the Last Will and Testament of Robert Steinhof Declaration of Trust," dated December 28, 1994; the Heirs at Law of LAURA VIOLET FERLAND; the Heirs at Law of EUGENIA STOUTNAR and JOSEPHINE STEINHOF, ET AL.
• Court: Rhode Island Superior Court

DAVID L. STEINHOF, MICHAEL E. STEINHOF, GREGORY E. STEINHOF, EDWARD J. STEINHOF, and JODY LOUSIE FEDELE
v.
MICHELLE J. MURPHY, Heir at Law Of Alice Bouchard and the Executrix of the Last Will and Testament of Robert Steinhof Declaration of Trust," dated December 28, 1994; the Heirs at Law of LAURA VIOLET FERLAND; the Heirs at Law of EUGENIA STOUTNAR and JOSEPHINE STEINHOF, ET AL.

C.A. No.: 2006-0463

Superior Court of Rhode Island

July 27, 2007

DECISION

THUNBERG, J.

Before this Court for decision are cross motions for summary judgment filed by plaintiffs David L. Steinhof, Michael E. Steinhof, Gregory E. Steinhof, Edward J. Steinhof, and Jody Lousie Fedele (collectively "Plaintiffs") and defendants Michelle J. Murphy, Elizabeth Ferland, Charles Ferland, and Oscar M. Ferland (collectively "Defendants"). The Court has reviewed the applicable law, together with the parties' legal memoranda and oral arguments, and now issues this written decision.

Facts and Travel

This matter concerns the interpretation of certain provisions of an inter vivos trust and two wills of the late Robert Steinhof ("Decedent"), who passed away on August 27, 2004. The decedent established the trust at issue on December 28, 1994. In relevant part, the trust states:

"ARTICLE III

RIGHTS AND POWERS RESERVED

I hereby reserve the following rights and powers, to be exercised by me at any time, and from time to time, by delivery to Trustee of a written, signed, and acknowledged statement subscribed to by two witnesses, setting forth my intention

(3) To alter, modify, or amend this Declaration of Trust in any particular or general respect, provided that the duties and responsibilities of a Trustee other than myself shall not be permitted to be changed without the Trustee's approval

ARTICLE IV

POST-DEATH MANAGEMENT

Section C. Taxes, Tax Allocation. Trustee shall pay to the Personal Representative of my estate, as a cost or expense of administration of my estate, such amounts as are certified in writing by my Personal Representative as due for estate, death, inheritance transfer, income, and excise taxes (specifically excluding generation-skipping taxes), including interest and penalties thereon, if any, which are payable to any state taxing authority or the United States, and which exceed the liquid assets of my estate subject to administration by my Personal Representative Any property of the Trust Estate existing on the death of my spouse and which was or is at that time, or earlier, qualified for exemption from generation-skipping tax shall not bear any estate tax until non-exempt property has been used to satisfy estate taxes associated with my death or the death of my wife.

** *

ARTICLE VII

FINAL DISTRIBUTION

. . . the entire Trust Estate upon my death if my wife does not survive me, shall be held in Trust and administered as follows:

Section A. Generation-Skipping Trusts.

(1) Establishment. The portion, or portions, if any, of the Trust Estate to which generation-skipping tax exemption was or is allocated by virtue of my death, or the death of my spouse, shall be divided to provide (a) one equal share for Settlor's brother, Edward J. Steinhof, and Settlor's sister,

Alice Bouchard, each to be held as a separate trust for their benefit under subsection (2) of this Section A, ARTICLE VII, and (b) one equal share for the issue, collectively, of Settlor's then deceased brother or sister, also to be administered as a separate trust for the benefit of those issue pursuant to subsection (2) of Section A, ARTICLE VII. In the event Settlor's brother or Settlor's sister shall predecease Settlor with no surviving issue, such deceased brother's or sister's share shall be distributed equally amongst the then remaining shares established hereunder.

Section B. Family Trusts.

(1) Establishment. The rest, residue, and remainder of the Trust Estate shall be divided to provide (a) one equal share for Settlor's brother and Settlor's sister, each to be held as a separate trust for Settlor's brother's and Settlor's sister's benefit under subsection (2) of this Section B of the ARTICLE VII, and (b) one equal share for the then living issue, collectively, of each then deceased brother or sister of Settlor, to be administered for the benefit of those issue pursuant to subsection (2) of Section B of this ARTICLE VII. In the event Settlor's brother or Settlor's sister shall predecease Settlor with no surviving issue, such deceased brother's or sister's share shall be distributed equally amongst the then remaining shares established hereunder."

Pl.'s Ex. A (emphasis added).

On that same date - December 28, 1994 - Decedent also executed a will which, in pertinent part, stated:

"ARTICLE II

PAYMENT OF EXPENSES, DEBTS, AND TAXES

** *

Section B. Expenses of Administration and Taxes. My Personal Representative shall pay from my estate, as an expense or cost of the administration of my estate, all estate, inheritance, succession, and other death taxes of any kind and nature, together with any interest and penalties thereon, which may be levied or assessed by reason of my death by the laws of the United States or any state, together with all administration expenses incurred by my estate, whether ancillary or within in the state of my domicile. I expressly require my Personal Representative to adhere to any allocation or charge of the expenses of administration of my estate or taxes on my estate made in that trust referred to in ARTICLE IV, the limited terms of which for

...