Beneficiaries Named in Unexecuted Trust Document Do Not Have Standing to Sue Attorney

Reversing a lower court decision, Pennsylvania's highest court holds that beneficiaries who are not named in a trust but only in an unexecuted document do not have standing as third-party beneficiaries to sue the attorney who drafted the trust. Estate of Agnew v. Ross (Pa., No. 76 MAP 2015, Jan. 19, 2017).

Robert Agnew hired attorney Daniel Ross in 2003 to draft his estate plan. In 2010, Mr. Agnew asked Mr. Ross to make changes to his estate plan, including an amendment to his trust to leave the residue to his nieces and nephews instead of to charity. After Mr. Ross prepared the amendments, he met with Mr. Agnew, but Mr. Ross did not bring the 2010 trust amendment with him, so Mr. Agnew did not execute it before his death.

Mr. Agnew's nieces and nephews sued Mr. Ross, arguing that he breached his contract with Mr. Agnew. The trial court granted Mr. Ross summary judgment, holding that Mr. Agnew's relatives did not have standing to sue as third-party beneficiaries because there was no document that named them as beneficiaries. The relatives appealed, and the appeals court reversed, holding  that beneficiaries who are not named in a will or trust may still have standing to pursue a breach-of-contract action against the attorney who prepared the document if circumstances indicate the testator intended to name the beneficiaries.

The Pennsylvania Supreme Court reverses, holding that the nieces and nephews do not have standing to sue. The court rules that "individuals who are named only in unexecuted, consequently invalid documents . . . may not claim status as third-party beneficiaries of the legal contract between the testator and his attorney, and may not achieve a legacy through alternate means, such as a breach of contract action."

For the full text of this decision, go to: https://law.justia.com/cases/pennsylvania/supreme-court/2017/76-map-2015.html

Did you know that the ElderLawAnswers database now contains summaries of more than 2,000 fully searchable elder law decisions dating back to 1993?  To search the database, click here.