Est. of: Sletten Family Trust, Appeal of: Dahl, K.

J-A01040-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ESTATE OF: SLETTEN FAMILY : IN THE SUPERIOR COURT OF
TRUST, : PENNSYLVANIA
:
:
APPEAL OF: KELLY M. DAHL; CHAD :
SLETTEN; J. JOSEPH SLETTEN; :
DANIEL SLETTEN, AND CHRIS :
SLETTEN :
: No. 2289 EDA 2018
Appeal from the Order Entered July 6, 2018
In the Court of Common Pleas of Montgomery County Orphans' Court at
No(s): No. 2017-X2838
BEFORE: OTT, J., STABILE, J., and McLAUGHLIN, J.
MEMORANDUM BY McLAUGHLIN, J.: FILED MAY 06, 2019
Kelly M. Dahl, Chad Sletten, J. Joseph Sletten, Daniel Sletten, and Chris
Sletten (“Sletten Children”) appeal from the order granting Kathryn Sletten’s
Petition for Declaratory Judgment and finding the Sletten Family Trust U.D.T.
dated May 15, 1998 (“May Trust”) to be a valid trust. We affirm.
Kathryn, the trustee of the May Trust, filed a first and intermediate
account of the May Trust and a Petition for Adjudication. The property
contained in the May Trust was a piece of real estate located on Summer Ridge
Drive in Lansdale, Pennsylvania, (“Lansdale property”) and $10.00
(collectively, “Trust Property”). The Sletten Children filed Objections to the
Account and Petition for Adjudication, including an objection challenging the
validity of the May Trust. The Sletten Children claimed a document entitled
the Sletten Family Trust U.D.T., created by an instrument dated April ___,
1998, (“April Trust”) was the valid Sletten Family Trust. Kathryn filed an
J-A01040-19
Answer to the Objections and a Petition for Declaratory Judgment asking the
court to determine the validity of the May Trust. The court held a hearing on
the petition.
The trial court set forth the following factual history:
Idamarie Sletten (“Settlor”) had two children, son John
Sletten and an unnamed daughter, with whom she resided
in West Virginia during the time of the trust creation in 1998.
Settlor and her husband, Warren Sletten, jointly purchased
a house at 138 Summer Ridge Drive, Lansdale, PA in 1995
(“Summer Ridge property”). When Warren died on
September 21, 1996, settlor became the sole owner of the
property.
...
After discussions with Attorney David Ennis, Idamarie
Sletten executed a deed of property conveying the Summer
Ridge property to the Sletten Family Trust on March 3, 1998.
Thereafter, on March 24, 1998, Attorney Ennis sent a fax to
Irving Cooper, Esquire with directions for him to draft the
Sletten Family Trust. The directions stated that the purpose
of this Family Trust is to protect the Summer Ridge property
from an IRS lien which had been filed in Montgomery
County, Pennsylvania against the settlor’s son, John A.
Sletten. This fax also stated that the intent of the trust is to
give John A. Sletten and his wife, Kathryn J. Sletten, a life
interest in the property with the remainder to the children
of John A. Sletten.
On April 8, 1998, Attorney Ennis submitted the Sletten
Family Trust document to Settlor along with a cover letter
that directed her to sign the document and to do so in the
presence of a notary. Settlor returned the signed document,
dated April 17, 1998, to Attorney Ennis as directed
(hereinafter referred to as the “April Trust”).[1]
____________________________________________
1 The April Trust that John returned to Ennis was torn.
-2-
J-A01040-19
On April 23, 1998, Attorney Ennis sent the April Trust,
signed by Idamarie Sletten, to John Sletten with a directive
that he and his wife execute the document as co-trustees of
the trust.
On April 28, 1998, John Sletten returned the April Trust,
which only bore his signature, to Attorney Ennis. Along with
the April Trust, John sent a letter with several directives to
make changes to the document, including naming him the
sole trustee rather than being a co-trustee with his wife,
who refused to sign the April Trust.[2]
Approximately one week later, on May 5, 1998, Attorney
Ennis sent a letter to John and Kathryn Sletten noting that
he had made changes to the April Trust as a result of his
conversation with Kathryn. Along with this letter was the
newly drafted Sletten Family Trust.2 The couple is directed
by Attorney Ennis to sign the new draft and return it to him,
after which he will send that document to Idamarie Sletten
for her signature.
2 The change from the April Trust addresses the
disposition of the trust assets in the event of divorce
or both of their deaths.
This draft is never signed by John and Kathryn. Presumably,
it was returned without signature with further directives for
more changes as a short time later, Attorney Ennis sent
John and Kathryn another draft of the Sletten Family Trust
on May 14, 1998. The cover letter that accompanied this
draft of the Sletten Family Trust directed the couple to sign
the trust document and then send it to Idamarie for her
signature and notary.
This draft of the Trust Agreement was fully executed by all
parties on May 15, 1998 (hereinafter referred to as the “May
Trust”). The May Trust was later recorded on June 8, 1998
with the Deed of Property dated March 3, 1998, with Office
of the Montgomery County Recorder of Deeds.
____________________________________________
2 Although the trial court found Kathryn refused to sign the April Trust, Kathryn
testified that she had not seen the document prior to litigation. N.T., 3/28/18,
at 61.
-3-
J-A01040-19
Trial Court Opinion, filed July 6, 2018, at 1-3 (internal citations and a footnote
omitted).
To this recitation of facts, we add that the house was in Settlor’s name
and Settlor and her husband had made the down payment for the home.
Declaratory Relief Petition at ¶ 8. However, Kathryn testified that she and John
resided in the home since it was built and made the mortgage payments for
the home. N.T., 3/28/18, at 53, 55, 60. Under the terms of the April Trust,
John and Kathryn had life estates in the Trust Property and, upon termination
of the life estates, the Trust Property would be distributed to the Sletten
Children. The Sletten Family Trust U.D.T. dated April ___, 1998 (“April Trust”).
Under the terms of the May Trust, John and Kathryn had life estates in the
Trust Property, and, upon termination of the life estates, $80,000 would be
distributed to the Sletten Children. The Sletten Family Trust U.D.T. dated May
15, 1998 (“May Trust”). Any amount remaining after the $80,000 would be
divided into two shares, with one share divided among the Sletten Children
and the second share divided among Kathryn’s children. Id.
Further, although Ennis did not recall speaking with Settlor, he stated
he believed she was competent and “knew what she was doing” when she
signed the May Trust. N.T., 3/28/18, at 41-42. He also stated that, “in [his]
opinion, [they] were working towards a document that was signed by
[Settlor], John and Kathryn. That was the ultimate goal.” Id. at 44.
The trial court found that the May Trust was the valid trust. It reasoned
that the documents admitted at trial created a timeline. It noted the property
-4-
J-A01040-19
deed executed in March 1998 stated the property transfer was a “tax exempt
transfer from parent to children and grandchildren,” and that both the April
Trust and the May Trust relay benefits to Settlor’s son and daughter-in-law
and to John’s children. It referenced the first paragraph of the April Trust,
which stated: “This irrevocable inter-vivos trust made and entered into this
___ day of April, 1998, by and between Idamarie Sletten . . . and John A.
Sletten and Kathryn L. Sletten . . . .” Id. at 4. The document identifies the
trustee “collectively and jointly” as John and Kathryn. Id. The court concluded
that “[g]iven this language, . . . Kathryn’s signature was necessary to make
the April 1998 deed of trust a valid trust.” Id. Because Kathryn did not sign
it, it was not a valid and enforceable trust. Id.
The court further found that, even if Kathryn’s signature was not
required, it could not “ignore the series of correspondence with the attorney
which ultimately culminated in the fully executed May Trust.” Id. at 4-5. It
noted that it was unclear why Settlor would sign the May Trust if she intended
the April Trust to be the Sletten Family Trust. Id. The court further noted
there was no evidence that Settlor’s notarized signature on the May Trust was
fraudulent or fraudulently obtained. Id. The court concluded that “[t]he
totality of the circumstances in this matter is paramount and indicative of the
Settlor’s intent. Attorney Ennis’ consistent, credible testimony regarding
multiple revisions of trust documents confirms the process where in the
relevant parties (settlor, John and Kathryn) resolve their concerns and reach
-5-
J-A01040-19
agreement as evidenced by the fully executed deed of trust dated May 15,
1998.” Id.
The Sletten Children filed a motion to reconsider, which the trial court
denied. They also filed a timely notice of appeal.
The Sletten Children raise the following issues:
A. Did the court err in failing to find that the April
irrevocable trust was valid and controlling where all
statutory requirements for the creation of a valid irrevocable
trust had been met?
B. Did the court err in making findings that were beyond the
scope of the March 28, 2018 hearing where the hearing was
specifically limited by the court to determine the intent of
the settlor?
C. Did the court make a number of key errors that are
unsupported by the record and included in the court’s
findings of fact which affect the basis of the court’s opinion?
Sletten Children’s Br. at 4 (some capitalization and suggested answers
omitted).
The Sletten Children first argue that the April 1998 Trust is the valid
trust, as it meets the requirements of 20 Pa.C.S.A. § 77323 and was never
____________________________________________
3 20 Pa.C.S.A.§ 7732(a) provides:
(a) Requirements.--A trust is created only if:
(1) the settlor has capacity to create a trust;
(2) the settlor signs a writing that indicates an
intention to create the trust and contains provisions of
the trust;
(3) the trust has a definite beneficiary . . . [;]
-6-
J-A01040-19
legally revoked. They claim the documents show the Settlor’s intent was to
create a life estate for John and Kathryn, with the property passing to the
Sletten Children after the life estates, which was the distribution scheme
contained in the April Trust. They claim Kathryn’s signature was not needed
to create a valid trust. They further note that there was no communication
between Ennis and Settlor after the April Trust. The Sletten Children argue
the April Trust was not a draft, noting that: the letter enclosing the trust did
not call the document a “draft”; the Settlor signed and notarized the
document; Ennis sent the signed and notarized document to John and Kathryn
for their signatures; and, when John wrote Ennis and returned the document,
he requested a change to the trustee, but also said this document would be
fine even though torn. They note that a trust will not fail for the lack of a
trustee.
We review orders in declaratory judgment actions “to determin[e]
whether the trial court clearly abused its discretion or committed an error of
law.” Commerce Bank/Harrisburg, N.A. v. Kessler, 46 A.3d 724, 729
(Pa.Super. 2012) (quoting State Automobile Mut. Ins. Co. v. Christie, 802
A.2d 625, 627-28 (Pa.Super. 2002)). “We may not substitute our judgment
____________________________________________
(4) the trustee has duties to perform; and
(5) the same person is not the sole trustee and sole
beneficiary of the trust.
20 Pa.C.S.A. § 7732(a).
-7-
J-A01040-19
for that of the trial court if the court’s determination is supported by the
evidence.” Id. (quoting Christie, 802 A.2d at 627-28).
When interpreting a trust, courts have stated that “the polestar in every
trust is the settlor’s intent and that intent must prevail.” In re Trust of Hirt,
832 A.2d 438, 448 (Pa.Super. 2003) (quoting In re Benson, 615 A.2d 792,
794 (Pa.Super. 1992)). When determining the settlor’s intent, courts must
consider “(a) all the language contained in the four corners of his will and (b)
his scheme of distribution . . . (c) the circumstances surrounding him at the
time he made his will and (d) the existing facts.” Id. (quoting In re
McFadden, 705 A.2d 930, 931 (Pa.Super. 1998)).
The trial court did not abuse its discretion or err in finding the April 1998
Trust was a draft, and that the May 1998 Trust was the valid Sletten Family
Trust. The court determined the Settlor’s intent not only from her signature
on the documents, but also from the wording of the documents, and the
circumstances and facts that surrounded the execution of the documents.
Settlor signed and notarized the May Trust and the wording of the Trust
document contemplated an agreement between Settlor, John and Kathryn.
Further, Ennis had subsequent conversations and communications which
established that the April Trust did not capture Settlor’s intent, and Ennis
testified he believed Settlor knew what she was doing.
We also note that the evidence established that Settlor and her husband
had invested a down payment for the Lansdale property, but that John and
Kathryn lived in the property from the time of purchase and John and Kathryn
-8-
J-A01040-19
paid the mortgage on the property. Such evidence supports a finding that
Settlor intended that only her initial investment be distributed to the Sletten
Children.
We conclude the trial court’s findings are supported by the record, and
it did not abuse its discretion or err as a matter of law in finding the May Trust
valid.
The Sletten Children next contend the court erred in making findings
that were beyond the scope of the hearing, as the hearing was limited to the
determination of the intent of the settlor.
The Sletten Children cite the court’s finding that there was no evidence
that Settlor’s signature on the May Trust was fraudulent or fraudulently
obtained. They claim this was incorrect, as there was no evidence that the
changes made to the document were explained to Settlor. Further, they claim
the hearing was “on intent only.” Sletten Children’s Br. at 16. The Sletten
Children had pled in their answer and new matter numerous problems that
went beyond the four corners of the document and intent of the Settlor,
including unclean hands. They claim the hearing was limited to intent of the
Settlor and therefore they did not have an opportunity to present their
defenses at the hearing.
The Sletten Children cite to no place in the record where the court
limited the hearing or precluded them from presenting evidence they wished
to present. Further, we have found no such limitation. Although the trial court
noted that it was looking to determine intent, N.T., 3/28/18, at 14, 41, 55,
-9-
J-A01040-19
we find no location where it said it would not consider evidence of unclean
hands or other defenses.
As to the Sletten Children’s claim that the lack of evidence of
communication of the changes to Settlor established that the Settlor’s
signature was fraudulent or fraudulently obtained, we disagree. There was no
written communication explaining the changes to Settlor. This, however, does
not establish she was unaware of the changes. Rather, the court could
determine that the signature was not fraudulently obtained based on the
evidence presented, which included the fully executed May Trust, which
included Settlor’s notarized signature, and Ennis’ testimony that he believed
Settlor knew what she was doing and that the May Trust captured the intent
of Settlor, John, and Kathryn.
In their last issue, the Sletten Children claim the court made factual
findings that were not supported by the record, including facts that impacted
its legal conclusions.
First, the Sletten Children claim that the deed states it is a “tax exempt
transfer from parent to children and grandchildren,” but the court failed to
state that Kathryn’s children would be subject to a transfer tax, as they are
not children or grandchildren of Settlor. Sletten Children’s Br. at 9. Second,
they note that there is no evidence showing that the attorney had contact with
Settlor after receipt of the April Trust, and the trial court “apparently has no
issue with [the] failure to discuss or explain or contact his client after April 3,
1998.” Id. at 18. Third, the Sletten Children cite the court’s finding that
- 10 -
J-A01040-19
Kathryn refused to sign the April Trust, even though she testified she did not
see the document. Id. Fourth, the Sletten Children challenge the court’s
finding that there was a “process wherein the relevant parties . . . resolve
their concerns and reach agreement as evidenced by the fully executed deed
of trust dated May 15, 1998,” id. at 19, noting that there was no evidence the
changes were communicated to Settlor.
The Sletten Children disagree with the trial court’s findings, and believe
the court’s findings are incorrect absent more evidence. We find these claims
lack merit. The absence of a discussion of tax implications does not alter our
conclusion that the trial court did not err when determining Settlor’s intent.
Further, as discussed above, the trial court’s conclusions regarding Settlor’s
signature is supported by the record, even though Ennis did not recall
communicating with Settlor after the April Trust. In addition, Kathryn’s
testimony that she did not see the April Trust does not make the court’s finding
that the April Trust was a draft unsupported. Rather, as discussed above, the
evidence supported the finding that the April Trust was a draft. This is true
regardless whether Kathryn knew of the April Trust. In sum, we do not agree
with the Sletten Children’s characterization of evidence presented, find the
record supports the trial court’s conclusions, and decline to find that the lack
of specific evidence makes the court’s conclusions any less sound.
Order affirmed.
- 11 -
J-A01040-19
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/6/19
- 12 -