Beneficiaries Omitted From Trust By Mistake Can Sue Lawyer Who Prepared Trust

A Pennsylvania appeals court held that beneficiaries omitted from trust have standing to sue the attorney who prepared the trust as third-party beneficiaries if they can show they were intended beneficiaries of the decedent’s estate. Agnew v. Ross (PA Superior Ct., No. 2195 EDA 2014, February 2, 2015)

In 2003, Robert H. Agnew hired attorney Daniel H. Ross to draft estate planning documents. As part of Agnew’s estate plan, Ross drafted a revocable living trust and last will and testament. Over the next several years, Ross prepared various amendments to the trust and will, as requested by Mr. Agnew. Mr. Agnew’s estate plan consisted of specific gifts to family members, friends and charities. The beneficiaries of the residue of the trust were several colleges. 

In 2010, Agnew learned he had inoperable cancer. Soon thereafter, Agnew contacted Ross to make changes to his estate plan limiting the amounts going to charity and providing a larger bequest to his family. In that regard, Agnew told Ross that he wanted to amend his estate documents so that the residue of his trust would be divided into five equal shares, to be shared by Agnew’s nieces and nephews. 

Ross prepared a revised will and trust amendment and sent them to Agnew for review in August 2010. In September 2010, Ross met again with Agnew. Agnew signed all estate documents except for the trust amendment because Ross failed to bring the trust amendment with him to the signing ceremony. Agnew never executed the trust amendment before he passed away. 

Agnew’s nieces and nephews filed a lawsuit against Ross and his law firm. The nieces and nephews alleged that, as third-party beneficiaries of Agnew’s estate plan, Ross harmed them when he breached the contract with Agnew by failing to conduct a signing ceremony for the trust amendment. Ross and his law firm filed a motion for summary judgment which was granted. The trial court held that the nieces and nephews did not have standing as third-party beneficiaries of Agnew’s estate plan because none of Agnew’s estate documents named them as beneficiaries. The nieces and nephews appealed. 

The Pennsylvania appeals court reversed. The appeals court held that beneficiaries who are not named in a will or trust have standing to pursue a breach of contract claim against the lawyer who prepared the document upon a showing that the decedent intended to name the beneficiaries in the estate documents. The court found evidence that Agnew intended to benefit his nieces and nephews through the unsigned trust, and therefore remanded the case for a trial on the merits. 

The case is annexed here – Agnew v. Ross (PA Superior Ct., No. 2195 EDA 2014, February 2, 2015)

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