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Fidelity Union Trust Co. v. Anthony

Decided: May 14, 1951.

FIDELITY UNION TRUST COMPANY, A NEW JERSEY CORPORATION, AND ARTHUR E. C. HELLER, AS TRUSTEES OF THE TRUST ESTABLISHED BY ARNAUD G. HELLER ON APRIL 5, 1935, PLAINTIFFS,
v.
TRINDA HELLER ANTHONY, ET AL., DEFENDANTS



Stein, J.s.c.

Stein

Fidelity Union Trust Company and Arthur E. C. Heller, trustees of the trust created by deed of trust made by Arnaud G. Heller on April 5, 1935, pray allowance of their account as submitted, which account is admitted to be correct by all parties in interest.

By the second count of the complaint the trustees pray instructions of the court: (a) whether the net accumulations as of the death of Paul E. Heller or any part thereof are income or corpus; (b) whether the estate of Arnaud G. Heller is entitled to have refunded to it by plaintiffs the money advanced by Arnaud G. Heller to pay premiums on said life insurance policy, together with sums advanced for other purposes; and whether any such repayments shall be made out of corpus or out of said accumulations; (c) whether the estate of Arnaud G. Heller is indebted to plaintiffs for the sum of $10,433.61 necessarily paid out for gift and inheritance taxes and expenses therewith, or any part thereof; (d) whether any part of said accumulation is payable to Constance P. Henry, administratrix of Frances Heller Blount.

The facts are stipulated to be as follows:

1. On April 5, 1935, Arnaud G. Heller, as donor, executed a deed of trust to the Fidelity Union Trust Company, as trustee, and deposited with and assigned to said trustee, as corpus , 1,000 shares of the Heller Brothers Company $100 par value common stock and policy No. 8368048 issued by the Prudential Insurance Company of America dated March 9, 1934, in the amount of $75,000 on the life of Paul E. Heller payable to the donor or his assigns, (which stock and life insurance policy the deed of trust provides "shall constitute the principal of this trust and is hereinafter referred to as the Trust Estate"), and the trustee was given authority to receive and collect the proceeds of the life insurance policy and hold, manage and apply said proceeds in accordance with the trust deed.

2. Paragraph 1 of the deed of trust provides as follows:

"The Trustee shall hold, manage, invest and reinvest the same and every part thereof in the manner hereinafter specified, and shall collect and receive the income therefrom, and after deducting the commissions of the Trustee and the proper and necessary expenses in connection with the administration of the Trust Estate, including all taxes legally assessed on account thereof, shall, during the lifetime of Paul E. Heller, apply the net income, or so much thereof as shall be necessary, to the payment of the net premiums on a certain policy of insurance totalling $75,000.00, which policy was issued by the Prudential Insurance Company of America on March 9, 1934, bearing Policy No. 8368048, on the life of Paul E. Heller and made payable to the Donor, and now assigned as part of this Trust Fund, and any balance of said net income remaining in any one year after the net premiums for said year shall have been fully paid, as aforesaid, shall be held and distributed in accordance with the terms of this agreement, as hereinafter stated, unless such balance is required in any future year or years to pay said premiums, or any part thereof if the said securities shall yield an amount insufficient to pay such premiums; further provided, that if such securities fail to yield sufficient income during any one year to pay such premiums, the said Donor, or his personal representatives, shall have the privilege of making a contribution to the Trustee of whatever amount is required in order to place the Trustee in sufficient funds to pay such premium, and any such advancements made by the Donor shall be repaid to him upon his request by the Trustee, and which repayments are to be made out of income or principal of this Trust Estate. In the event the aforesaid income in any one year during the lifetime of said Paul E. Heller shall be insufficient to pay in full the net premiums for such year on the aforesaid policy of insurance, and said Donor, or his personal representatives,

does not contribute the required amount to make up the difference, then and in that event the Trustee shall have authority to make up the deficiency by a payment from the principal of the Trust Estate."

3. Paragraph 4 of the deed of trust provides as follows:

"Upon the death of said Paul E. Heller, the net income from the Trust Estate, until distribution of corpus , shall be divided among the following persons in the following proportion, to wit: to the Donor's nephew, Arthur E. C. Heller, forty per cent (40%); to the Donor's nieces, Frances Heller Blount, Ruth Heller Lowe, Wren Heller Lee, Gladys Heller Fenlin and C. Pauline Heller, each ten per cent, (10%) and to the Donor's daughter, Elaine Heller, ten per cent, (10%) thereof. Upon the death of any of the beneficiaries in this paragraph named, the share of income which the deceased would have taken if living shall go to his or her issue, per stirpes , and if there be no issue, then it shall be distributed among the survivors of the said beneficiaries ratably in the proportion in which the survivors share the income of this trust estate, prior to the death of such beneficiary."

4. Paragraph 5 of the deed of trust provides as follows:

"Upon the death of the last survivor of the beneficiaries of this trust fund and mentioned in Paragraph 4 hereof, the said Trustee shall distribute the corpus of the Trust property to the next of kin of Paul E. Heller, as they exist at the time of his death and according to the statute in such case made and provided for the distribution of personal property of persons dying intestate in the State of New Jersey."

5. During the lifetime of Paul E. Heller from April 5, 1935, to February 26, 1948, part of the income from the corpus was applied to the payment of premiums on said insurance policy on the life of Paul E. Heller, taxes, administrative expenses and commissions of the trustee.

6. At the date of the death of Paul E. Heller on February 26, 1948, there remained an accumulation of income and other receipts over disbursements in the sum of $69,283.54. This accumulation arose from the increment on sales of certain United States Treasury bonds, moneys contributed by the donor, Arnaud G. Heller, to cover certain expenses of the trust, dividends on the 1,000 shares of Heller Brothers Company common stock, including special dividends paid in 6% debenture bonds of said company and interest on securities held in the accumulation account.

7. All dividends declared and paid on the 1,000 shares of Heller Brothers Company common stock, including special dividends paid

in 6% Debenture Bonds of said company from April 5, 1935, to March 17, 1948, were paid out of earnings accumulated after April 5, 1935.

8. Arnaud G. Heller, the donor, pursuant to paragraph 1 of the deed of trust, during his lifetime made contributions to ...


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