The Internal Revenue Service has released a 12/18/2015 draft of a new Form 8971 for reporting basis information in accordance with new IRC section 6035 for assets held by a decedent and reported on a federal estate tax return (Form 706) filed on or after August 1, 2015.
As previously reported, the IRS has delayed the due date for the new reporting requirements until February 29, 2016. See Notice 2015-57.
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| Month | Annual | Semiann. | Quarterly | Monthly |
|---|---|---|---|---|
| Jan. | 0.41% | 0.41% | 0.41% | 0.41% |
| Feb. | 0.48% | 0.48% | 0.48% | 0.48% |
| March | 0.40% | 0.40% | 0.40% | 0.40% |
| April | 0.48% | 0.48% | 0.48% | 0.48% |
| May | 0.43% | 0.43% | 0.43% | 0.43% |
| June | 0.43% | 0.43% | 0.43% | 0.43% |
| July | 0.48% | 0.48% | 0.48% | 0.48% |
| Aug. | 0.48% | 0.48% | 0.48% | 0.48% |
| Sept. | 0.54% | 0.54% | 0.54% | 0.54% |
| Oct. | 0.55% | 0.55% | 0.55% | 0.55% |
| Nov. | 0.49% | 0.49% | 0.49% | 0.49% |
| Dec. | 0.56% | 0.56% | 0.56% | 0.56% |
| Month | Annual | Semiann. | Quarterly | Monthly |
|---|---|---|---|---|
| Jan. | 1.75% | 1.74% | 1.74% | 1.73% |
| Feb. | 1.70% | 1.69% | 1.69% | 1.68% |
| March | 1.47% | 1.46% | 1.46% | 1.46% |
| April | 1.70% | 1.69% | 1.69% | 1.68% |
| May | 1.53% | 1.52% | 1.52% | 1.52% |
| June | 1.60% | 1.59% | 1.59% | 1.58% |
| July | 1.77% | 1.76% | 1.76% | 1.75% |
| Aug. | 1.82% | 1.81% | 1.81% | 1.80% |
| Sept. | 1.77% | 1.76% | 1.76% | 1.75% |
| Oct. | 1.67% | 1.66% | 1.66% | 1.65% |
| Nov. | 1.59% | 1.58% | 1.58% | 1.57% |
| Dec. | 1.68% | 1.67% | 1.67% | 1.66% |
| Month | Annual | Semiann. | Quarterly | Monthly |
|---|---|---|---|---|
| Jan. | 2.67% | 2.65% | 2.64% | 2.64% |
| Feb. | 2.41% | 2.40% | 2.39% | 2.39% |
| March | 2.19% | 2.18% | 2.17% | 2.17% |
| April | 2.47% | 2.45% | 2.44% | 2.44% |
| May | 2.30% | 2.29% | 2.28% | 2.28% |
| June | 2.50% | 2.48% | 2.47% | 2.47% |
| July | 2.74% | 2.72% | 2.71% | 2.70% |
| Aug. | 2.82% | 2.80% | 2.79% | 2.78% |
| Sept. | 2.64% | 2.62% | 2.61% | 2.61% |
| Oct. | 2.58% | 2.56% | 2.55% | 2.55% |
| Nov. | 2.57% | 2.55% | 2.54% | 2.54% |
| Dec. | 2.61% | 2.59% | 2.58% | 2.58% |
The Internal Revenue Service (IRS) has issued a notice providing guidance on the application of the decision in Obergefell v. Hodges, 576 U.S. ___, 135 S.Ct. 2584 (2015), to retirement plans qualified under section 401(a) of the Internal Revenue Code (Code) and to health and welfare plans, including cafeteria plans under section 125 of the Code. Notice 2015-86, 2015-52 IRB 1 (12/9/15).
Provision of will directing executor to pay the costs of delivering “such tangible property” expanded the meaning of “personal effects” to include a gift of automobiles, which is consistent with a previous will and a summary of that will prepared by the decedent’s lawyer. It was the intention of the testator that his four children should receive equal gifts, and so a cash gift to one child should have the same priority as gifts of real property to the other three children, and cash gifts to step-children will abate. Lozinak Estate, 5 Fid.Rep.3d 398 (O.C. Montg. 2015) (opinion by Ott, J.)
Administrator properly rejected offers of one beneficiary to rent or purchase real estate owned by decedent, and letter from the decedent, which expressed a desire that the beneficiary reside at the property, was not a codicil because it expressed no testamentary intention to transfer the property to the beneficiary. Smolsky Estate, 5 Fid.Rep.3d 392 (O.C. Bucks 2015), aff’d, No. 2182 EDA 2015 (Pa. Super. 2/4/2016) (memorandum by Platt, J.), pet. for app., No. 193 MAL 2016 (Pa.).
Estate’s payment of inheritance on individual retirement accounts was proper when will directed that “all taxes that may be assessed in consequence of my death” be paid “from my residuary as a part of the expense of the administration of my estate.” Reasonable executor commission and attorney fees determined in accordance with guidelines different from Johnson Estate, with a reduction in attorney fees for accountant fees for preparing tax returns. Donofrio Estate, 5 Fid.Rep.3d 384, 96 Wash.Co.Rep. 16 (O.C. Wash. 2015).
The Supreme Court has entered an order adopting new Orphans’ Court rules, generally effective September 1, 2016. In re: Order Rescinding and Replacing Rules 1.1 through 13.3 and Rule 17, and Amendment Rules 14.1 through 16.12 of the Pennsylvania Orphans Court Rules, No. 682 Supreme Court Rules Docket (12/1/2015), 45 Pa.B. 7098 (12/19/2015).
The Orphans’ Court Procedural Rules Committee Report, summarizing and explaining the rules, states that in response to some of the comments that were received some revisions were made to the rules as originally proposed, but it is not immediately apparent which of the proposed rules were revised. [Update: An unofficial copy of a comparison between the proposed rules and the final rules can be found here.]
We hope to provide some commentary on the new rules in the near future.
[Update (12/15/14): On 12/14/2015, the Supreme Court entered an amended order, the purpose of which was reportedly to correct the underlining and brackets for some additions and deletions to Chapter 14 (incapacitated persons) and Chapter 16 (abortion control).]
[Update: The Supreme Court entered a later order regarding the review of local rules for which there is a “continued necessity.”]
Preliminary objections sustained to civil complaint transferred from the Civil Division of Philadelphia County to the Orphans’ Court of Montgomery County after challenges to will and trust document had already been dismissed in Montgomery County, although claims of fraud and tortious interferece with inheritance were dismissed without prejudice to replead. Kaplan Estate and Trust, 5 Fid.Rep.3d 379 (O.C. Montg. 2015) (opinion by Murphy, J.)
Direction in will that all estate, inheritance, and other death taxes be paid “out of and charged against my estate” overcame statutory direction that inheritance tax be paid from shares of estate subject to tax, and not from charitable shares. Davis Estate, 128 A.3d 819, 2015 PA Super 249 (2015), rev’g 5 Fid.Rep.3d 8 (O.C. Erie 2014).
In an appellate case of first impression, the Superior Court has upheld the validity of a surrogacy contract, finding that the contract did not violate public policy and that, under the contract, the woman who was the “intended parent” under the contract was a parent of the child even though she was neither the gestational mother nor the biological mother (the egg coming from an egg donor). In re: Baby S, 2015 PA Super 244, No. 1259 EDA 2015 (11/23/2015), aff’g 5 Fid. Rep. 3d 221 (O.C. Montg. 2015) (Opinion by Ott, J.). Both the Orphans’ Court and the Superior Court placed significant reliance on the 20-year existence of policies and procedures of the Pa. Department of Health for birth registrations for babies born through assisted conception, the Superior Court concluding that:
“The legislature has taken no action against surrogacy agreements despite the increase in common use along with a DOH policy to ensure the intended parents acquire the status of legal parents in gestational carrier arrangements. Absent an established public policy to void the gestational carrier contract at issue, the contract remains binding and enforceable against Appellant.”