The Superior Court has affirmed a decree of the Philadelphia Orphans’ Court denying the validity of attempted appointments of a successor trustee (or, in the alternative, removing the successor trustee appointed) by the resigning trustee and by the settlor, and confirming the appointment of the trustee requested by the primary beneficiary. The Superior Court agreed that (1) the attempted appointment by the resigning trustee was invalid because it was made outside of the 60 days allowed by the trust document following the resignation, (2) the attempted appointment by the settlor was invalid because the settlor could not appoint himself as trustee and the attempted appointment was of a long-time friend of the settlor whom the court considered to be the settlor’s alter ego, (3) the attempted appointment by the settlor was also voidable under the doctrine of “unclean hands” because the appointment was part of a plan to avoid the enforcement of loans made to the settlor by a limited partnership partially owned by the trust, and (4) the appointed trustee could be removed by the court under the “substantial change in circumstances” standard of 20 Pa.C.S. §7766(b)(4). The Vincent J. Fumo Irrevocable Children’s Trust for the Benefit of Allison Fumo (Appeal of Vincent J. Fumo), 104 A.3d 535, 2014 PA Super 235, No. 2459 EDA 2013 (10/17/2014), app. den., No. 32 EAL 2015 (7/15/2015).
The IRS has issued five identical private letter rulings, apparently to five different parties involved in the same transaction, confirming that a court-approved reformation of a trust in accordance with § 415 of the Uniform Trust Code would be respected for federal estate and gift tax purposes retroactive to the date of the creation of the trust, when there was clear and convincing evidence that the trust documents were drafted incorrectly and contrary to the settlor’s intentions. Although the name of the state was redacted from the ruling, the state law in question appears to be Pennsylvania, because the text of the statute quoted by the ruling includes a sentence specifically authorizing retroactive reformations and that sentence appears in Pennsylvania’s version of § 415 (20 Pa.C.S. § 7740.5) but not in the version that was approved by the National Conference of Commissioners on Uniform State Laws. PLRs 201442042, 201442043, 201442044, 201442045, and 201442046.
Both houses of the legislature have passed SB 428, which makes changes to Pennsylvania laws on pooled trusts for persons with disabilities.
A beneficiary’s court-ordered child support arrearage should be paid from the estate, notwithstanding the spendthift clause in the will, and the children’s mother had no standing to object to the administration of the estate or seek removal of the executor. A claim for counsel fees was also denied because the attorney failed to perform services in a timely manner. Estate of Roy A. Creamer, Deceased, No. 911 DE of 2012 (Phila. O.C. 9/30/2014) (audit memorandum of Herron, J.).
Westmoreland County has issued a new general order directing the redaction of Social Security numbers from documents made available to the public by the Register of Wills and Clerk of the Orphans’ Court. Publication of Social Security Numbers; No. 3 of 2014, 44 Pa.B. 5834 (9/13/2014).
Lawrence County has republished its fees for the Clerk of the Orphans’ Court, originally effective 1/3/2012, with increases in the Judicial Computer Project (JCP) fee to be effective on 7/10/2014 and 8/8/2014. Prothonotary and Clerk of Courts’; Administrative Order No. 90102/14, 44 Pa.B. 5657 (8/30/2014).
Judge Herron of the Philadelphia Orphans’ Court has denied approval of a nonjudicial settlement agreement, stating that:
“The intent of this section [7710.1] is to give all beneficiaries and trustees flexibility in the administration of certain trust matters. Seeking court approval of such a nonjudicial agreement would encumber this option. Because there is no need to extend court approval to the proposed nonjudicial settlement agreement, this court declines to do so.”
The failure of the parties to attach a copy of the agreement to their petition also contributed to the judge’s decision.
However, the judge approved the resignation of the trustee and the appointment of a new trustee under 20 Pa.C.S.A. § 7765(a) and 7764(c).
Testamentary Trust of John B. Conti, Deceased, O.C. No. 464 ST of 1982 (Phila. O.C. 9/22/2014)
Decedent executed a will in 1996, consisting of 9 words, date, and signature leaving everything to his mother. Following his death, another document is found consisting of 12 words (“At the time of my death, the house goes to Sandy Munro”), which is signed but undated, and mother appeals from probate. Court finds that the additional document is a codicil and that the house refers to the only home or real estate the decedent owned, because decedent and Sandy did not know each other until 2003, meaning the putative codicil was drafted after the will and not vice versa. Basner Will, 4 Fid. Rep. 3d 375 (OC Chest. 2014) (Opinion by Tunnell, J.)
Auditor’s report was affirmed, and objections dismissed, that (a) approved the trustees’ liquidation of some family businesses, notwithstanding precatory language expressing desire that businesses continue under the management and control of testator’s immediate family, (b) relied upon previous findings of fact because objectant was collaterally estopped from relitigating factual issues previously decided, (c) correctly interpreted the pecuniary marital deduction formula in the will, (d) allowed the legal fees incurred by the executors and trustees, including legal fees incurred in recovering assets misappropriated by the objectant, which were not unreasonable given the size of the estate and the complexity of the business interests held by the estate, (e) dismissed an objection to an alleged failure to account for a tractor that was purchased, and (f) assessed half of the attorney’s fees and costs against the “obdurate” and “litigious” objectant. Mumma Estate, 4 Fid. Rep. 3d 384 (O.C. Cumberland Co. 2014) (Opinion by Oler, J.)
Petitioner presented sufficient evidence to show reasonable cause to believe that genetic testing would assist in a determination of paternity, and expert testimony to establish that exhumation of the decedent would provide viable tissue samples for DNA testing. Fox Estate, 4 Fid. Rep. 3d 380 (O.C. Luzerne Co. 2014)