On an appeal from an order of the Department of Revenue Board of Appeals, the court reversed the decision of the board and found that the funds in the revocable trust of the decedent were for the “sole use” of the spouse who was the sole trustee and sole beneficiary and could use or remove any of the funds, so no inheritance tax was owed. Potocar Estate, 11 Fid.Rep.3d 150 (Allegheny O.C. 2021), aff’d, 283 A. 3d 936, 662 C.D. 2020 (Pa. Cmwlth. Ct. 9/30/2022).
In allocating a settlement for improper distributions from a trust between income and principal, the court determined the amount of income that would have been earned by the trust by looking at the income earned by a similar trust created by the same grantor. The court also allowed legal fees to one of the beneficiaries for creating the settlement fund under the “common fund” doctrine. Scaife Trust, 11 Fid.Rep.3d 143 (Allegheny O.C. 2021).
Daughter’s request for reimbursement for legal fees and costs incurred in guardianship proceedings for her incapacitated father was denied because the daughter did not create new funds for her father or “provide a similar special service,” and an incapacitated person’s estate must be used exclusively for that person’s care and management. Clark, an Incapacitated Person, 11 Fid.Rep.3d 142 (Chester O.C. 2021).
[DBE Comment: This conclusion is almost surely wrong. The costs of the administration of an incapacitated person’s estate is normally paid from the estate, and there can’t be any administration or management until a guardian is appointed, so the reasonable costs of the appointment of the guardian should be considered administrative costs of the estate, just as the costs of probating a will or obtaining letters of administration are normally paid from the estate. For examples of legal fees that are not reimbursable from an estate, see “Non-Reimbursable Legal Fees of Fiduciaries.”]
Will provided for the residue to pass in equal shares to the two grandchildren and, if a grandchild was under the age of 25, his or her share was to be held in trust until age 25 or, if incapacitated, until the incapacity ended. The share of a grandchild who survived the testator, became incapacitated before age 25, and died after age 25 without regaining capacity, was distributed to the other grandchild and not the estate of the deceased grandchild. Moses Trust, 11 Fid.Rep.3d 139 (Berks O.C. 2021).
The Orphans’ Court Procedural Rules Committee is considering amendments to a number of Orphans’ Court rules to change references to “master” to “hearing officer.” The purpose of the amendments is to eliminate a term that has “a perjorative connotation” in “modern parlance outside of court.” The term has already been replaced, or is being replaced, in other bodies of rules. Comments should be submitted to orphanscourtproceduralrules@pacourts.us by September 24, 2021. “Proposed Amendment of Rules 1,3, 2.11, 9.1, 9.2, 9.4, 9.5, 9.6, 9.7 and 9.8 of the Pennsylvania Orphans’ Court Rules,” 51 Pa.B. 5194 (8/21/2021).
The various Supreme Court Procedural Rules Committees have proposed a new set of rules for the interpretation and construction of the rules promulgated by the Supreme Court, including the Rules of Orphans’ Court Procedure. Proposed Rules of Judicial Administration 104 through 115 contain fairly standard rules of construction and would be incorporated into the Orphans’ Court rules by a cross-reference in amended Rule 1.2(b). “Proposed New Pa.R.J.A. 104-115; Rescission of Pa.R.Civ.P. 101-104, 106-108 and 127-153; Amendment of Pa.R.Civ.P. 126, Pa.R.O.C.P. 1.2, Pa.R.Crim.P. 101, Pa.R.J.C.P. 101 and 1101, Pa.R.A.P. 107 and 903, Pa.R.Civ.P.M.D.J. 204 and Pa.R.E. 101,” 51 Pa.B. 5532 (9/4/2021).
An allegation that the decedent wanted to “discuss” adding the plaintiffs to his will or making gifts to them is not sufficient to state a cause of action for intentional interference with an inheritance, and there is no cause of action for intentional interference with a gift. Tecce v. Tecce, 11 Fid.Rep.3d 133 (Delaware C.P. 2020).
It is proper for a court to enforce a prior settlement order against an insurance company for a wrongful death and survival action, even though the settlement amount exceeds the policy limits, when the initial release was prepared by the insurer’s attorney, the attorney received notice of the filing of the petition to approve the settlement, there was no appeal from the approval, and there was no fraud, misrepresentation, or mutual mistake. Edwards Estate, 11 Fid.Rep.3d 123 (Bucks O.C. 2021), on appeal, 188 EDA 2021 (Pa. Super.).
Although the trustee had the discretion to deny requested withdrawals by the beneficiary if in the opinion of the trustee the beneficiary is suffering from a disability that renders him unable to manage his own affairs, the trustee failed to properly use that discretion when the “disability” was childhood attention deficit hyperactivity disorder (ADHD) allegedly aggravated by marijuana use. Harrison Trust, 11 Fid.Rep.3d 116 (Bucks O.C. 2021) (trust governed by Florida law), aff’d 635 EDA 2021 (Pa. Super. 1/4/2022) (non-precedential).
There was evidence of donative intent by the decedent to give her former son-in-law $500,000, but not $1,000,000, so the transfer of $1,000,000 by the decedent was a partial gift, but the gift was invalid because of the presumption of undue influence by the son-in-law who was also the decedent’s agent and caretaker. The additional $500,000 was obtained for promises made by the son-in-law to take care of the decedent, which he did not do and so was unjustly enriched. In re: Barbara D. Dotter, 11 Fid.Rep.3d 107 (Allegheny O.C. 2019).