The court refused to stay its review of the account of the trustees (based on in rem jurisdiction) while an action against the same trustees for tortious conduct in the administration of the trust (based on personal jurisdiction) was pending in another state. Frederick A. Stahl Trusts, 9 Fid.Rep.3d 161 (Monroe O.C. 2019).
The court exercised its discretion to summarily remove both co-administrators when both had filed pleadings to remove the other, finding that an evidentiary hearing would result in delay as well as unnecessary fees and expenses, and that the discord was not likely to end by removing only one of them. Estate of Robert Johnson, 9 Fid.Rep.3d 245, No. 62DE of 2017 (Philadelphia O.C. 7/9/2019).
It was an abuse of discretion and a denial of due process to deny a hearing on whether the contestant to a will had probable cause to challenge the validity of the will when the probate appeal was dismissed on a compulsory nonsuit following the close of the contestant’s case and the proponents of the will did not have an opportunity to present evidence. The existence of the in terrorem clause was not a defense to the will contest and did not need to be included in a new matter. Including the forfeiture issue in the new matter that was filed did not require the proponents to request a bifurcation or present evidence before moving for a nonsuit. Powell Estate, 2019 PA Super 140 (5/1/2019), vacating and remanding, 8 Fid.Rep.3d 147 (Philadelphia Co. O.C. 2018).
A new calculation for the valuation of promissory notes has been added to Webcalculators, the overview for which is below:
A new calculation for the valuation of intra-family loans at a below-market rate of interest has been added to Webcalculators, the overview for which is below:
Montgomery County has adopted new guardianship rules, to be effective 30 days after publication in the Pennsylvania Bulletin. “Adoption of Local Rules of Orphans’ Court 14.2—Petition for Adjudication of Incapacity and Appointment of a Guardian of the Person or Estate of an Incapacitated Person; Local Rule 14.2(a)(17)—Petition Contents; Local Rule 14.2(b-1)—Required Certification and Criminal Background Check of Guardians; Local Rule 14.2(c)(5)-(6)—Exhibits; and Local Rule 14.2(f)—Notice” (Montgomery Co. 6/19/2019), 49 Pa.B. 3603 (7/13/2019).
The Pennsylvania realty transfer tax (and the Philadelphia and other local versions of that tax) can be an issue when an executor or administrator is distributing real property from an estate, or when property is being transferred to or from…
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Westmoreland County has adopted new guardianship rules, effective 30 days after publication. “Guardianship Rules; No. 3 of 2019” (Westmoreland Co. 6/10/19), 49 Pa.B. 3476 (7/6/2019).
Schuylkill County has adopted local O.C. Rule 14.3(b), on proof of incapacity. “Local Orphans’ Court Rule 14.3(b); 2008-5000E” (6/18/2019), 49 Pa.B. 3476 (7/6/19).
H.B. 262, which eliminates the inheritance tax on all transfers from parents to children who are 21 or younger, also allows revocable trusts to be treated as part of the estate for Pennsylvania income tax purposes if the estate has made that election for federal income tax purposes. The bill passed both houses of the legislature and was approved by the governor as the Act of June 28, 2019, No. 13.
Under section 645 of the Internal Revenue Code, an estate can make an election to treat a revocable trust as part of the estate for federal income tax purposes, but there was no comparable provision under Pennsylvania law. So if an estate made that election, it would still be required to file separate Pennsylvania returns for the estate and trust, which was administratively burdensome. H.B. 262 eliminates this problem.
Section 10.2 of H.B. 262 amends section 331(g) of the Tax Reform Code of 1971, No. 2 of 1971 (72 P.S. § 7331), to read as follows:
“(g) The return for an estate or trust shall be made and filed by the fiduciary. If two or more fiduciaries are acting jointly, the return may be made by any one of them. If the executor of the estate and trustee of the trust make an election under section 645 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 645), as amended, to treat the income of the trust as part of the estate, the fiduciary may make and file a joint tax return for the estate and trust under this subsection for the taxable years when the trust income is reported as part of the estate income in accordance with section 645 of the internal revenue code of 1986, as amended. If the income tax liabilities of the estate and trust are filed on a joint tax return under this subsection, the tax liabilities of the estate and trust shall be joint and several. The provisions of subsection (d) shall be applicable to a joint tax return filed under this subsection.”
Section 29 of H.B. 262 makes this new provision applicable to tax years beginning after December 31, 2019.