Supreme Court Denies Trust Modification to Replace Trustee

The Supreme Court has held that that 20 Pa.S.C. § 7766 is the exclusive method for removing a trustee, and that a trust cannot be modified under § 7740.1 to allow the beneficiaries to remove and replace the trustee.  Trust under Agreement of Edward Winslow Taylor, 640 Pa. 629, 164 A.3d 1147, 15 EAP 2016 (Pa. 7/19/2017), rev’g 124 A.3d 334, 2015 PA Super 199, (9/18/2015).

For additional background and analysis of the Superior Court opinion, see Trust Modifications to Remove Trustees.  (Commentary on the Supreme Court opinion is also planned.)

 

New Monroe County O.C. Rules

Monroe County has adopted new local Orphans’ Court rules consistent with the state-wide rules that took effect in September 2016, to be effective 30 days after publication in the Pennsylvania Bulletin.

“Implementation of Local Orphans’ Court Rules; 5 CV 2017 ADM # 49” (Monroe Co. 6/28/2017), 47 Pa.B. 3810 (7/15/2017).

Successor Agent Could Not Bind Principal

The successor agent did not have the power to bind the principal to an arbitration agreement when there was no showing that the initial agent named in the power of attorney was “unwilling or unable to act” as attorney-in-fact for the principal, as required by the power of attorney.  Petersen v. Kindred Healthcare, Inc., 155 A.3d 641, 2017 PA Super 26 (2/1/2017).

Parental Rights May Be Terminated Despite Progress

The conclusion of the Orphans’ Court that there was a “reasonable probability” that a mother will be able to remedy conditions and regain custody of children was not supported by the record and ignored the requirements of the Adoption Act with respect to termination of parental rights, because the circumstances that lead to the children being removed from the parents’ custody had not changed.  Case remanded to the Orphans’ Court to allow reconsideration of the possible benefits of the parental relationships under 23 P.C.S. § 2511(b).  In the Matter of the Adoption of M.A.B., 2017 PA Super 202 (6/29/2017).

Child Born Before Execution of Will not “Omitted Child”

A child born before the execution of will and not provided for by the will is not entitled to an intestate share of the estate under 20 Pa.C.S. § 2507(4), and preliminary objections to the child’s petition for declaratory judgment were properly granted.  Estate of Sidney Rothberg, 2017 PA Super 198 (6/23/2017), aff’g No. 673 AP of 2009 (Philadelphia O.C. 9/8/2016).  [Previous decisions involving this same estate.]

Legal Counsel Not Waived in Involuntary Termination of Parental Rights

It was error for the Orphans’ Court to fail to grant a continuance to a parent to obtain counsel in a proceeding to terminate his parental rights when the parent failed to request counsel from the court but three of the five sets of notices received by the parent instructed the parent to contact the local legal services agency, which the parent did and was told that they do not represent parties in custody matters.  In Re: Adoption of C.A.S., 2017 PA Super 193 (6/21/2017).

Orphans’ Court Approval Needed for Sale of Park Land

Property purchased by township through the Project 70 Land Acquisition and Borrowing Act, 72 P.S. §§ 3946.1 et seq., and dedicated to public use as a park, cannot be sold by the township to private developers, and the township cannot grant easements to private developers, without approval of the Orphans’ Court in accordance with the Donated or Dedicated Property Act, 53 P.S. §§ 3381-3386, even after the deed restrictions imposed on the property in accordance with the Project 70 act had been removed by the legislature.  In Re: Petition of Borough of Downingtown, 12 MAP 2016 (Pa. 6/20/2017).

Surcharge Payments Enforceable by Civil Contempt

The Orphans’ Court has the power to enforce through civil contempt an order requiring a former fiduciary to pay a surcharge in installments, and may order incarceration for the former fiduciary when he contemptuously fails to make the required payments, the restrictions of 42 Pa.C.S. §§ 4132 and 4133 only applying to summary punishments for criminal contempts. In re: Estate of Helen J. DiSabato, 2017 PA Super 185 (6/13/2017).

New Late Filing Portability Relief

The Internal Revenue Service has announced a new simplified procedure for obtaining relief for filing a late estate tax return in order to elect portability.

Under IRC section 2010(c)(5)(A), the federal estate tax exclusion amount for a surviving spouse can be increased by the “deceased spousal unused exclusion amount” of the deceased spouse, but only if the executor elects “portability” by filing an estate tax return for the deceased spouse within the time prescribed by law (including extensions) for filing the return.

The IRS does not have the power to extend the time to make an election with the due date is set by statute, but can extend deadlines when the due date is prescribed by regulation.  When the combined gross estate and adjusted taxable gifts exceed the base exclusion amount, the due date for the return is prescribed by IRC § 6018(a) and so the IRS does not have the power to allow for a late filed election, but when no estate tax return is required by § 6018(a) and the return is being filed only to make the portability election, the due date is prescribed by Treas. Reg. § 20.2010-2(a) and the IRS can grant an extension of time under Treas. Reg. § 301.9100-3.

Therefore, under the new procedure, a late portability election will be allowed if (1) the estate tax return was not required due to the combined values of the gross estate and total adjusted taxable gifts and (2) the federal estate tax return is filed not later than two years after the decedent’s death or January 2, 2018, whichever is later.  A letter ruling not required to take advantage of this new procedure, and so there is no user fee required.

Rev. Proc. 2017-34, 2017-26 IRB 1282 (6/26/2017).

[Note:  This Revenue Procedure has been superseded by Rev. Proc. 2022-32, IRB 2022-30 IRB ___ (7/25/2022).  See “Late Filing for Portability Extended to Five Years.”]