In a dispute about whether the decedent had validly conveyed a property to her daughter as joint tenants with right of survivorship, testimony about statements made by the decedent about her daughter-in-law were admissible as evidence of the decedent’s state of mind consistent with the conclusion that the decedent did not want the property to pass to her daughter-in-law under her will, a deed signed by the decedent was valid even though the deed was not correctly notarized and was not recorded within two years (see 21 P.S. § 442), and it was not an abuse of discretion for the Orphans’ Court to find that the testimony of the daughter was credible even though the deeds she said were signed by the decedent contained discrepancies (for which the daughter had “rational explanations”), and even though the daughter had been convicted of federal wire fraud. In re: Estate of Emma Roy, Deceased, 1564 EDA 2024 (Pa. Super. 4/17/2025) (non-precedential).
The Erie County Orphans’ Court has adopted a new local Rule 4.7 on electronic filing. “Order Adopting Erie O.C.R. 4.7; Doc. No. 2025-00096” (3/31/2025), 55 Pa.B. 2851 (4/19/2025).
Executor surcharged for interest and penalties resulting from failing to file income tax returns for the estate for four years (and interest was added to that surcharge), for legal fees paid at hourly rates above prevailing rates in the county, and for an executor commission not supported by her work in the administration of the estate, which was not particularly complex and was delayed due to the executor’s negligence and inaction. An executor’s commission of 3% of the value of three parcels of real estate was allowed, but the executor was surcharged for legal fees expended to defend against the objections to her account and the estate was ordered to pay the legal fees and expert costs of the successful objecting beneficiary. Because objections to the account were sustained and surcharges imposed, the executor’s request for sanctions against the objecting beneficiary were denied. Weseman Estate, 2 Fid.Rep.4th 395 (Susquehanna O.C. 2024).
The agent for the deceased principal filed an account that showed the same rounded expenses each month, the agent failed to comply with discovery orders to provide financial records, and the agent failed to appear at the hearing on the objections to the account, and yet the Orphans’ Court entered an adjudication that failed to sustain all of the objections. The judge who entered the adjudication retired, an appeal was taken to the adjudication, and the succeeding judge issued a Pa. R.A.P. 1925(a) opinion recommending to the Superior Court that the appeal be sustained and the adjudication be vacated because the adjudication represented an abuse of discretion. Beam Estate, Principal, 2 Fid.Rep.4th 385 (Philadelphia O.C. 2024), on app., 768 EDA 2024 (Pa. Super.)
When a trustee engages in an act of self-dealing by using trust assets as collateral for loans taken out for the benefit of the trustee and his family, the court may impose a surcharge based on the benefit to the trustee and his family even though there was no loss to the trust and no profit to the trustee personally. In re: Credit Trust under the Will of William R. Cameron Jr., Trusts, 2025 PA Super 82 (4/9/2025), aff’ng, 2 Fid.Rep.4th 205 (Bucks O.C. 2024).
Generally speaking, an individual retirement account (IRA) is subject to inheritance tax if the owner of the account was age 59-1/2 or older at death, and an employer-sponsored pension, profit-sharing, or other form of retirement plan is taxable if the employee dies after retirement. This “tip” will provide the statutory and regulatory authority for those conclusions, and some of the exceptions to them.
Section 2111(r) of the Inheritance and Estate Tax Act, 72 P.S. § 9111(r), states that “Payments under pension, stock bonus, profit-sharing and other retirement plans, including H.R.10 plans, individual retirement accounts, individual retirement annuities and individual retirement bonds to distributees designated by the decedent or designated in accordance with the terms of the plan, are exempt from inheritance tax to the extent that the decedent before his death did not otherwise have the right to possess (including proprietary rights at termination of employment), enjoy, assign or anticipate the payment made.”
(Subsection (r) goes on to exempt from inheritance tax payments that would be exempt from federal estate tax, but that provision became a dead letter in 1978 when Congress amended section 2039 of the Internal Revenue Code to eliminate the exemption for retirement benefits paid in a form other than a lump sum subject to 10-year averaging. The fact that there is no federal estate tax because the decedent’s estate is less than the federal exclusion amount does not mean that retirement benefits are not subject to inheritance tax. See Woolslare Estate, 5 Fid.Rep.3d 363 (O.C. Allegh. 2015), aff’d, No. 1100 C.D. 2015 (Pa. Cmwlth. 2/19/2016) (unpublished).)
The meaning of “the right to possess …, enjoy, assign, or anticipate” is provided by the regulations in 61 Pa.Code § 93.131, and subsection (d)(2)(i)(A) provides that a right of withdrawal results in inheritance tax, but only if any penalty or additional tax is smaller than 10% of the withdrawal.
An IRA is controlled by the owner of the account, who can in theory withdraw all of the account at any time, but there is a penalty tax of 10% under section 72(t) of the Internal Revenue Code unless one of the exceptions applies, and one of the exceptions is that there is no 10% tax if the IRA owner is age 59-1/2 or older at the time of the distribution. So an IRA should not be subject to inheritance tax if the account owner is under age 59-1/2.
But there are other exceptions to § 72(t). Under § 72(t)(2)(A)(iii) the 10% tax also does not apply if the IRA account owner is “disabled” and “unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration,” and under § 72(t)(2)(A)(iv) the 10% tax does not apply if the account owner is making substantially equal period payments from the account. An IRA is therefore subject to inheritance tax if either of those circumstances should apply.
Because an employee usually has no unilateral right to withdraw from an employer-sponsored pension, profit-sharing, or other form of retirement plan, and because federal law (ERISA) prohibits the assignment or alienation of those plan benefits by employees, the death benefits payable under those kinds of plans are generally not subject to inheritance tax before actual retirement and the start of benefit payments. See 61 Pa.Code § 93.131(d)(1)(iii) and (d)(2).
The Orphans’ Court had jurisdiction to determine the disposition of the decedent’s remains in accordance with the will of the decedent even though the will had not yet been admitted to probate. The Philadelphia Orphans’ Court did not abuse its discretion in finding that the decedent had been domiciled in Philadelphia when the decedent had sold his trailer in New Jersey and leased a residence in Philadelphia even though the decedent spent the last seven weeks of his life in medical facilities in Delaware County. In re: Estate of Jeffrey Feldman, 465 EDA 2024 (Pa. Super. 3/31/2025) (non-precedential).
Although the decedent continued to hold real estate in Pennsylvania through an LLC, and did not claim a homestead exemption in Florida, he had purchased a residence in Florida, changed his driver’s license and voter registration to Florida, filed federal income tax returns using his Florida address, filed nonresident Pennsylvania income tax returns, and sold his Pennsylvania residence before his death, all of which showed his intention to remain in Florida indefinitely. Because the decedent had changed his domicile to Florida, and owned no real estate in Pennsylvania, Pennsylvania had no jurisdiction over his estate. Estate of Andrew J. Milligan, Deceased, 2310 EDA 2024 (Pa. Super. 3/18/2025) (non-precedential).
The Supreme Court has adopted a common law doctrine of “intent-based parentage” as a fifth way to establish parentage in Pennsylvania. In the case that was decided, a couple in a same-sex marriage had arranged to have a child through assistive reproductive technology and the artificial insemination of one of the spouses. The presumption that a child born during a marriage is the child of both parents did not apply because the parties separated and began divorce proceedings before the birth of the child, and neither the various documents that were signed by one or both of the parties nor the testimony of the parties were sufficient to establish parentage by contract. Because there was extensive evidence that the parties mutually intended to conceive and raise a child, the Supreme Court extended Pennsylvania’s parentage jurisprudence to adopt a doctrine of intent-based parentage, allowing a spouse who is not a biological parent to become a parent of a child which is not born during the marriage and for which there was no opportunity to adopt and no express contract. Glover v. Junior, ___ A.4th ___, ___ Pa. ___, 9 EAP 2024 (3/20/2025).
A marriage certificate is required to show the date of the marriage but not the time, the marriage ceremony does not need to take place in the same county that issued the marriage license as long is it occurs in Pennsylvania, and no particular words are required for a marriage as long as the parties express a present agreement to be married. Because the judgment of the trial court that there was no valid marriage was based on errors of law and was not supported by the record, and because there was conflicting testimony from the husband, wife, and officiant about whether there was a marriage ceremony and when it took place but the trial judge failed to make any determinations as to the credibility of the witnesses, the judgment was reversed and remanded for a determination of whether the parties had in fact exchanged marital vows in Pennsylvania. Eggleston v. Eggleston, 704 & 706 WDA 2024 (Pa. Super. 10/14/2025) (non-precedential).