PBA Supports Inheritance Tax Exemption for All 529 Accounts

Posted on by November 30, 2025

On November 21, 2025, the House of Delegates of the Pennsylvania Bar Association approved a joint recommendation of the Real Property, Probate and Trust Law and Elder Law Sections of the PBA to support HB 256, which will exempt from Pennsylvania inheritance tax all educational savings accounts (usually known as “529 accounts” or “529 plans”), regardless of whether the account was created under the laws of Pennsylvania or another state.

The complete Report and Recommendation of the two PBA sections explains the background of HB 256, which is that the Inheritance and Estate Tax Act does not include any exemption from inheritance tax for educational savings plans described in section 529 of the Internal Revenue Code. Pennsylvania has enacted its own plan for educational savings account to qualify under section 529, and that statute exempts accounts under that plan from all taxation, including inheritance tax. Because there is no general exemption for 529 plans, educational savings accounts created under the plans of other states remain subject to inheritance tax.

One Orphans’ Court judge has held that an inheritance tax exemption only for Pennsylvania 529 accounts violates the uniformity clause of the Pennsylvania Constitution. Calihan Estate, 2 Fid.Rep.4th 1, No. 0024 of 2021 (Allegheny O.C. 11/7/2023). However, the Pennsylvania Department of Revenue is not following that decision for estates in other counties.

HB 256 would amend the inheritance tax act to exempt from inheritance tax all 529 accounts, regardless of what state law was used to create the account, and the PBA now supports that legislation (or any similar legislation that might be proposed in the future).

Act 50 of 2025 Increases Some Amounts Payable without Letters

Posted on by November 30, 2025

House Bill 1176 has passed both houses of the legislature and has been signed into law by the governor, becoming the Act of November 24, 2025, No. 50. The two sections of the act can be summarized as follows:

Section 1 of the act amends 20 Pa.C.S. § 2103(a)(6) to change the ultimate intestate heir (who would take in the event that there is no surviving spouse and no surviving issue, parents, brothers or sisters, issue of brothers or sisters, grandparents or issue of grandparents) from the Commonwealth of Pennsylvania to an “endowed community fund” located in the municipality, school district, or county in which the decedent resided. If there is no such “endowed community fund” (as further defined by the statute), the last intestate heir is the Commonwealth. This part of the act takes effect in 60 days (which presumably means it applies to the estates of intestates dying 60 days or more after enactment, because intestate shares are usually determined based on the facts and laws as of the date of death).

Section 2 of the act amends two of the subsections of 20 Pa.C.S. § 3101 (“Payments to family and funeral directors”) to increase the amounts that may be paid without any grant of letters:

  • In subsection (b) (“Deposit account”), the maximum total amount on deposit in the name of the decedent at a bank or other financial institution that can be paid to a funeral director or family member is increased from $10,000 to $20,000. This change is effective in 60 days, which may refer to the date of the payment and not the date of death.
  • In subsection (e) (“Unclaimed property”), the maximum amount held by the State Treasurer as unclaimed property of a decedent that can be paid to a family member without any grant of letters is increased from $11,000 to $20,000. This change is effective in 180 days, which may refer to the date of the claim filed with the Treasurer not the date of death.

The maximum amounts which may be paid under other subsections of § 3101 remain unchanged, so wages, salaries, and employee benefits are still limited to $10,000 under subsection (a), a patient’s care account is still limited to $10,000 under subsection (c), and life insurance payable to the estate is still limited to $11,000 under subsection (d).

New Montgomery County Fee Schedules

Posted on by November 21, 2025

Montgomery County has published new fee schedules for the Register of Wills and Clerk of the Orphans’ Court, both effective January 1, 2026. “Register of Wills Fee Schedule; No. 2025-00001” (11/5/2025), 55 Pa.B. 7950 (11/22/2025); “Clerk of Orphans’ Court Fee Schedule; No. 2025-00002” (11/5/2025), 55 Pa.B. 7947 (11/22/2025).

Fiduciary Exception Not Applicable to Civil Action against Beneficiary

Posted on by November 16, 2025

The fiduciary exception to the attorney-client privilege does not apply to attorney records relating to a civil action brought by a trustee against one of the beneficiaries to enforce an indemnification agreement entered into for a distribution to that beneficiary, and so those records remain subject to attorney-client privilege. In re: First and Partial Account of Gerald L. Hempt, Trustee for the Max C. Hempt QTIP Trust, ___ A.4th ___, 2025 PA Super 2054 (11/13/2025).

No Breach of Duty by Agent on Sale of Property Placed in Joint Names before Power of Attorney Was Signed

Posted on by November 16, 2025

It was not a breach of fiduciary duty for the proceeds of sale of a property to be paid half to the two co-owners, mother and daughter, even though the daughter was the mother’s agent under a general power of attorney, when the mother purchased the property before executing the power of attorney and the addition of the daughter’s name as a co-owner when the property was purchased was solely the decision of the mother. There was also no evidence that the daughter had any role in the sale of the property other than signing a listing agreement that the mother later ratified. Although the grant of a power of attorney may be evidence of a prior confidential relationship, there was no evidence that the daughter had an “overmastering influence” on her mother or that the mother was not making her own decisions about the purchase and sale of the property. A claim by the mother against the daughter for withdrawing money from a joint account was denied because the money deposited to the account came from the daughter, and so the daughter remained the owner of the account during her lifetime. (Other issues addressed by the court included a breach of contract claim, the rights of co-owners of property, evidentiary rulings, and the denial of a claim for punitive damages.) Purcell v. Caples, 1818 EDA 2023, 1963 EDA 2023, 1964 EDA 2023, 1210 EDA 2024 (Pa. Super. 11/14/2025) (non-precedential).

Third Need for Emergency Guardianship

Posted on by November 16, 2025

It was an error of law, and so an abuse of discretion, for the Orphans’ Court to deny a third petition for a guardian of the person when there was evidence that the electroconvulsive treatments (“ECT”) that were administered to the incapacitated person (IP) with the consent of the emergency guardian and temporary guardian appointed in accordance with the first two petitions were effective but the IP’s mental illnesses had returned, and so there was a new emergency allowing the use of the emergency guardianship procedure, as well as evidence that the IP would suffer irreparable harm without additional ECT. In re: L.L.H., 1420 MDA 2025 (Pa. Super. 11/14/2025) (non-precedential).

Objections to Subpoenas Denied, but Protective Order Entered

Posted on by November 9, 2025

Objection to notice of intention to serve subpoenas on medical providers was denied even though the subpoenas covered time periods not relevant to whether the decedent had testamentary capacity, but a motion for a protective order was granted and the use of the subpoened material was limited to the current proceeding and directed to be destroyed at the conclusion of the proceeding. Although some procedural errors were disregarded, relief requested as a part of a “new matter” was denied without prejudice to seek the relief by a proper motion or petition. Palla Estate, 3 Fid.Rep.4th 278 (Northampton O.C. 2024).

Uncooperative Executor Removed, Held in Contempt, and Surcharged

Posted on by November 9, 2025

After being removed as executor, the former executor was held in contempt for failing to turn over the assets and records of the estate to the successor executor, for failing to file an account of her administration of the estate, and for failing to appear in court to respond to the petitions for contempt and to answer for her failure to account. A judgment for surcharge was also entered against the former executor for the full value of all known estate assets, as well as the attorney fees and court costs of the successor executor. Heller Estate, 3 Fid.Rep.4th 272 (Monroe O.C. 2025).

Motion for Recusal Denied

Posted on by November 9, 2025

A denial of a motion for recusal is an interlocutory order not subject to appeal. It is also not error for a judge to preside at the hearing on the recusal motion, for the judge to refuse to allow himself to called as a witness in the recusal hearing, or for the judge to deny the motion to recuse when the only evidence of bias is rulings against the movant and the movant’s attorney. Fetzer v. Fetzer, 3 Fid.Rep.4th 249 (Berks C.D. 2025) (child custody proceeding), appeal quashed sua sponte, 1093 MDA 2025 (Pa. Super. 9/12/2025).

No Jurisdiction over Burial Dispute of Non-Domiciliary

Posted on by November 2, 2025

The Philadelphia Orphans’ Court had no jurisdiction in a dispute over the burial of the decedent because the decedent was not domiciled in Pennsylvania and owned no property in Philadelphia, the decedent died outside of Pennsylvania, the decedent’s body was located in Pennsylvania but outside of Philadelphia, and the only connection to Philadelphia was that the decedent’s will directed that the decedent should be buried in a cemetery in Philadelphia. Singer Estate, 3 Fid.Rep.4th 240 (Philadelphia O.C. 2025), on appeal, 993 EDA 2025 (Pa. Super.)