The son of decedent, who was an agent under power of attorney and became executor of his mom’s estate, closed “payable on death” bank account while agent and distributed the money to two of the decedent’s three children and his son; the Court concluded that the document’s language lacked specificity to allow unlimited giving under power of attorney, ordering the money returned to the estate and distributed in accordance with the “payable on death” provision of the bank account. Coury Estate, 4 Fid. Rep. 3d 436 (OC Carbon 2014) (Opinion by Matika, J.)
Court terminated parental rights of father for two children, because of father’s domestic violence, drug and alcohol abuse, and mental health. In Re B.B. and M.B., 4 Fid. Rep. 3d 429 (OC Berks 2014) (Opinion by Keller, J.)
Decedent with multiple residences was found to be domiciled in Pennsylvania, as all of his mail came to his Philadelphia residence and he wished to return there; undue influence was not proved by either direct or indirect evidence, as the decedent was a strong willed individual with much business experience; and fraud, insane delusion, forgery, and lack of testamentary capacity lacked supporting evidence in will contest. Rothberg Estate, 4 Fid. Rep. 3d 403 (O.C. Phila. 2014) (Opinion by O’Keefe, Admin. J.), aff’d, Nos. 2391 EDA 2014 and 2795 EDA 2014 (Pa. Super. 6/26/2015) (non-precedential).
The Commonwealth (as parens patriae) objected to first and final account of estate and trust with charitable beneficiaries, because the Commonwealth was not given Rule 5.6 notice, and the trust and estate terminated at the death of the lifetime beneficiary, which occurred approximately 2 years before final accounts were filed; the Court found no harm in the delay, nor any breach of duty to preserve the assets of the estate and trust, meaning no harm occurred and no surcharge was warranted. Connor Estate and Trust, 4 Fid. Rep. 3rd 456 (OC Chester 2014)
It has only now come to our attention that amendments to Pennsylvania disciplinary rules were proposed in September, with a comment period ending November 3. The amendments are intended to reduce lawyer misappropriations from client funds and fiduciary funds in the possession of lawyers. According to the Disciplinary Board, the proposed rules would:
- “impose certain restrictions on the brokering, offer or placement of investment products in relation to the provision of legal services;
- “clarify the financial records required to be maintained, require account reconciliations on a monthly basis, require prompt availability and production of records upon request or demand, and allow for the temporary suspension of an uncooperative respondent-attorney;
- “require attorneys to provide on the annual fee form additional account information that will assist ODC [Office of Disciplinary Counsel] in the investigation of misappropriation cases and the preservation of fiduciary funds and other property;
- “streamline unduly cumbersome procedures that impede investigations and that unnecessarily extend the time from initial detection of signs of theft to successful prosecution; and
- “emphasize the importance of prompt and complete disengagement from the practice of law by a suspended or disbarred attorney, provide an incentive to timely disengage and consequence for failure to timely disengage, and give ODC enhanced oversight authority to ensure that a formerly admitted attorney has promptly and fully disengaged.”
“Proposed Amendments to the Pennsylvania Rules of Professional Conduct and the Rules of Disciplinary Enforcement to Reduce Loss Resulting from the Misappropriation of Client and Third Party Funds,” 44 Pa.B. 6070 (9/27/2014).
On October 27, 2014, Governor Corbett signed SB 428, making it Act 186 of 2014.
The act makes changes to 20 Pa.C.S. 7799.3, which deals with pooled trusts for people with disabilities. The most significant change is that, when a pooled trust ends, it must no longer distribute half of the trust to the Commonwealth, but the trust can continue for the benefit of other persons with disabilities.
Columbia and Montour Counties have published new local rules, including rules for Orphans’ Court Actions (accounts, auditors, adoptions, and appointments of guardians). Business of the Courts, Case No. 2014-MV-1, 44 Pa.B. 6750 (10/25/2014).
The Superior Court has affirmed a decree of the Philadelphia Orphans’ Court denying the validity of attempted appointments of a successor trustee (or, in the alternative, removing the successor trustee appointed) by the resigning trustee and by the settlor, and confirming the appointment of the trustee requested by the primary beneficiary. The Superior Court agreed that (1) the attempted appointment by the resigning trustee was invalid because it was made outside of the 60 days allowed by the trust document following the resignation, (2) the attempted appointment by the settlor was invalid because the settlor could not appoint himself as trustee and the attempted appointment was of a long-time friend of the settlor whom the court considered to be the settlor’s alter ego, (3) the attempted appointment by the settlor was also voidable under the doctrine of “unclean hands” because the appointment was part of a plan to avoid the enforcement of loans made to the settlor by a limited partnership partially owned by the trust, and (4) the appointed trustee could be removed by the court under the “substantial change in circumstances” standard of 20 Pa.C.S. §7766(b)(4). The Vincent J. Fumo Irrevocable Children’s Trust for the Benefit of Allison Fumo (Appeal of Vincent J. Fumo), 104 A.3d 535, 2014 PA Super 235, No. 2459 EDA 2013 (10/17/2014), app. den., No. 32 EAL 2015 (7/15/2015).
The IRS has issued five identical private letter rulings, apparently to five different parties involved in the same transaction, confirming that a court-approved reformation of a trust in accordance with § 415 of the Uniform Trust Code would be respected for federal estate and gift tax purposes retroactive to the date of the creation of the trust, when there was clear and convincing evidence that the trust documents were drafted incorrectly and contrary to the settlor’s intentions. Although the name of the state was redacted from the ruling, the state law in question appears to be Pennsylvania, because the text of the statute quoted by the ruling includes a sentence specifically authorizing retroactive reformations and that sentence appears in Pennsylvania’s version of § 415 (20 Pa.C.S. § 7740.5) but not in the version that was approved by the National Conference of Commissioners on Uniform State Laws. PLRs 201442042, 201442043, 201442044, 201442045, and 201442046.
Both houses of the legislature have passed SB 428, which makes changes to Pennsylvania laws on pooled trusts for persons with disabilities.