The court did not have jurisdiction to determine the priority of a purchase money mortgage over a later inheritance tax lien when the mortgage holder failed to exhaust the administrative remedies found in § 2186 of the Inheritance and Estate Tax Act (72 P.S. § 9186). Tammac Holdings Corp. v. Werner Estate et al., 10 Fid. Rep.3d 327 (Berks C.P. 2020).
One of two co-administrators of an estate has the power to compel an accounting by an agent for the decedent without the consent of the other co-administrator. An action in the Orphans’ Court to recover assets transferred by an agent is equitable and not barred by any statute of limitations, but only by a defense of laches, and the party asserting laches must show that there was prejudice caused by any delay in the filing of the petition. Mahlstadt Estate. No. 2, 10 Fid.Rep.3d 323 (Monroe O.C. 2020).
The Pa. Supreme Court has held that the voiding of a trust by a settlor alleging fraud in the inducement requires clear and convincing evidence of common law fraud, the elements of which are a knowing or reckless material misrepresentation, an intention to mislead another into reliance, and resulting injury caused by justifiable reliance. Evidence of the failure of the settlor’s husband to disclose the identity of real property held by entities transferred to the trust was insufficient because it was not a material misrepresentation. In re: Passarelli Family Trust, ___ A.3d ___, 71 MAP 2019 (Pa. 12/22/2020), aff’ng 206 A.3d 1188, 2019 PA Super 95 (2019) (en banc), rev’g 7 Fid.Rep.3d 63 (O.C. Chester Co. 2016).
The Internal Revenue Service has extended until June 30, 2021, the waiver of the physical presence requirement for retirement plan consents that was first announced in Notice 2020-42, 2020-26 I.R.B. 986 (6/22/2020). Notice 2021-03, 2021-02 I.R.B. ___ (1/11/2021).
This latest notice includes a request for comments, in particular on whether the waiver of the physical presence requirement should be made permanent.
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— Short Term Rates for 2020 —
| Month | Annual | Semiann. | Quarterly | Monthly |
|---|---|---|---|---|
| Jan. | 1.60% | 1.59% | 1.59% | 1.58% |
| Feb. | 1.59% | 1.58% | 1.58% | 1.57% |
| March | 1.50% | 1.49% | 1.49% | 1.49% |
| April | 0.91% | 0.91% | 0.91% | 0.91% |
| May | 0.25% | 0.25% | 0.25% | 0.25% |
| June | 0.18% | 0.18% | 0.18% | 0.18% |
| July | 0.18% | 0.18% | 0.18% | 0.18% |
| Aug. | 0.17% | 0.17% | 0.17% | 0.17% |
| Sept. | 0.14% | 0.14% | 0.14% | 0.14% |
| Oct. | 0.14% | 0.14% | 0.14% | 0.14% |
| Nov. | 0.13% | 0.13% | 0.13% | 0.13% |
| Dec. | 0.15% | 0.15% | 0.15% | 0.15% |
— Mid Term Rates for 2020 —
| Month | Annual | Semiann. | Quarterly | Monthly |
|---|---|---|---|---|
| Jan. | 1.69% | 1.68% | 1.68% | 1.67% |
| Feb. | 1.75% | 1.74% | 1.74% | 1.73% |
| March | 1.53% | 1.52% | 1.52% | 1.52% |
| April | 0.99% | 0.99% | 0.99% | 0.99% |
| May | 0.58% | 0.58% | 0.58% | 0.58% |
| June | 0.43% | 0.43% | 0.43% | 0.43% |
| July | 0.45% | 0.45% | 0.45% | 0.45% |
| Aug. | 0.41% | 0.41% | 0.41% | 0.41% |
| Sept. | 0.35% | 0.35% | 0.35% | 0.35% |
| Oct. | 0.38% | 0.38% | 0.38% | 0.38% |
| Nov. | 0.39% | 0.39% | 0.39% | 0.39% |
| Dec. | 0.48% | 0.48% | 0.48% | 0.48% |
— Long Term Rates for 2020 —
| Month | Annual | Semiann. | Quarterly | Monthly |
|---|---|---|---|---|
| Jan. | 2.07% | 2.06% | 2.05% | 2.05% |
| Feb. | 2.15% | 2.14% | 2.13% | 2.13% |
| March | 1.93% | 1.92% | 1.92% | 1.91% |
| April | 1.44% | 1.43% | 1.43% | 1.43% |
| May | 1.15% | 1.15% | 1.15% | 1.15% |
| June | 1.01% | 1.01% | 1.01% | 1.01% |
| July | 1.17% | 1.17% | 1.17% | 1.17% |
| Aug. | 1.12% | 1.12% | 1.12% | 1.12% |
| Sept. | 1.00% | 1.00% | 1.00% | 1.00% |
| Oct. | 1.12% | 1.12% | 1.12% | 1.12% |
| Nov. | 1.17% | 1.17% | 1.17% | 1.17% |
| Dec. | 1.31% | 1.31% | 1.31% | 1.31% |
The Supreme Court has allowed an appeal from the Superior Court decision in Trust under Will of Augustus T. Ashton, 203 EAL 2020 (12/2/2020). The order states the issue to be:
Did the Superior Court err when it held that the equitable property interest in the trust res of a current vested beneficiary does not establish the beneficiary’s automatic standing to raise issues with the Trustees’ breach of fiduciary duties to the Trust, but instead a court must evaluate each and every beneficiary’s individualized financial loss to determine if it meets some unknown threshold sufficient to meet the “substantial, direct and immediate” test?
Going forward, the docket number in the Supreme Court will be 36 EAP 2020.
As previously reported, the beneficiary in question is entitled to an annuity of $2,400 each year for life from the trust. The Superior Court held that the beneficiary did not have have a “direct, immediate and substantial” interest in transactions reported in the trustee’s account covering a period during which the trust fund increased from about $5.56 million to about $73 million and so did not have standing to object to those transactions or to petition for the appointment of a co-trustee, but did have standing to object to the division of the trust into separate trusts, only one of which would be used to pay the annuity. Trust under Will of Augustus T. Ashton, Deceased, Dated January 20, 1950, 2020 PA Super 130 (6/3/2020), rev’g No. 1039 ST of 1952 (Philadelphia O.C. 2/25/2019).
Update: On 10/4/2021, the Supreme Court issued an opinion reversing the Superior Court in part. Trust under Will of Augustus T. Ashton, Deceased, Dated January 20, 1950, ___ Pa. ___, ___ A.3d ___, 36 EAP 2020 (Pa. 10/4/2021), (with concurrence by Wecht, J.).
Luzerne County has published a new fee schedule for the Register of Wills and Clerk of the Orphans’ Court, to be effective January 1, 2021. “Request to Increase Fees of that Section of the Division of Judicial Services and Records, Formerly Referred to as the Office of the Register of Wills/Clerk of Orphans Court; No. 10345 of 2020” (11/10/2020), 50 Pa.B. 7018 (12/12/2020).
One trustee of a trust lacks standing to sue a lessee for possession of real property titled in name of trust when the other trustee objects to the action and the Orphans’ Court has empowered the other trustee to sell the property. Nowicki Trust v. Righter, 10 Fid.Rep.3d 315 (C.P. Bucks 2020), aff’d 1117 EDA 2020 (Pa. Super. 3/19/2021) (non-precedential).
A 1954 letter from the corporate trustee established an agreement for trustee compensation of 5% of income, and the trustee did not produce evidence of extraordinary services to merit additional compensation or that the resulting fee was unreasonable. However, neither the letter nor the conduct of the trustee waived any right to interim principal commissions, and an interim principal commission was awarded in the reasonable amount requested, which was not an unconstitutional impairment of the original fee contract. The legal fees of the corporate trustee in defending the third account and its fees were not an expense of administration and were payable by the trustee and not the trust, while the reasonable fees of the objectors (who were also co-trustees) benefited all beneficiaries and should be paid from the trust. Wallace Ott Inter Vivos Trust, 10 Fid.Rep.3d 281 (Philadelphia O.C. 2020), aff’d 2021 PA Super 203 (10/12/2021). (The same opinion was republished at 11 Fid.Rep.3d 329.)
A lawyer representing the beneficiary of an estate is entitled to a “charging lien” against the beneficiary’s share of the estate for work performed before being discharged by the beneficiary, based on an oral agreement that the lawyer’s billings could be paid out of the beneficiary’s share. Fischer Estate, 10 Fid.Rep.3d 277 (Monroe O.C. 2020).