Senate Bill 320, which enacts the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) as Chapter 39 of the Probate, Estates and Fiduciaries Code, 20 Pa.C.S. Ch. 39, was signed into law by Governor Wolf on July 23, 2020,…
The anti-alienation provisions that protect municipal pensions from attachment only apply while those funds are in the possession of the pension fund administrator, and so a post-nuptial agreement in which a spouse agreed to waive her rights to her husband’s pension, and to transfer those benefits after receiving them from the administrator, was legally enforceable. Estate of Michael A. Benyo v. Breidenbach, ___ Pa. ___, ___ A.3d ___, No. 90 MAP 2019 (Pa. 7/21/2020).
The decedent became disabled as an adult, and the decedent’s father owed him no legal duty of support, so the decedent was not a “dependent child” for the purpose of the forfeiture statute, 20 Pa.C.S. § 2106(b). In Re: The Estate of Charles L. Small, ___ Pa. ___, 234 A.3d 657, 26 EAP 2019 (Pa. 7/21/2020), aff’g 744 EDA 2018 (Pa. Super. 1/28/2019), 8 Fid.Rep.3d 229, No. 617 DE of 2017 (O.C. Philadelphia 6/7/2018).
H.R. 2484 was signed into law by Governor Wolf on July 23, 2020, becoming Act 71 of 2020.
The act amends Titles 15 and 20 to allow nonprofit corporations and charities to pay out more than 10% of their charitable funds as “income” in the years 2020, 2021, and 2022. The usual limit is 7%, and this change was thought to be needed to address the financial effects of the COVID-19 pandemic.
The act also amends Title 15 to allow nonprofit corporations to enter into nonjudicial settlement agreements with donors in order to modify restrictions on charitable gifts.
On Thursday, the Internal Revenue Service announced federal rates for the month of August under §§ 1274 and 7520 of the Internal Revenue Code (“IRC”) that will be lower than some of the previously record-low rates for June.
The §7520 rate of 0.4% is peculiar because that rate is defined as 120% of the federal mid-term rate, and yet the mid-term rate is 0.41%. The rate that is 120% of the mid-term rate can be less than 100% of the mid-term rate because the §7520 rate must be rounded to the nearest two-tenths of a percent. Multiplying 0.41% by 120% produces 0.492%, which rounds down to 0.4% (which is the nearest percentage evenly divisible by 0.2%).
For information on estate planning techniques to take advantage of these low rates, see “Low-Interest Estate Planning Strategies.”
The following message was sent to the Pennsylvania Bar Association on or about 6/29/2020 by Lora A. Kulick, Senior Counsel in the Office of Chief Counsel of the Department of Revenue:
“The department recently received inquiries regarding whether it was issuing Inheritance Tax notices of assessment. It temporarily had not been issuing assessments due to its offices and ROW offices COVID-19 closures. The department now has resumed issuing limited assessments and other notices. The department will continue to increase the number of and types of notices issued. The most up to date information regarding Revenue’s operations can be found on the department’s website at: https://www.revenue.pa.gov/Pages/COVID19.aspx.”
In Notice 2020-51, 2020-29 I.R.B. __ (7/9/2020), the Internal Revenue Service has provided additional guidance on whether (and how) taxpayers may return or rollover required minimum distributions (RMDs) that were taken in 2020 but that were no longer required following the enactment of I.R.C. § 401(a)(9)(I) as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), P.L. 116-136 (“CARES Act). See “No Required Minimum Distributions in 2020.”
The Notice generally allows distributions from qualified defined contribution plans to be rolled over, so that no income is realized in 2020.
What is perhaps most significant is that the Notice allows the owner or beneficiary of an individual retirement account (IRA) to return an unnecessary distribution to the IRA. See paragraph D of Section III. This is an important concession by the IRS because distributions from an inherited IRA (i.e., distributions to the beneficiaries of the IRA following the death of the IRA owner) cannot be rolled over. The Notice therefore says that the recipient may “repay” the distribution to the distributing IRA, provided the repayment is made no later than August 31, 2020.
The National Taxpayer Advocate Objectives Report to Congress for Fiscal Year 2021 (6/29/2020) addresses the issue of whether deceased taxpayers may receive “economic impact payments” (aka “stimulus payments”) authorized by the CARES Act and made the following observations and recommendations:
See “Individuals in Limited Circumstances Are Being Asked to Return the Economic Impact Payments,” beginning at page 56 of the Report.
Conclusion #2 is consistent with the observations made in “Economic Impact Payments for Decedents,” which has additional information about the relevant provisions of the CARES Act.
The merger of two non-profit corporations holding charitable funds, one of which had been decertified as a fire fighting organization by its municipality, did not require the application of the cy pres doctrine when the decertified organization had broad charitable purposes that would be continued by the surviving corporation. In Re: Merger of Universal Volunteer Fire Department into Point Breeze Volunteer Fire Association, No. 1060 C.D. 2019 (Pa. Cmwlth. 7/1/2020).
Amendments to the articles and by-laws of a foundation that changed the charitable goals of the foundation, and eliminated provisions that guaranteed that control of the foundation remained in the oldest descendant of the founder, adopted by the directors of the foundation in accordance with the by-laws (including the approval of the oldest descendant of the founder), were not breaches of duties of care, obedience, and loyalty and were not fundamental changes that required the approval of the Orphans’ Court. In Re: Jack Buncher Foundation, No. 306 C.D. 2019 (Pa. Cmwlth. 7/1/2020).