New Guardianship Tracking System Rule

Posted on by April 17, 2021

The Supreme Court has entered an order adopting a new Rule 510 of the Pennsylvania Rules of Judicial Administration that implements a new statewide electronic filing and tracking system for reports and inventories of guardians of adult incapacitated persons.  “In re: Adoption of Rule 510 of the Rules of Judicial Administration and Amendment of 204 Pa.Code §207.3,” No. 501 Judicial Administration Doc. (8/31/2018), 48 Pa.B. 5714 (9/15/2018).  (204 Pa.Code §207.3 relates to online payment fees and it has been amended to include filings made through the tracking system.)

The new rule specifically provides that filing under the new tracking system satisfies the reporting requirements of Pa.O.C. Rule 14.8, which refers to inventories and reports to be filed with the Clerk of the Orphans’ Court.

Chester Co. Register of Wills Amended Fees

Chester Co. has amended the fee schedule of the Register of Wills in two ways:

The filing fee for an affidavit of death pursuant to 20 Pa.C.S. § 925 is changed to $25.00.  “Fee Bill for the Office of the Register of Wills; Administrative Order No. 1-2018” (8/17/2018), 48 Pa.B. 5454 (9/1/2018).

The filing fee for an affidavit of small estate pursuant to 20 Pa.C.S. § 3101(d) is changed to $25.00.  “Fee Bill for the Office of the Register of Wills; Administrative Order No. 2-2018” (8/17/2018), 48 Pa.B. 5454 (9/1/2018).

Eligible Institutions for Fiduciary Funds

The Supreme Court updates from time to time (and the Disciplinary Board publishes in the Pennsylvania Bulletin) a list of the names of financial institutions which are “eligible institutions” in which lawyers may deposit funds held by the lawyer as a personal representative, guardian, conservator, receiver, trustee, agent under a durable power of attorney, or other similar position.  (See Pa.R.D.E. 221(b) and Pa.R.P.C. 1.15(a)(2).)

The most recent order of the Supreme Court is “Financial Institutions Approved as Depositories for Fiduciary Accounts; No. 247 Disciplinary Rules Docket” (8/7/2024), 54 Pa.B. 5235 (8/17/2024), also published by the Disciplinary Board as “List of Financial Institutions” at 54 Pa.B. 5232 (8/17/2024).

[Last updated 8/18/2024]

Probate Denied for Lack of Testamentary Capacity; Family Agreement Rejected

Probate of will and codicil was denied for lack of testamentary capacity that was supported by medical testimony and by evidence that the decedent had shown signs of memory loss and dementia before the execution of the will and trust, including an impulsive marriage and divorce (which was carried out by a guardian at litem).  The incorporation of family settlement agreements into the decree of probate was denied under the doctrine of unclean hands because the agreements were obtained by the decedent’s brother to the detriment of the decedent’s daughter and grandchildren, and with the assistance of lawyers having conflicts of interest.  An independent lawyer was therefore appointed to be the administrator of the estate.  Hughes Estate, 8 Fid.Rep.3d 175 (R.W. Cumberland Co. 2017).

Attorney-Client Privilege Waived in Will Contest

The beneficiary of a putative will has standing to request a waiver of attorney-client privilege in a dispute over the validity of the will due to lack of testamentary capacity, allegations of fraud in the execution of a note by the decedent without consideration and the execution and attempted probate of wills and trusts while the decedent lacked testamentary capacity were sufficient to invoke the crime-fraud exception to the attorney-client privilege, and the interests of justice require waiver of the decedent’s attorney-client privilege when the decedent’s attorneys are most likely to be able to provide relevant evidence of the decedent’s testamentary capacity.  Hughes Estate, 8 Fid.Rep.3d 169 (O.C. Cumberland Co. 2018).

Discovery of Attorney Invoices not Appealable

In a dispute over legal fees paid by a trustee, the Orphans’ Court ordered the trustee to turn over to the beneficiaries unredacted invoices for legal fees paid and, on appeal, the Superior Court held that the order was not appealable as a collateral order under Pa.R.A.P. 313(a) because (a) the order was not separable from the merits of the fee dispute, (b) records of trustees are generally accessible to beneficiaries, and (c) the trustee failed to substantiate the claims of privilege before the trial court.  In re: Estate of William K. McAleer, 2018 PA Super 227 (8/9/2018), app. allowed, 345 WAL 2018 (Pa. 2/4/2019).

[Update: An evenly divided Supreme Court reversed the Superior Court and affirmed the order of the Orphans’ Court. In re: Estate of William K. McAleer, 248 A.3d 416, ___ Pa. ____, 6 WAP 2019 (4/7/2021).  See “Evenly Divided Supreme Court Affirms Fiduciary Exception to Attorney-Client Privilege.”]

No “De Facto” Tenancy by Entireties

Surviving husband had no rights to any properties conveyed by his deceased wife one month before her death despite his claims of “sweat equity” in maintaining and improving the properties during their marriage because there is no “de facto” tenancy by the entireties.  The properties were not included in the husband’s intestate share of the estate because they were not in the name of the decedent at her death, although they would have been part of the husband’s elective share of the estate if the husband had exercised his right of election.  In re: Estate of Isabel Carrasquillo Rivera, 2018 PA Super 225 (8/8/2018).

New Webcalculator for Unitrusts

Posted on by August 6, 2018

A new Webcalculator has been added to my on-line service to provide factors, and values, for the valuation of unitrust remainders, such as charitable remainder unitrusts (CRUTs).

These factors and computations are based on tables published by the Internal Revenue Service.  As previously explained for income, remainder, and annuity factors, the intention is to add custom computations (such as for three or more lives) for paid subscribers, but leave the tables-based computations accessible to the public for free.  (Registration is required.)

Expanded ABLE Account Contributions

Notice 2018-62, 2018-34 I.R.B. ___ (8/20/2018), provides guidance on the application of the new expanded contribution limits to “ABLE” (“Achieving a Better Life Experience”) accounts under IRC section 529A.

According to the IRS, a designated beneficiary who works may contribute (in addition to the annual gift tax exclusion) up to the lesser of  (1) the designated beneficiary’s compensation for the tax year, or (2) the poverty line for a one-person household in the state in which the designated beneficiary lives.  However, an employed designated beneficiary is not eligible for the increased contribution limit for the taxable year if any contribution is made on behalf of the employee to a 401(a) defined contribution plan or 403(a) annuity contract, a 403(b) annuity contract, or a 457(b) eligible deferred compensation plan.

Notice 2018-62 states that the Treasury Department and the IRS intend to issue new regulations on these contribution limits, and that the guidance provided by the notice may be relied upon until regulations have been issued.

New Pennsylvania Income Tax Withholding

Posted on by August 6, 2018

The Act of October 30, 2017, No. 43, P.L. 672, amended the Tax Reform Code of 1971 by adding new requirements for the withholding of Pennsylvania income tax from payments of Pennsylvania source income to nonresidents, and the Department of Revenue has recently published some guidelines regarding the new rules in its bimonthly newsletter, “Tax Update” (No. 197, June/July 2018), and on its website.  Although the Department of Revenue describes these new withholding rules in very broad terms, it appears that these new rules do not apply to distributions from estates and trusts to nonresident beneficiaries.

Specifically, the Act adopted new withholding rules for the following:

  • Payments of Pennsylvania source income for which a Form 1099-MISC is required.  (See new Code § 316.2, added by Act § 13.)  This would include payments made in the course of a trade or business for things like non-employee compensation for services performed in Pennsylvania, or royalties paid for mineral interests in Pennsylvania.
  • Payments by lessees of Pennsylvania real estate to a nonresident lessor, but only for lease payments in the course of a trade or business.  (See new Code § 324.4, added by Act § 25.)  According to the Department of Revenue, this does not apply to residential leases.

So these new provisions might apply to an estate or trust, but only if the estate or trust were conducting a trade or business and were making the kinds of payments described above.  Even then, other exceptions might apply.