Appointment of Trustee “at Will”

Judge Tunnell of Chester County addressed a number of interesting and practical issues in his adjudication in Griggs Revocable Trust, 9 Fid.Rep.3d 85 (Chester O.C. 2019), including whether a trustee who has resigned (or been removed) can delay transferring trust…

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New Bucks Co. Guardianship Rules

Bucks County has vacated Bucks Co. O.C. Rules 14.2A through 14.5I and and adopted Rules 14.2A (Notice of Mental Health Commitment), 14.2B (Withdrawal of Petition), and 14.9A (Allowances), all relating to guardianships. “Order Rescinding Orphans’ Court Rules 14.2A through 14.5I and Promulgating Orphans’ Court Rules 14.2A through 14.9A,” (Bucks. Co. 4/18/2019), 49 Pa.B. 2346 (5/11/2019).

Repeal of the Inheritance Tax for Descendants?

There have been attempts from time to time in the Pennsylvania House of Representatives to repeal the Pennsylvania inheritance tax, but those attempts have always died in the Senate.

It is therefore noteworthy that a bill to repeal the inheritance tax on children, grandchildren, and other lineal descendants (as well as parents and grandparents) has been favorably reported out of the Senate Finance Committee, and has received in its first consideration by the Senate as a whole.

S.B. 28 would phase out the inheritance tax on lineal descendants (and ancestors), which is now 4.5%, by reducing the tax rate by 0.25%, 0.5%, and 1% increments over the next 10 years, ending with a 0% rate effective 7/1/2029. The 12% rate for siblings, and the 15% rate for other beneficiaries, will not be affected.

For information on other pending bills that might be of interest, see Pennsylvania Legislation Pending.

[6/28/2019 Update: Support for S.B. 28 may be undermined by the passage of H.B. 262, which imposes a tax of 0% for children who are age 21 or younger.)

Relevant Evidence and Classifications

The Supreme Court’s Committee on Rules of Evidence has published a proposed addition to the official comment to Pa.R.E. Rule 401 (“Test for Relevant Evidence”). The new comment would state that:

“Generally, evidence of a person’s race, sex, gender identity or expression, religion, national origin, immigration status, ethnicity, disability, age, sexual orientation, marital status, socioeconomic status, or political affiliation is irrelevant and inadmissible. See Pa.R.E. 402 (evidence not relevant is not admissible). Such evidence may also be subject to analysis under Pa.R.E. 403, concerning unfair prejudice.”

The report on the proposed change explains that the original catalyst for the change was a recommendation on the admissibility of evidence of immigration status, and the report explains why immigration status has usually been considered to be legally irrelevant. The committee then decided to address the more general issue of class prejudice and discrimination, drawing on other legal guidelines to create a more expansive list of classes protected from discrimination by public policy.

The deadline for comments is June 4, 2019.

“Proposed Amendment of the Comment to Pa.R.E. 401,” 49 Pa.B. 2218 (5/4/2019).

Trust Beneficiary as Sole Trustee

When trust document specifically excluded son from discretionary distribution decisions for son’s trust, son may be appointed to serve as a trustee but may not be the sole trustee. It was proper for the corporate trustee who had been appointed to serve “at will” to raise this issue, to delay distributions to the new trustees, and to continue to receive compensation for administering the trust until the issue had been resolved by the court and the account of the corporate trustee had been approved. Griggs Revocable Trust, 9 Fid.Rep.3d 85 (Chester Co. O.C. 2019).

Agent Must Return Joint Accounts

An agent abused her powers, and was ordered to return joint accounts to the estate, when she added the principal’s money to accounts that were in the joint names of her and the principal, knowing that the money would become hers upon the death of the principal, knowing that the principal’s will provided for a different disposition of his money, and without advising the principal of those consequences. Waite Estate, 9 Fid.Rep.3d 75 (Jefferson Co. O.C. 2019), aff’d, 157 WDA 2019 (Super. Ct. 2/24/2020) (non-precedential).

Attorney Registration Late Payment and Collection Fees

The Disciplinary Board of the Supreme Court has announced that, for the 2019-2020 Registration Year, the penalty for failing to complete registration by July 16 will be $200, with an additional $200 penalty for failing to complete registration by August 1. The collection fee for returned checks will be $100.

“Collection Fee and Late Payment Penalty; 2019-2020 Registration Year,” 49 Pa.B. 1999 (4/27/2019).