The wife of the decedent and executor of his estate, who had asserted attorney-client privilege during discovery, could not then waive the privilege at trial unless the opposing litigants could first conduct discovery regarding the communications for which the privilege had previously been claimed. Gregury v. Greguras, 2018 PA Super 261 (9/20/2018) (en banc).
With the release of the Chained Consumer Price Index (C-CPI-U) for August 2018, it’s possible to calculate various inflation adjustments for 2019. The following are the significant federal estate planning numbers, with the numbers for 2018 shown in parentheses:
- The base applicable exclusion amount (and generation-skipping tax exemption) will be $11,400,000 (was $11,180,000 for 2018).
- The annual gift tax exclusion will be $15,000 (was $15,000, so unchanged).
- The annual gift tax exclusion for a non-citizen spouse will be $155,000 (was $152,000).
- The “2 percent” amount for purposes of section 6166 will be $1,550,000 (was $1,520,000).
- The limitation on the special use valuation reduction under section 2032A will be $1,160,000 (was $1,140,000).
- The top (37%) income tax bracket for estates and trusts will begin at $12,700 (was $12,500).
- The alternative minimum tax exemption for a estates and trusts will be $25,000 (was $24,600), and the phaseout of the exemption will start at $83,500 (was $81,900).
The Internal Revenue Service will publish the official inflation adjustments in a Revenue Procedure in 4-8 weeks.
[Update on 11/16/18: The income tax brackets and exemptions shown in the last two items above are not correct, and the correct numbers can be found in the report on the official adjustments published in the Rev. Proc. from the Internal Revenue Service.]
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. 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).
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 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).
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).
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.”]
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).