New Proposed Rule (and Form) for Testimony on Incapacity

The Orphans’ Court Procedural Rules Committee has published a revised new O.C. Rule 14.3, and a new Form G-05, relating to expert reports on incapacity in guardianship proceedings in lieu of in-court testimony or depositions.  This new proposed rule and form will replace the Rule 14.3 and Form G-05 that were published on 8/19/2017, 47 Pa.B. 4815, as part of a new Chapter 14 of the O.C. Rules, which in turn were revisions to rules that were proposed in December of 2016, 46 Pa.B. 7934.

The Explanatory Report that has been published along with the revised rule provides a summary of the prior proposals and the changes made in the most recent revisions.

The deadline for comments is October 23, 2017.

“Proposed Adoption of New Pa. O.C. Rule 14.3, Form G-05 and Amendment of Index to Appendix,” 47 Pa.B. 5930 (9/23/2017).

 

 

Inflation Adjustments for 2018

With the release of the Consumer Price Index for August 2017, it’s possible to calculate various inflation adjustments for 2018. The following are the significant federal estate planning numbers, with the numbers for 2017 shown in parentheses:

  • The base applicable exclusion amount (and generation-skipping tax exemption) will be $5,600,000 (was $5,490,000 for 2017).
  • The annual gift tax exclusion will be $15,000 (was $14,000).
  • The annual gift tax exclusion for a non-citizen spouse will be $152,000 (was $149,000).
  • The “2 percent” amount for purposes of section 6166 will be $1,520,000 (was $1,490,000).
  • The limitation on the special use valuation reduction under section 2032A will be $1,140,000 (was $1,120,000).
  • The top (39.6%) 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 $24,600 (was $24,100).

The Internal Revenue Services will publish the official inflation adjustments in a Revenue Procedure in 4-8 weeks.

Federal Tax Lien Has Priority over Claims of Executor

When notices of federal tax liens are filed during the decedent’s lifetime, the federal lien has priority over expenses of administration of the decedent’s estate.  In re Estate of Simmons (United States v. Spiekhout), No. 1:15-cv-01097-TWP-MPB (U.S.D.C. S.D. Ind. 7/31/2017); Estate of Friedman v. Cadle Co., No. 3:08CV488 RNC, 2009 WL 7271206, at *3 (D. Conn. Sept. 8, 2009).  However, IRM 5.5.2.4(3) provides that the government “may in its discretion not assert priority over reasonable administrative expenses of the estate.”

Citation Refused when Foreclosed by Family Agreement

A trust may not be distributed in a manner that is inconsistent with a family settlement agreement approved by a decree of the Orphans’ Court more than 5 years before, so the court may deny the issuance of a citation, which is “tantamount to the grant of a demurrer.”  Edward Winslow Taylor Inter Vivos Trust, 169 A.3d 658, 2017 PA Super 275 (8/23/2017).

Gift Tax Payable by Donees not Deductible

The gift tax that is paid after death for net gifts made in the year of death is included in the gross estate under IRC section 2035 and the estate is not entitled to any deduction for the gift tax as a debt of the estate under IRC section 2053.  Under state law, no part of the federal estate tax that is payable will be apportioned to the donees even though the values of the taxable gifts are included in the calculation of the tax and the gift tax is included in the gross estate.  Estate of Sheldon C. Sommers v. Commissioner, 149 T.C. No. 8 (8/22/2017).

Proposed New Guardianship Rules Revised

Posted on by August 19, 2017

The Orphans’ Court Procedural Rules Committee has published proposed new rules for guardianship proceedings, Pa.O.C. Rules 14.1 to 14.14, and new Orphans’ Court Forms G-01 through G-06.  These new proposed rules are revisions to the rules that were proposed in December 2016, 46 Pa.B. 7934.

A Republication Report on the rules and their revisions is included with the proposed rules and forms.

An amendment to Pa.O.C. Rule 1.5 is also proposed in order to vacate local guardianship rules once the new statewide rules become effective.

“Proposed Amendment of Pa. O.C. Rule 1.5, Proposed Rescission of Pa. O.C. Rules 14.1—14.5 and Orphans’ Court Forms G-01 through G-04, Proposed Adoption of New Pa. O.C. Rules 14.1—14.14 and Orphans’ Court Forms G-01 through G-06, and Proposed Amendment of the Appendix of Forms,” 47 Pa.B. 4815 (8/18/2017).

Same-Sex Parents and Birth Certificates

It is a violation of due process for a state to refuse to put the name of the wife of a birth mother on a birth certificate if the state would put the name of a husband on a birth certificate even though the husband is not the biological father.  Pavan v. Smith, 582 U.S. ____, No. 16-992 (6/26/2017) (per curiam; Justices Gorsuch, Thomas, and Alito dissenting).