Beneficiaries of Trust Accounts Have Standing

The beneficiaries of certificates of deposits which the decedent had titled “in trust for” their benefit had standing to challenge actions of decedent’s agents who removed the beneficiary designations before the decedent’s death, notwithstanding the general rule that only the principal or the personal representative of the principal’s estate have standing to challenge the actions of agents acting under a durable power of attorney.  Rellick v. Rellick-Smith, 147 A.3d 897, 2016 PA Super 184 (Pa.Super. 8/22/2016).

[For a later decision in this same case, also addressing the issue of standing, see Rellick v. Rellick-Smith, 630 WDA 2022 (Pa. Super. 5/17/2023) (non-precedential).]

Parental Rights of Father May Not Be Terminated through Adoption by Grandparent

Posted on by September 28, 2016

Mother may not obtain a termination of the parental rights of the father through an adoption when the adopting adult is the mother’s father, and not a spouse of the mother, and the mother is not agreeing to terminate her own parental rights. In re: Adoption of M.R.D. and T.M.D., No. 26 MAP 2016 (Pa. 8/29/2016), rev’ng No. 1728 MDA 2013 (Pa. Super. 12/8/2015).

Inflation Adjustments for 2017

Posted on by December 19, 2016

With the release of the Consumer Price Index for August 2016, it’s possible to calculate various inflation adjustments for 2017. The following are the significant federal estate planning numbers:

  • The base applicable exclusion amount (and generation-skipping tax exemption) will be $5,490,000.
  • The annual gift tax exclusion will be $14,000 (i.e., no change).
  • The annual gift tax exclusion for a non-citizen spouse will be $149,000.
  • The “2 percent” amount for purposes of section 6166 will be $1,490,000.
  • The limitation on the valuation reduction under section 2032A will be $1,120,000.
  • The top (39.6%) income tax bracket for estates and trusts will begin at $12,500.
  • The alternative minimum tax exemption for an estates and trusts will be $24,100.

[Update:  The Internal Revenue Services confirmed these numbers, and published other inflation adjustments, in Rev. Proc. 2016-55., 2016-45 I.R.B. 707  (11/7/2016).]

Proof of ITF Accounts; Voided Transfers

Copy of bank statement was sufficient evidence that bank account was “in trust for” beneficiary, and both ITF and joint accounts were increased by lifetime transfers that were voided by court as beyond the powers of agent acting under durable power of attorney.  Estate of William F. Binnig, No. 12 DE of 2013 (O.C. Philadelphia 9/9/3015), aff’d No. 1204 EDA 2015 (Pa. Super. 4/4/2016) (non-precedential).

Revised Forms for Orphans’ Court and Register of Wills

Posted on by August 19, 2016

In an order dated August 9, 2016, (No. 702 Supreme Court Rules Docket), the Supreme Court rescinded and replaced Some of the state-wide forms for use in the Orphans’ Court and Register of Wills, specifically Forms OC-1 through OC-6 and RW-06 through RW-10.   A revised Index to the Appendix of the Pennsylvania Orphans’ Court Rules was attached to the order.

The revisions were made so that the forms reflect the new Orphans’ Court rules that go into effect on September 1, and under the new rules the forms are exclusive, and local rules may not require or allow other forms in their place.  See Pa.O.C. Rule 1.8(a).  The forms themselves can be found on the website of the Administrative Office of Pennsylvania Courts.

New Local Orphans’ Court Rules for 17 Counties

The July 30, 2016, Pennsylvania Bulletin (Vol. 46, No. 31) includes new or amended local Orphans’ Court rules for Allegheny, Beaver, Berks, Chester, Dauphin, Delaware, Franklin, Fulton, Lackawanna, Lancaster, Lehigh, Philadelphia, and Washington counties, all to be effective September 1, 2016.  (Citations and links below.)

The August 6, 2016, Pennsylvania Bulletin (Vol. 46, No. 32) includes new or amended local Orphans’ Court rules for Armstrong, Cumberland, Lebanon, and Montgomery Counties.  (Citations and links below.)

These publications appear to be the result of the order of the Supreme Court that local rules for which there is a “continued necessity” should be submitted to the Orphans’ Court Procedural Rules Committee for review before June 1, and a desire (or commitment) of the Committee to review and publish those rules before September 1. Review and Vacatur of Local Orphans’ Court Rules, No. 683 Supreme Court Rules Docket (12/1/2015), 45 Pa.B. 7126 (12/19/2015).  So we should see more publications of new local rules in the future.

Rules of the Orphans’ Court Division of the Court of Common Pleas (Allegheny Co., 6/9/2016), 46 Pa.B. 4078 (7/30/16).

Adoption of New Local Orphans’ Court Rules, No. CP-03-AD-0000001-2016 (Armstrong Co., 7/21/2016), 46 Pa.B. 4821 (8/6/2016).

Local Rules of Orphans’ Court, No. 10937 of 2016 (Beaver Co.), 46 Pa.B. 4119 (7/30/2016).

Amendments to Local Rules, No. 16-0094 (Berks Co. 7/20/2016), 46 Pa.B. 4120 (7/30/2016).

Order Rescinding Orphans’ Court Rules 1.2A through 13.3A and Orphans’ Court Rule 17.1A and Promulgating Orphans’ Court Rules 1.1A through 10.4A (Bucks Co. 7/19/2016), 46 Pa.B. 4129 (7/30/2016).

Adoption of Local Orphans’ Court Rules (Chester Co. 7/13/16), 46 Pa.B. 4135 (7/30/2016).

Rules of the Court of Common Pleas, No. 21-95-945 Orphans’ Court (Cumberland Co. 7/25/2016), 46 Pa.B. 4826 (8/6/2016).

Promulgation of Local Rules, No. 1793 S 1989 (Dauphin Co. 7/15/2016), 46 Pa.B. 4142 (7/30/2016).

Orphans’ Court Local Rules, Doc. No. 12-504046 (Delaware Co. 7/20/2016) 46 Pa.B. 4148 (7/30/2016).

Amended Local Rules for the Orphans’ Court of the 39th District; Rule 39-2.6 Time for Filing Accounts and Rule 39-2.7 Time for Filing Objections (Franklin and Fulton Cos. 7/18/2016), 46 Pa.B. 4155 (7/30/2016).

Local Orphans’ Court Rules (Lackawanna Co.), 46 Pa.B. 4155 (7/30/2016).

Adoption of Rules of Orphans’ Court, 2016-1570 (Lancaster Co. 7/20/2016), 46 Pa.B. 4159 (7/30/2016).

Orphans’ Court Rules (Lebanon Co.), 46 Pa.B. 4829 (8/6/2016).

Orphans’ Court Rules, File No. AO 20014-0002 (Lehigh Co. 7/19/2016), 46 Pa.B. 4161 (7/30/2016).

Adoption of Orphans’ Court Rules Chapters 1 through 9 (Montgomery Co. 7/27/2016), 46 Pa.B. 4833 (8/6/2016).

Adoption of Local Orphans’ Court Rules Pursuant to Pa.O.C. Rule 1.5(e) and Pa.R.J.A. 103, President Judge General Court Regulation No. 2016-2 (Philadelphia Co. 7/20/2016), 46 Pa.B. 4048 (7/30/2016).

Local Orphans’ Court Rules, No. 2016-1 (Washington Co. 7/15/2016), 46 Pa.B. 4172 (7/30/2016).

Inheritance Tax Amendments (Act 84)

Sections 45 and 47 of the Act of July 13, 2016, No. 84, (H.B. 1198), made several changes to the inheritance tax exemptions for agricultural property and family-owned businesses, sections 2111(s), (s.1) and (t), and section 2130(5), of the Tax Reform Code of 1971, 72 P.S. §§ 9111(s), (s.1), and (t), and 9130(5).  Specifically:

  • Language has been amended or added to extend the exemptions to transfers in trust for the benefit of family members.
  • To be exempt from inheritance tax, property devoted to the business of agriculture must produce a gross income of at least $2,000, both at the time of death and for seven years afterwards.
  • Property devoted to the business of agriculture, or agricultural easements or reserves, must be reported on a timely filed inheritance tax return.  (The requirement of a timely return already applied to the exemption for family-owned businesses.)
  • The exemption for family-owned businesses now refers to “members of the same family” and the definition of “qualified transferee” has been deleted.
  • In the event property ceases to be exempt, the beneficiaries of a trust that is the owner of the property are liable for any tax that may be imposed, and all liability is joint and several.
  • Expenses and debts incurred in connection with exempt property are not deductible.

These amendments to sections 2011(s) and (s.1) apply to decedents dying after December 31, 2012, while the amendments to section 2011(t) apply to the estates of decedents dying after June 30, 2013.  The amendment to section 2130(5) appears to be effective as of enactment.