Judgment creditor of beneficiary of spendthrift trust could not attach trust assets and could not require distribution of beneficiary’s right to withdraw contributions to the trust because the right was not a “power of withdrawal” as defined by 20 Pa.C.S.A. § 7703 when it was limited to the federal gift tax annual exclusion (i.e., a “crummey” power) and lapsed at the end of the calendar year within the limits of I.R.C. section 2041(e) (which allows lapses of 5% or $5,000 without gift tax consequences). The judgment creditor therefore had no standing to raise objections to the account of the trustee. Clegg Trust, 6 Fid.Rep.3d 69 (O.C. Philadelphia 2015) (opinion by Herron, J.).
The Juvenile Court Procedural Rules Committee has proposed amendments the Pa. Rules of Juvenile Court Procedures regarding investigations of child abuse or neglect. “Proposed Amendment of Pa.R.J.C.P. 100 and 1100, and New Pa.R.J.C.P. 1107 and 1109,” 46 Pa.B. 555 (1/30/2016).
In Notice 2016-19, , 2016-09 I.R.B. ___, the IRS has again postponed the due date for basis reporting (i.e., filing Forms 8971), this time to March 31, 2016. The notice (which is stated to be effective February 11, 2016) also states that proposed regulations will be issued “very shortly.”
For background on the new basis reporting rules and Form 8971, see “Consistent Basis Reporting Required,” “IRS Delays New Sec. 6035 Basis Reporting,” “New Basis Reporting Form,” and “Basis Reporting Form Released.”
When an Orphans’ Court enters a nonsuit to objections to an account, the objectant must file a motion with the court to remove the nonsuit before appealing the nonsuit. In re: Ernest J. Koeberlein Trust, No. 652 WDA 201 (Pa. Super. 2/9/2016) (non-precedential).
Petition for termination of father’s parental rights was denied, despite father’s criminal history and current incarceration, because father had cooperated with child welfare agency and had achieved most of the objectives established for him by the agency. In re J.M.W., 6 Fid.Rep.3d 56 (O.C. Bucks Co. 2015).
Objections to distributions and dispositions of tangible personal property were dismissed when all family members had an opportunity to review and claim items, the executor was able to sell some unclaimed items, and other items were given away or discarded and there was no evidence that any items were missing or any items had any special monetary value. The return of a time-share without any value was also approved. Adams Estate, 6 Fid.Rep.3d 49 (O.C. Monroe Co. 2015).
Fees of corporate trustee based on both a percentage of the value of closely-held stock and hourly charges for time spent approved when trust document allowed fees “in accordance with its schedule in effect” when the services are performed, the fee schedule was previously approved by the court, the fee schedule was the result of competition with other corporate trustees, expert testimony was presented that the compensation was reasonable in light of the risks to which the corporate trustee was exposed, the fee schedule was approved by individual co-trustees, the fees were at the lower end of industry standards, and the objectant failed to produce any evidence to rebut the presumption of reasonableness. Trust of Henry Orth Hirt, 6 Fid.Rep.3d 38 (O.C. Erie Co. 2015).
Daughter and her husband were found to be in a confidential relationship with the decedent because they lived next door to the decedent, had a close relationship with the decedent, the decedent trusted them, and the decedent relied upon them for transportation and other necessities, and so were ordered to return the proceeds of an annuity which the court found was purchased by the decedent as the result of undue influence. Carratura Estate, 6 Fid.Rep.3d 33 (O.C. Allegheny Co. 2015) (opinion by O’Toole), vacated and remanded, No. 294 WDA 2016 (Pa.Super. 1/9/2017) (non-precedential; expert opinion in support of “weakened intellect” was not rendered within “reasonable degree of medical certainty” and was inadmissible; court also abused discretion in applying unclean hands doctrine).
Probate of after-discovered will was properly denied based on evidence of undue influence. Weakened intellect was found in evidence of progressive dementia, and confidential relationship was found in son-proponent’s involvement in the testator’s personal and business affairs. Trustee of inter vivos trust named as beneficiary of previous will had standing to oppose petition for probate, and issue was waived by failure to raise the issue before the trial court. In re: Estate of Schumacher, 2016 PA Super 17 (1/29/2016).
The IRS has released the new Form 8971 (and its instructions) for executors to use to report federal estate tax values as required by new IRC section 6035. The Form 8971 is filed with the IRS, and a separate Schedule A is provided to each beneficiary receiving property from the estate.
The new reporting requirements apply to federal estate tax returns filed after July 31, 2015, and the due date for filing (and notice to beneficiaries) is normally 30 days after the federal estate tax return is required to be filed (including extensions). Under Notice 2015-57, 2015-36 I.R.B. 294, the date for filing returns (and notices to beneficiaries) required before February 29, 2016, was extended to February 29, 2016.