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33 (O.C. Allegheny Co. 2015) (opinion by O’Toole), vacated and remanded, No. 294 WDA 2016 (Pa.Super. 1/9/2017) (non-precedential; expert opinion in support of “weakened intellect” was not rendered within “reasonable degree of medical certainty” and was inadmissible; court also abused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.
The Orphans’ Court Procedural Rules Committee has proposed new rules for adoption proceedings. Proposed Rescission of Rules 15.1 through 15.9 and Replacement with the New Rules of Chapter XV, 46 Pa.B. 332 (1/16/2016).
(The recently adopted Orphans’ Court rules did not include any changes to adoption rules.)
Surcharge imposed against trustee for more than $600,000 for “reimbursements” to herself, but surcharge for failure to properly invest funds denied because the testimony of the expert witness was speculative and simplistic and lacked a solid foundation. In addition, punitive damages of more than $300,000 imposed for conduct the court found to be intentional and reckless. Simple interest imposed at the legal rate of 6% from the date of each “distribution” the trustee made to herself. Gansky Trust, 4 Fid.Rep.3d 330 (O.C. Montg. 2015) (opinion by Ott, J.)
On exceptions, the surcharge was recalculated, simple interest at 6% was affirmed, punitive damages were denied, and attorney fees for the objectants were denied. Gansky Trust, 6 Fid.Rep.3d 27 (O.C. Montg. 2015) (opinion by Murphy and Ott, JJ.).
Claims allowed for expenses paid by friends of the decedent (one of whom was a cousin of the decedent) for taxes on property of the decedent, as well as insurance and utilities, for hospice care for the decedent before death, and for the funerals and burials of both the decedent and her husband, who had died a few months before, and whose burial was therefore an obligation of the decedent. Miller Estate, 6 Fid.Rep.3d 23 (O.C. Allegh. 2015).
Executors surcharged for sale of estate property to a son of one executor, for expenses paid to the purchaser of the property for “cleanup” of the property 20 days before the sale, for distributions of automobiles contrary to the provisions of the will, for the value of assets shown on the inheritance tax return but not the account, for a discrepancy between the difference between the amounts shown as receipts and disbursements in the account and the amounts actually distributed, and for executor commissions paid in the face of acts of self-dealing, but surcharges denied for payments for utilities after decedent’s death, for a partial payment on a debt for which the decedent co-signed, and for distributions of personal property in the absence of evidence as to the nature and value of the property distributed. Attorney fees for the objectant were not awarded, and removal of executors was denied. Rehrig Estate, 6 Fid.Rep.3d 13 (O.C. Northampt. 2015).
A beneficiary may revoke an assignment of undistributed interests in a spendthrift trust, and so summary judgment on a petition for declaratory relief is appropriate. Middleton Trust, 6 Fid.Rep.3d 1 (O.C. Montg. 2015) (opinion by Murphy, J.)