When a hospital becomes part of a larger health care organization, but continues to operate as separate organization at the same location serving the same community, the cy pres doctrine should not be applied to require a pour-over trust and special accounting measures to prevent charitable trust income from indirectly benefiting the health care organization, but it was proper to order that the hospital’s articles of incorporation be amended to require that donor restricted funds be used solely for the operation of the hospital. In re: Grover C. Shoemaker Trust, 115 A.3d 347, 2015 PA Super 111, No. (5/7/2015).
The IRS web page with frequently asked questions on estate taxes now states that, effective Jun 1, 2015, estate tax closing letters will be issued only upon request, and requests should be made at least four months after the return…
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The Internal Revenue Service has issued T.D. 9725 containing final regulations on electing portability for the deceased spousal unused exclusion (DSUE) amount. Among the revisions that were made (and not made) to the proposed and temporary regulations are the following:
- The portability election must be made on a timely filed return, and an extension of time to file a return to elect portability may be allowed under Treas. Reg. § 301.9100-3 if a return is not required to be filed because the gross estate is too small to require a return (see Rev. Proc. 2014-18), but not if an estate tax return is otherwise required (although an extension may be allowed under IRC section 6081).
- Only an “executor” as defined by IRC section 2203 can file the estate tax return to elect portability.
- If an estate tax return is not otherwise required, only descriptions, and not values, are required for assets qualifying for marital or charitable deductions, subject to exceptions for partial interests, values needed to determine other non-deductible interests, and values needed to determine the eligibility of the estate under other transfer tax provisions.
- The IRS considered, and rejected, requests for a shorter Form 706 for portability elections.
- The general rule is that a non-citizen surviving spouse cannot apply the DSUE until the final amount of any additional estate tax on a qualified domestic trust has been determined, such as at the spouse’s death, but an exception to that rule has been created when the surviving spouse becomes a US citizen.
- In examining the return of a decedent who claims credit for DSUE from a deceased spouse, the IRS may examine the return of the deceased spouse for purposes of determining the correct amount of DSUE even though the statute of limitations does not allow for an assessment of tax in the estate of the deceased spouse, and the examination is not limited to the valuation of assets but can include any issue affect the calculation of the DSUE.
- Under Rev. Proc. 2001-38, the IRS will disregard a QTIP election that is not necessary to avoid federal estate tax, but it may be desirable in some cases to file an estate tax return to elect portability and make a QTIP election even though the QTIP election is not necessary to avoid federal estate. This issue is not addressed in the final regulations, but the IRS stated that it intends to provide guidance in a future Internal Revenue Bulletin.
- The DSUE cannot be increased by applying credits other than the unified credit (such as the foreign tax credit and credit for property previously taxed) before applying the unified credit.
The final regulations are generally applicable to estates of decedents dying on or after June 12, 2015.
There is an American Bar Association web page with summaries and links to various state opinions on the ethics of storing confidential client information on off-site “cloud computing” services of third parties. Included is a link to Formal Opinion 2011-200…
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Court approved permanency plan with goal of adoption for children who had been removed from home and declared dependent after finding that father, a registered sex offender, had a history of sexual conduct with minors and was not cooperating with sexual offender treatment, and that mother was unable to recognize risk that father posed to children, the county agency having made reasonable efforts toward reunification of children with parents. In re M.Y., Jr. and T.J., 5 Fid.Rep.3d 216 (Juv. Div. Berks 2013), aff’d, 1843 MDA 2015 (Pa. Super. 5/6/2016) (memorandum by Musmanno, J.).
Declaratory judgement entered interpreting handwritten will as granting petitioner a fee simple interest in decedent’s residence, and not a life estate, despite language regarding the sale and distribution of proceeds of sale in the event of petitioner’s death, which were held to be precatory. The court also held that the gift of the “house and contents” included the contents of the attached and detached garages, but that gifts to “all the grandchildren” included only the decedent’s grandchildren and not the petitioner’s grandchildren. Heckendorn Estate, 5 Fid.Rep.3d 208 (O.C. Cumb. 2009).
Distributions from charitable trust to Green Tree Community Health Foundation approved as successor or substitute for Chestnut Hill Hospital. Geschick Trust, 5 Fid.Rep.3d 203, No. 1321 ST 1965 (O.C. Phila. 2011).
Executor commission reduced in accordance with the fee schedule in Johnson Estate, and charitable distributions approved to charities selected by the trustees. Haffner Estate, 5 Fid.Rep.3d 195 (O.C. Monroe 2015).
The Pennsylvania legislature abolished common law marriages entered into after January 1, 2005, but common law marriages before that date will continue to be valid. See Act of November 23, 2004, No. 144, amending 23 Pa.C.S. § 1103.
In Whitewood v. Wolf, 992 F. Supp. 2d 410, No. 1:13-cv-1861 (M.D. Pa. 5/20/2014), a federal district court held that Pennsylvania’s statutory prohibition on same-sex marriages was unconstitutional. (See previous commentary on the decision, and the announcement by the Pennsylvania Department of Revenue in response to the decision.)
Before the Whitewood decision, a same-sex couple would not have been able to obtain a marriage license in Pennsylvania, but they still could have exchanged wedding vows (which is the essence of a common law marriage). Those wedding vows would not have been considered legally valid before the Whitewood decision, but will the Whitewood decision allow the retroactive recognition of common law marriages which the parties attempted to enter into before 2005?
The Cumberland County Sentinel reported on July 22, 2014, that in one case, the Department of Revenue has allowed that result, applying a 0% spousal inheritance tax rate to the survivor of a long-term same-sex relationship when the survivor was able to present evidence of a pre-2005 contractual marriage. That’s only an administrative determination in one case, and it’s not a precedent for any other case, but it shows that the Department of Revenue is at least willing to consider the issue.
The proceeds of the sale of stock that had been held by a husband and wife continued to be entireties property in the absence of any contrary provisions of the stock purchase agreement, and so the remaining proceeds were payable to the wife after the death of the husband even though separate payments had been made to the agents for husband and wife during husband’ s lifetime. In re: Estate of Navarra, 113 A.3d 829, 2015 PA Super 65, No. 571 WDA 2014, (Pa. Super. 4/6/2015).