An adult adopted by the testator’s grandson became a beneficiary of a testamentary trust upon the death of the adopting grandson because of the existence of a parent-child relationship during the minority of the adoptee. Armistead Trust (No. 2), 5 Fid. Rep. 3d 29 (O.C. Delaware Co. 2014) (Opinion by Kenney, P.J.)
We’ve created a new page that lists legislation that might be of interest to estate and trust lawyers in Pennsylvania, and provides links to bill information on the website of the Pennsylvania General Assembly, as well as brief summaries, affected statutes, and the last actions taken.
The Pennsylvania Department of Revenue has announced the release of new inheritance tax forms designed to “enhance processing efficiency.” Tax Update, No. 177 (Dec. 2014/Jan. 2015).
According to the Department:
The newly designed form has revised Ovals 4 through 11 and added Ovals 12, 13 and 14,as described below:• Oval 4 will be used when the estate is claiming an agricultural exemption.• Oval 11 will now be used to report non-probate transfers by the transferee that will not be reported on the probate return. Taxpayers should now use this oval in lieu of the Advance Payment Worksheet for such situations.• Oval 13 will be used to indicate that the estate contains business assets, whether an exemption is being claimed or not.• Oval 14 will indicate that the spouse is the sole beneficiary of an estate whereby the assets pass outright and not in trust.In addition to the aforementioned changes, the requirement for the surviving spouse Social Security number has been eliminated; there is a new data-captured box for date stamp entry, which will enable the department to track returns based on the order in which they were filed; and the signature section has been moved to the bottom of the second page to accommodate the date stamp box.The REV-1501 Instruction Book is being replaced by new REV-1500 Instructions, a seven-page document for the preparation and filing of the Inheritance Tax return, REV-1500. Separate instruction sheets corresponding to most of the individual schedules will be available.The department has also created a new pamphlet, REV-720, containing general information regarding the Pennsylvania inheritance tax.Forms and schedules are available at www.revenue.pa.govor by calling the department’s form ordering service at 1-800-362-2050.
When a power of attorney provided for “limited gifts” to persons “my attorney reasonably considers to be the natural objects of my bounty,” the agent should be surcharged for gifts that exceed the federal gift tax annual exclusion amount, but should not be surcharged for limited gifts to a daughter’s son, her son’s wife, her step-son, or her step-son’s wife, even though those persons were not beneficiaries under the principal’s will. In re: Betty J. Fiedler, 132 A.3d 1010, 2016 PA Super 3 (1/5/2016) (en banc; applying statutes in effect before Act 95 of 2014), 2015 PA Super 10 (1/16/2015) (decision of three judge panel), aff’ng in part and rev’g in part, Betty J. Fiedler, In re, 4 Fid. Rep. 3d 90 (O.C. Lanc. 2013) (Opinion by Hoberg, J.).
A Vanguard account payable to a named beneficiary at the death of the account owner is subject to the surviving spouse’s elective share under 20 Pa.C.S. § 2203. In re Estate of Rood, 5 Fid.Rep.3d 15, 107 Berks Co.L.J. 71 (10/17/2014), aff’d 2015 PA Super 180 (8/29/15).
Father’s parental rights were terminated, even though he was incarcerated, because the father “evidenced a settled purpose of reliquishing his parental claim to Child by failing to maintain any parent-child relationship.” Adoption of F.G.T., 5 Fid. Rep. 3d 19 (OC Cumb. 2014) (Opinion by Placey, C.P.J.)
The court cannot grant a guardian’s petition to admit an incapacitated person into an inpatient psychiatric facility, because 20 Pa. C.S. 5521(f)(1) specifically forbids it. Jane Doe, Incapacitated Person, 5 Fid. Rep. 3d 13 (OC Del. 2014) (Opinion by Kenney, P.J.)
Direction in will that all estate, inheritance, and other death taxes be paid “out of and charged against my estate” was insufficient to overcome statutory direction that inheritance tax be paid from shares of estate subject to tax, so objection of Attorney General to the payment of inheritance tax from the 60% of the residue payable to charities was sustained even though the charities had consented to the division of the residuary after the payment of the tax. Davis Estate, 5 Fid. Rep. 3d 8 (O.C. Erie 2014) (Opinion by Kelly, J.), rev’d and remanded, 128 A.3d 819, 2015 PA Super 249, No. 1347 WDA 2014 (11/30/2015) (originally published 8/17/2015 as a non-precedential memorandum decision, with an application for publication of memorandum decision granted 9/21/2015).
The IRS has issued five identical private letter rulings, PLRs 201442042, 201442043, 201442044, 201442045, and 201442046, apparently to five different parties involved in the same transaction, agreeing that a court-approved reformation of a trust in accordance with § 415 of…
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The Pennsylvania Supreme Court has adopted new ethics rules and disciplinary rules intended to address the problem of misappropriation of client and third-party funds, generally effective in 60 days. In re: Amendments to the Pennsylvania Rules of Professional Conduct and the Pennsylvania Rules of Disciplinary Enforcement, 45 Pa.B. 279 (1/17/2015), D.R. No. 132 (12/30/2014) (with text of amendments in Annex A and Annex B). Public notice of the amendments was provided by publication of “Proposed Amendments to the Pennsylvania Rules of Professional Conduct and the Rules of Disciplinary Enforcement to Reduce Loss Resulting from the Misappropriation of Client and Third Party Funds,” 44 Pa.B. 6070 (9/27/2014).
I (and others) had submitted comments to the Disciplinary Board objecting to proposed amendments to Enforcement Rule 217 that would require every “formerly admitted attorney” to resign from all fiduciary positions, even if the attorney was merely retiring from practice or moving out of the jurisdiction and so assuming inactive status. As actually amended, Enforcement Rule 217(d)(3) will require fiduciary resignations by attorneys who are disbarred, suspended for more than one year, suspended under Rule 208(f) (emergency suspensions) or 213(g) (enforcement of subpoenas), or inactive due to disability.
The new Note to Rule 217(d)(3) states that the amended rule does not prevent a retired or inactive attorney from serving as a fiduciary, but a formerly admitted attorney serving as a fiduciary or accepting a fiduciary appointment must still give notice in accordance with Rule 217(c)(1) to persons to whom a fiduciary is owed, as well as “supervising judges and courts” and “other recipients of the formerly admitted attorney’s fiduciary services” so that interested parties will have “an opportunity to consider replacing the formerly admitted attorney.”
The reference in the Note to attorneys on retired status is puzzling because Rule 219(i) states that Rule 217 generally does not apply to attorneys who have applied for, and received, a transfer to retired status. It is therefore not clear whether the Note negates Rule 219(i) and retired attorneys are not required to comply with Rule 217(a), (b), and (c), or whether the reference in the Note to retired status was a mistake and Rule 217 continues to be inapplicable to attorneys on retired status.
If Rule 219(i) continues to make Rule 217 inapplicable to attorneys on retired status, then there is the additional question of why attorneys on inactive status (to which Rule 217 clearly applies) should be treated so differently from attorneys on retired status.
The order adopting the amendments states that the amendments to Rule 217(c) and (d) and the Note after Rule 217(d)(3) shall apply to persons who are formerly admitted attorneys on the effective date of the order and to persons becoming formerly admitted attorneys on or after the effective date of the order. So, every lawyer who is currently inactive who is serving as a fiduciary must give the notices required by Rule 217(c)(1) regardless of when the lawyer became inactive. Whether notices under Rule 217(c)(1) are required of attorneys on retired status is not clear, for reasons explained above.
[Note: This article was updated on 1/13/2015 to include references to the conflict between Rule 219(i) and the note to Rule 217(d)(3). Also updated on 1/19/2015 to include citation and link to the publication of the amendments in the Pennsylvania Bulletin.]