Legal Fees Not Allowed to Defend Legal Fees, and Other Fees Reduced to 15% of Trusts

Posted on by March 25, 2024

Objections filed by the individual beneficiary of two charitable remainder unitrusts to the administration and investments of the trusts, and the legal fees paid by the trusts, were overruled after a hearing on the objections, and so the trustee is now entitled to reasonable attorney fees for defending the administration and investments of the trusts, but not attorney fees for defending the legal fees incurred. The court was satisfied that the attorneys for the trustee separated their time defending the trustee from the time defending the legal fees, but reduced the fees from 25% of the value of the trusts to 15% of the value of the trusts. Chadwick Trusts Nos. 6 and 7, 2 Fid.Rep.4th 4 (Montgomery O.C. 2022).

[For other cases denying legal fees of a fiduciary to defend legal fees, see “Non-Reimbursable Legal Fees of Fiduciaries.”]

Dismissal of Answer and New Matter Is Not Appealable

Posted on by March 26, 2024

In an action relating to the appointment of a trustee and change of situs of an irrevocable trust, the order of the Orphans’ Court sustaining preliminary objections to an answer and new matter filed by the settlor of the trust, finding that the settlor had no standing, was not a final order and was not otherwise appealable. Trust of John S. Middleton, 2449 EDA 2022 (Pa. Super. 3/21/2024) (non-precedential), quashing appeal from 12 Fid.Rep.3d 543 (Montgomery O.C. 2022) (see “Settlor Lacked Standing in Litigation over Trust“).

[3/26/2024 Note: The original version of this summary failed to identify which of two similar actions were the subject of the appeal. For a published Superior Court opinion addressing the same issues with the same settlor, but a different trust, see “Dismissal of Answer and New Matter for Lack of Standing Was Not Appealable“.]

Appointment of Co-Guardian Affirmed in Absence of Objections

Posted on by March 23, 2024

The appointment of a co-guardian for an incapacitated person was affirmed on appeal despite potential conflicts of interest of the co-guardian when the counsel for the appellants failed to appear at the hearing before the Orphans’ Court and failed to make any objections to the proposed appointment, and the incapacitated person was represented by counsel and consented to the appointment. In re: G.A.T., an Alleged Incapacitated Person, 962 EDA 2023 (Pa. Super. 3/21/2024) (non-precedential).

Orphans’ Court Had Discretion to Deny Termination of Charitable Trust

Posted on by March 31, 2024

The intent of the settlor to create a perpetual charitable trust, and not make an outright charitable gift, is protected by the “high standard” of 20 Pa.C.S.A. § 7740.3(e) and the Orphans’ Court acted within its discretion in denying termination even though the trustee fees were almost 28% of the annual distributions to the charitable beneficiary but the fees were reasonable and at market rates. In re: Trust B Under Agreement of Richard H. Wells dated September 28, 1956, ___ A.3d ___, 5 WAP 2023 (Pa. 3/21/2024) (concurring and dissenting opinion of Justice Mundy), aff’g, ___ A.3d ___, 2022 PA Super 154 (9/7/2022) (see “Trustee Fees Did Not Warrant Termination of Charitable Trust“).

[The original version of this summary had the wrong date for the Supreme Court decision and failed to provide a link to the opinion of Justice Mundy.]

Undue Influence Not Proven

Posted on by March 10, 2024

The credible testimony of a reputable attorney who had known the decedent for many years created a presumption of the absence of undue influence. Conflicting testimony as to the health and mental state of the decedent was insufficient to establishe weakened intellect, an increase in a share of the estate by only 8% was not a substantial benefit, and the grant of a power of attorney was not a confidential relationship when the decedent continued to manage his own financial affairs and the agent only used the power to pay a bill and to pay for hospice care after the will was signed. Roche Estate, 1 Fid.Rep.4th 487 (Luzerne O.C. 2022), aff’d, 1377 MDA 2022 (Pa. Super. 10/27/2023).

Agent Was Competent to Testify to Wishes of Mother

Posted on by July 5, 2024

In a challenge to a transfer of the decedent’s residence during the decedent’s lifetime that was made to the decedent’s daughter by the agents under the decedent’s power of attorney, the brother of the transferee, who was also a co-agent, was competent to testify as to the wishes of the decedent and the Dead Man’s Rule did not apply because as a beneficiary of the estate his interests were adverse to the transfer. The court concluded that the testimony of the agents was more credible than the testimony of their brother, and so found that there was no fraudulent transfer by the agents and no need for an accounting by them. Pileggi Estate, Principal, 1 Fid.Rep.4th 476 (Montgomery O.C. 2023), aff’d, 2443 EDA 2023 (Pa.Super. 7/3/2024) (non-precedential).

Father Removed as Guardian for Misconduct

Posted on by March 10, 2024

It was not an abuse of discretion for the Orphans’ Court to remove the father of the incapacitated person as guardian when the father had failed to provide financial information and turn over assets to a successor guardian as ordered by the court, had been verbally aggressive and uncooperative with the son’s caregivers, and had commingled his son’s assets with his own. It was also not an abuse of discretion to deny the father’s request for a continuance when he had had three months to prepare for the hearing on his petition and the continuance would not be in the best interests of his son. In re: Estate of E.C.P., an Incapacitated Person, 1 Fid.Rep.4th 451 (Bucks O.C. 2023), on appeal, 2357 EDA 2023 (Pa. Super.)

Estate Funds Improperly Used for Business

Posted on by March 4, 2024

Executor is required to reimburse estate for estate funds used to pay taxes and expenses of decedent’s business. Sale of property to decedent’s daughter for less than the value reported on the inheritance tax return was approved due to the dilapidated condition of the property and the expenses incurred by the daughter to improve the property. Payment of the family exemption to the daughter was also approved. The account of the executor as agent for the decedent during his lifetime was approved even though it showed no meaningful transactions based upon the credible testimony of the agent that he conducted no financial transactions for the decedent. Hill Estate, 1 Fid.Rep.4th 413 (Bucks O.D. 2023).

Administrator Removed after 25 Years

Posted on by March 4, 2024

The administrator was properly removed for failing to make any effort to settle or distribute the estate for twenty-five years, for failing to keep records allowing for an account of his administration, and for co-mingling of assets. Neither the lack of any action by the beneficiaries nor the possible increase in the value of the estate excused the failures of the administrator. Frey Estate, 1 Fid.Rep.4th 405 (Luzerne O.C. 2021), aff’d, 1533 MDA 2020, 258 A.3d 553 (Pa. Super. 2021) (non-precedential).

Interrogatories Denied as Overly Broad and Burdensome

Posted on by March 4, 2024

In litigation over the compensation and expenses of trustees of a charitable trust, the Orphans’ Court denied enforcement of interrogatories by the trustees addressed to the Attorney General which requested information about admissions and the purposes of expenses because the interrogatories were overly broad and burdensome and requested information that the Attorney General did not have. 1994 Charles B. Degenstein Foundation, 1 Fid.Rep.4th 399 (Snyder O.C. 2023).