Shortly before decedent’s death, decedent deposited proceeds from the sale of his business into a bank account in joint names with his wife (tenancy by the entirety), from whom he was separated, and then promptly withdrew the money, placing it in an account in his own name. The court found that the decedent did not intend the deposit to be a gift and found clear evidence that decedent’s intent was for the money to go to his son. Fawley Estate, 3 Fid. Rep. 3d 254 (O.C. Chester 2013) (Opinion by Hall, J.)
On April 13, 2013, the Orphans’ Court Procedural Rules Committee published proposed new rules for the Orphans’ Courts of the Commonwealth. Exists rules 1.1 through 14.5 would be vacated and new rules 1.1 through 11.6 adopted in their place.
The proposed rules would also vacate all local rules, and require that all new local rules be submitted to the Procedural Rules Committee for review before being adopted.
Some members of the Real Property, Probate and Trust Law Section of the Pennsylvania Bar Association submitted comments on the proposed rules. It is believed that the committee has reviewed those and other comments and has sent a final version of the rules to the Supreme Court for its review and (presumably) adoption.
Proposed New Pa.O.C. Rules 1.1–11.6 and Explanatory Notes, 43 Pa.B. 2010 (4/13/2013).
Trustees who successfully defend themselves against a surcharge action are entitled to recover the legal fees and costs from the trust, and the litigation costs relating to three trusts should be born proportionately by all three trusts because the surcharge related to actions that occurred before the division of the one trust into three trusts, because the non-surcharge actions were intended to divide the trusts in a way that benefited all of the beneficiaries, and because all three beneficiaries participated in the litigation. McFadden Trusts, 3 Fid. Rep. 3d 209 (O.C. Phila. 2013):
Trust allowed invasion of principal for support, education, and health care of beneficiary “after considering other available resources and economies of taxation,” and the trustee paid medical bills but refused to pay rent or purchase an automobile for the beneficiary. The court refused to direct distributions of principal because the beneficiary failed to provide adequate information about her income and assets and the court was unable to conclude that the trustee had abused its discretion. Smith Trust, 3 Fid. Rep. 3d 234 (O.C. Lycoming 2013):
Executor surcharged for missing dividends, for the costs of multiple appraisals, for losses upon the sale of securities that should have been more promptly liquidated, for litigation costs that exceeded the amounts at issue, and for late filing penalties for the decedent’s individual income tax returns. The court also reduced the executor’s commission for payments to others for performing duties that were the responsibility of the executor. Surcharge was denied for failing to make distributions before the executor’s account had been approved. Grimble Estate, 3 Fid. Rep. 3d 224 (O.C. Washington 2013).
The failure of the Department of Revenue to appear at the hearing of an inheritance tax appeal in the Orphans’ Court or otherwise participate in the decision of that court operated as a waiver of all issues before that court and so those issues cannot be raised on appeal. Sheluga Estate, 3 Fid.Rep.3d 181 (Cmwlth Ct. 2013):
Mortgage lien was extinguished by sale ordered by court under 20 Pa.C.S. 3353, which had the effect of a judicial sale. Landis Estate, 3 Fid. Rep. 3d 183 (O.C. Montgomery Co. 2013), rev’d, 85 A.3d 506, 2014 PA Super 7 (2014).
Agent’s account was found to be unreliable and was not confirmed, so the agent was ordered to return to the guardian of the estate of the incapacitated principal amounts claimed to have been paid as compensation, reimbursements for expenses, or gifts to the agent and her husband, as well as undocumented amounts claimed to have been paid to the principal. Bitschenauer, Incapacitated, 3 Fid. Rep. 3d 186 (O.C. Philadelphia 2013).
After incapacitated person was found to be eligible for medical assistance, guardian of the estate was not required to file a petition to seek court approval to spend the ward’s income on expenses other than the medical and nursing home expenses of the ward, even though the payments of the guardian were less than the payments for care determined by the Department of Public Welfare, and the court declined to substitute its judgment for the decision of the guardian to spend income to preserve the value of the ward’s assets. Maene, an Incapacitated Person, 3 Fid. Rep. 3d 194 (O.C. Bucks 2012), aff’d 909 EDA 2012 (Pa. Super. 5/23/2013) (non-precedential).
An oral prenuptial agreement may be established by clear and convincing evidence, and the court found credible the wife’s testimony that there was an agreement that she would have an interest in the marital residence based on her use of the proceeds of her sale of her house to pay the mortgage on the residence. Thompson v. Thompson, 3 Fid.Rep.3d 202 (Cumberland Co. C.P. 2013).