In Rev. Rul. 2023-2, ___ I.R.B. ___, the Internal Revenue Service has held that assets held in an irrevocable trust that was a grantor trust do not receive a new basis under I.R.C. § 1014 on the death of the grantor if the assets are not included in the grantor’s gross estate for federal estate tax purposes.
[For a brief explanation of grantor trusts, see “Overview: Benefits/Costs of Grantor Trusts.”]
In an ejectment action brought by the administrator of an estate, the heirs of the decedent were not indispensible parties even though title to the property had passed to the heirs at the death of the decedent under 20 Pa.C.S. § 301(b), but the decree of the Orphans’ Court was vacated and remanded because the administrator had failed to introduce any proof that the decedent had owned the property at death. In re: Estate of Vernell Smith, 378 EDA 2022 (Super. 3/24/2023) (non-precedential).
Westmoreland County has adopted a new local form of report for adoption intermediaries. “Order Adopting New Form for Report of Intermediary; No. 3 of 2023” (3/14/2023), 53 Pa.B. 1665 (3/25/2023).
The discovery of a later will may be the subject of an appeal to the Orphans’ Court within one year of the probate of the earlier will even though the appeal is after the end of the three month period within which the Register may admit the later will to probate under 20 Pa.C.S. § 3138. In re: Estate of Kathryn V. Ruhlman, 2023 PA Super 43, ___ A.3d ___ (3/15/2023).
Philadelphia has adopted new local Orphans’ Court Rules 3.5A (“Procedure for Determination when No Response is Filed to a Petition under Pa.R.O.C.P. 3.5(a) or 3.5(b)”) and 5.50A (“Settlement of Small Estates by Petition”), and has amended and restated Rule 14.2A (“Petition for Adjudication of Incapacity and Appointment of a Guardian of the Person or Estate of an Incapacitated Person). “Adoption of Philadelphia Court of Common Pleas Orphans’ Court Rules 3.5A, 5.50A and 14.2A; President Judge General Court Regulation; No. 3 of 2023” (2/15/2023), 53 Pa.B. 1169 (3/4/2023).
It was not an abuse of discretion or an error of law for the Orphans’ Court to allow a late spousal election under 20 Pa.C.S. § 2210 by the guardian of an incapacitated spouse when the COVID-19 pandemic struck between the date of death and the six month filing deadline, the estate was not harmed by the delay, all parties were aware that the guardian intended to make the election, and inequities and gross injustice would otherwise result. In re: Estate of Terri Garbutt, 616 EDA 2022 (Pa. Super. 2/27/2023) (non-precedential), aff’g Garbutt Estate, 1 Fid.Rep.4th 29 (Chester O.C. 2022). [Updated on 6/5/2023 to add citation to the O.C. opinion.]
The Orphans’ Court had the power to set aside a conveyance of real estate by the executor after his removal from office as a remedy for self-dealing, and not a surcharge, and under the doctrine of “the law of the case,” the appellate court would not reconsider its holding in a prior appeal that the executor had engaged in self-dealing. In re: Estate of Angela DiMatteo, 363 WDA 2022 (Pa. Super. 2/22/2023), (non-precedential).
[For a related decision in the same case, see “Executor’s Transferto Wife Voided as Self-Dealing.”]
Wife in divorce action died on the same day the decree of divorce was entered, and the family court later issued a final order for the equitable division of marital property. The family court, and not the Orphans’ Court, had jurisdiction to order the executor to sell and transfer assets in accordance with the order for equitable division and to impose sanctions on the executor for failing to comply with that order. Tomasetti v. Suarez, 1004 EDA 2022 (Pa. Super. 2/22/2023), (non-precedential).
By distributing some trusts years before and adding the assets of those trusts to other trusts, the trustee waived claims for commissions payable from those trusts, as well as attorneys’ fees incurred later. The trustee also failed to provide clear and persuasive evidence of the amount of work involved in serving as trustee, and did not present hourly records or other support for the claims for substantial commissions, and so the claimed compensation was reduced. Legal fees charged to prepare accounts that were inaccurate and had to be withdrawn were not approved. Legal fees also not allowed for disputes that arose out of errors by the trustee and his counsel, and the resulting litigation was unnecessary and needlessly complex. Cassalia Trusts, 12 Fid.Rep.3d 562 (Montgomery O.C. 2022), on appeal, 666 EDA 2023 (Pa. Super.) (consolidated with 667-672 EDA 2023). (The Pa.R.A.P. 1925(a) opinion is Cassalia Trusts (No. 2), 1 Fid.Rep.4th 63 (Montgomery O.C. 2023).).
Petition for temporary injunction against the funeral and burial of the decedent’s father was denied for lack of jurisdiction when the decedent did not reside in Pennsylvania and was to be buried in another county, the only connection to Montgomery County being the location of the funeral home making the burial arrangements. The petitioner also failed to demonstrate immediate and irreparable harm, because it was alleged that preservation of the body was needed for an autopsy but there no showing of a need for an autopsy or what would be learned that could not be learned from medical records, or from a later autopsy. Gilbert Estate, 12 Fid.Rep.3d 556 (Montgomery O.C. 2022). (The same opinion was also published at 2 Fid.Rep.4th 390.)