Decedent Substantially Complied with Policy to Retain Former Spouse as Beneficiary

Because 20 Pa.C.S. § 6111.2(b)(4) does not require that a post-divorce “designation of a former spouse as a beneficiary” be in writing, and because the decedent “substantially complied” with the life insurance policy provisions for beneficiary designations by orally advising the insurance agent that he was divorced but wished his former spouse to remain the beneficiary of the policy, and it was reasonable for him to take no further action after the agent advised him (incorrectly) that no additional written documentation was needed because the former spouse was already designated as the beneficiary, the proceeds of the policy were properly payable to the former spouse. State Farm Insurance Company v. Kitko, ___ A.3d ___, 2020 PA Super 253 (10/20/2020).

Redacted Time Records Did Not Support Attorney Fees

Executor and her attorney were surcharged for excessive and unreasonable attorney fees because the attorney time records that were submitted had the descriptions of services redacted and so they failed to meet their burden of proof. Stoughton Estate, 10 Fid.Rep.3d (Lawrence O.C. 2020).

No DNA Test Required of Child

The administrator of an estate cannot require an alleged child of the decedent to take a DNA test, and the child may rely on the other factors in 20 Pa.C.S. § 2107(c) to establish paternity. Ackley, Sr. Estate, 10 Fid.Rep.3d 253, 55 Monroe, No. 41, P. 10 (Monroe O.C. 2020).

Charity May Sell Building with Exterior Mosaic

When a charitable nonprofit corporation did not agree to maintain a mosaic on the outside of the building it owns, the preservation of the mosaic would be expensive and is not within the charity’s exempt purposes, and the decision of the charity to sell the building is a reasonable business decision, it was error for the Orphans’ Court to deny the charity’s petition to sell the building, effectively imposing on the charity an obligation to maintain the mosaic. In Re: Painted Bride Art Center, Inc., No. 1642 C.D. 2019 (Cmwlth. Ct. 10/20/2020) (not reported).

New Record Low Short-Term Rate for November

The Internal Revenue Service has announced federal rates for the month of November under §§ 1274 and 7520 of the Internal Revenue Code (“IRC”), one of which will be the lowest rate since the IRS began publishing federal interest rates in 1984.

  • The federal short-term rate under §1274, which would apply to (among other things) an intra-family loan under §7872 with a term of not more than three years, will be 0.13%, which is lower than the 0.14% which applied in September and October.
  • The November mid-term and long-term rates of 0.39% and 1.17% will be somewhat higher that the rates of 0.35% and 1.00% that applied in September.
  • The §7520 rate, which is used to value life estate, annuities, and remainders, will remain at 0.4%, which is the record low first set in August.

For information on estate planning techniques to take advantage of these low rates, see “Low-Interest Estate Planning Strategies” (subscription required), which contains links to the Webcalculators overviews of long-term GRATs and interest-only term notes (no subscription required for those overviews) and sample calculations from Webcalculators.

New Guardianship Manual

The Advisory Council on Elder Justice in the Courts and the Administrative Office of Pennsylvania Courts have published the “Guardianship Bench Book” intended to provide judges with a practical guide to making critical guardianship decisions.

Although written as a guide for judges, this book should also be a valuable resource to practitioners, and a PDF copy of the book can be downloaded by clicking on the link above.