Warren and Forest Counties have adopted new local Orphans’ Court rules, to be effective 30 days after publication in the Pennsylvania Bulletin. “Local Orphans’ Court Rules; Misc. No. 48 of 2021,” (Warren and Forest Cos. 8/25/2021), 51 Pa.B. 5823 (8/11/2021).
[Note: There is nothing in the adopting order to indicate whether the rules were submitted to the Oprhans’ Court Procedural Rules Committee for review prior to adoption, as required by Pa.R.J.A. 103(d)(4).]
Letter and other documents signed by decedent showed his intent to change the ownership and beneficiary designation of a life insurance policy owned by his insurance trust and was “substantial compliance” with policy requirement that changes be made on insurance company forms. Rothstein Trust (No. 1), 11 Fid.Rep.3d 162 (Bucks O.C. 2021); Rothstein Trust (No. 2), 11 Fid.Rep.3d 169 (Bucks O.C. 2021), aff’d, 763 EDA 2021 (Pa. Super. 1/12/2022) (non-precedential).
The Orphans’ Court did not have mandatory jurisdiction in a dispute over the beneficiary designation of a decedent’s interest in a nonqualified employee benefit plan, and the court declined to exercise permissive jurisdiction when the plan provided for jurisdiction in Illinois. Swain Estate, 11 Fid.Rep.3d 160 (Allegheny O.C. 2021), aff’d, 465 WDA 2020 (Pa. Super. 6/22/2021) (non-precedential).
Daughter who lived with decedent and cared for her received substantial benefits under a 2006 will and 2014 codicil. Despite medical evidence to the contrary, the court determined that the decedent did not suffer from a weakened intellect in 2006, but did suffer from a weakened intellect when the codicil was executed, so the will was held to be valid but the codicil was not. Kefalos Estate, 11 Fid.Rep.3d 154 (Allegheny O.C. 2020).
Surviving spouse did not meet her burden of proving that full and fair disclosure of assets was not made in the schedules included in the prenuptial agreement, and her testimony that she did not see the entire agreement before signing it was contradicted by other testimony and not considered credible. The failure of the decedent to fund an individual retirement account (IRA), as required by the agreement, can be remedied by a claim against the estate and does not invalidate the agreement. Renwick Estate, 11 Fid.Rep.3d 152 (Allegheny O.C. 2020).
On an appeal from the Department of Revenue Board of Appeals, the Orphans’ Court found that the continuing joint revocable trust was a “sole use” trust for the surviving spouse. Potocar Estate, 11 Fid.Rep.3d 150 (Allegheny O.C. 2021), aff’d on other grounds, 283 A. 3d 936, 662 C.D. 2020 (Pa. Cmwlth. Ct. 9/30/2022).
[2/20/2026 Note: The Commonwealth Court expressly rejected the conclusion that the continuing trust qualified as a “sole use” trust because the power of the surviving spouse to revoke the trust was a form of power of appointment. The court found instead that the joint revocable trust was a form of joint ownership that was exempt from inheritance tax under 72 P.S. § 2111(m).]
In allocating a settlement for improper distributions from a trust between income and principal, the court determined the amount of income that would have been earned by the trust by looking at the income earned by a similar trust created by the same grantor. The court also allowed legal fees to one of the beneficiaries for creating the settlement fund under the “common fund” doctrine. Scaife Trust, 11 Fid.Rep.3d 143 (Allegheny O.C. 2021).
Daughter’s request for reimbursement for legal fees and costs incurred in guardianship proceedings for her incapacitated father was denied because the daughter did not create new funds for her father or “provide a similar special service,” and an incapacitated person’s estate must be used exclusively for that person’s care and management. Clark, an Incapacitated Person, 11 Fid.Rep.3d 142 (Chester O.C. 2021).
[DBE Comment: This conclusion is almost surely wrong. The costs of the administration of an incapacitated person’s estate is normally paid from the estate, and there can’t be any administration or management until a guardian is appointed, so the reasonable costs of the appointment of the guardian should be considered administrative costs of the estate, just as the costs of probating a will or obtaining letters of administration are normally paid from the estate. For examples of legal fees that are not reimbursable from an estate, see “Non-Reimbursable Legal Fees of Fiduciaries.”]
Will provided for the residue to pass in equal shares to the two grandchildren and, if a grandchild was under the age of 25, his or her share was to be held in trust until age 25 or, if incapacitated, until the incapacity ended. The share of a grandchild who survived the testator, became incapacitated before age 25, and died after age 25 without regaining capacity, was distributed to the other grandchild and not the estate of the deceased grandchild. Moses Trust, 11 Fid.Rep.3d 139 (Berks O.C. 2021).
The Orphans’ Court Procedural Rules Committee is considering amendments to a number of Orphans’ Court rules to change references to “master” to “hearing officer.” The purpose of the amendments is to eliminate a term that has “a perjorative connotation” in “modern parlance outside of court.” The term has already been replaced, or is being replaced, in other bodies of rules. Comments should be submitted to orphanscourtproceduralrules@pacourts.us by September 24, 2021. “Proposed Amendment of Rules 1,3, 2.11, 9.1, 9.2, 9.4, 9.5, 9.6, 9.7 and 9.8 of the Pennsylvania Orphans’ Court Rules,” 51 Pa.B. 5194 (8/21/2021).