The U.S. Supreme Court has held that a state cannot tax the undistributed income of a trust when the only connection between the state and the trust is that beneficiaries of the trust reside in the state but the beneficiaries have not received income from the trust, have no right to demand income, and are uncertain to receive any income. N.C. Dept. of Revenue v. Kimberley Rice Kaestner 1992 Family Trust, 588 U.S. ___, 139 S. Ct. 2213, 204 L. Ed. 2d 621, No. 18-457 (U.S.S.C. 6/21/2019).
The son of the decedent was not removed as executor for wasting or mismanaging the estate because (a) the executor transferring the decedent’s worthless timeshare properties to himself relieved the estate of the maintenance fees; (b) the executor had been working to sell a property of the decedent’s but had been unable to find a buyer for the property, which was worth less than the mortgage on the property; and (c) it was not clear whether payments on a debt owed by the executor to the estate had been properly made or accounted for but an amended accounting might resolve those issues. However, the son was removed as trustee for selling a publicly traded utility and investing 10% of the trust in an unmarketable security which was not producing income, and because of acrimony between the trustee and the beneficiary of the trust, his mother. Shore Estate, 9 Fid.Rep.3d 142 (Monroe O.C. 2019).
Because the two executors were deadlocked over the discretionary distribution of the estate, and one of them had a conflict of interest over a claim against her daughter while the other was believed to be more likely to bring the estate to a conclusion, the court removed the executor with the conflict and left the other executor to complete the administration and distribution. Gurtler Estate, 9 Fid.Rep.3d 126 (Monroe O.C. 2019).
Probate of 2007 will was upheld based on testimony of lawyer who met with the decedent on several occasions and prepared the will, as well as the lack of any evidence of undue influence, while probate of a 2013 will was denied because of a lack of testamentary capacity and evidence of undue influence, based on medical records showing that the decedent had been diagnosed with advanced dementia and testimony that the will was prepared by the son who had been disinherited by the 2007 will, who lived with the decedent and “looked out after her as she got older” and so stood in a confidential relationship. Arnao Estate, 9 Fid.Rep.3d 115 (Philadelphia O.C. 2018), on appeal, 2645 EDA 2018 (Pa. Super.).
The execution of a post-nuptial agreement as part of the divorce proceedings was an effective waiver of the right of the surviving spouse to a joint-and-survivor pension annuity, and that waiver can be enforced against the surviving spouse despite failure to comply with the Employee Retirement Income Security Act of 1974 (“ERISA”), which otherwise preempted state law, because ERISA does not bar an estate from recovering pension funds distributed to an ex-spouse who had executed a waiver of rights to those funds. Pa.R.C.P. 1920.42(b)(2) is a valid exercise of the rule making power of the courts, and so grounds for divorce were not established within the meaning of 23 Pa.C.S. § 3323(g) when the decedent’s affidavit of consent to the divorce was filed more than thirty days after it was executed, and the decedent’s designation of his wife as beneficiary of his life insurance was not modified by 20 Pa.C.S. § 6111.2. Easterday Estate, 653 Pa. 143, 209 A.3d 331 (2019), aff’ng 171 A.3d 911, 2017 PA Super 315 (10/3/17), aff’ng on other grounds, 6 Fid.Rep.3d 178 (O.C. Montgomery Co. 3/22/2016).
(See the earlier reports on the decision of the Orphans’ Court. and the decision of the Superior Court.)
Cumberland County has issued an administrative order appointing the Clerk of the Orphans’ Court as the designee to fulfill the requirements of Pa. O.C. Rule 14.8(d), (e), and (f) and monitor and review all guardianship reports. “Guardianship Tracking System; 96-1335” (Cumberland Co. C.P. 4/5/2019), 49 Pa.B. 2716 (6/1/2019).
Philadelphia has adopted new local O.C. Rules 1.8(c) (forms), 14.1A (guardianship petition practice and pleading), and 14.2A (petition for adjudication of incapacity), 14.6A (determination of incapacity and selection of guardian; hearing date), and 14.8A (guardianship reporting, monitoring, review, and compliance), to be effective June 1, 2019. An appendix of forms in included with the new local rules. “Adoption of Local Orphans’ Court Rules Governing Guardianship Proceedings; Administrative Order No. 09 of 2019” (Philadelphia Co. 5/1/2019), 49 Pa.B. 2477 (5/18/2019).
Dauphin County has adopted new local O.C. Rules 14.1(c.1) (post adjudication petitions) and 14.2 (proof of service) for guardianship proceedings, to be effective June 1, 2019. “Promulgation of Local Rules; No. 1793 S 1989” (Dauphin Co. 4/18/2019), 49 Pa.B. 2489 (5/18/2019).
Judge Tunnell of Chester County addressed a number of interesting and practical issues in his adjudication in Griggs Revocable Trust, 9 Fid.Rep.3d 85 (Chester O.C. 2019), including whether a trustee who has resigned (or been removed) can delay transferring trust…
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Bucks County has vacated Bucks Co. O.C. Rules 14.2A through 14.5I and and adopted Rules 14.2A (Notice of Mental Health Commitment), 14.2B (Withdrawal of Petition), and 14.9A (Allowances), all relating to guardianships. “Order Rescinding Orphans’ Court Rules 14.2A through 14.5I and Promulgating Orphans’ Court Rules 14.2A through 14.9A,” (Bucks. Co. 4/18/2019), 49 Pa.B. 2346 (5/11/2019).