ACTEC Comments on Basis Reporting Regulations

The American College of Trust and Estates Counsel (ACTEC) has sent comments to the Internal Revenue Service on the proposed regulations for basis reporting by estates.

These comments should be of interest to practitioners concerned about compliance with the new basis reporting rules and the use of Form 8971.
For background on the new basis reporting rules and Form 8971, see “Consistent Basis Reporting Required,” “New Basis Reporting Form,” and “Basis Reporting Form Released.”
  The due date for Form 8971 has been postponed until June 30, 2016.  Notice 16-27  (3/23/16).

New Guardianship Form for Expert Testimony

The Orphans’ Court Procedural Rules Committee has proposed a new O.C. Rule 14.6, and a new form, relating to written depositions in guardianship proceedings.

As the committee report explains, expert testimony in guardianship proceedings is authorized by statute, 20 Pa.C.S. § 5518, but the form for this testimony has varied by county.  The proposed form would become a mandatory statewide form to be used by each and every evaluator who is providing testimony by deposition regarding the capacity of an alleged incapacitated person where incapacity is uncontested.

Comments on the new rule and form may be submitted by email to orphanscourtproceduralrules@pacourts.us, or by U.S. Mail to the address provided in the report.  Any comments should be submitted by June 20, 2016.

The report also notes that the committee “continues its efforts to develop more comprehensive statewide rules and forms for guardianship proceedings.”

Proposed Adoption of New Pa.O.C. Rule 14.6 and Form G-05, 46 Pa.B. 2306 (5/7/16).

Evidence Supports Testamentary Capacity and Lack of Undue Influence

Appeal from probate denied where testamentary capacity was supported by testimony of attorney who prepared will, subscribing witnesses, and other disinterested parties, and no confidential relationship shown to support allegation of undue influence.  Lewis Will, 6 Fid.Rep.3d 123 (O.C. Allegheny 2016) (opinion by O’Toole, A.J.), app. quashed, No. 155 WDA 2016 (Pa.Super. 10/11/2016) (non-precedential).

Divorced Wife Remained Beneficiary of Irrevocable Trust with Split-Dollar Insurance

Wife continued to be a co-trustee and beneficiary of the husband’s irrevocable trust even after the divorce of the parties where (a) the trust document made no provision for the possibility of divorce, (b) the irrevocable trust was the beneficiary of a life insurance policy owned by wife’s revocable trust, which was the owner of the cash surrender value of the policy under a split-dollar agreement, (c) the divorce agreement allowed the wife to keep the insurance policy and cash surrender value, and made no mention of the irrevocable trust, and (d) the wife continued to pay insurance premiums following the divorce.  Klein Trust, 6 Fid.Rep.3d 118 (O.C. Monroe 2016) (opinion by Williamson, J.)

Amicus Curiae in Guardianship Proceeding without Standing to Appeal

Nonprofit advocacy organization which was removed as counsel for alleged incapacitated person (“AIP”), but allowed to participate in guardianship proceedings as amicus curae while the AIP was represented by court-appointed counsel, should not have standing to appeal adjudication of incapacity.  In re Sabatino, 6 Fid.Rep.3d 101 (O.C. Montgomery 2016) (opinion by Ott, Sr.J.), aff’d on other grounds, No. 3836 EDA 2015 (Pa. Super. 11/30/2016) (non-precedential; organization had standing to appeal, and orders affirmed on the merits, any error being harmless; remanded on issue of  allocation of costs of expert testimony).

Pennsylvania ABLE Act

Posted on by April 18, 2016

Both houses of the Pennsylvania legislature have approved SB 879, the “Pennsylvania ABLE Act” (an unconsolidated statute), which allows the creation of “ABLE” savings accounts intended to qualify under IRC section 529A.  (“ABLE” is an acronym for “Achieving a Better Life Experience.”)

Section 529A allows the creation of savings accounts for people with disabilities that act somewhat like the education accounts authorized by section 529, except that it refers to “qualified disability expenses” instead of “qualified education expenses.”

Look for an article on the Pennsylvania ABLE Act and section 529A in the near future.

Update:  SB 879 was approved by the Governor on 4/18/2016, becoming Act No. 17 of 2016.