One Paper Size Fits All Pa Inheritance Tax Returns

Effective April 1, 2011 any REV-1500 (PA Resident Inheritance Tax Return), including attachments, submitted to the Pennsylvania Inheritance Tax Division in a format size other than 8½ x 11 will be rejected by the Department of Revenue, which will equate to a non-filing.

Pursuant to a Notice entitled REV-1500 Formatting Limitations to 8½” X 11”  issued by the Pennsylvania Department of Revenue, Inheritance Tax Division, and referenced by the Registers of Wills in at least two Pennsylvania Counties -- Center County (Inheritance Tax Return Formatting Limitation to 8 1/2" X 11") and Chester County (Inheritance Tax Returns REV 1500 Required Formatting) -- returns not filed on standard letter-sized (8½” X 11”) paper will be rejected.

Rejection (read, "non-filing") will occur because such a filing would "not conform" to the Pennsylvania Inheritance and Estate Tax Act of 1991, 72 P.S. §9136, and the Department's requirements.  That Section provides:

§ 9136.  Returns.  

(a) The following persons shall make a return: * * *

(c) Any person required to file a return under subsection (a) shall promptly file a
supplemental return with respect to additional assets and transfers which come to his knowledge after the original return has been filed. * * *

(e) The returns required by subsections (a) and (c) shall be made in the form prescribed by the department.

The Notice explains why the new limitation will be enforced.

Historically, the Department has manually reduced the size of any 8½” x 14” REV-1500 by coping them onto 8½” x 11” paper.  The copies do not image correctly and the loss of division personnel has required us to input this new procedure.

The REV-1500 is in an official format of 8½” x 11”. The Department will return the forms to the local Register of Wills’ office and note on the inheritance tax system that the forms were returned to the Register’s office as the form did not fit the standard format. * * *

However, there was a phase-in period for the change, which began on April 1, 2011, but will expire on June 30, 2011.

The Department has recommend to the Register of Wills’ office personnel to immediately inform estate return preparers when they bring a REV-1500 to their office printed on any format that is not 8½” x 11” that the Register’s office will reject the REV-1500 to be forwarded to the Department for processing and advise the preparer of the correct procedures.

As a representative of the PA Department of Revenue, Inheritance Tax Division, the county Register of Wills office does have the authority to refuse any form that does not qualify as an accepted form for processing under the above noted section.

From April 1, 2011 [until] June 30, 2011, the Department will inform the estate representative that the forms were sent back to the Register’s offices as a result of incorrect formatting. The estate representative will be required to deliver to the Register a revised REV-1500 formatted correctly and pay any additional filing fee as required.

After June 30, 2011, the Department will discontinue informing the estate representative of their error.

The effort to standardize paper sizes has a long history.  In the legal world, paper sizes have been determined as much by the two standard filing cabinet sizes as anything else.  But now technology, with its scanning processes and computer monitor viewing, drives paper standardization.  Aberrant paper sizes will not be accommodated any longer, due to additional processing costs incurred to fit the systems.

So, when it comes to the filing of Inheritance Tax Returns in Pennsylvania after June 30, 2011, one size shall fit all.

Update: 11/02/11:

For those seeking an overview of, or online resources about, Pennsylvania Inheritance and Estate Taxes, see: PA EE&F Law Blog posting PA Inheritance Tax Summarized (11/02/11).

Proposed PA Adoption Rule Changes

On Saturday, June 11, 2011, in the Pennsylvania Bulletin, Volume 41, No. 24, publication appeared regarding proposed and renumbered Orphans' Court Rules governing Adoptions under Rule 15.  This is a major revision and update of that Rule and its sub-rules (15.1 - 15.16).

The proposed rule changes would accomplish two general objectives:  1) Amend the statewide adoption rules after the enactment of the Open Adoption Act in the Commonwealth, which became effective on April 25, 2011, and 2) generally update the adoption rules for clarity in existing practice.  The first objective reflects a substantive change in adoption law, while the second objective reflects clarifications.

The Open Adoption Law was approved by the Legislature as Senate Bill 1360, Printer's Number 2188, on October 27, 2010.  Governor Edward G. Rendell signed it into law as Act 101 of 2010.  The amendments to the Adoption Act (23 Pa.C.S. Domestic Relations Chapters 21-29), became effective April 25, 2011.

The nature of the changes were briefly noted in an online article entitled Open Adoption in Pennsylvania, by law student Lisa Dougan, posted on March 11, 2011, by Juris (the official blog of the Duquesne University School of Law News Magazine).

The four overall objectives of the rule changes are set forth in the notice's Recommendation:

(1) Amendments to existing rules so that the court can ensure birth parents received notice of the opportunity of birth relatives to enter into agreements with adopting parents for post-adoption contact or communication which become legally enforceable, upon court approval, and amendments to existing rules to accurately reference statements of medical and personal and/or social history information, their maintenance in the court record, and their accessibility. (See Proposed Rule 15.3(a)(8), (a)(10), (b)(2), (b)(4), (f), Proposed Rule 15.4(a)(9), (a)(11), (b)(1), (b)(3), (f), Proposed Rule 15.5(a)(9), (a)(11), (b)(2), (b)(3), (f), Proposed Rule 15.6(a)(10), (b)(3), (f), and Proposed Rule 15.8(a)(1), (b)(4)).

(2) A proposed new Rule 15.5 to address the statutory alternative procedure for confirmed consent created in Section 2504 of the Adoption Code, 23 Pa.C.S. § 2504. (See Proposed Rule 15.5).

(3) New rules implementing Act 101's provisions regarding the court's approval of voluntary post-adoption contact agreements and the procedure by which the court may modify, enforce, or discontinue such court-approved voluntary post-adoption contact agreements. (See Proposed Rules 15.7, 15.9, 15.10 and 15.11).

(4) New rules and amendments to the existing confidentiality rule to implement Act 101's provisions for releasing information in the court file, including requests for non-identifying information, identifying information and/or for contact. (See Proposed Rules 15.12, 15.13, and 15.14).

The purpose of the proposed rule changes under the Open Adoption Act is explained in the Explanatory Comment's Background section of the published notice:

Act 101 of 2010 amended the Adoption Act to provide an option for adopting parents and birth relatives to enter into legally enforceable voluntary agreements so that adopted children can have ongoing communication or contact with their birth family, if desirable. While the enforceability of voluntary post-adoption contact agreements is new, the concept of these agreements is not.

For years adopting and biological parents have recognized the benefits of post-adoption contact and have made arrangements informally. Nothing in Act 101 or these proposed rules precludes or discourages the use of such informal arrangements which have benefited children and families through the years.

However, by complying with the statute and these proposed rules, as ultimately adopted, the parties will have an agreement for post-adoption communication or contact that can be enforced by the courts, upon proper petition.

Act 101 also amended the Adoption Act to allow for the collection of a birth parent's social history in addition to personal and medical history, to permit attorneys to forward their records and information to the court for maintenance as part of the court record, and to provide new procedures for accessing information from the court record related to adoptions.

For example, Act 101 expands the class of individuals who can file a written request for non-identifying information, identifying information or contact with the court that finalized the adoption, the agency that coordinated the adoption, or the successor agency.

Finally, Act 101 provides that when there is a proper request for identifying information or contact and no authorization is on file, the entity receiving the request, including the court that finalized the adoption, shall search for the person from whom information or contact is sought, advise that person of the request, and ask that person to consent to the release of identifying information or permit contact. Searches and contact are to be provided by an authorized representative trained by the Department of Public Welfare. * * * [Reparagraphing applied]

These proposed Adoption rule changes may not be permanent. The Explanatory Comments further note the likelihood for ongoing monitoring and possible readjustment based upon forthcoming experiences by county courts:

The Committee anticipates that the experience of the local courts over the next several months working in concert with private adoption agencies, county Children and Youth Service Agencies and PAIR to implement Act 101 will provide a base of practical experience that will inform the rule-making process. In the meantime, the Committee believes that each court is aware of Act 101 and is seeking to be compliant with its requirements.

I serve as a member of the the Pennsylvania Supreme Court's Orphans' Court Procedural Rules Committee, and specifically as a member of the subcommittee that worked on the proposed rule changes with very capable staff attorneys.

Any comments on the proposed rules should be addressed in writing no later than Wednesday, August 10, 2011, to:

Lisa M. Rhode, Counsel
Orphans' Court Procedural Rules Committee
Pennsylvania Judicial Center
601 Commonwealth Avenue, Suite 6200
P.?O. Box 62635
Harrisburg PA 17106-2635

Fax: 717-231-9555
Email: orphanrules@pacourts.us 

Proposed Amendments of PA POA, Guardianship & Health Care Directive Laws

On June 14, 2011, the Pennsylvania Joint State Government Commission posted the latest report (June, 2011) of the Advisory Committee on Decedents' Estates Laws regarding proposed amendments to the Probate, Estates, and Fiduciaries Code (PEF Code), which is available here.

This latest report (June 2011; PDF, 85 pages) alters and updates a prior report (June 2010; PDF, 87 pages) of the same organization regarding the PEF Code.

The two reports are the product of Subcommittee study and drafting, Advisory Committee review and revision, and JSGC approval, for submission to the Pennsylvania Legislature:

Over the years, the Advisory Committee has formed various subcommittees to assist in reviewing specific topics and developing statutory recommendations involving the Probate, Estates and Fiduciaries Code for consideration by the Advisory Committee.

The Subcommittee on Guardianships and Powers of Attorney was formed to review, among other things, 20 Pa.C.S. Chapters 54 (health care), 55 (incapacitated persons) and 56 (powers of attorney).

The subcommittee consists of John F. Meck, Esq., Chair; Robert Clofine, Esq.; William R. Cooper, Esq.; The Honorable Calvin S. Drayer, Jr.; Jay C. Glickman, Esq.; Neil E. Hendershot, Esq.; The Honorable Anne E. Lazarus; John J. Lombard, Jr., Esq.; James F. Mannion, Esq.; Michael J. Mullaugh, Esq.; R. Thomas Murphy, Esq.; The Honorable Paula Francisco Ott; The Honorable Stanley R. Ott; William Campbell Ries, Esq. and Robert B. Wolf, Esq.

After reaching consensus on its legislative recommendations, the Advisory Committee presents its recommendations to the Task Force on Decedents’ Estates Laws, which is a bicameral and bipartisan panel of legislators. The Task Force authorizes the Joint State Government Commission to publish a report containing the recommendations, which serve as a basis for legislation. * * * [Paragraphs rearranged]

What is in the June 2011 Report?  Its proposed legislation would reverse one Pennsylvania Supreme Court decision (Vine, December 21, 2010) regarding financial powers of attorney, and clarify the guardianship and healthcare decision-making statutes after another Pennsylvania Supreme Court decision (D.L.H., August 17, 2011) regarding medical decision-making.

In response to the Vine [v. Commonwealth, 9 A.3d 1150 (Pa. 2010)] and [In Re] D.L.H. [2 A.3d 505 (Pa. 2010)] rulings of the Pennsylvania Supreme Court, the Subcommittee on Guardianships and Powers of Attorney reviewed the topics of powers of attorney and health care decision-making and presented its recommendations at the 2011 annual meeting of the Advisory Committee.

The Advisory Committee reached consensus on the recommendations, and the Subcommittee subsequently finalized specific statutory amendments to the Probate, Estates and Fiduciaries Code, which are contained in this report.

The major statutory amendments that form the basis of this report concern the following:

(1) Third party liability and immunity regarding powers of attorney under 20 Pa.C.S.  Chapter 56, in light of the Vine ruling.
(2) An acknowledgment by the principal and affidavits of the two witnesses for powers of attorney.
(3) Health care decision-making by guardians under 20 Pa.C.S. Chapters 54 and 55, in light of the D.L.H. ruling.

Proposed legislative reversal of the Vine holding was explained in a Memo, dated April 4, 2011, from Senator Stewart J. Greenleaf to all Pennsylvania Senators:

[The Court's opinion appears to remove the immunity third parties have had for decades in relying on facially valid power of attorney.

Third parties will now be put in a position of having to investigate the circumstances surrounding the execution of a power of attorney.

Instead of routinely relying on the validity of a power of attorney, they may have to seek the principal's ratification before acting. And, in turn, if the third party questions the power of attorney and does not comply with the instructions of the attorney-in-fact, the third party could find itself subject to liability for failing to comply with an agent's instructions. * * *

The need for remedial legislation after the Vine decision was highlighted by a Pennsylvania Bar Association Recommendation, dated April 11, 2011.  That Recommendation concluded:

These amendments are vital to restore commercial viability of Powers of Attorney following the decision in Vine v. Commonwealth, 9 A.3d 1150 (Pa. 2010), while still adopting appropriate new safeguards for potentially vulnerable principals. In expressing our support for prompt action by the Pennsylvania State Legislature, we have carefully considered the proposals by the Joint State Government Commission and we support the Commission’s approach to the necessary amendments of existing statutes.

As a means of strengthening the original execution of powers of attorney in Pennsylvania, the most recent proposal would require notarization of the maker's signature and affidavits by two witnesses, which requirements parallel those of a self-proving last will.  Other amendments would allow for use of facsimile copies of documents.

The other proposal in the June 2011 Report would clarify points made in the D.L.H. case, where the PA Supreme Court considered, "[W]hether plenary guardians can refuse life-preserving medical treatment on behalf of a person who lacks -- and has always lacked -- the capacity to make personal healthcare decisions, where the person is neither suffering from an end-stage medical condition nor permanently unconscious."

Careful study of that decision revealed areas of the Guardianship statute and the Health Care Decision Making statute that should address long-term and end-of-life medical decision making by a court-appointed guardian.  The result would be these amendments:

• § 5521. Subsection (d.1)(1) is added to provide that a guardian of the person for an incapacitated person shall have the same authority to make health care decisions on behalf of the incapacitated person as a health care representative, and a decision shall be effective without court approval, subject to (1) any limitations and conditions set forth in the order of appointment; (2) the same health care decision-making process as prescribed in the statutory provisions regarding the authority of a health care agent in making health care decisions; (3) the same limitations regarding pregnancy and regarding the duties of an attending physician and health care provider under Chapter 54; (4) the statutory provisions regarding powers and duties only granted by the court and regarding powers and duties not granted to a guardian; and (5) any other provision regarding health care representatives as set forth in Chapter 54, except the statutory provisions regarding who may act as a health care representative.

• Subsection (d.1)(2) is added to specify that, to the extent practicable, a guardian of the person must consult with close family members of the incapacitated person in making a health care decision, particularly one involving end-of-life decision-making.

• Subsection (d.1)(3) is added to require that a petition that is filed for the appointment of a guardian of the person on or after the effective date of the act must state whether it is proposed that the guardian of the person shall have the power to make health care decisions and, if so, whether the guardian shall have all the powers of a health care representative to make such decisions, and any limitation of those powers.

• Subsection (d.1)(4) is added to require that the notice of a petition or hearing must contain the information under the previous paragraph.

• Subsection (d.1)(5) is added to require that an order of appointment of a guardian of the person that is issued on or after the effective date of the act must specify whether the guardian of the person shall have the power to make health care decisions and, if so, whether the guardian shall have all the powers of a health care representative to make such decisions, and any limitation of those powers.

• Subsection (d.1)(6) is added to specify that a guardian of the person appointed before the effective date of the act shall have the same powers as a health care representative unless (1) a prior court order has limited the power of the guardian to make health care decisions or (2) a health care representative is available and assumes authority to act by agreement between the health care representative and the guardian, in which case the guardian thereafter has no health care decision-making powers.

I serve as a Guardianship/POA Subcommittee member and as an Advisory Committee member, and I worked on the reports and recommendations.

I strongly advocate for the Legislature's adoption of the recommendations contained in the June 2010 Report, as modified by the June 2011 Report.

Update:  10/27/11:

In searching bill information on the website of the Pennsylvania General Assembly, I do not find any legislation pending that derives from the two reports.

However, a guardianship-related bill, House Bill 1720, was introduced recently and finds support.  See: PA EE&F Law Blog posting "Granny Snatching" Prohibition Pending in PA (10/25/11).

PA DoR Revised Safe Deposit Box Entry

The Pennsylvania Department of Revenue has loosened restrictions as to who may inventory a safe deposit box in which a decedent had an interest.

By its Inheritance Tax Bulletin 2011-02, entitled Safe Deposit Box Inventories and Notice, issued May 11, 2011, PA DoR announced its modification, effective on that date, of "the procedures under which estate representatives may enter the safe deposit box of a decedent" pursuant to the the provisions of the Inheritance and Estate Tax Act of 1991 (the 'Act')."

The general rule regarding entry into a safe deposit box of a decedent is stated in 93 Pa. Code § 93.11 ("Limitation of entry by statute or regulation"), as follows:

No person seeking entry otherwise prohibited by the act, having actual knowledge of the death of a decedent may enter a safe deposit box of the decedent unless the entry is made under * * * [the Act] and no person acting as deputy, agent or in a similar capacity may enter a safe deposit box except as provided in this subchapter.

Subchapter B of those Regulations specifies the parameters of access, inventory, removal of contents, and reporting of values, regarding a decedent's safe deposit box.  Those regulations address:

• Definitions & Duties generally (93.21 & 93.22);

• Permission to Enter a Box Without Notice to the Department ( 93.31, 93.32, 93.33, 93.34, 93.35, 93.36, & 93.37 ) where a bank, Department representative, court, or business is involved or where a last will or cemetary deed is sought;

• Entry upon Notice to the Department (93.41, 93.42, & 93.43);

• Subsequent entries (93.51);

• Confidential information (93.61); and

• Penalties (93.71, 93.72, & 93.73).

Approximately twenty years ago and before, only PA DoR representatives could open and inventory a safe deposit box after an owner's death. Then the Department relented, and allowed, first banks, and later attorneys or accountants, to perform an inventory at an intial post-motem opening and then report to PA DoR.

With the issuance of this latest bulletin, a personal representative need not be accompanied by a Revenue representative, a bank employee, a lawyer, or an accountant, to inventory a safe deposit box:

[N]either a department or bank employee, nor lawyer or CPA must be present at a safe deposit box inventory. Instead, pursuant to the Act, a safe deposit box of a decedent may be entered at the time fixed in a notice mailed within seven days of the date of proposed entry, to the Department of Revenue and to the financial institution in which the box is located. 72 P.S. § 9193. The department no longer will provide employees to be present at safe deposit box inventories.

The procedures for those authorized by law to access a decedent's safe deposit box remain the same:

The Act requires that notice of a proposed safe deposit box entry and inventory must be delivered to the department via United States Postal Service with return receipt service.

The Act allows that, when a person furnishes a signed statement under penalty of perjury that he or someone in his behalf has given this notice, the financial institution in which a safe deposit box of a decedent is located shall permit entry into the box and removal of its contents, without the presence of a department or bank employee.

(1) The Notice must include:
a. the name of estate and person entering the box,
b. the name and street address of the financial institution in which the box is located, and
c. the date and time of entry.

(2) The Notice must be:
a. delivered via United States Postal Service, return receipt service
b. copied to the financial institution in which the box is located
c. sent at least seven days in advance to:

PA Dept of Revenue
Safe Deposit Box Unit
P.O. Box 280601
Harrisburg, PA 17128-0601

The Department's bulletin was announced in its Tax Update, April/May 2011 (Issue No. 155), on pages 5 & 6, which provided a further explanation:

At the time of entry, the estate representative must also provide a statement to the financial institution attesting the notice was sent to the department, with the following or similar language:

Under penalties of perjury I swear that I gave the notice required under Section 2193 of the Inheritance and Estate Tax Act, 72 PS § 9193, to the Pennsylvania Department of Revenue, via United States Postal Service, of my intention to enter this safe deposit box on today’s date.

Within 20 days of entry, the estate representative must also return a completed Safe Deposit Box Inventory form, REV-485, to the department’s Safe Deposit Box Unit.

That inventory reporting form, REV-485 ("Safe Deposit Box Inventory"), revised May, 2004, is available online.

This new Bulletin will require updating of the Department's Brochure on Pennsylvania Inheritance Tax & Safety Deposit Boxes (REV-584).