Kahn Trust

Montgomery County Court of Common Pleas

Kahn Trust

1 Pa. Fid. 322

CourtPennsylvania Court of Common Pleas, Montgomery County

DecidedJuly 10, 1981

StatusPublished

This text of 1 Pa. Fid. 322 (Kahn Trust) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Montgomery County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Kahn Trust, 1 Pa. Fid. 322 (Pa. Super. Ct. 1981).

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Opinion

Adjudication by

Tredinnick, J.,

The account is filed because of the death of the settlor.*** There is attached to the trustees’ account, as an exhibit, the account of the executors. Counsel has submitted with the audit papers, a petition for adjudication relating to the estate account, as well as a separate petition relating to the trust account. This suggests that the accountants believe the piggyback provisions of §7188 of the PEF Code provide for simultaneous audit of both accounts with full protection to the executors as well as the trustees. That section does not so provide, however. The proper annexation of an estate account (that is where there has been an actual “pour-over” into the trust) “. . . relieve (s) both the trustee of the principal trust and the personal representative ... of the distributed estate ... of all liability to beneficiaries of the principal trust for transactions shown on the account so annexed ...” but does no more: PEF Code, §7188.

This may be of some importance in the present situation, as the petition for adjudication relating to the estate account reflects a disputed claim. No claim was filed at audit, although the court has been advised that the claimant had instructed his attorney to do so. That debt is not discharged by these proceedings. As the official advisory committee comment to §7188 states: “No attempt is made to deal with the rights of creditors of the precedent estate since they would not be a concern [323]*323to the receiving fiduciary: Section 3532 gives protection to the executor of a ‘pour-over’ will against unknown creditors; if there are known creditors, the filing of an account of the precedent estate would probably be indicated.” (20 C.P.S.A. (Supp.) §7188).

Subject to distributions heretofore properly made, the net ascertained balances of principal and income are awarded as set forth under the last paragraph of the petition for adjudication.

The account is confirmed, and it is hereby ordered and decreed that the aforesaid executors forthwith pay the distributions herein awarded.

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Adjudication by

Tredinnick, J.,

The account is filed because of the death of the settlor.*** There is attached to the trustees’ account, as an exhibit, the account of the executors. Counsel has submitted with the audit papers, a petition for adjudication relating to the estate account, as well as a separate petition relating to the trust account. This suggests that the accountants believe the piggyback provisions of §7188 of the PEF Code provide for simultaneous audit of both accounts with full protection to the executors as well as the trustees. That section does not so provide, however. The proper annexation of an estate account (that is where there has been an actual “pour-over” into the trust) “. . . relieve (s) both the trustee of the principal trust and the personal representative ... of the distributed estate ... of all liability to beneficiaries of the principal trust for transactions shown on the account so annexed ...” but does no more: PEF Code, §7188.

This may be of some importance in the present situation, as the petition for adjudication relating to the estate account reflects a disputed claim. No claim was filed at audit, although the court has been advised that the claimant had instructed his attorney to do so. That debt is not discharged by these proceedings. As the official advisory committee comment to §7188 states: “No attempt is made to deal with the rights of creditors of the precedent estate since they would not be a concern [323]*323to the receiving fiduciary: Section 3532 gives protection to the executor of a ‘pour-over’ will against unknown creditors; if there are known creditors, the filing of an account of the precedent estate would probably be indicated.” (20 C.P.S.A. (Supp.) §7188).

Subject to distributions heretofore properly made, the net ascertained balances of principal and income are awarded as set forth under the last paragraph of the petition for adjudication.

The account is confirmed, and it is hereby ordered and decreed that the aforesaid executors forthwith pay the distributions herein awarded.

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Bluebook (online)

1 Pa. Fid. 322, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kahn-trust-pactcomplmontgo-1981.