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HomeMy WebLinkAbout08-22-031N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION /NRE THE ESTATE of HERBERT L HULL, Deceased No 2002- 00515 OBJECTIONS OF TRACY A. HULL TO THE FIRST AND PARTIAL ACCOUNT OF LAWRENCE C. HULL~ EXECUTOR OF THE ESTATE OF HERBERT L. HULL AND PETITION FOR SURCHARGE AND NOW COMES the objectant and petitioner, Tracy A Hull, by and through his attorneys, SAIDIS, SHUFF, FLOWER and LINDSAY, and objects to the First and Part~al Account of Lawrence C Hull, executor of the Estate of Herbert L Hull, and petitions for surcharge of the executor, stating in support the following BACKGROUND: 1 The objectant and petitioner is Tracy A Hull, a residuary beneficiary under the will of Herbert L Hull, deceased 2 The accountant is Lawrence C Hull, executor of the Estate of Herbert L. Hull 3 Herbert L Hull died testate on October 19, 2001, and on May 28, 2002 the Cumberland County Register of Wills issued a rotation to Lawrence C Hull, at the instance of the objector, to show cause why he should not produce the will of Herbert L Hull 4. On June, 28, 2002 the executor produced the will of Herbert L Hull and Letters Testamentary were issued to the accountant OBJECTIONS TO ACCOUNT: 5. The Flint and Partial Account of Lawrence C Hull, Executor of the Estate of Herbert L Hull, deceased ("the Account"), falls to conform to the reqmrements of Pa Supreme Court Orphans' Court Rule 6 and Cumberland County ,O C Rule 6 1-1, as follows no statement of the current value of assets is provided, as reqmred by Uniform Fiduciary Accounting Pnnclple IV, incorporated by Rule 6.1(g), in partlc,Ular, the current values of the vanous securities, whmh apparently have still not been hquldated almost two years after the date of death, should be disclosed, b the dates of receipts and disbursements are not dmclosed, as required by Rule 6 l(a), an omission which obscures the dilatory and neglectful conduct of the executor's administration of the estate, no itemized statement of the pnnc~pal balance on hand at the time of fihng the account ~s provided, as reqmred by Rule 6 l(c), which obscures the extent to which the executor has faded to liquidate assets, and makes ~t impossible to balance the account, d no lnformat~on schedules are provided to ~nform beneficmnes of the s~gmficant transactions occumng dunng the accounting period, as required by Rule 6 1(0 and Fiduciary Accounting Pnnc~ples III and IV, and notably absent ~s any account of the sale or other d~spos~tlon of securities and ~tems of tangible personal property of the estate e the Account finis to conform substantially with the model form approved by the Supreme Court, as reqmred by Rule 6 l(f) f the Account falls to state income from personal estate, as reqmred by Cumberland County Local Rule 6 1-1(e) (Whether the copy provided to the objectant was m~ss~ng that page is ~mposs~ble to determine w~thout page numbenng, as reqmred by Local Rule 6 1-1(a)) 6 Amounts of attorney's and accountant's fees and executor's commissions are hsted, without dates of payment, under "FEES AND COMMISSIONS," and also under "PROPOSED DISTRIBUTIONS," as "balance of fees [or commissions] due," ~n a manner that obscures the total amounts cla~med and the extent to whmh these expenses have been pa~d to date The Account should make clear whether the fees and commlaslons claimed under "PROPOSED DISTRIBUTIONS" are In addition to, or included within, the amounts clmmed under "FEES AND COMMISSIONS" 7 The amount prod (apparently, $17,500) or proposed to be prod ($7,500) to Charles F Sulhvan for preparatmn of estate and mhentance tax returns ~s grossly excessive and unreasonable on ~ts face 8. S~nce the executor's attorney had no respons~bdlty for the preparation of tax returns, his claimed fee of $21,200 (plus, apparently, $12,500) Is beheved by the obj ectant to be unreasonable, and to exceed the actual value of the attorney's services to the estate 9 The amount of commissions clmmed by the executor, $35,000 (plus, apparently, $25,000), ~s unreasonable, and bears no relation to the actual value of the executor's services to the estate 10 Under "PROPOSED DISTRIBUTIONS," the Account lists "remmnder of pecuniary legacy" to Naom~ Stahlnecker in the amount of $5,000, but no prior payments to Ms Stahlnecker are hsted m the Account Th~s xnconslstency should be explained. 11 Under "PROPOSED DISTRIBUTIONS," the Account lists "remmnder of pecumary legacy" to Margaret R DeStefano in the amount of $80,000, and no prior payments to Ms DeStefano are hsted ~n the Account Th~s ~ncons~stency should be explmned 13 According to ITEM IV of decedent's will, the "pecuniary legacies" to Naomi Stahlnecker and Margaret R DeStefano referred to in the preceding paragraphs 10 and 11, should be given, in trust, to the decedent's three children, as trustees, for the benefit of Ms. Stahlnecker and Ms DeStefano, remainder to decedent's children The Account fails to disclose the executor's intention with regard to the trust 14 The executor has claimed as a deduction on the federal estate tax return a $48,000 debt owed by decedent to the objectant, Tracy A Hull, but the debt has been orrntted from the Account This inconsistency should be explained 15 The executor has declared on the Pennsylvania Inheritance Tax return distributions to the residuary beneficlanes of $1,913,724 79 of which only $430,108 was non- probate property, yet the Account shows total principal distributions to the same residuary beneficiaries of only $574,671 This mconsistency should be explmned 16 The Account, under the heading "FEDERAL AND STATE TAXES," shows Federal Estate Tax of $526,912 75 and Pennsylvania Inheritance Tax of $128,578 12 (exclusive of interest and penalties), which match the total tax due figures on the returns themselves. However, the Account also shows a "balance" of federal estate and gift taxes and estamated interest due in excess of $300,000 No prior payments of estate or inheritance taxes are noted, and it is impossible to determme how much has actually been paid by the estate or the dates of payment. Further, no acknowledgment is made of the tax payment (in the approximate amount of $177,965, according to the Estate's form 706), presumably made by the trustees of the revocable life insurance trust established by decedent dunng his lifetime. The amounts and dates of tax payments actually disbursed from the estate should be clearly stated. 17 A footnote to the amounts stated for distributions to residuary beneficiaries, under the heading "PROPOSED DISTRIBUTIONS," explains nothing, and serves only to obscure a d~sputed question of interpretation, which should be plainly set forth in the Account for determination by ttus Court The executor has stated, as a note to Schedule J of the Pa Inhentance Tax retnrr/', that objectant's one-third share of the residue of the Estate should be reduced by the value of real estate in Tltusvllle, Florida, equitable ownership of which was conveyed~by the decedent to the objectant by contract of sale executed subsequent to decedent's wall Objectant asserts, on the contrary, that the decedent's sole purpose for executing the contract of sale was to keep a promise to the objectant, by correcting an unintended consequence of the will as written, and to ensure that the Florida real estate would be conveyed to objectant, without reduction of his one-third share of the residuary estate 18 ObJector reserves the right to rinse such additional objections to the executor's First and Partial Account as may prove warranted by facts and ewdence produced through further accounting, d~scovery and heanngs PETITION FOR SURCHARGE: 19. Paragraphs 1-17, above, are incorporated herein by reference - 20 The executor knew the locatmn of the original will, and was famthar, ~f dissatisfied, with ~ts contents, yet he failed to produce the will for probate until cited to do so by the Register of Wills at the objectant's ~nstance more than seven months after the date of death 21. The objectant first learned that the executor had faded to commence even the most basic steps of estate adm~mstrat~on, through contact lmtmted by the Trane Company, wbach became concerned upon nottclng that its checks made to the decedent for rent in the amount of $10,000 per month were not being deposited 22 The objectant and petitioner requests that the executor be surcharged, as follows for any excessive and unreasonable fees or cornmlsslons that the executor may have already prod to bamself, h~s tax account and/or h~s attorney; b. for the lost 5% inheritance tax pre-payment d~scount, C for ~nterest and penalties ~ncurred by the estate due to the executor's failure to timely file and pay federal estate and PA inheritance taxes, d for xnvestment losses ~ncurred due to the executor's fmlure to hqmdate the decedent's securities w~thln a reasonable t~me followang the date of death; for interest lost due to the executor's fmlure to deposit checks received by bam from the decedent's tenant, the Trane Company, in the amount of $10,000 per month from the date of death until the checks were first deposited and properly apphed to a tax hablhty or other legitimate expense of the estate, for reasonable counsel fees tncurred by the objectant to compel (0 the production and probate of the will, (u) the filing of an ~nventory and (m) the d~sclosure to h~s tax accountant and attorney of the existence of approximately $300,000 in unregmtered bonds of the decedent's, d~stnbuted to the beneficiaries shortly after death (although declared as a hfetlme gift on tax returns) WHEREFORE, Objectant respectfully requests this Honorable Court to enter the following Order and grant such other relief as may be appropriate. (1) the Executor shall w~thdraw bas F~rst and Part,al Account and resubmit a First and Partial Account stated to August 31, 2003, in substantial conformity with the "Model Account" format and the Uniform Fiduciary Accounting Pnnciples Incorporated in Supreme Court Orphans' Court Rule 6 1 by the next fihng deadhne following this Order. (2) the Executor and h~s attorney are denied any compensation for the time expended ~n prepanng and filing the w~thdrawn account, (3) the Executor shall submit the following documentation to the Court and to the Objectant within twenty (20) days following this Order (1) copies of detailed bflhng statements for the legal services provided by Scott Dinner, Esquire, including a chronological list of the services performed by the attorney and reflecting the time expended and specific tasks performed by the timekeeper on the respective dates and the bflhng rate of the timekeeper, (ii) copies of detmled billing statements for the accounting services provided to the Estate by Charles F Sullivan, C P A, Including a chronologmal list of the servmes performed by him and reflecting the time expended and specific tasks performed by the timekeeper on the respective dates and the bllhng rate of the timekeeper, (iii) a detmled statement of the services performed on behalf of the Estate of Herbert L Hull by Lawrence C Hull, as executor, providing a chronological list of such services, the amount &time expended and the task(s) performed on each given date, and the billing rate charged by Lawrence C Hull for~such services, (4) , following the filing of a resubmitted First and Final Account as set forth above, a heanng shall be held at a date to be determined, on the reasonableness of the claimed attorney's and tax accountant's fees and executor's commissions, the proper interpretation &the residuary clause of the decedent's will and such other issues of &spute that may be revealed by a proper accounting of the administration ofth~s Estate SAIDIS, SHUFF, FLOWER & LINDsAY By' Thomas E F1;we~5'v -- [ Supreme Court ID #83993 2109 Market Street Camp Hill, PA 17011 (717) 737-3405 Attomey for Objectant/Petitloner, Tracy A Hull IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, - PENNSYLVANIA ORPHANS' COURT DIVISION THE ESTATE of HERBERT L HULL, Deceased No 2002- 00515 CERTIFICATE OF SERVICE AND NOW, ttus 2 2._ day of August, 2003, I, Thomas E Flower, of the firm of Sal&s, Shuff, Flower and Llndsay, hereby certify that I this day served a tree and correct copy of the foregoing ObJections and Petition of Tracy A Hull upon the party hsted below via Umted States Mall, postage prepaid, addressed as follows Scott M. D~nner, Esquire 3117 Chesmut Street Camp Hill, PA 17011 Respectfully subrmtted, SAIDIS, SHUFF, FLOWER & LINDSAY Thomas E. Flower, Esqmre Supreme Court ID #83993 2109 Market Street Camp Hill, PA 17011 (717) 737-3405 Attorney for Petltmner IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA -- ORPHANS' COURT DIVISION 1NRE THE ESTATE OF HERBERT L HULL Deceased No 2002 - 00515 Late of Camp Hill Borough VERIFICATION I, Tracy A Hull, Petitioner, hereby verify that the statements made in the foregoing ~et~t~on are tree and correct to the best of my ~nformat~on, knowledge and behef I understand that false statements herren are made subject to the penalties of 18 Pa C S Section 4904, relating to unsworn falsfficat~on to authontms Tracy A/~-Iull, Petitioner