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HomeMy WebLinkAbout03-20-09 (3)Stanley A. Smith, Esquire Attorney I-D. No. 33782 Jill E. Neary, Fsquire Attorney LD. Na. 20$O5~ BROADS & S1N0'~ LLP One South Market Square PO Box 1146 Harrisburg, PA 1710&1146 (717} 233-5731 Attorneys for Co-Trustees Iva V. Otto, lII, Esquire Attorney LD. No. 27763 Katie 3- Maxwell, Esquire Attorney LP. No. 206018 MARTSON LAW OFFICES 10 East High Sheet Carlisle, FA 17013 (717) 243-3_>41 Attorneys for Richard E. Dixon and George F. Dixon, Il I, Co- Trustees IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PENNSYLVANIA IN RE: r~' . ~~ QTIP TRUST U/A ~ o ~' GEORGE F. DIXON, JR. ; ORPHANS' COURT DIVISION NO.2I-1994-0754 _~"~ ~' i-r~{ .- -cs - ANSWER AND NEW MATTER TO EXECUTOR'S :.>~~ ~ OBJECTIONS TO FIRST AND FINAL ACCOUNT :~ ~- NOW COME, Manufacturers & Traders Trust Company, Richard E. Dixon, and George F. Dixon, III, as Co-Trustees of the QTIP Trust under the George F. Dixon, Jr. Revocable Trust dated May 16, 1985 (the "QTIP Trust"); by and through their attorneys, Rhoads & Sinon LLP, joined by Richard E. Dixon and George F. Dixon, Ill, as Co- Tntstees of the QTIP Trust, by and through their attorneys, Manson Law Offices, and file the following Answer and New Matter to Objections the Executor of the Estate of Lottie L Dixon, to the First and Final Account: i . Admitted. 2. Item l3 of the Co-Trustees' Petition for Adjudication, being a writing, speaks for itself and requires no paraphrasing or mischaracterizations by the Objecte~r, which are denied. It is denied that the Co-Trustees of the QTIP Tntst refused to satisfy any debts owed to the Estate. ~assoo.i 3. Admitted. By way of further answer, all of the Settlor's children borrowed funds from the QTIl' Tnist from time to time. 4, It is admitted that the total of unpaid interest and late fees was $14b,970.95. The Q"I'IP Trust, being a writing, speaks for itself and requires no paraphrasing or mischaracterizations by the Qbjector, which are denied. 5. The first statement is a conclusion of fact to which no response is deemed required. In the event and to the extent a response is required, the same is denied. It is denied that the Account contains insufficient information to determine the accurate amounts of the outstanding Loans. The Account, being a writing, speaks for itself; and requires no paraphrasing or mischaracterizations by the Qbjector, which are denied. b. Denied. The letter, referenced as Exhibit "A," being a writing, speaks for itself and requires no paraphrasing or mischaracterizations by the Objector, which are denied. It is specifically denied that the Co-Trustees distributed the Estate Receivable to themselves, either in their individual capacities or in their capacities as Co-Trustees of the Lottie L Dixon Revocable Trust. By way of further answer, the Lottie L Dixon Revocable Trust was an integral part of the Lottie I. Dixon Estate. Article VI (H) of the Revocable Trust authorizes the Trustees, To pay, in the Trustee's discretion, without reimbursement, ali costs, Death Taxes, or other taxes, expenses and charges in connection with the administration of the Settlor's estate or mist, and to pay the funeral expenses and the expenses of the Last illness of the Settlor. 7. The con-espondence attached to the Estate's Objections as Exhibit "B" is a writing that speaks for itself and requires no paraphrasing or mischaracterizations, which are denied. 2 8. Denied. It is specifically denied that the Estate was forced to borrow cash from the Executor. The Executor needed only to request the Trustees of the Revocable Trust for payment of Estate expenses, as anticipated by Article VI(H), quoted above. The attached Exhibit contains conclusions of fact to which no response is deemed required. In the event and to the extent a response is required, the same is denied. 9, Upon information and belief, it is believed that the Estate did receive the Federal Estate Tax refitnd on June 24, 2008. The correspondence attached by the Estate as Exhibit "D" is a writing that speaks for itself and requires no paraphrasing or mischaracterizations by the Objector, which are denied. By way of fitrther answer, counsel for Co-Trustees sent a letter to counsel for Executor on March 28, 2008 along with checks from the QTIP Trust, Lottie T. Dixon Revocable Trust, Richard Dixon and George Dixon to be used for payment of the Estate's taxes. Between the date the checks were delivered and the date the Estate received the Federal Estate Tax refund, counsel far Executor failed to indicate that the Estate did not accept the terms outlined in the letter regarding the tax refund owed to the QTII' Trust. A true and correct copy of the letter dated March 28, 2008 is attached hereto as Exhibit "A." 10. Denied as stated. Upon information and belief, the Executor previously received the appropriate documents or had access to the documents needed to determine the accurate amount the interest and late fees due from George F. Dixon III. The correspondence attached to the Estate's objections is a writing that speaks for itself and requires no paraphrasing or misrepresentations by Objector, which are denied. 11. This paragraph states a conclusion to which no response is required. In the event and to the extent a response is required, it is specifically denied that the Lottie I. 3 Dixon Revocable Trust was not entitled to the disbursement of $146,97095 paid to it on December 20, 2007. WHEREFORE, the Co-Trustees of the QTIP Trust respectfully request that this Court dismiss the Executor's objections and affirm the First and Final Account. NEW MATTER 12. Paragraphs 1 through 11 above are incorporated by reference as i f set forth in full. Co-Trustees therefore re-allege and incorporate by reference the responses to paragraphs I through 11 of the Executors Objections. In the event and to the extent a responsive pleading is required, the same is denied. 13. At the time of the QTIP Trust's distribution of accumulated income to the Lottie I. Dixon Revocable Trust, Co-Trustees Richard and George Dixon were investigating the merit behind filing a petition to remove Marshall L. Dixon as Executor of the Estate for events related to his involvement in the financial affairs of his mother, Lottie Dixon, prior to her death. 14. As a result of this ongoing investigation into Marshall Dixon's actions as Executor, the Co-Trustees resolved that it was not in the best interests of the Estate and the beneficiaries of Lottie Dixon's Estate to distribute the accrued income to Marshall Dixon as Executor of the Estate. The Co-Tnistees sought to preserve the assets of the QTIP Trust and in fact succeeded in preserving all of the trust assets during this time by distributing such accumulated income to Lottie Dixon's Revocable'I'rust. 15. Article VI(H} of Lottie Dixon's Revocable Tn~st, to which the accumulated income was paid, specifically gives the Trustees the following power: 4 To pay, in the Tn~stee's discretion, without reimbursement, all costs, Death Taxes, or other taxes, expenses and charges in connection with the administration of the Settlor's estate or tnlst, and to pay the funeral expenses and the expenses of the Iasi illness of the Settlor. At no time did Marshall Dixon request payment of Estate expenses from the Revocable Trust as anticipated by such Article. 1 fi. 4n March 28, 200$, the Trustees of Lottie Dixon's Revocable Trust did pay $18,826.67 to the U.S. Treasury and $b,43$.43 to the Pennsylvania Department of Revenue acting pursuant to Article VI(H). The Executor of Lottie I. Dixon's Estate was fully aware that the assets of the Revocable Tnist were to be used for Estate expenses. 17. In their capacity as beneficiaries Richard and George Dixon filed objections to the accounting in the Estate of Lottie Ivy Dixon nn February 27, 2009 and requested resolution of the questions requiring adjudication. 18. Any objections to the loans made to Richard and George Dixon from the QTiI' Trust are barred by the Consents executed by Marshall Dixon approving such loans. All of the Consents signed by Marshall Dixon contain the following language: The undersigned intend to be legally bound by this Consent. They acknowledge that their binding consent is given after full knowledge and disclosure of all relevant facts and after discussion and negotiation of the same. The undersigned, each for themselves, their heirs and assigns, agree to indemnify and save the Co-Trustees of the George F. Dixon Jr. Trust Under Agreement and QTIP Tnist harniless from and against any and all claims, losses, liabilities or damages which the Co-Trustees incur in connection with any actions previously taken or hereafter taken which are consistent with the Consent herein provided and waive any claims against the Co-Trustees for actions previously taken or hereafter taken which are consistent with the Consent herein provided. WHEREFORE, the Co-Trustees of the QTIP Trust respectfully request that this Court dismiss the Executor's objections and affirm the First and Final Account. Respectfully submitted, BROADS & SINON LLP By: +~~ _ to ley A. Sm~th E. Neary One South Market Square P.O. Box 1 I46 Harrisburg, PA 17108-1146 (717) 233-5731 MARTSON LAW OFFICES By: No V. Otto, III Katie J. Maxwell 10 East High Street Carlisle, PA 17013 (717) 243-3341 6 ~. r un A ~ ,/h11a~~' .L ~.L .1 Vl .11J ~ 114 & NINON LLP March 28, 2008 RE: DIXON MATTERS VIA HAND DELIVERY Elizabeth P. Mullaugh, Esquire MCNGES, WALLACE & NURICK 100 Pine Street P.O. Box 1166 Harrisburg, PA 1 X 08- 1166 Dear Elizabeth: Enclosed please find the following checks: Stanley A. Smith ph (717) 231-6628 fr (7l 7) 231-6676 smith@rhoads-sinon.com FI t. E NO: 1078 ~~02 I . MST Investment Group check from the George Dixon QTIP Trust payable to the U.S. Treasury in the amount of $4,851,303.78. - 2. Ml4cT Bank check from Mrs. Dixon's Revocable Trust payable to the U.S. Treasury in the amount of $18,626.67. 3. M&T Bank check from Mrs. Dixon's Revocable Trust payable to the Pennsylvania Department of Revenue in the amount of $6,438.43. 4. M&T Bank check from the George Dixon QTIP Trust payable to the Estate of Lottie Ivy Dixon in the amount of $I2,430.07, being accrued income on the Trust's investment portfolio as of Mrs. Dixon's date of death. S. M&T Bank check payable to the Pennsylvania Department of Revenue in the amount of $422.72 in payment of George Dixon's anal Richard Dixon's share of the Pennsylvania Inheritance Tax. This was not drawn from the George or Lottie Dixon accounts. These checks are being remitted to you as counsel to Mrs. Dixon's estate and with the following understandings. We understand that they will be remitted to the appropriate tax authorities today with extension requests, along with other checks for tax due. Additionally,. we are delivering the checks to you and your firm with the expectation that you will assure that any refunds that might arise will be promptly delivered to the source of the payment to which the refund relates. In particular, if the ultimate valuation of the Sheaffer Farm should be lower than the presumed amount for the purposes of the prepayment of tax, it is our understanding and expectation that that refund resulting from that reduction would be promptly returned to the QTIP Trust. 68a278. t Rhoads .~ Sinon LLP Attorneys at Law "twelfth Ploor One South Market Square f'_O. C3os 11~}( 1-iarrisburg, 1'A 17106-1146.• p!r (717) 233-5731 fx C717) 232-7459 - www.rho~tds-sinon.com March 28, 2008 Page 2 Thank you for your continued efforts in this matter. Very truly yours, Enclosures ce: Mr. Joseph A. Maeri, M&T Bank {w/o encl) Mr. Richard Dixon (w/encl} Mr. George Dixon (w/encl) No V. Otto, III, Esquire {w/encl) VERIFICATION Ruth Ann McMillen, deposes and says, subject to the penalties of 1 ~ Pa. C.S.y~'49fl4 relating to unsworn falsification to authorities, that she is an Officer of Manufacturers and Traders Trust Company, that she makes this verification by its authority and that the facts set forth in the foregoing Answer and New Matter are true and correct to the best of her knowledge, information and belief. a ,~ ~ ~ ~ . ~~ , r ~ -~, _ ~, Date Rutli~ Ann McMillen ~~~a. ~;, ~t<r ~ TRUST OFFIC€R v~ ~ ~rcamzaN C'i~eorgc Dixon, cle~poses and says, subject to the penalties of 18 Pa. C.g. §4904 relating to unsworn falsi~fiaation to authorities, that he is a CaTrustr~ of. the [~'~ Trust under the George P. Damon, 7r. Revocable Trust, that he makes this verification by its authority and that the facts set fault inn the 1~wc-~ aixd. S~?'ear Matter are true and correct t4 the heat of his ~owledge, information ar~d taalitl~: "~j Z t~ 0 ~ Date G~arge b' on CERTIFICATE OF SERVICE I hereby certify that on this 20`x' day of March, 2009, a tnie and eoi~rect copy of the foregoing Answer and New Matter to Executor's Objections was served by means of United States mail, first class, postage prepaid, upon the following: Daniel L. Sullivan SAIDIS, FLOWER & LINDSAY 2109 Market Street Camp Dill, PA 17011 Elizabeth P. Mullaugh McNa~.s, WALLACE Bz.NURICx, LLC 100 Pine Street P.Q. Box 1166 Harrisburg, PA 17I 08-1166