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Home My WebLink About10-09-09CHARLES E. SHIELDS, III ATTpRNEY-AT--LAW GEORGE M.HOUCK (1912-]99]) Honorable Judge J. Wesley Oler Cumberland County Courthouse 1 Court House Squaze Carlisle, PA 17013 Dear Judge Oler: 6 CLOUSER ROAD Corner ofTnnd(e and Clouser Roads MECHANICSBURG, PA 17055 October 9, 2009 RE: Estate of W. William Apgar TELEPHONE (717) 766-0209 FAX (717) 795-7473 n ~ cp `~',~ c°a ? rn- --~ rn 1 ~ ~ ~ `;-; ~ c,,r_ ~, ~ w o Please find enclosed a copy of my letter to the beneficiaries in the Estate of W. William Apgar. The letter and enclosures are fairly self-explanatory. From the time of the original calculation of adjusted shares of principal of the beneficiaries to the time of the filing of the Account an error was made in the tax apportionment. The Accounting and Proposed Distribution was prepared by me and Orrstown Bank in a rush to make the calendar deadline date. In our haste, I did not catch the error during my review. I therefore apologize for any inconvenience. The matter has been discussed with the Attorney General's Office, the Orrstown Bank, and Glenda Fazner Strasbaugh. All aze agreed to make this correction informally. All of the beneficiaries have been notified by my said letter of the error and have been provided a ballot to consent to the correction in an informal manner. If the Account is confirmed the Bank and I have guaranteed the Attorney General and hereby guarantee your Honorable Court that no monies wil] be distributed until we receive all consents. I cannot imagine that anyone would refuse to consent but if anyone does we will formally correct and re-file the Account. This will, of course, cause a substantial delay for no good reason. In addition, the Bank has most generously consented to pay an approximately $800 income tax bill that has just been received -another reason why I do not foresee anyone refusing to consent to correct an obvious mathematical error. Thank you for your kind attention to this matter. Very truly yours, ~~~ Charles E. Shields, III CES/mjj Attorney-At-Law Enclosure ca All beneficiaries of the Estate of W. Walter Apgar m. C'"~ <~ <n- n x_r ~~' ;~.; _^ - `: ,.~ =,y .;:> -~~ CHARLES E. SHIELDS, III ATTORNEY-AT-LAW GEORGE M.HOUCK (1912-1991) Brandee Myers c/o Kelly Myers 513 Joyce Road Camp Hill, PA 17011 Courtney Apgar c/o Kenneth Apgar 114 North 21"Street Camp Hill, PA 17011 Gretchen Huntzinger 806 Linwood Avenue Collingswood, NJ 08108 Hugh Huntzinger 200 Coming Street Charleston, SC 29403 Joel L. Hocker c/o Marilyn Hocker 31 Round Ridge Road Mechanicsburg, PA 17055 6 CLOUSER ROAD Corner of Trindle and Clouser Roads MECHANICSBURG, PA 17055 October 8, 2009 Kelly Myers 513 Joyce Road Camp Hill, PA 17011 Matthew F. Hocker S 169 East Trindle Road, Lot 5 Mechanicsburg, PA 17050 Marilyn Hocker 31 Round Ridge Road Mechanicsburg, PA 17055 Rita Lengel 825 Lee Lane Enola, PA 17025 Susan Ervin 713 Champion Avenue West Collingswood, NJ 08107 Crossfire Ministries 430-A Colonial Road Harrisburg, PA 17109 TELEPHONE (717) 766-0209 FAX (717) 795-7473 Mr. Mike Hammer Celebration Community Church 1048 South Mountain Road Dillsburg, PA 17019 Christian Life Assembly Church 2645 Lisburn Road Camp Hill, PA 17011 Ms. Heather J. Vance-Rittman Senior Deputy Attorney General Charitable Trust & Org. Section 14'6 Floor, Strawberry Square Harrisburg, PA 17120 RE: Estate of Walter William Apgar Dear Beneficiaries: Please be advised that this is a Supplementary Notice Letter being sent to you with important updated revisions and information you should review carefully. I have enclosed a responsive ballot for you to mark and return. PLEAS~TE; The Charities need not return anything since their shares will not be adversely affected by the adjustments made herein. I will try to walk you through this step by step in simple fashion so that this will be clear to everyone. Please start with enclosed Item #1. This is my original handwritten calculation sheet of tax apportionments. At the top is net value of the Estate afrer the payment of all debts, costs, expenses, etc. This is the base figure we use to start all calculations. 15% of this figure is deducted as it goes to the three (3) Charities at 5% each. Each Charity would thus receive $22,796.14 as its proportionate share; this share is each Charities' tax exempt share. The rates of taxation on inheritances are imposed by the Commonwealth of Pennsylvania and are based upon the relationship of the beneficiary to the decedent. Beneficiary Letter October 8, 2009 Page 2 Under Pennsylvania law unless a decedent specifically says in his Will that he wants to burden and impose part of the "tax bite" onto the Charities, they get their shares in the standard fashion and without any tax burden since they have a zero inheritance tax rate. This is the crux of and the reason for the adjustments we are making. If you deduct the $69,388.42 total charitable share from the net value, this leaves $387,534.38 to be distributed among the non-charitable beneficiaries. Of this amount, $68,388.42 is subject to a tax rate of 4.5%. The then remaining $319,155.96 is subject to a tax rate of 15%. Please refer to Item #1 to see how this was done. If you follow through the rest of the calculations on my Item # 1 scratch sheet, the method of calculating the figures and the tax adjustment against each person's share should make sense. The double check method of columnar addition results in the same figures. The "net share" column to the far right is the correct adjusted principal amount for each non-charitable beneficiary. This is the figure for each of you that I had originally determined and that should have appeared on the proposed distribution sheet. The "gross share" figures are the same figures which appeared on Schedule J of the Inheritance Tax Return opposite your names and respective shares before the tax assessment reduction was made to come up with the "net shares." See the left hand column on my original scratch sheet marked "gross share." When looking at all of the columns the method of calculation should be clear. These principal shares are then adjusted by adding to them the proportionate amount of income you each earn on your share of the principal. In essence, your share of the income earned is allotted to you based on your percentage share of the residue. The original Accounting could not be filed under our Orphans' Court rules until we got clearance from the Department of Revenue. Our state has a "budget crisis" which is at least partly to blame for the long delay in getting the clearance letter. Our Court calendars have specific deadline dates for filing to be in time for the next calendared Account Confirmation date. The bank and myself were cognizant of the fact that everyone was eagerly awaiting their shares. In our haste to try to meet everyone's expectations in this matter we did a hurried job on the Accounting and Proposed Distribution Schedule. The bank miscalculated by simply taking the "tax bite" off the top of the entire residue figure instead of excepting out therefrom the charitable shares before doing the tax calculations and respective apportionments. In my hasty review of the materials before filing, I did not realize the proposed amounts for each recipient had not been entered into the Account as I had originally calculated. I offer this background as our explanation -not as my excuse. 1 should have detected this but failed to do so. You therefore have my apologies. The buck in this matter stops at my desk. See what I have enclosed and marked as Item #2. This is the proposed distribution as sent to you originally and which has the erroneous figures by which each charity was shorted out approximately $2,500.00. The Attorney General's Office which oversees all Orphans' Court matters involving charities was kind enough to point this out to us without formally filing an Objection to the Account. An Objection would have required formal action on our part and would have resulted in further substantial delays. Beneficiary Letter October 8, 2009 Page 3 The adjusted figures for the principal amounts appear on the revised Schedule of Distribution, Item #3. Rather than withdraw the Account and incur further delay, we are suggesting an informal revision by way of this letter and your prompt consent. This is not a majority vote situation. Everyone will have to consent or we will have to submit a new Account formally again to the Court with these same revisions in a formal manner. That will cause a delay in the distribution of funds. Since this is a clear mathematical error and not one involving legal contentions or interpretation, the Register of Wills, myself and the Attorney General are willing to have the Account conditionally confirmed. No distribution will then be made unless and until all taxable beneficiaries send in their agreement to this informal correction. 1 have enclosed a ballot and aself-addressed stamped envelope for your convenience. Please respond posthaste. Also, since we rushed to get this through to try to get you your money as quickly as we could, we did not wait for a final IRS closing letter. We have now found to our chagrin that the IRS took a position that the Estate owes approximately $800.00! In an effort to accommodate everyone, Orrstown took that risk for you and will pay that bill out of its own fee. This is fairly generous on the Bank's part. It will eliminate any need to redo the Account on that ground. Thank you for your kind attention to this matter and your anticipated prompt cooperation. Very truly~y~o~urs~, ~ Charles E. Shields, III Attorney-At-Law CES/mjj cc: Charlene Feuchtenberger, Orrstown Bank Glenda Farner Strasbaugh, Register of Wills Office, Clerk of the Orphans' Court Judge J. 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X37 336 SBS.oI ~z PROPOSED DISTRIBUTION TO BENEFICIARY PER LAST WILL AND TESTAMENT OF WALTER W. APGAR; DECEASED JUNE 12, 2008 Investment Market Value Cost Basis 6/9/08 Income Cash Principal Cash $5,617.62 $5,617.62 $430,845.06 $430,845.06 Total 4 6 46 6g 436"462 6g Less Reserves: Orrstown Bank fee (principal): Attorney fee: Filing fee: Total Total Proposed Distribution Amount: Beneficiarv• Hugh Huntzinger 200 Coming Street Building B-301 Charleston, SC 29403 $21, 000.00 $10, 850.00 $500.00 32 350.00 404 112.68 Estimated Total Distribution $80,822.54 Gretchen Huntzinger 806 Linwood Avenue Collingswood, NJ 08108 Rita Lengel 825 Lee Lane Enola, PA 17025 Marilyn Hocker 31 Round Ridge Road Mechanicsburg, PA 17055 Susan Ervin Kings Run -Unit #403 401 E Atlantic Avenue Haddon Heights, NJ 08035 Kelly Myers 1 $80,822.54 $20,205.63 $60,616.90 $20,205.63 $20,205.63 Courtney Apgar 114 North 21st Street Camp Hill, PA 17011 Brandee Apgar 513 Joyce Road Camp Hill, PA 17011 Matthew Hocker 31 Round Ridge Road Mechanicsburg, PA 17055 Joel L Hocker 31 Round Ridge Road Mechanicsburg, PA 17055 Christian Life Assembly Church 2645 Lisburg Road Camp Hill, PA 17011 Crossfire Ministries 430-A Colonial Road Harrisburg, PA 17109 Celebration Community Church 303 Golf Club Avenue Dillsburg, PA 17019 3 $20,205.63 $20,205.63 $10,102.82 $10,102.82 $20,205.63 $20,205.63 $20,205.63 Total $404.112.68 ern -{~3 - fI PROPOSED DISTRIBUTION TO BENEFICIARY PER LAST WILL AND TESTAMENT OF WALTER W. APGAR; DECEASED JUNE 12, 2008 Income Cash Principal Cash Less Reserves: Orrstown Bank fee (principal): Attorney fee: Filing fee: Investment Cost Basis $5,617.62 $430, 845.06 Total Total Total Proposed Distribution Amount: Beneficiarv• Hugh Huntzinger 200 Coming Street Building B-301 Charleston, SC 29403 Gretchen Huntzinger 806 Linwood Avenue Collingswood, NJ 08108 Rita Lengel 825 Lee Lane Enola, PA 17025 Marilyn Hocker 31 Round Ridge Road Mechanicsburg, PA 17055 Susan Ervin Kings Run -Unit #403 401 EAtlanticAvenue Haddon Heights, NJ 08035 Kelly Myers 1 $21, 000.00 $10, 850.00 $500.00 32 350.00 404 112.68 Estima~~I Distribution $77,359.81 $77, 359.81 $19,339.96 $58, 019.88 $19, 339.96 $21, 716.33 Market Value 6/9/08 $5,617.62 $430,845.06 Courtney Apgar $21,716.33 114 North 21st Street Camp Hill, PA 17011 Brandee Apgar $21,716.33 513 Joyce Road Camp Hill, PA 17011 Matthew Hocker $9,669.97 31 Round Ridge Road Mechanicsburg, PA 17055 Joel L Hocker 31 Round Ridge Road $9,669.97 Mechanicsburg, PA 17055 Christian Life Assembly Church $22,734.77 2645 Lisburg Road Camp Hill, PA 17011 Crossfire Ministries $22,734.77 430-A Colonial Road Harrisburg, PA 17109 Celebration Community Church $22,734.77 303 Golf Club Avenue Dillsburg, PA 17019 Total $404.112 68 3