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Home My WebLink About12-23-14 RHOADS & SINON LLP By Scott Alan Mitchell Attorney ID No. 76124 One S. Market Square, 12`h Fl, P.O. Box 1146 Harrisburg,PA 17108-1146 Cl> C= (717)231-6602 rn nuM Fax: (717)260-4402 Email: smitchell@rhoads-sinon.com C,,�, --0 Cn —D 4 IN RE: IN THE COURT OF COMMON`P'-E-AS CUMBERLAND COUNTY, PENTqSYLVIA-NLAf— KATHLEEN M. KNISELY ORPHANS' COURT DIVISION . An Incapacitated Person No, 21-12-946 PETITION FOR APPROVAL TO EXPEND PRINCIPAL BY PLENARY GUARDIAN OF ESTATE TO THE HONORABLE, THE JUDGES OF THE SAID COURT: The Petition of The Bryn Mawr Trust Company, by and through its counsel, Scott Alan Mitchell, Rhoads & Sinon LLP, respectfully represents the following: 1. The Petitioner is The Bryn Mawr Trust Company, with a principal place of business at One West Chocolate Ave., Suite 200, Hershey, PA 1,7033. 2. This Court has jurisdiction over this matter pursuant to 20 Pa.C.S.A. § 711(10) in that this matter involves the administration and distribution of the real and personal property of the estate of an incapacitated person. 3. The Incapacitated Person is Kathleen M. Knisely ("Mrs. Knisely") who resides at 23 W. Lawn Circle, Wormleysburg, PA 17043. 4. By Order of this Court dated November 15, 2012, a copy of which is attached hereto as Exhibit A and incorporated herein by reference, Petitioner was appointed plenary 1 974432.1 guardian of the estate of Mrs. Knisely. Additionally, under the said Order of Court, James G. Knisely and Barbara Knisely were appointed co-guardians of the person of Mrs. Knisely. 5. Mrs. Knisely is 81 years of age, having been born on February 11, 1933. 6. Matters involving Mrs. Knisely's person and estate have been the subject of numerous petitions filed with this Court resulting in various Orders of Court issued by the Court, and such procedural history will not be reiterated in this Petition. 7. Petitioner has recently been made aware of a life insurance policy on Mrs. Knisely's life that was purchased by Mrs. Knisely in or around the 1990's. Petitioner understands from discussions with the family (and in light of Mrs. Knisely's assets) that the policy was obtained by Mrs. Knisely for purposes of payment of federal estate tax at her death. 8. Approximately 2-3 years ago, prior to Petitioner being appointed as guardian, Mrs. Knisely transferred ownership of the policy to all five (5) of her children, Lee Ann Knisely, Barbara L. Knisely, James G. Knisely, Kathleen L. Knisely, and Samuel Scott Knisely, whereupon she has continued to pay the annual premiums for the policy. 9. Attached hereto as Exhibit B and incorporated herein by reference is an Accelerated Payment Anniversary Statement of MetLife, which has been provided to Petitioner by Mrs. Knisely's children. 10. As noted in the Statement, the life insurance policy is on Mrs. Knisely's life and bears a face amount of$3 million, and the policy includes additional paid-up insurance and dividends earned. 11. As also noted in the Statement, the current annual premium payment for the policy is $81,490.00, which is due January 1, 2015. However, because of accrued dividends in 2 the policy, the dividends may be applied to the premium under option 2 in the statement, leaving a net premium due in the amount of approximately $34,000. 12. Petitioner also has confirmed that although the Statement reflects a due date of January 1, 2015 for the annual premium, the premium can be paid within thirty (30) days after the due date without any lapse in coverage or policy forfeiture. 13. In discussing the premium payment options with Mrs. Knisely and her children, Petitioner understands that the family desires to proceed under option 2 in the attached Exhibit B by allowing 2015 dividends to be applied towards the premium and Mrs. Knisely paying the remaining premium balance (approximately $34,000, as noted above). 14. As of December 22, 2014, Petitioner is managing approximately $6.5 million of Mrs. Knisely's assets under the guardianship. Additionally, pursuant to this Court's Order of Court of December 20, 2012, Petitioner, as trustee, is managing approximately $4 million of Mrs. Knisely's assets under a Declaration of Trust, dated December 28, 2012. Finally, Mrs. Knisely's house at 23 W. Lawn Circle, Wormleysburg, PA 17043 is owned by a Qualified Personal Residence Trust, dated June 5, 2012, 15. Mrs. Knisely's current income consists of the following: a. Social Security—approximately $1,150 per month; b. BNY Mellon trust established by husband—approximately $2,000 to $3,000 semi-annually; and C. Guardianship account—approximately $168,000 per year, the majority of which is expended each year for Mrs. Knisely's health, support, maintenance, and welfare. 16. Because Mrs. Knisely's income and personal assets (outside of the guardianship and trusts) are insufficient to pay the above-referenced life insurance premium, Petitioner seeks 3 approval from this Court to expend principal of Mrs. Knisely's estate hereafter in an amount not to exceed $34,000 to pay for the annual premium due January 1, 2015 in the above-referenced policy. 17. Additionally, because the life insurance policy will continue to have an annual premium of approximately $85,000, which, as demonstrated in Exhibit B, may be offset in whole or in part by each year's dividends within the policy, which are impacted by current interest rates, Petitioner seeks approval from this Court to expend principal of Mrs. Knisely's estate hereafter in an amount necessary to pay the ongoing annual premium for the above-referenced policy, in addition to the January 1, 2015 premium. 18. By Order of Court dated March 14, 2013, this Court decreed, "None of Mrs. Knisely's children may accept any money from Mrs. Knisely without express permission of this Court." 19. 20 Pa. C.S.A. §5536(a) provides, in part, "The court, for cause shown and with only such notice as it considers appropriate in the circumstances, may authorize or direct the payment or application of any or all of the income or principal of the estate of an incapacitated person for the care, maintenance or education of the incapacitated person, his spouse, children or those for whom he was making such provision before his incapacity. . . ." (emphasis added). 20. 20 Pa.C.S.A. §5521(a) provides, "Expressed wishes and preferences of the incapacitated person shall be respected to the greatest possible extent." 21. "20 Pa.C.S.A. §5536(b)provides that this Court, for good cause shown, shall have the power to substitute its judgment for that of the incapacitated person with respect to the estate and affairs of the incapacitated person for the benefit of the incapacitated person, her family, 4 members of her household, her friends and charities in which she is interested, such power including the power to make gifts outright or in trust. 22. In light of the foregoing, whereas (1) Mrs. Knisely has expressed her wish to continue to pay for the annual life insurance premium; (2) Mrs. Knisely has paid the annual life insurance premium in the past, both when she owned the policy and after she transferred ownership to her children; (3) Mrs. Knisely's assets will result in federal estate tax liability at her death, thus underscoring the importance of maintaining the insurance policy; and (4) Mrs. Knisely's assets (including the guardianship and trust assets) are of a sufficient amount that Petitioner distributing principal for the payment of the life insurance premium will not in any way jeopardize ongoing future funds being available for Petitioner to pay for the ongoing health, maintenance, support, and welfare of Mrs. Knisely, Petitioner submits that the above-referenced statutes warrant this Court approving principal expenditures for the payment of the life insurance premium. 23. Mrs. Knisely's next of kin consists of her five children, who are the current owners of the life insurance policy on Mrs. Knisely's life. As the Court is aware, one of Mrs. Knisely's children, Samuel Scott Knisely, is not a named beneficiary under Mrs. Knisely's Will nor under the Qualified Personal Residence Trust, which has resulted in prior Orders of Court often containing the following provision: "We will decide at a later date whether or not it would be appropriate to seek reimbursement from the remaindermen from the real estate trust for these charges." 24. In the instant petition, funds distributed from the guardianship decrease funds otherwise passing to four of the five children under Mrs. Knisely's Will, and they benefit all five of the children as the beneficiaries under the life insurance policy. As a result, Petitioner 5 requests that any Order of Court in the instant petition, confirm that the Court will decide at a later date whether it would be appropriate to seek reimbursement from Samuel Scott Knisely for his pro rata share of any life insurance premiums paid out of the guardianship funds. 25. As evidenced by the attached Certificate of Service, notice of the filing of this Petition has been provided to Mark F. Bayley, Esquire, guardian ad litem for Mrs. Knisely; Anthony L. DeLuca, Esquire, counsel to Barbara L. Knisely and James G. Knisely; Delano M. Lantz, Esquire, counsel to Samuel Scott Knisely; Lee Ann Knisely; and Kathleen L. Knisely. 26. Whereas all five of Mrs. Knisely's children are owners of the life insurance policy, Petitioner believes that all five children would consent to the relief requested in this Petition, and Petitioner shall hereafter file with the Court any consents that are executed by the children. 27. As a result of filing this Petition, Petitioner has occurred and will incur legal fees and Court costs. 28. Specifically, Petitioner have incurred legal fees and costs of$1,595.00 through and including December 23, 2014, as evidenced by the itemization attached hereto as Exhibit C and incorporated herein by reference. 29. Petitioner anticipates additional legal fees and costs of up to $1,500.00 being incurred in the matter after December 23, 2014 in concluding this matter, including a possible hearing before the Court regarding this Petition. 30. Therefore, in addition to the above-referenced requested principal expenditures for payment of the life insurance premiums, Petitioner requests approval to expend principal of Mrs. Knisely's estate for legal fees and costs in an amount not to exceed $3,095.00, to Rhoads & 6 Sinon LLP, subject to such firm providing Petitioner with satisfactory evidence of actual legal time and costs incurred. WHEREFORE, Petitioner, The Bryn Mawr Trust Company, respectfully requests that this Honorable Court enter the proposed Decree attached hereto, authorizing The Bryn Mawr Trust Company, Guardian of the Estate of Kathleen M. Knisely, (1)to expend up to $34,000 of the principal of the Estate of Kathleen M. Knisely for payment of the life insurance premium due January 1, 2015, as outlined further in the Petition; (2) to expend principal of the Estate of Kathleen M. Knisely for payment of the ongoing annual life insurance premiums, subject to any dividend reduction in the premium that Petitioner so elects; and (3) up to $3,095.00 for payment legal fees and Court costs involving the filing of this Petition. Respectfully submitted, RHOADS & SINON LLP Dated: bd x3( �� By: Scott Alan Mitchell Attorneys for Petitioner One S. Market Square, 12'h Fl. P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 231-6602 �. Sup. Ct. Attorney ID #76124 7 Exhibit A 11/21/2012 11:48 FAX 1a002/002 IN RE: IN THE COURT OF COMMON PLEAS OF KATHLEEN M. KNISEL , CUMBERLAND COUNTY, PENNSYLVANIA an alleg d incapacitated ; person ORPHANS ' COURT DIVISION NO. 21-12-946 ORDER OF COURT AND NOW, this (15th--day pf November,_2012y after hearing, we are satisfied by clear and convincing evidence that Kathleen M. Knisely meets the definition of incapacitated person under the statute. CHryn .Mawr.Trust-is appointers permanent pl er3�ry- and an _a her--.estate #ames C;,-Knisely,and=-Barbara jtnise,ly_ re. appoin ed co-_guardians of her peisori: The fees of the Petitioner's counsel and Mr. Bayley a e author' ed to be paid by the guardian of the estate, as are . e fees of Dr. Hume. All powers of attorney executed before this date are deemed to bei valid and revoked. By the Court, Edward E. Gui o, J. Anthony DeLuca, Es ire For the Petitioner Mark F. Bayley, Esquire For Kathleen M. Kn' sely C) -,-, ; Thomas R . Flower, Esquire rT1 - < e.710 For Sam el Scott Knisely 4 �0- srs A TRUE COPY FROM RECORD Q;=-' In Testimony whomf, I hereunto Q rr; set my hand and the seal v -' Z6 Q St laid court at Carkle,PA az L `'� � Cummbeftnd ccumv Exhibit B O .. 1VIetLifQuestions? METROPOLITAN LIFE INSURANCE COMPANY Contact your MetLife Reresentative: 101 ERFORD ROAD SUITE 200 $ 717-724-9700 CAMP HILL PA 17011 fi A ales 7 5/163�3gency Accelerated Payment Anniversary Statement Amount Due $81,490.00 J,B,S,K, & L KNISELY Date Due 23 W LAWN CIR January 1, 2015 WORMLEYSBURG PA 17043-1142 P9 iic44y 1816Obet 570 PR Face Amount UUOf insurance $3,000,000 Payment Mode Nameof KATHLEEN MANN KNISELY Annual inmued Plan LIFE PAID—UP AT AGE 98 �y ---_AmountYaid/DatePwo Dividend Summary Ylatseryy, Fo. Your 2015 dividend will be used to buy Additional Paid-up Insurance if premiums are paid to January 1,2015. . platelh(.s Fi ; n 2015 Dividend: $47,550.00 �,tnc)t,ysijr . �Y zi Additional Paid-Up Insurance Prior Balance: 127,614.07 Additional Insurance Earned on Prior Balance: 1,722,79 Amount Purchased b y Current Dividend: 61,339.50 Total Additional Paid-Up Insurance(Al): 190,676.36 <= ww;= ; Payment Information Amount Due(Premium): $81,490.00 As requested,the amount due will be paid by the Accelerated Payment(AP)arrangement,if you do not pay it alher out-of-pocket See ) y y sfde:faYF�g:-:.cs P ( Option 3.However,you should be aware that based on MetLife's current dividend scale, our dividends will not be sufficient to pay all future premiums.You may want to consider the following payment options a f3rmahon i shown below. These calculations are based on the current dividend scale which is not guaranteed and are therefore subject to change in the future. j lu if ! 1. Pay this year's premium out-of-pocket.The AP arrangement would pay premiums until the year 2025. c 2. Use the 2015 dividend of$47,550.00 plus$33,940.00 out-of-pocket to pay this year's premium.Your c total AI would be reduced to$129,336.86.The AP arrangement would pay premiums until the year 2020. J. Allow the premium to be paid by the AP arrangement.The premium would be withdrawn from the total o'I; Al reducing it to$86,050.53.The AP arrangement would pay premiums until the year 2018. Your MetLife Representative may be able to offer additional payment options.For questions or service,please 73 abto t `. contact your MetLife Representative or call 1-800-MET-5000(1-800-638-5000).Our busiest day is Monday,so it is xfini£4s-y€ best to call Tuesday through Friday,if possible. <t wnGl>, v'j?o`hila: ----------- --------------,___.___-------.------- .-.----_----__•---------. -• MePLefe° Accelerated Payment — Type 4 A Detach here and return with our payment Folicy No. Frenuum vivrdena 934900570 PR 343 1 000 81490.00 47550.00 SalesOffice/Agy, Nameefinsured - Date Due C75/633 KATHLEEN MANN KNISELY January 1, 2015 J B S K & L KNISELY Amount Due 211 * LA*N CIR $81,490.00 WORMLEYSBURG PA 17043-1142 Unscheduled Payment Please make check or money order payable to MetLife $ Mail to: METROPOLITAN Amount Enclosed P 0 BOX 371310 PITTSBURGH PA 15250-7310 $ X11-1.111i1111111ifHIIIIII 11IT,1.1rvr1111+1 1 NYH6HX830A Exhibit C BIM300T R2 BIM RHOADS & SINON LLP BIM RUN# . . . 0023072 Page . . . . . . . . . . 1 Date . . . . . . . . . . 12/23/14 BILLING INFORMATION MEMO Requ Attorney. . 801 Roteman, Cinda L. 13696 000 Bryn Mawr Trust CO BIM#: 00382998 N Orig Attorney 603 MITCHELL/SCOTT A 3 Kathleen Knisely Guardianship Time: 12/19/2014 12/23/2014 N Bill Attorney 603 MITCHELL/SCOTT A Opened Date. . . . 12/01/2014 Cost: 12/19/2014 12/23/2014 N Resp Attorney 603 MITCHELL/SCOTT A BILL MONTHLY Estate-Planning, Wills & Trusts N Rept Attorney 9999 9999 STDO1 Time by Prd/Year: N N Othr Attorney 9999 9999 Cost by Prd/Year: N Bryn Mawr Trust CO Wealth Management Division 10 South Bryn Mawr Avenue Bryn Mawr, PA 19010 Susan W O'Donnel, Sr VP T I M E Wkng Actv Billable - Date - Atty Task Code Description Hours Rate Value Non-Chrg. Group# /Item# 12/19/2014 SAM E-mails from/to client; review file; .70 290.00 203.00 91531 7 teleconference with client and Tony Deluca; teleconference with James Knisely 12/22/2014 SAM Review file; draft petition to expend 3.30 290.00 957.00 91550 1 principal for payment of life insurance premium; e-mails to/from client 12/23/2014 SAM Review file; review/edit petition; 1.50 290.00 435.00 91550 2 teleconference with client; teleconference with James Knisely; review/edit petition ----------- -------------- ------------ Unbilled Time 5.50 1,595.00 .00 No costs advanced recorded for this matter through 12/23/2014 No unapplied credits for this matter No trust activity balance for this matter VERIFICATION The Undersigned hereby verifies that the statements made in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that false statements herein are made subject to penalties of 18 Pa.C.S.A. Section 4904, relating to unsworn falsification to authorities. THE BRYN MA TRUST COMPANY Dated: �Z 7� o�v1 By: ff eo e . George, Vice President 6 CERTIFICATE OF SERVICE I HEREBY CERTIFY that I have this 23'( day of 4OVW - , 2014, served the foregoing Petition upon the person and in the manner indicated below. Service by first-class mail, addressed as follows: Mark F. Bayley, Esquire Anthony L. DeLuca, Esquire 17 West South Street 113 Front Street Carlisle, PA 17013 P.O. Box 358 Boiling Springs, PA 17007 Delano M. Lantz, Esquire Lee Ann Knisely 4 North Hanover Street 485 Front Street Carlisle, PA 17013 Louisville, CO 80027 Kathleen L. Knisely 9008 Avis Court Vienne, VA 22182 RHOADS & SINON LLP By: Scott Alan M ti c e Attorneys for Petitioner One S. Market Square, 12`x' Fl. P.O. Box 1146 Harrisburg, PA 17108-1146 (717) 231-6602 Sup. Ct. Attorney ID #76124 9