HomeMy WebLinkAbout07-23-02
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ESTATE OF LOY T. HEMPT
Deceased
:IN THE COURT OF COMMON PLEAS
:CUMBERLAND COUNTY, PENNSYLVANIA
: ORPHANS , COURT DIVISION
TRUST CREATED UNDER ITEM
FIFfH OF THE WILL
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;NO. ,;1..1-] 7-~ 3 J
DECREE
AND NOW, this _ day of ,2002, upon review of the First and Final i
Account for the Estate ofLoy T. Hempt and Residuary Trust under Will ofLoy T. Hempt
("Account") filed by Gerald L. Hempt, trustee of the Residuary Trust (the "trustee"), and its
accompanying Petition for Adjudication ("Petition"), it is hereby ORDERED AND DECREED:
I. Proper notice having been given of the filing of the Account, and no
objections having been filed thereto, the Account is hereby approved and confirmed.
v
2. The distributions of income to Jean Hempt, as stated on pages 166-169
of the Account, are hereby specifically approved and confirmed.
3. The trustee acted properly pursuant to ~719I(a) of the Probate, Estates
and Fiduciaries Code, 20 Pa. C.S. ~719I(a), when dividing the Residuary Trust into
three (3) separate trusts. Furthermore, the trustee allocation of the Trust's assets to
each of the three (3) separate trusts is hereby specifically approved and confirmed.
4. No objections having been filed to the Account or the Petition, this is a
final decree confirming the account absolutely, and approving the distributions as
stated therein.
BY THE COURT,
J.
Page 1
Petition for testamentary trustee or guardian.
In the Orphans' Court Division of the
Court of Common Pleas of Cumberland County
COMMONWEALTH OF PENNSYLVANIA
No.
Estate of LOY T. HEMPT
, deceased.
The petition of GERALD L. HEMPT
respectfully represents:
(Name of Petitioner)
I.
The decedent, Loy T. Hempt
, died
on March 19
(Date)
(Name of Decedent)
, 1977, having made a Will, and
One Codicil(s)l duly probated on March 31.
(Number) (Date)
1977, and recorded in Roll , on which letters Testamentary
(Date)
were granted on March 31 , 1977, to
(Date)
Max C. Hempt and Margaret Hempt*
*Max C. Hempt died on May 23, 1999. Margaret Hempt died on September 4, 1988.
II.
The accountant, Gerald L. Hempt
(Name of Fiduciary)
was
appointed trustee
, by the
(Fiduciary Capacity)
said will of the decedent or by other proceeding. 2
The decedent's codicil appointed Max C. Hempt and Margaret Hempt as trustees of the trust
created under Item Fifth of decedent's will (hereinafter referred to as the "Residuary Trust"). When
Margaret died in 1988, Dorothy Hempt, the decedent's niece, became the successor co-trustee
pursuant to the terms of the codicil. Dorothy died in 1995 at which time Max became sole trustee.
The decedent's will did not appoint a successor to Dorothy or Max. Gerald L. Hempt was appointed
co-trustee by a Court Order dated September 3, 1996 (copy provided in Exhibit B). When Max C.
Hempt died in 1999, Gerald became the sole trustee of the Residuary Trust.
1 Attach copy of will and any codicils if not previously ftled.
2State any other circumstances of appointment.
Page 2
III. The trust arises as follows:
See Attachment
IV. An inventory of the trust estate was filed.
No inventory for the Residuary Trust has been filed.
V. The fund now before the Court
Pennsylvania Inheritance Tax.
is K-- is not subject to the payment of
The decedent's estate elected to prepay the inheritance tax on the remainder interest of the
Residuary Trust, therefore the trust assets are not subject to further inheritance tax. See copies in
Exhibit C of Pennsylvania Department of Revenue Notices regarding Department's acceptance of
the estate's inheritance tax return.
VI. Accounts of such fund
accountant.
were X- were not heretofore filed by the
No prior accounts filed.
VII. The occasion for the filing of the present account is:
This accounting is being filed to report the receipts, disbursements, and beneficiary
distributions during the administration of the Residuary Trust. The Residuary Trust was the sole
residuary beneficiary of the decedent's Estate. Since no prior accounting was done for the Estate,
this accounting incorporates the estate transactions, and provides a detailed summary of the Estate
and Residuary Trust transactions from March 19, 1977 through May 31, 2002, including the
recent division of the Residuary Trust into three (3) separate trusts pursuant to ~7191(a) of the
Probate, Estates and Fiduciaries Code, 20 Pa. C.S. ~7191(a). The effective date of the division of
the Residuary Trust into the three (3) separate trusts was April 25, 2002. Actual distributions
occurred after that date.
3rfRUST CREATION: Concisely state the purpose and terms of trust, how and when established, whether
terminated in whole or in part and date and reason therefor, name of any predecessor trustee and accountant's date
of appointment. Identify any prior adjudications in which fund was awarded to succeeding or present fiduciary.
4INVENTORY: If filed, give date and amount. Submit copy.
sINHERIT ANCE TAX: If subject, state amount of tax assessed, and date of payment.
6PRIOR ACCOUNTS: If filed, give dates and action thereon.
'OCCASION FOR ACCOUNT: State fully the reason, and give details and dates.
..
ATTACHMENT TO ITEM III - The trust arises as follows:
TRUSTS TERMS, LIFE TENANT AND REMAINDER
BENEFICIARY INFORMATION
The Residuary Trust was created under Item Fifth of the decedent's Will to provide for
the decedent's wife, Margaret Hempt, and the decedent's niece, Jean Hempt, during their
lifetimes. The terms of the Residuary Trust are:
"(1) During such time as either or both of my wife, Margaret, and my niece, Jean
Hempt, are living, trustees shall pay to or expend directly for the benefit of either or both of
my wife and my niece such parts or all or none of the net income and principal as trustees may
determine in their sole and absolute discretion, to provide for their care, support and
welfare,.... "
At the death of both life tenants, the Residuary Trust is to be distributed as follows:
"2) Upon the death of the survivor of my wife, Margaret, and my niece, Jean
Hempt, ..., trustees shall transfer the remaining principal as follows:
(a) Forty percent (40%) thereof to my nephew, Max C. Hempt, if he is then
living, but if he is then dead, to his then living issue, per stirpes.
(b) Forty percent (40 %) thereof to my niece, Dorothy Mark, if she is then
living but if she is then dead, to her then living issue, per stirpes.
(c) Twenty percent (20%) thereof to my nephew, Robert Kalbach, if he is
then living, but if he is then dead, to his then living issue, per stirpes."
The Residuary Trust continues for the lifetime benefit of Jean Hempt, who currently
resides at The Woods School, and is 75 years old. Margaret Hempt died on September 4,
1988. Max C. Hempt, a remainderman, died on May 23, 1999 survived by his children:
George F. Hempt, Gerald L. Hempt, Martha H. Bair, and Marian H. Semoff. Dorothy Mark
died on June 15, 1995 survived by her children: Robert Mark, Forrest Mark, and Steven
Mark; Robert Kalbach, a remainderman, survives.
Item III - Continued
HISTORY OF THE LOY T. HEMPT ESTATE
AND RESIDUARY TRUST
The Residuary Trust was funded with the residue from the decedent's Estate (the
"Estate"). Below is a summary as to the time line for the establishment and funding of the
Residuary Trust:
The administration of the Estate encompassed the period from the
decedent's death in March 1977 and extended to August 1983 when the Internal
Revenue Service completed its audit of the Estate's United States Estate Tax
Return (Form 706), and the resulting estate tax was paid by the Estate. Max C.
Hempt and Margaret Hempt, the Co-Executors of the Estate, did not state an
accounting, either formally or informally, to account for the transactions during
their administration of the Estate, most likely since they were also the initial Co-
Trustees of the Residuary Trust. The Co-Executors did not change the registration
of the assets from the Estate to the Residuary Trust. They began to administer, as
Co-Trustees, the funds as the Residuary Trust. Gerald L. Hempt, the accountant
herein, has continued to administer the assets as part of the Residuary Trust.
Page 3
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VIII. The names of all persons or entities having any interest in the trust fund are as
follows:
Names Relationship to Interest Of Age Give name of guardian or committee, if
Decedent (Yes or No) any, and how appointed; submit copy of
will in case of testamentary appointment
LIFE TENANT:
Jean Hempt Niece Discretionary Yes, but Gerald L. Hempt, Guardian of Estate
income and incompetent and Person
principal for her
lifetime
REMAINDER BENEFICIARIES:
(1) Issue of Max C. Hemot: Issue of 40% of trust N/A
Decedent's remainder
George F. Hempt Nephew Yes
Gerald L. Hempt Yes
Martha H. Bair Yes
Marian H. Semoff Yes
(2) Issue of Dorothv Mark Issue of 40% of trust N/A
Decedent's Niece remainder
W. Robert Mark Yes
Forrest H. Mark Yes
Steven E. Mark Yes
(3) Robert H. Kalbach Decedent's 20 % of trust Yes N/A
Robert Kalbach, Jr. * Nephew and remainder Yes
Richard C. Kalbach * Children Yes
* Contingent Remainder Benefi ~iaries
8PARTIES IN INTEREST: If any are minors, or persons otherwise under disability, state facts and whether
they have guardians or committees, and if so, how and when they were appointed and if they have qualified. Both
life tenants and remaindermen should be named.
Page 4
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IX. All of said parties having any interest in the trust fund and any unpaid creditors of
the fund have had actual notice of the filing of the account and this audit except as follows:
All parties in interest received notice of the f1ling of this Petition for Adjudication and of
the filing of the First and Final Account for the Estate of Loy T. Hempt and the Residuary Trust.
A copy of the Petition and Account was provided to the Life Tenant and the Remainder
Beneficiaries. Contingent Remainder Beneficiaries were notified of the f1ling of the Petition an~
Account, but did not receive copies of the documents.
Please see attached Certificate of Notice as required by Rule 6.3-1 of the Cumberland
County Orphans I Court Rules.
X. The questions which are to be adjudicated are as follows:
See attachment
XI. No share of any party in interest has been assigned or attached.
Not applicable
9NOTICE OF AUDIT: State how notice was given, and when. Give exceptions, if any.
IOQUESTIONS FOR ADJUDICATION: If none, insert the word "none". If any, state questions which are to
be adjudicated, presenting all material facts not already given and that the persons affected thereby have had
notice that they will be submitted for adjudication.
IIASSIGNMENT OR ATTACHMENT: State exceptions, if any, giving facts, with copy of assignment,
certified by counsel, and the record of proceedings in which the attachment issued.
ATTACHMENT TO ITEM X: The questions which are to be adjudicated are as follows:
There are two questions regarding the Residuary Trust (the "Trust") which the trustee,
the accountant herein, asks be adjudicated by the Court:
Question No.1: Income Distributions to Life Tenant
A prospective remainder beneficiary has questioned the trustee's practice of paying the
Trust's income to Jean Hempt, the life tenant (hereinafter referred to as "Jean"), and has
suggested that the accountant would have been better advised to accumulate some or all of the
income. Any accumulated income would be kept in the Trust and distributed to the remainder
beneficiaries upon Jean's death. The prospective remainder beneficiary asserts that the trustee
distributed to Jean more income than she needed. The terms of the Trust permit the trustee in
his sole and absolute discretion to pay some or all of the income to Jean and to accumulate the
balance of the income. The accounting shows at pages 166-169 that $ 870,040.01 of income
has been paid to Jean, and that $ 522,631.74 of income has been accumulated and kept in the
Trust during the period from March 19, 1977 to May 31, 2002 (as shown on the Summary of
Account of the accounting). The income actually distributed to Jean was slightly less than the
cost of her maintenance at the Woods School.
The prospective remainder beneficiary has also suggested that the trustee's judgment on
this point may have been improperly influenced by a conflict of interest. The trustee also
serves as the court-appointed guardian of Jean (Jean has been adjudicated an incompetent) and
is a non vested intestate heir of Jean's estate. As a factual matter these multiple roles did not
affect the trustee's judgment. As a legal matter the decedent, Loy T. Hempt, was well aware
of the potential conflict of interest when he appointed as the original trustee, Max C. Hempt
(the present trustee's father who then served as guardian of Jean and also was an heir of Jean's
estate), and this Court was well aware of the situation when it appointed the present trustee
(because the same petition asked this Court to appoint the same individual as trustee and as
guardian). Under Pennsylvania law this means the decedent waived the usual conflict of
interest rules.
The trustee asks the Court to adjudicate that there was nothing improper in the trustee's
actions in distributing income to Jean as shown in the Account, as the life tenant, and
accumulating. the balance.
Question #2 - Division of Residuary Trust into Separate Trusts
The trustee has divided the Residuary Trust into three (3) separate trusts (division of
trust reported on pages 42 to 44(c) of the accounting). The trustee made this division pursuant
to ~7191(a) of the Probate, Estates and Fiduciaries Code, 20 Pa. C.S. ~7191(a), which
provides:
A trustee may, without court approval, divide a trust into
separate trusts, allocating to each separate trust either a
fractional share of each asset and each liability held by the
original trust or assets having an appropriate aggregate fair
market value and fairly representing the appreciation or
depreciation in the assets of the original trust as a whole.
As previously indicated, the terms of the trust specify that on Jean's death, the trust
principal is payable 40% to the issue of Max C. Hempt, 40% to the issue of Dorothy Mark,
and 20% to Robert Kalbach. The trustee therefore divided the trust assets on a 40/40/20 basis.
The trustee meticulously followed the statute in giving each of the three new trusts
40 %, 40 % and 20 % respectively of the fair market value of the original trust, and 40 %, 40 %
and 20 % respectively of the federal income tax basis of the assets of the original trust.
As permitted by the statute, the trustee did not divide each asset of the original trust
40%,40% and 20%, but rather allocated some assets to one new trust and other assets to
another new trust, preserving always the appropriate percentage of both fair market value and
federal income tax basis. In particular, the trustee allocated no stock of family businesses to
the 20% share because the prospective remainder beneficiary of that share has been hostile to
the family members running those businesses, and such hostility bodes ill for the future smooth
management of those family companies if that remainder beneficiary became a stockholder.
The prospective remainder beneficiary may argue that the trustee used artificially low
valuations for these family businesses, the consequence of which would be to allocate less
value of other assets to the prospective remainder beneficiary's share. In fact this is not the
case. The trustee relied on appraisals and valuations of the family business he believes
reasonable, and such reliance and valuations are prima facie correct. And in any event, the
decedent's Will authorizes his trustee to deal with Hempt Bros. stock - the principal family
business - "as my fiduciaries in their sole and absolute discretion, may deem fair and proper,
without the necessity of obtaining court approval thereof, and without liability for self-
dealing. "
The trustee asks the Court to adjudicate that the trustee acted properly in dividing the
trust, and in his allocation of the trust I s assets to each of the three separate trusts.
Page 5
XII. There are attached hereto the following:
(X) Copy of will and codicils, certified by counsel;
(X) Copy of any prior Order of Court;
(X) Attorney's Certificate of Notice (EXHIBIT D);
(X) Proposed Decree
XIII. The distributive shares of principal and income, and the persons who are thereunto
entitled, are suggested as follows:
In the First and Final Account flled with this Petition, please refer to pages 41-44(c) for the
principal distributions made to the life tenants and to the three (3) separate trusts. The income
distributions to the life tenants and to the three (3) separate trusts are reported on pages 166-170.
12RECORDS: Indicate with cross (x) mark, those attached.
13DISTRIBUTION:
(1) Give names and proportionate share of distributees;
(2) Give name of guardian, committee, trustee, or other fiduciary, if any;
(3) Give name of personal representative of deceased party in interest, date of letters and
place of grant, if any; and
(4) If any advancements, or prior payment of share, or debts due estate, name distributee
and state amount received or due.
Page 6
Your petitioner, therefore, asks that the above described distributions be approved.
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COMMONWEALTH OF PENNSYLVANIA
COUNTYOF~
: SS.:
The above named petitioner, being duly sworn, does depose and say that the facts set forth
in the foregoing petition which are within the personal knowledge of the petitioner are true, and as
to facts based on the information of others, the petitioner, after diligent inquiry, believes them to
be true.
Sworn to and subscribed before me
this ~ day of
, 2002.
[DCBA OC Forms: Adjudcn.frm:\trust.fr4 (Rev: 11193)]
NOTARIAl SEAl
LINDA M. ESHELMAN, Notary Public
Harrisburg. PA Dauphin County
My CommIeaIon Expires Sept. 5. 2005
~'.. ... I . .. .,.... <"~_
EXHIBIT A
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CODICIL
{ . II
I, lDY T. HEMPT, of Mechanicsburg, Cumberland County, Pennsyl
vania, declare this to be the sole Codicil to my Last Hill and
Testament dated December 8, 1964.
1. I hereby revoke Item Thirteen of my Last Will and Testa-
ment, and in lieu thereof provide as follows:
THIRTEENTH: I appoint my nephew, Nax Hempt, and my
w~fe, ~Iargaret Hempt, as Executors and Trustees;
PROVIDED, HO\-lEVER, that my said wife, Margaret Hempt,
shall not participate in any discretionary decision
relating to her right to any principal or income in
the trust created in Item Five of my Last Will and
Testament. I further appoint my niece, Dorothy Hempt
Mark, as co-ExecutQr and co-Trustee in the event either
Max Hempt or Margaret Hempt are unable or unwilling to
act or continue to act, for any reason. No fiduciaries
serving hereunder shall be required to enter bond or
other security in any jurisdiction.
2. In all other respects I hereby ratify, confirm and repub-
lish my Last Will and Testa~ent dated December 8, 1964, together
with this sole Codicil as and for my Last Will and Testament.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this
12~
_ day of December, 1969.
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J ~,(';J7t /-: / /(SEAL)
Ley'T. Hemp~ ~-
I
Signed, published and declared on the date thereof, by the
above named Loy T. Hempt, as and for the sole Codicil to his Last
Will and Testament dated December 8, 1964, in the presence of us,
who, at his request, in his presence, and in the presence of each
other, have subscribed our names as witnesses hereto.
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, , .
I, LOY T. 8E<I:PT, of Mechanicsburg, Cumberland
County, Pennsylvania, make this my ~lill, hereby revoking all
prior wills and codicils.
FIRST: I desire that my body be cremated
and that my remains be disposed of without a funeral.
SECOND: I bequeath my automobiles and all
my articles of personal 'and household use, equipment and ornament,
together with all policies of insurance thereon, to my wife,
Margaret, if she survives me.
THIRD: I bequeath the sum of.One Thousand
($1,000.00) Dollars to VirgL~ia Bricker, now of North Second
Street, Harrisburg, Pennsylvania, if she survives me.
FOURTH: I bequeath the sum of Two Hundred
Thousand ($200,000.00) Dollars to my trustees hereinafter named,
in trust as follows:
(1) Trustees shall pay the net
income annually or more frequently to my wife, Margaret, for life.
(2) Trustees shall transfer to
my wife, free of all trusts, such parts or all of the principal
as she may from time to time request in writing.
(3) Trustees are authorized to
pay to or expend directly for the benefit of my wife such parts
or all of the principal as they may determine in their sole and
absolute discretion to provide for her care, support and welfare.
(4) Upon my wife's death, trustees
shall transfer any remaining principal to such one or ~ore
appointees (L~cluding, without limitation, her estate), in such
amounts, for such estates, or upon such trusts as she may appoint
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by specific reference to this power in her will. To the extent
my w~fe fails to exercise effectively her power of appointment,
trustees shall pay to her estate or to the tax authorities, an
amount el1.ual to any increase in estate, inheritance and other
death taxes, and interest and penalties thereon, payable because
of the inclusion of the principal of this trust in her estate for
tax purposes. The principal remaining after such payment shall
be added to the principai of the trust created in Item FIFTH hereo .
(5) In the event that assets of
my estate are allocated to this trust in kind, such assets shall
be valued as of the date of distribution of said assets to this
trust. If any unproductive property is allocated to this trust,
my wife, Margaret, shall have the power to require that trustees
either make the property productive or dispose of it and reinvest
the proceeds in productive property within a reasonable ttme.
FIFTH: I devise and bequeath all the rest
of my estate, of ~T.atever kind and wherever situate, to my
trustees hereinafter named, in trust as follows:
(1) DurL~g such time as either
or both of my ~~fe, Margaret, and my niece, Jean Hempt, are
liVing, trustees shall pay to or expend directly for the benefit
of either or both of my wife and my niece such parts or all or
none of the net income and principal as trustees may determine
in their sole and absolute discretion, to provide for their care,
support and welfare, provided that no principal shall be paid
to or used for my wife so long as any principal remains in trust
under Item FOURTa hereof.
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(2) Upon the death of the
survivor of my wife, Margaret, and my niece, Jean Hempt, or upon
my death if both my wife and niece predecease me, trustees shall
transfer the remaining principal as follows:
(a) Forty per cent (40%)
thereof to my nephew, Max Hempt, if he is then living, but if he
is then dead, to his then living issue, per stirpes.
(b) Forty per cent (40%)
thereof to my niece, Dorothy Mark, if she is then living but if
she is then dead, to her then living issue, per stirpes.
(c) Twenty per cent (20%)
thereof to my nephew, Robert Kalbach, if he is then living, but
if he is then dead, to his then living issue, per stirpes.
(d) If any of the above
named beneficiaries u.~der this Item FIFTH Paragraph (2) shall not
be livL~g at the time above set forth for distribution of the
principal of this trust, leaving no issue surviving him, the
share of principal to which such beneficiary or his issue would
have been entitled, if living, shall be transferred to the other
living beneficiaries under this Item FIFTH Paragraph (2), in
proportion to their respective interests in my estate.
SIXTH: Any principal or income to which a
minor becomes entitled absolutely under my will may nevertheless
be retained by my trustees during the minority of the beneficiary,
and income may be accumulated and invested in accordance with the
investment po'~ers hereinafter given my fiduciaries. Hy trustees,
having regard for the minor's assets and resources, may apply such
part or all of the L~come and principal as they, in th~ir sole
discretion, may determine, for the education, maintenance and
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welfare of the minor, either by the p&yment of bills therefor, or
by payment to such persons as they may select. My trustees
shall distribute the remaining balance of principal and
accumulated income to such beneficiary absolutely at age
twenty-one.
SEVENTH:
No principal or income of my
estate shall be liable for any debt, contract or engagement of
.
any beneficiary, nor liable to any legal process, nor subject to
assi~ent, transfer or anticipation; provided, however, that
any beneficiary may disclaim and renounce any part or all of his
interest in my estate, or assign any part or all of his interest
in my estate to one or more of his or my descendants.
EIGHTH:
All estate, L~eritance or other
death taxes and any interest and penalties thereon imposed by
reason of my death with respect to any property or interests in
property, whether passing under my will or not, shall be paid out
of the principal of ~y residuary estate. Taxes on future interest
may be prepaid in the discretion of my executors. .
NINTH:
I give my fiduciaries the following
discretionary powers during the administration and until the
completion of distribution of my estate and of the trusts created,
to be exercisable in ajdition to any authority given by law and
without court approval:
(a) To retain and invest in all
forms of real or personal property, including stock and common
trust funds of my corporate fiduciary, if any, without being
limited to "legal investments."
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(b) To jo~~ in any merger,
consolidation, reorganization, voting trust plan or other concerte
action of investment holders and to delegate discretionary powers
or duties with respect thereto.
(c) To sell or exchange, and to
give options for sales or exchanges, or otherwise dispose of
real or personal property, for any purpose, at public or private
sale, for casn or credi~.
(d) To lease, or to give options
to lease, real or personal property, for any period of time,
irrespective of wnether the term of such lease shall exceed the
period permitted by law or the probable period of any trust
hereby created, and to renew or modify any such leases.
(e) To renew notes or debts of
mine, ~~d to borrow money for any purpose from any person ~r
persons including my corporate fiduciary, if any; to execute
promissory notes or other obligations for amounts so borrowed,
and to secure the payment of any amounts so borrowed by mortgage
or pledge of any real or personal property.
(f) To comprooise or settle
claims by or against my estate, without obtaining the consent of
any beneficiary.
(g) With the exception of property
specifically devised or bequeathed, to make distribution in cash
or in kind.
(h) To apply directly any payment
to which any beneficiary shall be entitled hereunder for the
maL~tenance and welfare of such beneficiary, should such bene-
ficiary by reason of illness or any other cause, in the opinioR
of my fiduciaries, be incapable of disbursing it.
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(i) To join with my wife or her
estate in the fUing of any federal income tax return for any
year for which I have not filed such return prior to my death,
and to consent to any gifts made by her as being made one-half
by me for gift tax purposes; and my executors may take such
action even though it may result in additional liabilities for
my estate. J..ny 1."lcome or gift taxes due on such returns and any
deficiencies, interest, penalties, or re~ds thereon, shall be
allocated between my estate and my w~fe or her estate, or all
to any of them, in such manner as they may agree.
(j) With respect to the trust
under Item FIFTH hereof only, to make repairs, replacements, and
improvements, structural or otherwise, of any real or personal
property, and to charge the expense thereof to principal or
income, or partly to each, as they may deem proper.
(k) So long as there is no
corporate fiduciary,to employ L"lvestment counsel and,with respect
to the trust under Item FIFTH only, to allocate charges therefor
to principal or income, or to both 1."l such proportions as they
deem wise, without dim1."lution of co~pensation otherwise properly
payable to my fiduciaries.
(1) So long as there is no
corporate fiduciary,to arrange for custodian and/or accounting
services, and, with r~spect to the trust under Item FIFTH only,
to allocate the charges therefor to principal or income, or to
both in such proportions as they deem wise, without diminution
of compensation otherwise properly payable to my fiduciaries.
(n) To m~{e the elections now or
hereafter per~itted by the Internal Revenue Code with respect to
the date for valuing the assets of my es~ate and with respect to
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administration and medical expenses as income or estate tax de-
ductions, without making any compensating adjustments between _
principal and income and between beneficiaries or trusts in
consequence of such elections.
TENTH: In addition to and not in limita-
tion of any other powers give~ my fiduciaries by law or by other
provisions of this will, but subject to the right given my wife
in paragraph (5) of Item FOURTH to require trustees to convert
unproductive property, I hereby make the following express pro-
visions with respect to Hempt Brothers, Inc., and any successor
corporation or corporations of t~s company, and I expressly
authorize my fiduciaries:
(a) To retain, invest or reinvest
in the stocks, bonds, debentures, notes or accounts of said com-
pany without regard to any principle of diversification, and
whether or not such investments would nOl'"lllally be considered
suitable investments for fiduciaries.
(b) To vote the stock in said
company in whatever manner my fiduciaries deem desirable, includ-
ing the power to vote at corporate meetings by special, limited,
or general proxy, and to enter into voting trust agreements and
stockholder-agreements.
(c) To cause or join in or to
prevent the recapitalization, merger, consolidation, reorganiza-
tion, or liquidation of said company.
(d) To elect or employ as direc-
tors, officers, employees or agents of said company any persons,
inClUding a trustee hereunder or a director, officer, employee
or agent of a trustee hereunder, and to compensate such elected
or employed person.
-7-
--.--.---_..__.P_._. __
_.- - ..-...----.--.-.-----.--...- ----. .--- -- --.-.-------.--..--
- r
.. ,
(e) To sel~ to or buy from a
trustee hereunder stocks, bon~s or debentures of said company at
such prices and upon such teros and conditions as my fiduciaries
in their sole and absolute discretion, may deem fair and proper,
without the necessity of obtaining any court approval thereof,
and without liability for self-dealing.
(f) In general, to deal with such
company '\on. th the Sa:Iie fr.eedom of action, I now have.
ELEVEHTH:
~~erever in this trust trustees
are given a discretionary power to dete~ine whether or to what
extent principal or income shall be distributed to or used for
the benefit of a beneficiary, trustees ~ay consider, to such
extent as they deem proper, the resources and sources of funds
available to such beneficiary.
No trustee "n~o is also a beneficiar
hereunder shall participate in deciding whether or to what extent
prL~cipal or income shall be distributed to or used for the benefi
of a beneficiary or whether any item of charge or credit shall be
allocated in whole or in part to principal or income, in those
instances where the trustees have the discretion to determine
the same, but all such decisions shall be made solely by the
other trustee.
T~~L~~E: If my wife, Margaret, and I shall
die lL~der such circumstances that there is no sufficient evidence
that ~e have died otherwise then Simultaneously, then my wife,
{argaret, shall be conclusively presumed to have survived me.
THIRTEENT]:
I appoint Hax ile::J.pt and J. F. Hempt
executors and trustees. If at any time either of the above n~ed
persons is unable or unwilling to act or continue to act as such,
-8-
-----.-...-. .._-- - .
, .
then I authorize the remaining co-fiducihry to designate any
individual or corporation to serve as co-fiduciary and I authorize
such remaining co-fiduciary to enter into any agreement with such
individual or corporation as he ~ay designate providing for the
payment of compensation to such designated co-fiduciary L~ such
amounts and upon such terms and conditions as the said remaining
co-fiduciary may, in his sole and absolute discretion, determine
to be appropriate; provi~ea, however, that at all times there
shall be serving hereunder at least one co-fiduciary ~ho is not
a beneficiary under this "Till and any codicils hereto.
No fiduciary serving hereunder
shall be rel;.uired to enter bond or other security in any
jurisdiction.
IN vITTNESS l1HBHEOF, I have set my hal'ld and seal
,~/
unto thi~, my "Till, fO,ntaining nine (9) pages, this 'Z ,{/.t~ "
day of }f.,lL/llfL'L/l../ , 19 ?f
SIGNED, SIThLED, PUBLIS~D and
DECL;J~D by LOY T. F.~.~T,
Testator above named, as and
for his Will and Testament,
on the day ~~d year last above
written, in the presence of us,
who, at his re~uest, in his
presence, and in the presence
of each otner, all being present
at the sa:r.e time, have hereunto
subscribed our n~es as ~itnesses.:
. ~'
//v7'l .
.'-" // /.. .
., ,(..' : ,t- " ,/. '.
, ~( / . /.. 1.). SEAL)
/ "",,1FT I /"
///7/ c,/./ /; j /':,/7 1/ m /c.'"
,/ ..-'
,- /t-/~7 !c..,( I ';n l?krCi il./Glf
I
-'hll k(\,I.J-I(~r:$ lJf-r[c( B
\ '
-9-
~-_._- --...-----.--- _..-
r-
EXHIBIT B
I I) ,
.-
IN THE MATTER OF
JEAN DORIS HEMPT,
AN INCOMPETENT
COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
ORPHANS' COURT DMSION
Nos. 2008 of 1942, 253 of 1977, and 117 of 1985
FINAL DECREE
AND NOW, thiSt ~Jtay of &.: .o1-~".J<... , 1996, upon consideration of the annexed
I
Petition, IT IS ORDERED AND DECREED that Gerald L. Hempt is hereby appointed: (1) a
co-trustee (with Max C. Hempt) of the Testamentary Trust for the benefit of Jean Doris
Hempt under the Will of George L. Hempt; (2) a co-trustee (with Max C. Hempt) of the
Testamentary Trust for the benefit of Jean Doris Hempt under the Will of Loy T. Hempt; and,
(3) a co-guardian (with Max C. Hempt) of the estate, and of the person, of Jean Doris Hempt.
BY THE COURT,
tJ f"\
a5yt 'Q.~ AD}', c., I ) r\
_(A.,,,"~ c,. \..>~ ~'O f' J.
7
EXHIBIT C
I
REV. 1593EX (11-82)
PENNSYLVANIA DEPARTMENT OF RE\lr....UE
BUREAU OF ACCOUNTS SETTLEMENT
P.O. BOX 8903
HARRISBURG. PA 17105 I
ESTATE OF HEMPT LOY T
DATE OF DEATH 03-19-77
NOTE: TO INSURE PROPER CREDIT TO YOUR ACCOUNT
PAYMENT TO THE REGISTER OF WILLS OF THE
WILLS. AGENT."
J,NH~R,ITf'NCE TAX
RECORD ADJUSTMENT
ASSESSMENT 101
CONTROL NO.
,DATE 01-05-84
FILE NO. 21 77-0231
COUNTr CUMBERLAND
SUBMIT THE UPPER PORTION OF ITHIS FORM WITH YOUR TAX
ABOVE COUNTY. MAKE CHECKS PAYABLE TO "REGISTER OF
RICHARD R LEFEVER
100 PINE ST
HBG PA 17101
PLEASE RETURN THIS
PORTION TO REGISTER OF
WILLS IF PAYMENT DUE
CUT ALONG THIS LINE
**INHERITANCE TAX RECORD AD~USTMENT**
ESTATE OF HEMPT
LOY
T FILE NO.21 77-0231
ACN 101
DATE 01-05-84
ADJUSTMENT BASED ON:
ADMINISTRATIVE CORRECTION
VALUE OF ESTATE:
1. Real Estate (Schedule A)
2. Stocks and Bonds (Schedule B)
3. Closely Held Stock/Partnership Interest (Schedule C)
4. Mortgages and Notes (Schedule D)
5. Cash & Miscellaneous Personal Property (Schedule E)
6. Jointly Owned Property (Schedule F)
7. Transfers (Schedule Gl
8. Total Gross Assets
/
( 1)
( 2)
( 3)
( 4)
( 5)
( 6)
( 7)
350,000.00 ./
.00
.00
.00 J
./
2,327,652.77
.00
.00
( 8)
2,677,652.77
DEDUCTIONS AND EXEMPTIONS:
9. Funeral Expenses/Administrative Costs/Miscellaneous
Expenses (Schedule H)
10. Debts/Mortgages/Liens (Schedule II
1 1. Total Deductions
12. Net Value of Estate
13. Charitable Bequests (Schedule J)
14. Net Vaiue Subject to Tax
( 9)
(10l
.00
69,498.14 "";/
(11 )
( 12)
( 13)
(14)
69,498.14
2,608,154.63
.00
2,608,154.63
TAX:
15. Amount of line 14 taxable at 6% rate
16. Amount of line 14 taxable at 15% rate
17. Principal Tax Due
TAX CREDITS:
(15) 259,650.33
(16) 1,048,899.93
X.06=
X.15=
( 17)
15,579.02
157,334.99
172,914.01
PAYMENT
DATE
RECEIPT
#
DISCOUNT (+)
INTEREST H
7,368.42
.00
AMOUNT PAID
06-20-77 I
12-19-771
I
007553
001035
140,OQO.00
50,404.97
* IF PAID AFTER DATE INDICATED SEE REVERSE FOR CALCULATION
OF ADDITIONAL INTEREST
(If Balance Due is less than $1.00 no payment is required)
RETAIN THIS PORTION FOR YOUR RECORDS
TOTAL 'r AX CREDIT
BALANCE OF tAX DUE
INTERE$T
TOTAL DUE
] 97 7TI.39
24,859.38CR
.00
24,859.38CR
R;V. 1547EX (3-83)
I ' I
BUREAU CS' ACCOUNTS SETTLEMENI NOTICE- Ofl INHERITANCE TAX
PENNSfLVANIA DEPARTMENT OF REVENUE APPRAISEMENT ALLOWANCE OR DISALLOWANCE
P.O. BOX 8903 I .
HARRISBUR -.l7..105-__ OF DEDUCTIONS. AND ASSESSMENT OF TAX
ESTATE 0 LOY
DATE OF
'NOTE: TO INSUR PER CREDIT TO Y UR ACCOUNT
PAYMENT TO THE REGISTE~_
AGENT" . \ '\ <;\
RICHARD R LEFEVER
100 PINE ST
HBG PA 17101
FILE NO.
COUNTY eu
T THE UPPER PORTION OF THIS NOTICE WITH YOUR TAX'
ABOVE COUNTY. MAKE CHECKS PAYABLE TO "REGISTER Of WILLS,
PLEASE RETURN THIS
PORTION TO REGISTER OF
WILLS IF PAYMENT DUE
CUT ALONG THIS LINE ~ RETAIN LOWER PORTION FOR YOUR RECORDS ~
----------------.------------------------------------------------------.
NOTICE OF INHERITANCE TAX APPRAISEMENT, ALLOWANCE OR DISALLOWANCE OF DEDUCTIONS AND ASSESSMENT OF TAX
REV. 1547EX (3-83)
ESTATE OF HEMPT LOY T FILE NO.21 77-0231 ACN 102 DATE 01-17-84
9. Funeral Expenses/Administrative Costs/Miscellaneous
Expenses (Schedule H)
1 O. Debts/Mortgages/Liens (Schedule Il
1 1. Total Deductions
12. Net Value of Tax Return
i 3. Charitable/Governmental Bequests (Schedule J)
14. Net Value of Estate Subject to Tax
NOTE: If an assessment was previously issued, lines 14, 15 and/or 16
reflect figures that include the total of JLLL returns assessed
ASSESSMENT OF TAX:
15. Amount of line 14 taxable at 6% rate
16. Amount of line 14 taxable at 15% rate
17. Principal Tax Due
TAX CREDITS:
TAX RETURN WAS: (X) ACCEPTED AS FILED
RESERVATION CONCERNING FUTURE INTEREST - SEE REVERSE
APPRAISED VALUE OF RETURN BASED ON: REMAINDER RETURN
1 . Real Estate (Schedule A)
2. Stocks and Bonds (Schedule B)
3. Closely Held Stock/Partnership Interest (Schedule C)
4. Mortgages and Notes (Schedule D)
5. Cash & Miscellaneous Personal Property (Schedule E)
6. Jointly Owned Property (Schedule F)
7. Transfers (Schedule Gl
8. iotal Assets
APPROVED DEDUCTIONS AND EXEMPTIONS:
PAYMENT
DATE
RECEIPT
#
DISCOUNT (+)
INTEREST (-)
03-20-78
001217
.00
* IF PAID AFTER THIS DATE SEE REVERSE FOR CALCULATION
OF ADDITIONAL INTEREST
) CHANGED
( 1) .00
( 2) .00
( 3) .00
( 4) .00
( 5) 651,501. 34
( 6) .00
( 7) .00
( 8)
651,501.34
( 9)
(10l
.00
.00
(1 1)
(12)
(131
(14)
and 17 will
to date.
.00
651,501.34
.00
651,501.34
(15)
(16)
.00
651,501.34
X.06=
X. 15=
(17)
.00
97,725.20
97,725.01
AMOUNT PAID
97,72$.01
97 7
TOTAL TAX CREDIT
BALAN~ OF T DUE
INTERES
TOTAL DUE
(If Balance Due is less than $1.00 no payment is required)
REV-1470 EX (11-811 J
. COMMONWEALTH OF PENNSYLVA~IA .
O:::PARTMENT OF REVENUE INHERITAN<;:E TAX
BUREAU OF EXAMINATION
P. O. BOX 8327 EXPLANATIoN OF CHANGES
HARRISBURG, PA 17105
..
DECEDENT'S NAME
ITEM
SCHEDULE NO.
Fill: NQ
.. -e:uc;l5ft: ~ ~ ,
_ m______~______ ~ yt:f~ /92__0 ~
'7
--------------- l. 7--
~-Z- - -;- ~ ~ -;I rJ.{J '3 0 ~ 7:m~
~ 9Ci-Df . . ......x ./7,00.
, . ___________d I ~ 79'..K:L-~ 7'
/ :J 0 ~9gy':J~Iff_#{~t', --;/~~.U rf- (; / ~
s-c-;; W~--~.-9~
....__ tJ _~-~rr~_ ?'!~~------- .
/ . ~ --- - - -. .-------.--_. -- - -..-. _...-- - ----------------------------------
X ,5L_t:z.ZO ~ 6.~~i3~ c: ~2
- -'
~;L~_ ~__2(}~:Z 7' . _ _ ______~o
. 03-t2.tZ.2rL...... '3~~L2 ~..
~1liCl&_ .ke~ .~L..Y~
__ __~ -L-~__________ _______________
--:-~ -25"_---- _______ _________~=~------------------- /-0-2-
. ;0t?a .. . :t.-~-.-.:-5~-ud
t 25fftJtJ ~o.'.t'~L .~ 5~ r .
.. 9Y~~7 -----LL- ij~02~~?:~.LE
Jt) '-ft,~6 _ ___________m_ !~$29y,r3)(.)5J
--..xs:!1-t.'50,-,-2:3-kh-.:i-:- - ___12!_~_;; ~ f 7 .
_~5-7~_~~~_~___ _ .____~m-_-_-_--_-----
- ~ /7::29 ()
PAGE /-1
EXHIBIT D
.. .. .. ,
ESTATE OF LOY T. HEMPT
Deceased
:IN THE COURT OF COMMON PLEAS
:CUMBERLAND COUNTY, PENNSYLVANIA
:ORPHANS' COURT DMSION
TRUST CREATED UNDER ITEM
FIFTH OF THE WILL
:NO.
CERTIFICATION UNDER RULE 6.3.1.
I certify that notice as required by Rule 6.3.1 of the Orphans' Court Rules was mailed to
the following Parties in Interest of the above-captioned trust on July 23,2002:
Jean Hempt
c/o Gerald L. Hempt, Guardian
P.O. Box 278
Camp Hill, P A 17001-0278
W. Robert Mark
329 9th Street
Atlantic Beach, FL 32233
George F. Hempt
763 Limekiln Road
New Cumberland, P A 17070
Forrest H. Mark
2833 Sinks Canyon Road
Lander, WY 82520
Gerald L. Hempt
101 Spanglers Mill Road
New Cumberland, P A 17070
Steven E. Mark
3516 Arbor Lane
Minnetonka, MN 55305
Martha H. Bair
225 North Ridge Drive
Perrysburg,OH 43551
Robert H. Kalbach
1 W Lawn Circle
W ormleysburg, P A 17043
Marian H. Semoff
410 Candlewyck Road
Camp Hill, PA 17011
Robert Kalbach, Jr.
6339 Creek View Road
Mechanicsburg, P A 17055
Richard C. Kalbach
3 Manassas Ct.
Mechanicsburg, P A 17055
Notice has now been given to all persons en "tIed
"chard W. Steve on, Esq.
cNEES WALLACE & NURICK LLC
Pine Street, P.O. Box 1166
Harrisburg, P A 17108
(717) 237-5208
. f 1 J
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
SS:
AUGUST 27.2002
I~ Mary C. Lewis~ Register for probate of Wills and granting Letters of
Administration for the County of Cumber1an~ in the Commonwealth of Pennsylvani~ do hereby
certify the foregoing to be true and accurate copies of the
FIRST AND FINAL ACCOUNT OF GERALD L HEMPT. TRUSTEE FOR THE ESTATE OF
LOY T HEMPT. DECEASED AND RESIDUARY TRUST UNDER WILL OF LOY T HEMPT
FOR THE PERIOD 3/19/1977 - 5/31/2002.
as the same were passed and advertised and remain
on file and of record in this office.
IN TESTIMONY WHEREOF~ I have
hereunto set my hand and official seal the date
above.
/lJfl7//JM~~'~~
Mary C. ewis, egister fWllls
NOW TO WIT, AUGUST 27TH.2002, came into Court GERALD L HEMPT
TRUSTEE
and presented an account and statement of proposed
distribution~ which were examined, passed, approved, and confirmed with a balance in his hands
of $ and the accountant was directed to distribute said
balance in accordance with the statement of distribution filed.
lJm,uJm~~~~
Mary C. Lewis, C of the hans' ourt
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF CUMBERLAND
SS:
I~ Mary C. Lewis~ Clerk of the Orphans ~ Court, in and for said County, do hereby certify
the foregoing to be a true copy of the account and statement of proposed distribution of
GERALD L HEMPT TRUSTEE
as full and entire as the same remain on file and
record in this office.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and official seal at Carlisle~
this AUGUST day of2L20 02
. .. .
~{}Q~j,'1(i/1 ,'ft-tJad
Mary C. Lewis, CI of the hans C