HomeMy WebLinkAbout12-27-06
CA THERINE V. McKINNEY,
Settlor of The Patricia M.
Kilkenny Family Irrevocable
Turst and PATRICIA M.
KILKENNY,
Petitioners
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYL VANIA
v.
ORPHANS ' COURT DIVISION
COMMUNITY TRUST
COMPANY,
Respondent
NO. 21-06-553 ORPHANS' COURT"
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AND NOW, this 2ih day of December, 2006, upon consideration of
Petitioners' Petition for Termination of Trust and Objections to First and Final
Account, following a hearing held on November 29, 2006, and for the reasons
stated in the accompanying opinion, it is ordered and directed as follows:
IN RE: PETITION FOR TERMINATION OF TRUST
and OBJECTIONS TO FIRST AND FINAL ACCOUNT
BEFORE OLER, J.
ORDER OF COURT
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1. The Family Irrevocable Trust dated September 6, 2002,
in which Petitioners are settlor and beneficiary and Respondent
is trustee is terminated;
2. Petitioners' objections to Respondent's First and Final
Account filed September 6, 2006, are sustained to the extent
that Respondent is directed to file, within 30 days of the date of
this order, an Amended First and Final Account (a) correcting
the overcharges on administration fees, (b) deleting
administration fees after March 13, 2006, except as to the asset
which Petitioners had elected to leave in the trust, (c) charging
a termination fee based only on the asset which Petitioners had
elected to leave in the trust, and (d) deleting all attorney's fees
incurred as a result of Petitioners' petition and objections, with
the exception of fees for the preparation of the accounts
themselves;
3. Within 30 days of the date of this order, Respondent
shall pay to Petitioners the sum of $2,602.34 for attorney's
fees; and
4. No other relief is granted to either party.
BY THE CQUR1:,
Michael L. Bangs, Esq.
429 South 18th Street
Camp Hill, PA 17011
Attorney for Petitioners
Todd F. Truntz, Esq.
415 F allowfield Road
Suite 301
Camp Hill, PA 17011
Attorney for Respondent
CA THERINE V. McKINNEY,
Settlor of The Patricia M.
Kilkenny Family Irrevocable
Turst and PATRICIA M.
KILKENNY,
Petitioners
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
v.
ORPHANS' COURT DIVISION
COMMUNITY TRUST
COMPANY,
Respondent
NO. 21-06-553 ORPHANS' COURT
IN RE: PETITION FOR TERMINATION OF TRUST
and OBJECTIONS TO FIRST AND FINAL ACCOUNT
BEFORE OLER, J.
OPINION and ORDER OF COURT
OLER, J., December 27,2006.
In this Orphans' Court case, the settlor and the beneficiary of a trust
designed to insulate the beneficiary's assets from invasion by the government in
the event of her entry into a nursing home (Petitioners), have filed a petition to
terminate the trust and objections to a first and final account filed by the trustee
(Respondent). A hearing on the petition and objections was held by the court on
November 29,2006.
For the reasons stated in this opinion, the petition to terminate the trust will
be granted and the objections to the account will be sustained in part.
FINDINGS OF FACT
1. Petitioners are Catherine A. McKinney, an adult individual residing at 6
Coover Court, Dillsburg, York County, Pennsylvania, and Patricia M. Kilkenny,
an adult individual residing at 603 Fairway Drive, Camp Hill, Cumberland
County, Pennsylvania.
2. Respondent is Community Trust Company, a trust company operated and
licensed under the laws of the Commonwealth of Pennsylvania and having its
principal place of business at 3907 Market Street, Camp Hill, Cumberland County,
Pennsy Ivania.
3. Petitioner McKinney is the daughter of Petitioner Kilkenny.
4. In 2002, Petitioner Kilkenny, the mother of Petitioner McKinney, owned
the following assets: a residence at 605 Fairway Drive, Camp Hill, Cumberland
County, Pennsylvania, valued at $162,155.50 as of September 30, 2002; a MetLife
annuity valued at $103,000.00 as of July 1, 2002; and a MetLife annuity valued at
$50,401.03 as of September 1,2002.
5. On September 6, 2002, Petitioner Kilkenny transferred her assets,
consisting of the residence and two annuities, in trust to her daughter, Petitioner
McKinney.
6. Later on that date, Petitioner McKinney transferred those assets in trust
to Respondent Community Trust Company pursuant to a "Family Irrevocable
Trust" instrument, wherein Petitioner McKinney was settlor, her mother (Patricia
Kilkenny) was beneficiary, and Respondent Community Trust Company was
trustee.
7. The purpose of this set of transactions was to insulate the mother's assets
from attachment by the government in the event that she was subjected to nursing
home expenses which were paid through government programs.
8. The trust instrument provided that "[t]he Trustee shall receIve as its
compensation for the services performed hereunder that sum of money which the
Trustee normally and customarily charges for performing similar services during
the time which it performs these services."
9. Normal and customary charges of Respondent with respect to a trust of
the size involved included an administration fee of 1.1 % per annum (with the
minimum fee being $1,500.00) and a termination fee "[ e ]qual to the average fee
charged over the prior 12 months, annualized."
1 O. The trust agreement did not provide for or contemplate a partial
termination fee; the trustee was, to a substantial degree, protected with respect to
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trusts with reduced principals by the aforesaid minimum annual administration
fee.
11. Due to an accounting error, the annual administration fee actually
charged by Respondent throughout its administration of the trust has been 1.3% of
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the corpus.
12. The trust instrument further provided as follows: "Settlor, Catherine A.
McKINNEY, is hereby granted the general power to appoint some or all of the
principal of this Trust to herself, her estate or any other individual, in such
proportions and upon such terms (in trust, outright gifts, or in any other manner) as
she deems advisable."
13. In the course of the trust, Petitioner McKinney exercised her power of
appointment on two occasions, withdrawing $20,000.00 in May of 2004, and
withdrawing $11,120.00 in September of 2006; no "termination fee" was charged
by Respondent in connection with these transactions.
14. During the course of the trust, Petitioners came to the conclusion that
the benefit of the trust was not worth its cost in terms of administration fees,
particularly in light of the fact that Petitioner Kilkenny had long-term (five year)
. .
nursmg care msurance.
15. On December 27, 2005, counsel for Petitioners sent a letter to
Respondent indicating that they desired to terminate the trust by Petitioner
McKinney's exercise of a power of appointment over the entire corpus of the trust.
16. Respondent replied by letter dated February 3, 2006, that it would
comply with Petitioners' wishes, but noting (a) that a termination fee would be
charged and (b) that, if Petitioners wished to avoid the delay inherent in the filing
of an account and confirmation by the court, Petitioner McKinney would be
expected to execute a release in return for receipt of the assets.
I By letter to the Court dated December 22, 2006, Respondent's counsel presented a revised
computation of administration fees. However, this document was not filed of record.
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17. As subsequently discovered, the proposed termination fee represented
an overcharge because it was based upon the incorrectly computed administration
fee.
18. Petitioners were not willing to accept either of these preconditions.
19. On February 16, 2006, Petitioners attempted to avoid the preconditions
by the device of Petitioner McKinney's exercise of a power of appointment over
two of the three assets in the trust-the residence and the larger annuity.
20. On March 13, 2006, Respondent responded to this attempt by asserting
a right to charge a termination fee based upon the partial withdrawal of assets from
the trust.
21. On March 16, 2006, Petitioners disputed Respondent's right to charge a
termination fee when the trust was not in fact being terminated.
22. On or about April 25, 2006, Respondent reasserted (a) its position that it
had a right to charge a termination fee for withdrawal of part of the assets of the
trust and (b) its position that, in lieu of a court accounting and confirmation, the
appointed assets would not be distributed without a release
23. Petitioners continued to reject these positions of Respondent.
24. On June 20, 2006, Petitioners filed a petition to terminate the trust, and
for incidental relief including attorney's fees, without payment of a termination
fee.
25. Respondent filed a First and Final Account with respect to the trust on
September 7,2006.
26. This account included overcharges for administrative fees as discussed
previously, a termination fee calculated incorrectly as discussed previously in the
amount of $4,242.50, and attorney's fees in the amount of $11,641.00; an
additional $4,554.50 in attorney's fees was claimed by Respondent's counsel at
the hearing; and in a letter to the court received after the hearing Respondent's
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counsel claimed a further amount of $4,235.00 in attorney's fees.2 The majority of
these $20,448.50 legal fees were apparently related to Plaintiffs' petition and
objections.
27. Petitioners have incurred reasonable and necessary attorney's fees in
connection with this matter in the amount of $2,602.34.
27. At the hearing on the petition and objections, counsel for the parties
stipulated to the parties' agreement that, at this point, the trust should be
terminated.
CONCLUSIONS OF LAW
1. The Court has jurisdiction over the parties and subject matter of this
litigation.
2. Respondent breached its contractual and fiduciary duties by (a)
overcharging for administration fees during the course of the trust, (b) claiming a
termination fee for transactions which would not have terminated the trust, and (c)
overcharging for the termination fee; and
3. Petitioners did not act improperly or unreasonably in declining to release
Respondent from liability for its administration of the trust or declining to pay a
termination fee in connection with the withdrawal of two of the trust's three assets.
ORDER OF COURT
AND NOW, this 27th day of December, 2006, upon consideration of
Petitioners' Petition for Termination of Trust and Objections to First and Final
Account, following a hearing held on November 29, 2006, and for the reasons
stated in the accompanying opinion, it is ordered and directed as follows:
1. The Family Irrevocable Trust dated September 6, 2002,
in which Petitioners are settlor and beneficiary and Respondent
is trustee is terminated;
2 With regard to this letter, the court advised counsel that if it were to consider such additional
evidence at this time the evidence would have to be presented by a filed stipulation rather than in
the form of correspondence.
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2. Petitioners' objections to Respondent's First and Final
Account filed September 6, 2006, are sustained to the extent
that Respondent is directed to file, within 30 days of the date of
this order, an Amended First and Final Account (a) correcting
the overcharges on administration fees, (b) deleting
administration fees after March 13, 2006, except as to the asset
which Petitioners had elected to leave in the trust, (c) charging
a termination fee based only on the asset which Petitioners had
elected to leave in the trust, and (d) deleting all attorney's fees
incurred as a result of Petitioners' petition and objections, with
the exception of fees for the preparation of the accounts
themselves;
3. Within 30 days of the date of this order, Respondent
shall pay to Petitioners the sum of $2,602.34 for attorney's
fees; and
4. No other relief is granted to either party.
BY THE COURT,
sl J. Wesley Oler, Jr.
J. Wesley Oler, Jr., 1.
Michael L. Bangs, Esq.
429 South 18th Street
Camp Hill, PA 17011
Attorney for Petitioners
Todd F. Truntz, Esq.
415 Fallowfield Road
Suite 301
Camp Hill, PA 17011
Attorney for Respondent
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ORPHANS' COURT DIVISION
COURT OF COMMON PLEAS OF
In Re: CATHERINE V. MCKINNEY
SETTLOR OF THE PATRICIA M KILKENNY F AMIL Y
IRREVOCABLE TRUST AND PATRICIA M KILKENNY
PETITIONERS
V.
COMMUNITY TRUST COMPANY
RESPONDENT
CUMBERLAND COUNTY
PENNSYL VANIA
NO. 21-06-0553
CERTIFICATE OF SERVICE OF ORDER
ORDER DATE: 12-27-06
JUDGE'S INITIALS: JWO
TIME STAMP DATE: 12-27-06
IN RE: ORDER OF COURT & OPINION AND ORDER OF COURT
SERVICE TO:
TODD F. TRUNTZ, ESQ
MICHAEL L. BANGS ESQ
METHOD OF MAILING:
ENVELOPES PROVIDED BY:
L8J USPS
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o HAND DELIVERED
o OTHER_
o PETITIONER
L8J JUDGE
o CLERK OF ORPHANS COURT
MAILED: 12/28/06
SERVICE TO:
METHOD OF MAILING:
ENVELOPES PROVIDED BY:
o USPS
DRRR
o HAND DELIVERED
o OTHER_
o PETITIONER
o JUDGE
o CLERK OF ORPHANS COURT
MAILED:
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THE
PATRICIA M. KILKENNY
FAMILY IRREVOCABLE TRUST
TmS TRUST AGREEMENT is executed in triplicate on this b 14. day of September,
2002, by and between and CATHERINE A. McKINNEY, (hereinafter called "Settlor") and
COMMUNITY TRUST COMPANY, located at 3907 Market Street, Camp Hill, Cumberland
County, Pennsylvania (hereinafter called "Trustee").
ARTICLE I.
PARTIES, PERSONAL DATA AND DISCLAIMER
1.01. Parties and Personal Data. Settlor, CATHERINE A. McKINNEY, is the
daughter of PATRICIA M. KILKENNY, the Beneficiary of the Trust created herein.
Throughout this Agreement: (a) "Settlor" shall refer to CATHERINE A. McKINNEY; and (b)
PATRICIA M. KILKENNY will be referred to as the Beneficiary.
1.02. Disclaimer. The Trustee shall have the right to disclaim, in whole or in part, prior
to its acceptance by the Trustee, any interests in property for any reason, including but not limited
to a concern that such property could cause potential liability under any federal, state, or local
environmental law.
ARTICLE n
PURPOSES OF TRUST
2.01. Beneficiary. This Trust is established for the benefit of PATRICIA M.
KILKENNY as well as to preserve assets for distribution to the remaindennen hereunder. This
Trust may serve as a primary or main source of income, support or maintenance for PATRICIA
M. KILKENNY.
2.02. Supplemental Assistance Limitation of Benefits. With respect to the
Beneficiary, PATRICIA M. KILKENNY, the express purpose of this Trust is to provide for
PATRICIA M. KILKENNY's necessities, and extra or supplemental needs, over and above the
benefits PATRICIA M. KILKENNY otherwise receives or may receive as a result of handicap
or disability from any local, state, or federal government or from private agencies, any of which
provide services or benefits to disabled or otherwise challenged persons. Anything to the contrary
herein notwithstanding, no trust income or principal shall be paid to or expended for the benefit of
PATRICIA M. KILKENNY so long as there are sufficient monies available to her for care,
comfort, and welfare from federal, state, and local government agencies and departments. The
Trustee shall consider such governmental funds in det . 'ng whether there are funds available
..t'P.Q II..... ...,
to the Beneficiary from sources other than the Trust estate and shall use Trust assets only to
supplement and never to substitute for such funds. In no event may Trust income or principal be
paid to or for the benefit of a governmental agency or department, and the Trust estate shall at all
times be free of the claims of such governmental bodies.
2.03. Advocacy. The Trustee shall periodically contact the Settlor, CATHERINE A.
McKINNEY, any applicable local associations for citizens with disabling conditions, other
relatives, guardian if applicable, and the staff of any group home or other residential facility where
PATRICIA M. KILKENNY resides regarding items and directives of this Trust for her and her
well being.
ARTICLE III.
TRUST ESTATE
3.01. Transfer to Trust. Settlor does hereby assign, transfer and deliver to the Trustee
and its successors and assigns the property described in Schedule "A" attached hereto and made a
part hereof, or as Schedule "A" may be amended. As further evidence of such assignment, the
Settlor has executed or will execute or cause to be executed such other instruments as may be
required for the purposes of completing the assignment or transfer of title to such property to the
Trustee. The Trustee accepts such transfer and assignment to itself as Trustee, and undertakes to
hold, manage, invest and reinvest the assets of this Trust, and to distribute the income and
principal of the Trust in accordance with the provisions of this Agreement.
3.02. Additional Transfen to Trust. The Settlor, and any other person, with the
consent of the Trustee, shall have the right at any time to make additions to the corpus of this
Trust or any shares thereof hereby established. All such additions shall be held, controlled, and
distributed by the Trustee in accordance with the terms and conditions of this Agreement.
ARTICLE IV.
LIFE INSURANCE POLICIES
[THIS ARTICLE IS INTENTIONALLY LEFT BLANK.]
ARTICLE V.
DISTRIBUTIONS FROM TRUST
5.01. Distributions Durine Continuation of Trust. Subject to the termination of this
Trust, the trust estate shall be held for the benefit of the Beneficiary, PATRICIA M.
KILKENNY, for her lifetime, together with any other assets received by the Trustee, for the
following uses and purposes:
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(A) This Trust is established for the purpose of improving the quality of life of the
Beneficiary, PATRICIA M. KILKENNY, for and during all the term of her natural life. As the
result of the natural physical and mental deteriorations of her age and infirmities, the Beneficiary,
PATRICIA M. KILKENNY, suffers, or may suffer, from substantial mental and physical
disabilities and requires, or may require additional medical care. She may be entitled to benefit
from various governmental programs which provide for her basic or supplemental care. It is the
purpose of this Trust to provide the Beneficiary, PATRICIA M. KILKENNY, with a higher
quality of life beyond that which would be provided by these public entitlement programs and to
provide her with a proper funeral and burial.
(B) Settlor's intent in creating this Trust is that the Trustee use the Trust created herein to
promote the happiness, welfare and benefit of the Beneficiary, PATRICIA M. KILKENNY,
through income and principal distributions, without in any way reducing the services or financial
assistance and basic maintenance, support, medical or dental care which the Beneficiary may
receive without charge from any local, state or federal government agency or department thereof,
and without using any portion of the Trust income or principal to reimburse any local, state or
federal government agency or department thereof for basic maintenance, support, medical or
dental care received by the Beneficiary.
(C) The Trustee shall distribute to the Beneficiary, PATRICIA M. KILKENNY, or
expend and apply for her benefit, so much of or all of the income and principal of this Trust, as
the Trustee, in its sole and absolute discretion, determines to be advisable for the Beneficiary's
special needs for necessities, happiness and comfort to achieve the purpose of the Trust herein set
forth, or as much of the income as the Beneficiary may, in writing, request. The "special needs"
which the Trustee may provide to the Beneficiary, PATRICIA M. KILKENNY, include, but are
not limited to, spending money, additional food, clothing, gifts on her birthday and major
holidays, small appliances that would provide the Beneficiary with entertainment or amusement,
computer equipment, camping excursions, vacations, athletic contests, movies, trips, money to
purchase appropriate gifts for relatives and friends, any recreational items that would be of use to
her and other monetary requirements to enhance her self-esteem or situation. "Special needs"
shall also include medical and dental expenses, annual independent check-ups, rehabilitation and
physical therapy equipment, programs of training, education, treatment, physical therapy and
rehabilitation, private residential care, eye glasses, transportation (including vehicle purchase),
maintenance, and insurance (including payment of premiums of insurance on the life of the
beneficiary) and other requisites for maintaining the good health, safety, and welfare of the
Beneficiary when, in the discretion of the Trustee, such requisites are not being provided by any
public agency, office, or department of any state or of the United States. Nothing herein shall
preclude the Trustee from purchasing those services and items which promote the Beneficiary's
happiness, comfort and welfare. The Trustee shall also have authority in its absolute and sole
discretion to make gifts to any community residence in which the Beneficiary may be residing.
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(0) Any net income not expended for or applied to the needs of the Beneficiary,
PATRICIA M. KILKENNY, shall be accwnulated and added to the Trust principal.
(E) The Trustee shall have no obligation to expend Trust assets for the Beneficiary's
special needs. This Trust is created expressly for the Beneficiary's necessities, extra and
supplemental care, maintenance; support and education in addition to, and over and above the
benefits she otherwise receives or may receive as a result of handicap or disability, from any local,
state or federal government, or from any other private agency, any of which provides service or
benefits to persons with disabilities. It is Settlor's express purpose that this Trust be used only to
supplement other benefits that the Beneficiary may receive.
(F) Because the Beneficiary may be dependent on the support and aid of others, the
Trustee shall, in the exercise of his best judgement and fiduciary duty, seek support and
maintenance for her, or request the guardian of the Beneficiary to seek support and maintenance
for her, from all available public resources, including, but not limited to, Social Security
Administration benefits, the Supplemental Security Income Program (SSI), any such supplemental
income program offered by or through the Commonwealth of Pennsylvania, the Old Age
Survivors and Disability Insurance or successor programs, U.S. Civil Service Commission
benefits, Medicaid, and Federal Social Security Disability Insurance (SSDI), and any other
comparable programs, state, federal, or local. The Trustee shall take into consideration applicable
resource and income limitations of any public assistance programs for which the Beneficiary is
eligible when determining whether or not to make any discretionary distributions. In carrying out
the provisions of this Article, the Trustee may disregard the future needs of the remaindermen of
this Trust if those needs are in conflict with the needs of the beneficiary. If necessary, the Trustee
may seek appropriate authority to collect, expend, and account for separately all such
governmental assistance benefits, but shall not commingle them with these Trust assets. In
addition, in making distributions for the special needs of the Beneficiary, the Trustee shall take
into consideration the applicable resource limitations of the public assistance programs for which
he is or may become eligible.
(0) The Trustee shall regard this Trust as existing for the welfare and benefit of the
Beneficiary, PATRICIA M. KILKENNY. Accordingly, the Trustee shall exercise its discretion
as to disbursements and investments with this standard in mind.
(H) The Trustee shall exercise reasonable diligence. However, the Trustee shall not be
liable for any acts or omissions done or performed in good faith.
(I) The Trustee shall not be required to make an accounting to any public official except
to the extent otherwise required by law. The Trustee shall, however, keep and maintain complete
and open accounts of the Trust principal and income and any expenditures from the Trust.
Anyone having an interest in the Trust shall have a right to inspect the accounts at reasonable
times and with reasonable notice to the Trustee. All discretion conferred on the Trustee shall be
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absolute and unlimited, and its exercise by the Trustee shall be conclusive and binding on all
persons.
(J) The Trustee shall pay reasonable burial expenses including a suitable and proper grave
marker for the Beneficiary, PATRICIA M. KILKENNY.
5.02. General Power of Ap'pointment. Settlor, CATHERINE A. McKINNEY, is
hereby granted the general power to appoint some or all of the principal of this Trust to herself,
her estate or any other individual, in such proportions and upon such terms (in trust, outright
gifts, or in any other manner) as she deems advisable. This power shall not be exercisable under
her Will. If Settlor fails, either in whole or in part, to exercise this general power of
appointment herein granted, the unappointed principal shall continue in trust and shall be
administered according to the terms of this Trust.
5.03. Special Power of Appointment. PATRICIA M. KILKENNY shall have the
power at any time, exercisable either (i) by instrument or instruments in writing delivered to the
Trustee during her lifetime, or (ii) by her will, admitted to probate within three hundred and sixty-
five (365) days from her death, specifically referring to this Subparagraph 5.03, to appoint all or
any portion of the principal and any accumulated and accrued income of this Trust. Any
appointment made under this Subparagraph 5.03 may be upon any terms and conditions.
However, no such appointment may be made to her spouse, nor to the estate, the creditors, nor
the creditors of the estate of her spouse, nor for the health, education, support, or maintenance of
any children whom she or her spouse is legally obligated to support or maintain, nor may any
general powers of appointment be created by the exercise of the special power of appointment
created herein.
5.04. Distributions Upon Termination of Trust. The Trust shall terminate upon the
death of the Beneficiary, PATRICIA M. KILKENNY. Upon termination, the then-remaining
trust estate shall be distributed as follows:
(A) Nine-tenths (9/10) of the total trust estate shall be divided into separate and equal
shares with one such share distributed to each of the Beneficiary's children, CATHERINE A.
McKINNEY, JOAN M. GILLIS, JANET M. HEIN, and JOHN E. KILKENNY, JR.. If any
of the Beneficiary's children, CATHERINE A. McKINNEY, JOAN M. GILLIS, JANET M.
HEIN, and JOHN E. KILKENNY, JR., should predecease the termination of this Trust, then
and in such event, the predeceased individual's share shall be distributed to the predeceased
individual's children, per stirpes. If any of the Beneficiary's children, CATHERINE A.
McKINNEY, JOAN M. GILLIS, JANET M. HEIN, and JOHN E. KILKENNY, JR., should
predecease the termination of this Trust without leaving surviving issue, then and in such event,
the predeceased individual's share shall be distributed to the Beneficiary's then-surviving children,
per stirpes.
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(B) One-tenth (1110) of the total trust estate shall be distributed to the Beneficiary's
grandchild, KEELAN A. BOOTH, per stirpes. If KEELAN A. BOOTH should predecease the
termination of the trust, then and in such event, his share shall be HELD IN FURTHER
SEPARATE TRUST for the benefit of KARA E. R. BOOTH (and any children born or legally
adopted by KEELAN A. BOOTH hereafter), to be used as the Trustee, in its sole discretion,
from time to time deems advisable for the health, education, support and maintenance of KARA
E. R. BOOTH (and any children born or legally adopted by KEELAN A. BOOTH hereafter).
ARTICLE VI.
POWERS OF TRUSTEE
6.01. General Powers. In addition to such other powers and duties as may have been
granted elsewhere in this Trust, but subject to any limitations contained elsewhere in this Trust,
the Trustee shall have the following powers and duties:
(A) In the management, care and disposition of this Trust, the Trustee shall have the
power to do all things and to execute such deeds, mortgages, instruments, and docmnents as may
be deemed necessary and proper, including the following powers, all of which may be exercised
without order of or report to any court:
(I) To sell, exchange, or otherwise dispose of any property, real, personal
or mixed, at any time held or acquired hereunder, at public or private sale, for cash
or on terms, without advertisement, including the right to lease for any term
notwithstanding the period of the Trust, and to grant options, including an option
for a period beyond the duration of the Trust; and to execute such deeds or other
instruments as are necessary.
(2) To invest and reinvest all or any part of the Trust Estate in any
common or preferred stocks, shares of investment trusts and investment
companies, bonds, debentures, mortgages, deeds of trust, mortgage participations,
notes, real estate, or other property the Trustee, in the Trustee's discretion, selects;
provided that the Trustee may not invest in any stock or securities issued by the
corporate Trustee or issued by a parent or affiliate company of such Trustee; in the
manner that, under the circmnstances then prevailing (specifically including, but
not limited to, the general economic conditions and the anticipated needs of the
Trust and its beneficiaries), persons of skill, prudence, and diligence, acting in a
similar capacity and familiar with those matters would use in the conduct of an
enterprise of similar character and similar aims, to attain the Settlor's goals under
this trust agreement.
(3) To retain for investment any property deposited with the Trustee
hereunder; except that the Trustee may not retain for investment any stock or
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securities in the corporate Trustee or in a parent or affiliate company of such
Trustee.
(4) To vote in person or by proxy any corporate stock or other security
and to agree to or take any other action in regard to any reorganization, merger,
consolidation, liquidation, bankruptcy or other procedure or proceedings affecting
any stock, bond, note or other security held by this Trust.
( 5) To use lawyers, real estate brokers, accountants and other agents, if
such employment is deemed necessary or desirable, and to pay reasonable
compensation for their services.
(6) To compromise, settle or adjust any claim or demand by or against the
Trust and to agree to any rescission or modification of any contract or agreement
affecting the Trust.
(7) To renew any indebtedness, as well as to borrow money, and to secure
the same by mortgaging, pledging or conveying any property of the Trust,
including the power to borrow from the Trustee (in the Trustee's individual
capacity) at a reasonable rate of interest.
(8) To retain any business interest transferred to the trustee, as
shareholder, security holder, creditor, partner or otherwise, for any period of time
whatsoever, even though the interest may constitute all or a large portion of the
trust principal; to comply with the provisions of any agreement restricting transfer
of the interest; to participate in the conduct of the related business or rely upon
others to do so, and to take or delegate to others discretionary power to take any
action with respect to its management and affairs which an individual could take as
outright owner of the business or the business interest, including the voting of
stock (by separate trust or otherwise regardless of whether that separate trust will
extend for a term within or beyond the term of the trust) and the determination of
all questions of policy; to execute and amend partnership agreements; to
participate in any incorporation, reorganization, merger, consolidation, sale of
assets, recapitalization, liquidation or dissolution of the business, or any change in
its nature, or in any buy-sell, stock restriction, or stock redemption agreements; to
invest in additional stock or securities of, or make secured, unsecured, or
subordinated loans to, the business with trust funds; to take all appropriate actions
to prevent identify, or respond to actual or threatened violations of any
environmental law or regulation thereunder; to elect or employ with compensation,
as directors, officers, employees, or agents of the business, any persons, including
a trustee of any trust held under this instrument, or any director, officer, employee,
or agent of a corporate trustee of any trust held under this instrument, without
7
adversely affecting the compensation to which that trustee would otherwise be
entitled; to rely upon reports of certified public accountants as to the operations
and financial condition of the business, without independent investigation; to deal
with and act for the business in any capacity (including in the case of a corporate
trustee any banking or trust capacity and the loaning of money out of the trustee's
own funds) and to be compensated therefor; and to sell or liquidate the business or
any interest in the business.
(9) To register any stock, bond or other security in the name of a nominee,
without the addition of words indicating that such security is held in a fiduciary
capacity, but accurate records shall be maintained showing that the stock, bond or
other security is a trust asset and the Trustee shall be responsible for the acts of the
nommee.
(10) To set aside as a separate trust, to be held and administered upon the
same terms as those governing the remaining trust property, any interests in
property, for any reason, including but not limited to a concern that such property
could cause potential liability under any federal, state, or local environmental law .
(B) Whenever the Trustee is directed to distribute any trust principal in fee simple to a
person who is then under twenty-one (21) years of age, the Trustee shall be authorized to hold
such property in trust for such person until he becomes twenty-one (21) years of age, and in the
meantime shall use such part of the income and the principal of the Trust as the Trustee may deem
necessary to provide for the proper support and education of such person in the standard of living
to which he has become accustomed. If such person should die before becoming twenty-one (21)
years of age, the property then remaining in trust shall be distributed to the personal
representative of such person's estate.
(C) In making distributions from the Trust to or for the benefit of any minor or other
person under a legal disability, the Trustee need not require the appointment of a guardian, but
shail be authorized to payor deliver the distribution to the custodian of such person, to payor
deliver the distribution to such person without the intervention of a guardian, to payor deliver the
distribution to the legal guardian of such person if a guardian has already been appointed, or to
use the distribution for the benefit of such person.
(D) In the distribution of the Trust and any division into separate trusts and shares, the
Trustee shall be authorized to make the distribution and division in money or in kind or in both,
regardless of the basis for income tax purposes of any property distributed or divided in kind, and
the distribution and division made and the values established by the Trustee shall be binding and
conclusive on all persons taking hereunder. The Trustee may, in making such distribution or
division allot undivided interests in the same property to several trusts or shares.
8
(E) If at any time the total fair market value of the assets of any trust established or to be
established hereunder is so small that the Trustee's annual fee for administering the trust would be
equal to or less than the minimum annual fee set forth in the Trustee's regularly published fee
schedule then, in effect, the Trustee in its discretion shall be authorized to terminate such trust or
to decide not to establish such trust, and in such event the property then held in or to be
distributed to such trust shall be distributed to the persons who are then or would be entitled to
the principal and/or income of such trust. If the amount of principal and/or income to be received
by such persons is to be determined in the discretion of the Trustee, then the Trustee shall
distribute the property among such of the persons to whom the Trustee is authorized to distribute
principal and/or income, and in such proportions, as the Trustee in its discretion shall determine.
(F) The Trustee shall be authorized to lend or borrow at an adequate rate of interest and
with adequate security and upon such terms and conditions as the Trustee shall deem fair and
equitable.
(G) The Trustee shall be authorized to sell or purchase, at the fair market value as
determined by the Trustee, any Trust property.
(H) The Trustee shall have discretion to determine whether items should be charged or
credited to income or principal or allocated between income and principal as Trustee may deem
equitable and fair under all the circumstances, including the power to amortize or fail to amortize
any part or all of any premium or discount, to treat any part or all of the profit resulting from the
maturity or sale of any asset, whether purchased at a premium or at a discount, as income or
principal or apportion the same between income and principal, to apportion the sales price of any
asset between income and principal, to treat any dividend or other distribution on any investment
as income or principal or to apportion the same between income and principal, to charge any
expense against income or principal or apportion the same, and to provide or fail to provide a
reasonable reserve against depreciation or obsolescence on any asset subject to depreciation or
obsolescence, all as the Trustee may reasonably deem equitable and just under all of the
circumstances.
(I) The Trustee is hereby authorized and empowered to purchase such insurance policies
as it deems appropriate.
6.02. V otine by Trustees. When the authority and power under this Trust is vested in
two (2) or more Trustees or Co-Trustees, the authority and powers are to be held jointly by the
Trustees or Co-Trustees.
9
ARTICLE VII.
SPENDTHRIFf PROVISION
7.01. General Provisions. No beneficiary shall have the power to anticipate, encwnber
or transfer his interest in the Trust Estate in any manner other than by the valid exercise of a
Power of Appointment. No part of the Trust Estate shall be liable for or charged with any debts,
contracts, liabilities or torts of a beneficiary or subject to seizure or other process by any creditors
of a beneficiary, including but not limited to creditors who are public or private entities with
claims arising from the provision of medical and/or residential care and services.
ARTICLE VIII.
CONSTRUCTION OF TRUST
8.01. Choice of Law. This Trust shall be administered and interpreted in accordance
with the laws of the Commonwealth of Pennsylvania.
8.02. Code. Unless otherwise stated, all references in this Trust to section and chapter
numbers are to those of the Internal Revenue Code of 1986, as amended, or corresponding
provisions of any subsequent federal tax laws applicable to this Trust.
8.03. Other Terms. Unless the context otherwise requires, the use of one or more
genders in the text includes all other genders, and the use of either the singular or the plural in the
text includes both the singular and the plural.
8.04. Exoneration of Trustee. No Trustee shall be liable for any loss or depreciation in
value sustained by the Trust as a result of the Trustee retaining any property upon which there is
later discovered to by hazardous materials or substances requiring remedial action pursuant to any
federal, state, or local environmental law, unless the Trustee contributed to the loss or
depreciation in value through wil1:ful default, willful misconduct, or gross negligence.
8.05. Indemnification of Trustee Upon Distribution. Notwithstanding any contrary
provision in this Trust Agreement, the Trustee may withhold a distribution to a beneficiary until
receiving from the beneficiary an indemnification agreement in which the beneficiary agrees to
indemnify the Trustee against any claims filed against the Trustee as an "owner" or "operator"
under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
from time to time amended, or any regulation thereunder.
8.06. Captions. The underlined captions set forth in this Agreement at the beginning of
the various divisions hereof are for convenience of reference only and shall not be deemed to
define or limit the provisions hereof or to affect in any way their construction and application.
8.07. Situs of Trust. The Trust shall have its legal situs at Cumberland County,
Pennsylvania.
10
ARTICLE IX.
COMPENSATION OF TRUSTEE AND
APPOINTMENT OF SUCCESSOR TRUSTEE
9.01. Compensation. The Trustee shall receive as its compensation for the services
performed hereunder that sum of money which the Trustee normally and customarily charges for
performing similar services during the time which it performs these services.
9.02. Removal of Trustee. The Settlor may remove the Trustee at any time or times,
with or without cause, upon thirty (30) days' written notice given to the current Trustee. Upon
the removal of the Trustee, a successor Trustee shall be appointed in accordance with the terms
set forth in Paragraph 9.03.
9.03. Successor Trustee. The Trustee may resign at any time upon thirty (30) days'
written notice given to the Settlor. Upon the death, resignation, removal or incapacity of the
Trustee, a successor trustee may be appointed by the Settlor. The successor Trustee shall be a
financially sound and competent corporate Trustee. Any successor trustee thus appointed, or,
if the Trustee shall merge with or be consolidated with another corporate fiduciary, then such
corporate fiduciary, shall succeed to all the duties and to all the powers, including discretionary
powers, herein granted to the Trustee.
ARTICLE X.
PERPETUITIES CLAUSE
10.01. General Provisions. Notwithstanding anything to the contrary in this Trust, each
disposition the Settlor has made here, legal or equitable, to the extent it can be referred in its
postponement of becoming a vested interest to a duration measured by some life or lives in being
at the time of the Beneficiary PATRICIA M. KILKENNY's death is definitely to vest in
interest, although not necessarily in possession, not later than twenty-one (21) years after such
lives (and any period of gestation involved); or, to the extent it cannot be referred in any such
postponement to such lives, is to so vest not later than twenty-one (21) years from the time of
PATRICIA M. KILKENNY's death.
ARTICLE XI.
IRREVOCABILITY. OF TRUST
11.01. Irrevocability. Settlor has been advised of the consequences of an irrevocable
trust and hereby declares that this Trust shall be irrevocable and shall not be altered, amended,
revoked, or terminated by Settlor or any other person or persons.
11
IN WITNESS WHEREOF, the Settlor and Trustee have hereunto set their hands and
seals as of the day and year first above written.
/1 ..~ ": /~
~. a /4..~EAL)
CATHERINE A. McKINNEY
SETTLOR
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF (!;/J1iJ B672t1M1lJ
On this, the {p!f!... day of September, 2002, before me, a Notary Public, the undersigned
officer, personally appeared CATHERINE A. McKINNEY, and the above witness, whose
names are subscribed to the within instrument and who executed the same, and that said persons
acknowledged that they executed the same for the purposes therein contained.
SS:
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
c3flJaflfb~
Notary Public
My Commission Expires:
NotIffaI Seal
fir! L. W8/ker. Notary Public "
I..mnoyno Bofo. CUnbeffinf County
My CommIuton ExpI.... Jan. 20, 2003
Member, ~"'"IYIY,"" AeIocIatlon at Notaries
The foregoing T~t Agreement was delivered, and is hereby accepted, at Lemoyne,
Pennsylvania, on the ~ day of September, 2002.
ATTEST:
1
COMMUNITY TRUST COMPANY,
TRUSTEE
(~;~u~ -~~4F~-Y?
By: SUSAN A. RUSSELL, Vice-
President and Trust Officer
12
SCHEDULE "A"
SCHEDULE
REFERRED TO IN THE ANNEXED
TRUST AGREEMENT
DATED SEPTEMBER~ 2002
FROM CATHERINE A. McKINNEY, SETTLOR
TO COMMUNITY TRUST COMPANY, TRUSTEE
PROPERTY DESCRIPTION:
13
EXHIBIT
I R-)3
1I.a.I-or, fdJ!::,
'- \' i' .
CE:: Sovereign Bank
Trust & lVealtb JIIlanagement Division
SCHEDULE OF LIVING TRUST FEES
Based on the average market values as shown on the periodic investment review
statements, annual fees until final distribution are as follows:
Principal - On marketable stocks and bonds) U.S. government securities,
certificates of deposit, cash, real estate and other evidence of indebtedness.
1.10 % of market value computed monthly on the first $2,000,000.
.85 % of market value computed monthly on the next $3,000,000.
.55 % ofthe market value on the balance.
To be charged against income until the death of Grantor, at which time the
fee will be charged SO/50 against principal and income.
Minimum Fee: Account to be subject to a minimum annual fee of $4,000.
On Death of Grantor (Trust Only) - 1 % based on the market value of the
Trust as of date of death of a grantor or the first grantor's death in a joint trust.
Should Sovereign Bank qualify as a fiduciary of the Grantor's estate, an
additional principal fee equal to the greater of (a) 2% of the market value of
the trust principal as of the date of the Grantor's death; or (b) the personal
representative fee as defined by applicable State Statutes.
Cash on hand and funds awaiting investment may be held in a ST Money
Market Fund. Sovereign Bank receives 25 basis points for bookkeeping
services rendered the Fund Manager, Federated Investors, Inc.
We reserve the right to charge additional fees for extraordinary services
rendered.
Signature
Date
R:\FORMS\L VTRST.FEE
Effective 8108102
Revised 1120104
Page 1 of 2
Confir"'Vlation S atement
MetlifeJ'
001.0343
MetLife
P.O. BoX 22030
Tulsa, OK 74121-2030
~ 1(800) 638-7732
o WWW.metlife.com
.........1.
Overnight Address
Met Life
12902 E 51st Street
Tulsa, OK 74131-6700
-
PATRICIA M KILKENNY
603 FAIRWAY DRIVE
CAMP HILL, PA 17011
-
---
Account Summary
Account Balance on July 1, 2002
$103,000.00
Transaction
Date
Transaction
Description
Dollar Amount
of Transaction
Unit
Value
Unit(s) this
Transaction
711/02
Initial Purchase Payment
Fixed Interest Account @ 3.55%
$100,000.00
$100,000.00
7/1/02
Value Adjustment
Fixed Interest Account @ 3.55%
$3,000.00
$3,000.00
PETITIONER'S
EXHIBIT
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II- df. t?r,
__________ __. - __ __. - ____._ - - _.... .____ __ ________ ______ - .__ - __._ - - . __._ __. ___. __ - - _.. - __ __ __ _.._._ _' _0" __. _.. _.' .______ _ .__ --.... -. -.. -. -.. -" - - - - - - .-. - ___OM .--------- -.-. ----
Metlife~
FOR IRA ACCOUNTS ONLY: Is this a rollover contribution? Yes No
If not, for which tax year are you making this contribution?
Mail-in Stub
MetLife
P.O. Box 371537
Pittsburgh, PA 15250-7537
~ I
1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111
Please make your check(s) payable to MetLife. DO NOT
SEND CASH. Write your account number on lhe check(s)
and mail to:
For change of address please complete below:
Streel Address ............ .... .......... ...... ......... ...............
City ...____......................... State .....-. Zip ..........
64398002-001-0343
page 1 OT "L
l,;onnrrnanon ;)(alemelll
Metlife
001-0469
MetLife
P.O. Box 22030
Tulsa, OK 74121-2030
~ 1(800) 638-7732
D www.metlife.com
-~
Overnight Address
MetLife
12902 E 51st Street
Tulsa, OK 74131-6700
==
---
-
---
-
PATRICIA M KILKENNY
603 FAIRWAY DRIVE
CAMP HILL, PA 17011
IJ~1y
d- ()J,~
Account Summary
Account Balance on September 1, 2q02
$50,401.03
Transaction \
Date
Transaction
Description
Dollar Amount
of Transaction
Unit
Value
\
Unit(s) this
Transaction
9/1102
Dollar Cost Averaging Transfer From
12-Month EDCA
$2,083.33
$2,083.33
9/1/02
Dollar Cost Averaging TransferTo
Harris Oakmark Large Cap Value Portfolio
MetUfe Mid Cap Stock Index
Salomon Brothers US Government
State Street Research Bond Income Series
$2,083.33
$416.67
$416.67
$625.00
$624.99
10.032994
8.661240
15.363221
43.111593
41.5300
48.1074
40.6816
14.4970
..__ ____...__.__ ___________._________.________________._____.__________.________________________________...____________.....__ ..____.______________ ___w._____
MetLife
FOR IRA ACCOUNTS ONLY: .Is this a rollover contribution? Yes No
II not, for which tax year are you making this contribution?
Mail-in Stub
MetLife
P.O. Box 371537
pittsburgh, PA 15250-7537
I
Ilml 111111111111I1111111111111111111111111111111111111 11111111111 11111111I11111111I111111111
Please make your check(s) payable to MetLffe. DO NOT
SEND CASH. Write your account number on the check(s)
and mail to:
For change of address please complete below:
Street Address __ _.. _ ----- --. -- _ -- ---..... - ........... -- ..--.. --.. .....
City ..__._.........___________...... State ....n. Zip ..n....n
PETITIONER'S
EXHIBIT
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TAX PARCEL NO. 09-20-1850-278
TOWNSHIP OF EAST PENNSBORO
-i'"
THIS DEED is made the ~ day of September, in the year two thousand two (2002).
BETWEEN CATHERINE A. McKINNEY, a married woman, now of 6 Coover Court, Dillsburg,
Pennsylvania, 17019, party of the first part, GRANTOR,
AND
^ I
COMMUNITY TRUST COMPANY, now of 3907 Market Street, Camp Hill, Pennsylvania,
Trustee of THE PATRICIA M. KILKENNY FAMILY IRREVOCABLE TRUST dated
September 6, 2002, party of the second part, GRANTEE.
WITNESSETH, that said party of the first part, for and in consideration of the sum of One ($1.00)
Dollar, lawful money of the United States of America, well and truly paid by the said party ofthe
second part to the said party of the first part, at or before the sealing and delivery of these presents,
the receipt whereof is hereby acknowledged, have hereby granted, bargained, sold, aliened,
enfeoffed, released, conveyed and confirmed, and by these presents do grant, bargain, sell, alien,
enfeoff, release, convey and confirm unto the said party of the second part, their heirs, successors
and assigns,
ALL THAT CERTAIN piece or parcel ofland situate in the Township of East Pennsboro, County
of Cumberland and State of Pennsylvania, more particularly bounded and described as follows, to
wit:
BEGINNING at a point on the eastern line of Fairway Drive, which point is at the dividing line
between Lots Nos. 271 and 272 on Plan of Lots hereinafter mentioned; thence North 51 degrees 16
minutes East and along the dividing line between Lots Nos. 271 and 272 on Plan of Lots hereinafter
mentioned, a distance of 100 feet to a point at line of lands now or late of Berwin Manor; thence
North 38 degrees 44 minutes West and along line oflands now or late ofBerwin Manor, a distance
of 75 feet to a point at the dividing line between Lots. Nos. 272 and 273 on Plan of Lots hereinafter
mentioned; thence South 51 degrees 16 minutes West and along the dividing line between Lots Nos.
272 and 273 on Plan of Lots hereinafter mentioned, a distance of 100 feet to a point on the eastern
line of Fairway Drive; thence South 38 degrees 44 minutes East and along the eastern line of Fairway
Drive, a distance of75 feet to a point, the point and place of BEGINNING.
BEING Lot No. 272 on Plan of Lots known as part of Country Club Park, which Plan is recorded
in the Office of the Recorder of Deeds in and for Cumberland County in Plan Book 26, page 41.
ii.DOW' I)'':;:'~' r>;['"/1rJ"'S
U r, r",vr.j! I!\ '[-f,j~
BEIN G the same premises which Patricia Kilkenny, a single woman, by her Deed dated September
6,2002, and recorded in the Office of the Recorder of Deeds in and for Cumberland County, on
September 17, 2002, in Deed Book 253, Page 3034, granted and conveyed unto Catherine A.
McKinney, a manied woman, who, with the joinder of her husband, Hugh C. McKinney, are the
Grantors herein. Hugh C. McKinney joins in this deed solely to release his mm;tal interest and does
not warrant title.
UNDER AND SUBJECT to the following restrictions which shall be construed as covenants
running with the land: The property herein described shall not beused an any time for a beauty parlor
or barber shop. No trailers or mobile homes are to be permitted on the premises at any time.
HAVING thereon erected a dwelling house known and numbered as 603 Fairway Drive, Camp Hill,
Pa.
THIS IS A TRANSFER FOR NOMINAL CONSIDERATION TO TRUSTEE OF A LIVING
TRUST AND IS THEREFORE EXEMPT FROM THE PAYMENT OF REALTY
TRANSFER TAX.
TOGETHER with all and singular the buildings and improvements, ways, streets, alleys, driveways,
passages, waters, watercourses, rights, liberties, privileges, hereditaments and appurtenances,
whatsoever unto the hereby granted premises belonging, or in any wise appertaining, and the
reversions and remainders, rents, issues, and profits thereof; and all the estate, right, title, interest,
property, claim, and demand whatsoever ofthe said Grantors, as well at law as in equity, of, in, and
to the same.
TO HAVE AND TO HOLD, the said lot or piece of ground above-descn"bed, with all and singular
the buildings and improvements thereon erected, hereditaments and premises hereby granted, or
mentioned and intended so to be, with the appurtenances, unto the said Grantees, their heirs and
assigns, to and for the only proper use and behoof of the said Grantees, their heirs and assigns
forever.
AND the said Grantor, for herself, her heirs, executors and administrators, do covenant, promise and
agree, to and with the said Grantee, her heirs and assigns, by these presents, that she, the said
Grantor, and her heirs, all and singular the hereditaments and premises hereby granted or mentioned
and intended so to be, with the appurtenances, unto the said Grantee, her heirs and assigns, against
them, the said Grantor and her heirs, and against all and every person and persons whomsoever
lawfully claiming or to claim the same or any part thereof, by, from or under him, her, them or any
of tllem, sl1311 and will, subject as aforesaid, SPECIALLY WARRANT AND FOREVER
DEFEND.
BOOK 253 PAGE4400
IN WITNESS WHEREOF, the said parties of the first part have hereunto set their hands
and seals, the day and year first above-written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF
~~~~
5?/b/02-
2{{IC/j. Pp/z/vl'C
COMMONWEALTH OF PENNSYL V AN1A
~ () ;lqY~
CA THERlNE A. McKIl~NEY
ijj~ (I, lll/giLu~
miGIUt. McKINNEy "j 'J
ss:
COUNTY OF CUMBERLAND
On this, the ('r-I day of September, 2002, before me, a Notary Public for the
Commonwealth of Pennsylvania, the undersigned officer, personally appeared CATHERINE A.
McKINNEY and HUGH C. McKINNEY, known to me (or satisfactorily proven) to be the persons
whose names are subscribed to the within instrument, and acknowledged that they executed the same
for the purpose therein contained. "" "",
IN WITNESS WHEREOF, I hereunto set m an~ ~dl~~ial ~eal.
Notarial Seal UULttP..Jl.J
Terll. Walker, Notary Public
Lemoyne Boro, Cumberland County Notary Public
My Commission Expires Jan. 20, 2003 My Commission Expires:
Member, Pennsylvania Association 01 Notaries
CERTIFICATE OF RESIDENCE
I hereby certify that the present residence of the Grantee herein is as follows: (RETURN DEED TO:)
The Patricia M. Kilkenny Family Irrevocable Trust
Community Trust Company, Trustee
3907 Market Street
Camp Hill, PA 17011
BOOK 253. PAGE440i
,
./ JLong-Term Care IlISUra..~
,
Long-Term Care
Long Term Care Insurancelllustration
IndividualLong-Tenn Care Insurance Policy
Prepared for: Patricia M Kilkenny
Prepared by: Bob Stengle FSR,CL TC,MBA,PE
For Presentation in: PA
ADF#401.99 (Rev. 04/01)
Page 1 of 12
MetLife
LO] 054RY7( exp0504 )MLIC-LD
19.007
PETITIONER'S :
EXHIBIT
te Prepared: 7/1712002
One Madison Ave
New York, NY 100]0
P/I ~
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MetLife Long-Term Care Insurance Proposal
What is Long-Term Care?
Long-term care is the kind of care you need when you are no longer able to care for
yourself independently, when you need help to eat, bathe, dress, move freely or cannot be
left alone. You may need this care because of an accident, a chronic medical condition or
simply because you're getting older. -
Long- Term Care - It's More Common Than You Think
While most prefer not to think about it, the need for long-term care can happen at any time
and at any age. Statistics show that 60% of Americans who reach age 65 may need
long-term care at some point in their lives. *
Is Long-Term Care a Part of Your Financial Plan?
You've worked hard to build the kind of life you want. You've planned for the future;
saved for your retirement - but, have you considered what effect an unexpected accident
or illness could have on your future? Like most Americans, probably not.
Are You Already Covered? Probably Not.
You may think you're already covered for this kind of care, either through Medicare, or
your medical plan. But the fact is, these plans are not designed to pay for long-term care.
Some of the most important reasons why people purchase
Long- Term Care Insurance. **
. To help avoid physical and financial dependence on family
. To help protect hard-earned assets
. To help maintain choice on how and where to receive care
. To help assure high-quality care, at an affordable price
Sources:
Conning & Company, Long-Term Care Insurance - Baby Boom or Bust?, 1999, p.15.
** Health Insurance Association of America, 1999.
*
Date Prepared: 7/17/200205:43:44 PM Pa~e 2 of 12
ADF#401.99 (Rev. 04/01) PEANUTOO United Feature Syndicate, Inc.
For Presentation in: PA
L01 054RY7( exp0504 )MLlC-LD
Version 19.007
\ktn)jl(lliLII1 Llk II1"ur~lllL'L C(ll1ljldll~
MetLife Long-Term Care Insurance Proposal,
Many people are surprised by the high cost of long-term care.
Unless you have had a personal experience with long-term care, it is hard to understand the
financial impact long-term care can have on a family.
Nursing home care can cost
an average of $44,100 a year*
Home health care can cost
an average of $15,743 a year*
You and your family will often pay for the cost of long-term care.
Who pays for long-term care?
Total long-term core
spending · .117 billion in 199a-
7 A% Private
Insurance
Take Advantage of an opportunity
to help protect yourself.
Fortunately, protection is available to
help fill the void left by traditional health
insurance.
The MetLife Long-Term Care Insurance
Policy can not only help you protect
yourself and your family against the high
cost of long-term care, but it can also help
you get...
The care you need in the setting you want.
Sources: * ACLI Study, "Can Aging Baby Boomers Avoid the Nursing Home?" March 2000
(Home Health Care assumes 5 Home Health Aide visits per week.)
** Office of the Actuary, National Health Statistics Group, Personal Care Expenditures,
HCFA - DHHS, 2000.
Date Prepared: 7/17/200205:43:44 PM Page 3 of 12
ADF#401.99 (Rev, 04/01) PEANUTS@ United Feature Syndicate, Inc,
For Presentation in: P A
L01 054RY7( exp0504 )MLlC-LD
Version 19.007
...
\ ktrupul itan Li rc In\ur~lI1L'L' C( )Illp~lll)
T E R M
IndiVidual Long-Term Care Insurance Proposal
Form #: lL TC-97
Met..,r0
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
Prul'(l\cd Ba\c C()\ cr~l~L
Plan of Coverage
Covera~e for Patricia
Comprehensive
Daily Benefit Amount
Home/Community Care %
Selected Waiting Period
Lifetime Multiplier
Total Lifetime Benefit
Up to $170.00
80%
100 Days
1825 Days (5 years)
$310,250.00
Prupll\cd Bcncl ih \nd P()lil') P1L'll1iull1 Dctail
Covera~e for Patricia
Monthly
Proposed Benefit Covera~e Premium
Base Coverage See Above $398.27
Inflation Protection Option 5% Compound $216.10
Nonforfeiture Coverage No N/A
Total Monthly Premium $614.37
Total Initial Premium
Annual Premium Semi-Annual Premium Monthl Premium
Patricia
$6,826.32
$3:481.42
$614.37
Please note that paying your premiums more often than annually (once a year) results in higher
yearly premium costs.
Premiums are subject to change. All premiums shown illustrate the available discount(s)
applicable to the coverage illustrated in this proposal. For details on the availability of the
illustrated discount(s), please refer to the Available Discount(s) section of the attached
"Understanding The Proposed LTC Coverage" pages.
Date Prepared: 7/171200205:43:44 PM Page 4 of 12
ADF#401.99 (Rev. 04/01) PEANUTS@) United Feature Syndicate, Inc.
For Presentation in: PA
L01 054RY7(exp0504 )MLlC-LD
Version 19.007
9:
\kll llrh l] i Un Li k II1~urtlI1L'l' Cllll1l'tlI1)
T E R M
Individual Long-Term Care Insurance Proposal
Form #: lL TC-97
MetL,te
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
,'\ \ tl i leth Ie Cm CLlgl' Sl' k'l'l i ()Ih - Pr\.'11111l111 S II m mar)
This page shows the premiums for a policy with different waiting periods and benefit
periods for the coverage outlined below.
Proposed Coverage for Patricia M Kilkenny
Form # 1 L TC-97
Plan of Coverage
Daily Benefit Amount
Comprehensive
Home/Community Care %
Up to $170.00
80%
(,:~
'---.-- /"
--~--.---
Not Included
Inflation Protection Option
Nonforfeiture Coverage
Illustrated Payment Mode
Monthly
Total
Lifetime
Benefit
$124,100
$186,150
$248,200
$310,250
Unlimited
Lifetime
Multiplier
730 Days (2 Yr)
1095 Days (3 Yr)
1460 Days (4 Yr)
1825 Days (5 Yr)
Unlimited
20 Days
$447.37
$569.62
$635.94
$706.17
$940.26
Premiums
------------ Waiting Period----------
45 Days 100 Days
$427.24 $389.21
$543.99 $495.57
$607.33 $553.27
$674.39 $614.37
$897.95 $818.03
180 Days
$355.66
$452.85
$505.58
$561.41
$747.51
Total Lifetime Benefit column does not reflect any increases based on
the indicated inflation option.
Please note that paying your premiums more often than annually (once a year) results in
higher yearly premium costs.
Premiums are subject to change. All premiums shown illustrate the available discount(s)
applicable to the coverage illustrated in this proposal. For details on the availability of the
illustrated discount(s), please refer to the Available Discount(s) section of the attached
"Understanding The Proposed LTC Coverage" pages.
Date Prepared: 7/171200205:43:44 PM Page 5 of 12
ADF#401.99 (Rev. 04/01) PEANUTS@ United Feature Syndicate, Inc.
For Presentation in: PA
L01 054RY7( exp0504)MLlC-LD
Version 19.007
..'
:\ Ictrupul i t,ll1 Li r,-' [Il"uralll'c C()l11pall~
T E R M
Individual Long-Term Care Insurance Proposal
Form #: lL TC-97
MctLlrc
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
l' nder....tCllldi Ilg The Pn lpu"cd LTC CU\ crClgc
Plan of Coverage
MetLife will pay benefits for covered services received in a Nursing Home, Hospice
Facility or Assisted Living Facility and if the proposed coverage includes
Home/Community Care, MetLife will pay benefits for covered services received in the
home and community.
Daily Benefit Amount
The Daily Benefit Amount is the maximum amount of reimbursement you can receive per
day. You will be reimbursed up to 100% of your Daily Benefit Amount for covered
services received in a Nursing Home, Hospice Facility or Assisted Living Facility, and if
the proposed coverage includes Home/Community Care, Respite Care (for up to 21 days
per policy year).
Lifetime Multiplier
Your Lifetime Multiplier is the number (of days) used in calculating the Total Lifetime
Benefit under the proposed policy.
Total Lifetime Benefit
The Total Lifetime Benefit is the total amount of dollars that is available to you over the
lifetime of the proposed policy. It is calculated by multiplying your selected Lifetime
Multiplier by your selected Daily Benefit Amount.
Home/Community Care %
This is a percentage of the Daily Benefit Amount that you will be reimbursed for covered
services received in the home and community, if the proposed coverage includes
Home/Community Care. The Weekly Home Care Rider, included in your policy if you
have a Home/Community % illustrated, helps maximize your home care benefits. The
Weekly Home Care Benefit is equal to the home care Daily Benefit Amount times 7. The
total amount is available in any week in which you incur expenses for Home/Community
Care covered services.
Selected Waiting Period
The Waiting Period is the number of days you must receive certain covered services while
you are chronically ill before you can receive benefit payments. This requirement need
not be met for Initial Care Advisory Services, or if the proposed coverage includes
Home/Community Care, for Respite Care or for Informal Caregiver Training.
Date Prepared: 7117/200205:43:44 PM Page 6 of 12
ADF#401.99 (Rev. 04/01) PEANUTS@ United Feature Syndicate. Inc.
For Presentation in: PA
L01054RY7(exp0504)MLlC-LD
Version 19.007
Notice to Proposed Insured
You should keep the copy of this Receipt and Agreement. The original will be kept by MetLife. If you do not hear from us about the
insurance applied for within 120 days ofthis Agreement. contact us at:
PO Box 937. Westport. CT 06881-0937
Long-Term Care Service Center
1-800-308-0179
I have read this Agreement, and reviewed my answers to questions 1 through 7 of Part B of the application. To the best of my knowledge and
belief. the answers to all those questions are true. I understand and agree to all of the terms of the Agreement. I understand that THIS
INSURANCE IS TEMPORARY AND LIMITED. I have received a copy of this Receipt and Agreement.
Date
No account representative is authorized to accept any payment with the application if you answered "YES" (or left blank) to any part of
questions 1 through 7 in Part B of your application.
Receipt of$ ~?2~ J>'..c:sack
on this Agreement Date.
By: l;1
hfr//~:'" 4/ k-e#n of
wIed ed in connection with the application in which the Proposed Insured is made /
C'
Metropolitan Life Insurance Company
District/Branch c:;. ,., ~J A".,,,
.$.?- J?'o~~ L,
~d- t~~
L is J. Ragu
Vice Presiden d Secretary
o
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)>
..,..,
)>
::r:
Title: F.r~
MetLife makes no representations as to the tax consequences of premium paid under this receipt, or the benefits you receive under this Agreement.
Consult your own legal or tax advisor.
ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO METROPOLITAN LIFE INSURANCE COMPANY.
DO NOT MAKE CHECK PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK.
00
e?
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MctL:tc
\ ktr\lj1\l!1 tan Li k Ilhllrcll1L'L' C\lmplln ~
Individual Long-Term Care Insurance Proposal
Form #: lL TC-97
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
Inflation Protection Option
MetLife provides options to help protect you against the rising cost of long-term care.
These increases can continue without regard to your age, health, or if you are receiving
benefits. The option illustrated is shown in the proposed coverage on page 4 of this
proposal.
Nonforfeiture Coverage
If you purchase this option and stop paying premiums after a period of time, you may still
receive certain benefits under the policy. Please refer to the policy or outline of coverage
for complete details or ask your MetLife representative.
Tax Qualified
This policy is intended to be tax qualified under the Internal Revenue Code. All or part of
your LTC insurance premiums may be deducted, for federal income tax purposes, based
on your age, as itemized medical deductions if they exceed 7.5% of your adjusted gross
income. Also, any LTC insurance benefits you receive will generally be federally income
tax free.
Available Discount(s)
Your policy may be eligible for a 15% preferred health discount if you meet certain
underwriting criteria.
Each policy will receive a 15% spousal discount on your policy if both you and your
spouse apply and are accepted for coverage, as long as both policies remain in force. If
one spouse dies, the ongoing policy retains the discount. If a policy is eligible for
multiple discounts, the maximum discount that can be applied to a policy is 25 %.
Your policy will receive a 10% spousal discount if both you and your spouse apply and
only one of you is accepted.' If your policy is eligible for multiple discounts, the
maximum discount that can be applied to your policy is 20%.
Discounts may vary on policy(ies) issued in substandard classes.
Guaranteed Renewable
Your policy cannot be cancelled, as long as you pay your premiums on time.
No part of the PEANUTS materials may be copied, reproduced, used or performed in any form (graphic,
electronic or mechanical, including photocopying, recording, taping or information storage and retrieval
systems) for any purpose without the express written permission of United Feature Syndicate, Inc.
Date Prepared: 7/171200205:43:44 PM Page 7 of 12 For Presentation in: PA
ADF#401.99 (Rev. 04/01) PEANUTS@ United Feature Syndicate. Inc. L01054RY7(exp0504)MLlC-LD
Version 19.007
...
\kll\)I',ditdl1 Lllc 111'-urancc C\)I11!"1lil1:
T E R M
Individual Long-Term Care Insurance Proposal
Form #: lL TC-97
Metl,re
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
LI\IIT.\TIO\S L~ E,\CLL SIO\S
There are times when MetLife WILL NOT PAY BENEFITS under the proposed
policy. These are known as "LIMITATIONS & EXCLUSIONS" and they VARY
BY STATE.
Below are the "LIMITATIONS & EXCLUSIONS" that are applicable in most states..
For the "LIMITATIONS & EXCLUSIONS" that are applicable in your state, refer
to the "OUTLINE OF COVERAGE" that will be given to you before completing an
application for coverage.
No payments will be made for any of the following:
· Treatment of alcoholism or drug addiction, unless such drug(s) was taken on the advice
of a physician.
· Any care received while in a hospital, except in a unit specifically designated as a
nursing home or hospice.
· Any injury or sickness that results from:
a) any war, or warlike action in time of peace; or
b) participation in a felony, riot or insurrection; or
c) aviation, except for fare paying passengers.
· Any intentional self-inflicted injury.
· Care received outside the United States or its territories.
· Services, other than chore services, performed by a member of the insured's immediate
family.
· Any service or supply to the extent the expense for it is reimbursable under Medicare
or would be reimbursed but for the application of a deductible, coinsurance or
co-payment amounts. This exclusion will not apply where Medicare is the secondary
payer under applicable law.
· Treatment received in a government facility (unless otherwise required by law);
services for which benefits are available under a government program (except
Medicaid); or services for which no charge is normally made in the absence of
insurance.
This is an illustration only; not a policy or a contract.
Refer to actual policy for complete details. Illustrated coverage is
subject to underwriting approval.
Date Prepared: 7/17/200205:43:44 PM Page 8 of 12
ADF#401.99 (Rev. 04/01) PEANUTS@ United Feature Syndicate, Inc.
For Presentation in: PA
L01054RY7(exp0504)MLlC-LD
Version 19.007
...
\lclrllpllliLlll Lik IIl\uraIlL'C Clllllpan:
T E R IV.
Individual Long-Term Care Insurance Proposal
Form #: lL TC-97
MetLlh:
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
r\\cllLthlc Inl1lliun Bencfil O!'li()n\ RCI,ull
Choosing the right Inflation Protection Option is a very important decision.
Whatever you decide will affect your available benefit amounts in the
future. This report is intended to help you better understand inflation
benefit options available to you.
· With the Optional Inflation Option, on each Policy Anniversary, you will be given
the opportunity to increase your daily benefit amount and the balance of your lifetime
benefit amount by 5%. You will not have to provide evidence of good health, as long
as you accept this offer once every two years. The premium will be adjusted to reflect
the increased coverage, and the premium for the increase in coverage will be based on
your attained age and the premium rates at the time each increase takes effect.
· With the Compound Inflation Option your daily benefit amount and the balance of
your lifetime benefit amount will automatically increase on each Policy Anniversary by
5%, with no increase in your premium.
The following 3 pages will show you how all the inflation protection options can affect
your policy over a period of time. Please note that each option causes your benefit
amounts to increase at a different rate.
Date Prepared: 7/171200205:43:44 PM Pa~e 9 of 12
ADF#401.99 (Rev. 04101) PEANUTOO United Feature Syndicate, Inc.
For Presentation in: PA
L01 054RY7( exp0504 )MLlC-LD
Version 19.007
....
\ Ictruj1u] it~1l1 Li k Ill\urancL' CUIl1j1an~
T f R M
Individual Long-Term Care Insurance Proposal
Form #: lL TC-97
MetLlfc
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
C()Il1j1~lri'-,un ()I tilL' .\\:liLlbk Inllltil)1l ()l,ti\)ll'-, I'()r PatriL'l:l
Amounts shown here under the Inflation Benefit Options available are based on the benefits selection as
described on page 4 of this proposal.
Optional Inflation Compound Inflation
Policy Age Daily Annualized Daily Annualized
Year Benefit Premium* Benefit Premium
Amount* Amount
1 75 170.00 4,779.24 170.00 7,372.44
2 76 179.00 5,055.24 178.50 7,372.44
3 77 188.00 5,357.16 187.43 7,372.44
4 78 198.00 5,723.76 196.80 7,372.44
5 79 208.00 6,131.04 206.64 7,372.44
6 80 219.00 6,630.00 216.97 7,372.44
7 81 230.00 7,185.24 227.82 7,372.44
.8 82 242.00 7,860.00 239.21 7,372.44
9 83 255.00 8,673.00 251.17 7,372.44
10 84 268.00 9,578.40 263.73 7,372.44
11 85 282.00 10,664.16 276.92 7,372.44
12 86 297.00 11,958.00 290.76 7,372.44
13 87 312.00 13,398.00 305.30 7,372.44
14 88 328.00 15,107.76 320.57 7,372.44
15 89 345.00 17,130.72 336.59 7,372.44
20 94 445.00 33,903.72 429.59 7,372.44
25 99 571.00 69,997.92 548.27 7,372.44
Premiums are subject to change. All premiums shown illustrate the available discount( s)
applicable to the coverage illustrated in this proposal. For details on the availability of the
illustrated discount(s), please refer to the Available Discount(s) section of the attached
"Understanding The Proposed LTC Coverage" pages.
* The Optional Inflation Daily Benefit Amount and Annualized Premium amounts shown assume that
you will exercise this option each policy year.
Date Prepared: 7/17/200205:43:44 PM Page 10 of 12
ADF#401.99 (Rev. 04/01) PEANUTOO United Feature Syndicate. Inc.
For Presentation in: P A
L01 054RY7( exp0504)MUG-LD
Version 19.007
...
\ktrllpllllldll LirL' Insurance Clllllp~lIl)
T E R M
Individual Long-Term Care Insurance Proposal
Form #: lL TC-97
Me/Lire
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
:'-Jet Cu-,[ III Bel1L'lltl'l'r Dllllclr ul Prl'll1iull1 :\Il~tl)-,i-, I'llI' Patricia
The graph below provides analysis of how much, in annualized premium dollars, you would pay for each
dollar of the Daily Benefit Amount each policy year. This graph is based on the figures shown in the table
on the previous page.
Notice that while the Optional Inflation option will cost you the least per dollar of the Daily Benefit
Amount in the first policy year, it will increase and become more expensive than the other option in later
policy years. Because the premium for the Compound Inflation Option is expected to stay level, taking
into account the annual increase in the Daily Benefit Amount, their Net Cost of Benefit per Dollar of
premium paid will decrease over time.
Net Cost of a dollar of daily benefit amount per dollar
of annualized premium for each inflation option
15
,-...
{,A-
'-..-/
en
1-0
C':S
.....
.....
o
o
... ... ... A----A--A.
o
] 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Year
... Compound
. Optional
Premiums are subject to change. All premiums shown illustrate the available discount(s) applicable to the
coverage illustrated in this proposal. For details on the availability of the illustrated discount(s), please
refer to the Available Discount(s) section of the attached "Understanding The Proposed LTC Coverage"
pages. Above graph assumes that you will exercise the Optional Inflation Option every policy year.
Date Prepared: 7/171200205:43:44 PM Page 11 of 12
ADF#401.99 (Rev. 04/01) PEANUTS@United Feature Syndicate. Inc.
For Presentation in: PA
L01 054RY7( exp0504)MLlC-LD
Version 19.007
...
\klWP()liLlll Lik In'-ural1L'c C()ll1p~lI1)
T E R M
Individual Long-Term Care Insurance Proposal
Form #: lLTC-97
t....~etLI tc
Proposed Insured:
Health Rating:
Age:
Patricia M Kilkenny
Preferred
75
;'\\ ~llLtbk Inrlatiun Iklldil Opli(lll PICll1iUlll'- Rc\ ic\\
Let's review the policy premium amounts for Patricia
· With the Optional Inflation Option, assuming that you will exercise your option each
year to increase the benefit amounts, your first year policy premium will double in the
10th policy year, triple in the 14th policy year and quadruple in the 16th policy year.
· With the Compound Inflation Option, the corresponding premium amounts will remain
level for all the policy years.
Choose your option wisely.
Date Prepared: 7/171200205:43:44 PM Page 12 of 12
ADF#401.99 (Rev. 04/01) PEANUTOO United Feature Syndicate, Inc.
For Presentation in: PA
L01054RY7(exp0504)MLlC-LD
Version 19.007
April 8, 2004
TRUST
COMPA Y
Catherine A. McKinney
6 Coover Court
Dillsburg,PA 17019
RE: The Patricia M. Kilkenny
Family Irrevocable Trust
Dear Mrs. McKinney:
Enclosed is a photo static copy of your mother's irrevocable trust, as you requested in
your letter dated April 6, 2004, and also during our phone conversation of April 7, 2004.
As I mentioned on the phone, we reviewed the grantor rules for classifying the
taxability of this trust and with the powers of appointment that you and your mother
possess, the trust could be considered a complex 100 trust for fiduciary income tax
preparation purposes. Therefore, in reclassifying the trust for tax purposes, there will be
no taxable income to declare on you or your mother's personal income tax returns for the
tax year ending December 31, 2003. A corrected return is being prepared for the trust
and you should disregard the grantor letter that you received. Since there were no
distributions from the trust for the 2003 taxable year all reportable income is reported on
the trust tax return.
Also, in answer to your question concerning your mother's fees, Trustee fees are
calculated at the annual rate of 1.10% of the market value of the Trust. This calculation
is done monthly on the last business day of the month, based on the month end market
value, and charged to the account accordingly on a monthly basis. These fees can be
taken from the income or principal of the account.
PETITIONER'S
EXHIBIT
rI~
Pc 6 II'd.#Ob
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...
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...
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...
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3907 Market Street Camp Hill. PA 17011 Telephone 717.731.9604 888.442.9604 Fax 717.737.7834 www.communitytrustco.com
The real estate was added to the trusj in October 2002 and the annuities were not
added to the trust until later in 2003. Fees were calculated and accrued from the time the
trust was funded in 2002. However, there was no liquidity from which to charge the fees
until the annuities were deposited to the trust. At that time withdrawals were made from
one of the annuities to cover fees accrued and not paid, as well as future fees and
expenses against the real estate held in the trust. As you mentioned on the phone, all of
the fees taken in 2003, came from income. The annuity company considered the
withdrawal amount made from the annuity to be a distribution of income, therefore, fees
were charged against income.
After reading the enclosed agreement, if you have any questions, please give me a
call. It is very important both you and your mother fully understand the trust, and feel
comfortable with the way it is administered.
Cordially,
Community T~s#t COIl}pany
~..........,. ." ....
/J / /
_~ .:~~ (d.t.t <.
- atricia A- Walter
Trust Officer
Enclosure
10/25/2005 14:54
71 77377834
COMMUNITY TRUST CO
PAGE 01
....-.-------..- .----"-
UNlIT
TRUST
" ~ W I' 1\ Nl
TO: Catherine 'McKinney
COMP~:
TELECOPIER NUMBER: (717) 705-7241
FROM~ Patricia A. Walter, Trust Officer
DATE: Octobe~ 25, 2005
TOTAL NUMBER OF PAGES (iNCLUDING COVER SHEET): 2
IF YOU DO NOT RECEIVE ALL OF THE PAGES, PLKASE CALL (71'7) 731-9604
M S S SAG El
Ca.therine:
Article 9.01 of the Patricia M. Xilkenny Family Irrevocable
Trust Agreement indiaatea, ~The Truste shall receive as its
campensationfor the services performed hereunder that sum of money
which the Trustee nor.mally and customarily charges for performing
similar services during ~ t~ which it perfor.ms these services.w
Atta.ched is a copy of our current Fee Schedule. If you have
any questions, please feel free to give me a call.
~-:J(
===;===~~=:==~=~=~=====~====~====~===~===;===========~===~~===
The information contained in thia facsimile communication is
confidential and intended only for the use of the person to whom
it is addressed. Such information may be privileged and exempt
from disclosure under applicable law. If the reader of this
communication is not the intended recipient, or the employee or
agent responsible for its delivery to the intended recipient, you
are hereby notified that the reproduction, distribution or
losure of any part of this communication, other than to the
nded recipient, is strictly prohibited. If you have received
communication in error, please notify US immediately by
~. phone, and return the original communication to us at our
Pel.> lJ.a,.plt? ing address above by united States First Class Mail.
PETITIONER'S
EXHIBIT
on,,", U~~l.~~ c;..MDI r.:>lmn HilL PA 170I.1i;;:,~lephone ~H'i6~1.9604 888.442.9604 Fax 717.737.7834 www.communitytrustco.com
COl\l1\lUNIT~' TRlTST COl\IIP A~~'
I.rrevocable and Revocable Trusts
Guardianships
MARKET VALUE tEE:
, .10% on the first
1.00% on the next
0.90% on the next
0.80% balance over
$ 500,000
$ 500.000
$ 500,000
$ 1,500,000
~lNIMUM FEE: (per year)
Standard Trusts S 1,500
Plus an Annual base fee $ 250
~1ANDARD ADMJNlSTRA TIVE SERVICES
A. lnvestment Management
I. In\lestment management of stocks, bonds, money mlU'}<et instruments
2. Periodic review of assets and portfolio
3. Execution of security trades
B. Administrative
1. Determination of beneficiary needs
2. Communication with beneficiaries
3. Safekeeping of assets
4. Collection/distributioTl ofincome
5. Deciding discretionary distributions
6. Bill paying services and medical claim filing services.
C. Accounting
1. Recordkeeping
2. Periodic statement of activity
3. periodic sratemeJlt of asset values
OTHER FEES
. Fees quoted arc annual fees. They will be prorated and charged to the account monthly. Fee wlll be
assessed based on the market value of the account on the last business day of every month.
. Grantor Directed Trusts (outside investment advisor) will be charged II 20 basis point premium.
. Federal Reserve wire fees at cost. Broker and SEe commissions for trades at cost.
. Account Termination Fee: Equal to the average fee charged over the prior 12 mouths, annualized.
(If account open less than 12 months, average of total fees charged, annualized.)
. Trust Company receives a 25 Basis Point commission from fund provider on money market balances.
. Fiduciary Income Tax Preparation fee is not included in the Trustee fee.
. Fees quoted are for the standard asset management and administrative services as noted above.
eTC reserves the right to charge additional reasonable compensatioJl fOf extr'dordinary services
based on time, expertise and reimbursement of costs and expenses.
3907 MBrltd Street Camp Hill. l'A 17011 Telephone 717,731.9604 888442.9604 Fa, 717.737.7834 WWW,CQ\l1mumtytrustCQ.COITl
BANGS LAW OFFICE.
429 SOUTH 18TH STREET
CAMPHILL,PA 17011
E-mail: mikebangs@verizon.net
PHONE: 717-730-7310
FAJ{: 717-730-7374
MICHAEL L. BANGS, Attorney-at-Law
WENDY K. STRAUB, Paralegal
WILLIAM E. MILLER, JR.
Of Counsel
December 27, 2005
VIA FACSIMILE AND REGULAR MAIL
.1
n 'f.~':-~,jll
r'" y. ....
.--------- '.'" ~
\ <~ ~ ~
\'
Patricia A. Walter, Trust Officer
Community Trust Company
3907 Market Street
Camp Hill, PA 17011
RE: The Patricia M Kilkenny Family Irrevocable Trust
Dear Ms. Walter:
Please be advised that I represent Catherine A. McKinney, Settlor under the above-referenced trust
as well as Patricia M. Kilkenny, her mother who is the beneficiary of the trust. Under Paragraph 5.02,
Catherine A. McKinney is exercising her general power of appointment for the principal of this trust.
Specifically, she is exercising her general power of appointment over all principal of the trust which I
believe includes the following:
1. The residence at 605 Fairway Drive, Camp Hill, Pennsylvania; and
2. Annuities with MetLife, Contract Nos. 550008223 and 550008217.
She intends to appoint all the principal of the trust to her mother, Patricia M. Kilkenny, thus
terminating the trust.
I am in the process of preparing a deed to accomplish that task. I have also received
documentation from the annuities to transfer the assets as well.
Please advise me if there is someone else who should be receiving these original documents. Also,
you need to advise me right away if there are any other steps that need to be taken in order to effectuate
the termination of the trust with your company.
PETITIONER'S
EXHIBIT
PC'IJ
/17
// J..f'"
Page 2
December 27, 2005
We want to get this accomplished right away so we expect that there will be no further charges
accruing to the trust for further services by Community Trust Company as trustee.
I look forward to hearing from you.
Very truly yours,
Michael L. Bangs
wks
cc: Mrs. Patricia M. Kilkenny
Mrs. Catherine A. McKinney
Office of Attorney General
Torts litigation Section
15th FI. Strawberry Square
Harrisburg,PA 17120
(717) 783-3148 - Direct
(717) 705-7241 - Fax
FAX TRANSMISSION COVER SHEET
To: Pat Walters From: Kay McKinney
.
Fax: : 717-737-7834 Pages (including cover sheet): 3
Phone: 717-731-9604 Date: February 3, 2006
Subject: Patricia Kilkenny Trust
Classification:
o URGENT
o FOR REVIEW
[gJ PLEASE COMMENT
o PLEASE REPLY
Message: I tried unsuccesfully to reach you this week to discuss the enclosed
letter. Please contact either Mike Bangs or myself to discuss the arrangements
that must be made to transfer the property and annuities to my mother.
Any questions, please call me at 717-783-5535.
IMPORTANT/CONFIDENTIAL: This communication is intended for the use of
the. individual or entity to which it is addressed. This message contains
information from the Office of Attorney General, Commonwealth of Pennsylvania,
which may be privileged, confidential and exempt from disclosure under
applicable law.
PETITIONER'S
EXHIBIT
#$
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TRANSMISSION VERIFICATION REPORT
TIME 02/03/2006 15:14
DATE. TIME
FAX NO. 1 NAME
DURATION
PAGE(S)
RESULT
MODE
02/03 15:13
97377834
00:00:49
03
OK
STANDARD
ECM
Fenruary 3,2006
TRUST
COMPANY
Bangs Law Office
429 South 18th Street
Camp Hill, PA 17011
Attention: Michael L. Bangs
RE: The Patricia M. Kilkenny Family
Irrevocable Trust
Dear Mr. Bangs:
I have received your letter, dated December 27,2005, concerning Catherine A.
McKinney's request to exercise her Section 5.02 General Power of Appointment for the
principal of the above referenced trust. I would like to take a moment to reiterate what I
have told Catherine McKinney and Patricia Kilkenny concerning the termination of the
trust.
When Mrs. Kilkenny decided to create this Trust she was concerned with the
preservation of her assets in the event she needed long-term nursing care. She wanted to
also avoid capital gains taxes and inheritance taxes at her death. The Trust she created
did iust that. Mrs. McKinney executed the Trust documents on September 6,2002;
therefore, Mrs. Kilkenny has exceeded the three year period of ineligibility for Medical
Assistance. If this trust is terminated, all the estate planning for asset protection will be
eliminated.
The last time I spoke to Mrs. Kilkenny, she had expressed an interest in selling her
residence; this is a large part of her estate that will no longer be protected. We are more
than willing to comply with Mrs. McKinney's wishes; however, I thought you should
know the consequences involved by terminating her trust.
When terminating a trust this size, it is our standard practice to file a formal account
with the Orphans Court of Cumberland County; however, knowing Mrs. McKinney
wants this done expeditiously we will terminate the trust by a Receipt and Release si med
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3907 Market Street Camp Hill, PA 17011 Telephone 717.731.9604 888.442.9604 Fax 717.737.f'634 www.communitytrustco.com
-
Michael L. Bangs
Page 2
January 26, 2006
by the grantor. Upon receipt ofthe executed Receipt and Release, we will prepare the
paperwork necessary to reregister the assets held in the above referenced trust.
Also, we will continue to charge fees on this account until we are no longer Trustee;
there will also be a termination fee assessed, per our published fee schedule. The fee will
be the average fee charged over the prior twelve months, annualized. The termination fee
for this account will be $4,273.02. There will also be tax preparation fees charged
against the trust for the tax year ending December 31, 2005 and for 2006 through to the
date of termination.
If you have any questions concerning this information, I can: be reached at (717) 731-
9604.
Cordially, I
P:i:.~~ojt~
Trust Officer
cc: Catherine A. McKinney
Patricia M. Kilkenny
~="";.':::^~
BAN6S LAY/. OFFICE
PHONE: 717-730-7310
~AJ{: 717-730-7374
429 SOUTH lSTH STREET
CAMP HILL, P A 17011
E-mail: mikebanpftverizon.net
MICHAEL L. BANGS, Attorney-at-Law
WENDY K. STRAUB, Paralegal
WILLIAM E. MILLER, JR.
Of Counsel
February 16,2006
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Patricia A. Walter, Trust Officer
Community Trust Company
3907 Market Street
Camp Hill, P A 17011
RE: The Patricia M Kilkenny Family Irrevocable Trust
Dear Ms. Walter:
I am in receipt of your letter of February 3, 2006 and have reviewed this with Catherine McKinney
and Patricia M. Kilkenny. After discussing this matter with them, it is their desire to exercise a general
power of appointment over the following assets:
1. The residence at 605 Fairway Drive, Camp Hill, Pennsylvania.
2. Annuity No. 55008223.
In your letter of February 3,2006, on Page 2 (which incidentally is dated January 26, 2006), you
indicated that you would be preparing the paperwork necessary to reregister these assets. There is no
need to prepare the paperwork because I enclose for you a Deed which will accomplish the transfer of
the residence and the beneficiary change form that I received directly from MetLife. I enclose for your
information a copy of the letter I received from MetLife.
All that needs to occur under the MetLife beneficiary change form is a signature by a designated
person for the trust who is the owner. That needs to he returned to me along with the signed Deed and
then we can go ahead and have these assets transferred directly to Mrs. Kilkenny.
The trust will remain in place with the other annuity.
I would appreciate a quick return of these documents. I hope that I do not have to go through
another 4S-day or so delay in receiving a response. I think this is a very simple matter and it is in
accordance with my client's wishes and, more importantly, it is an appropriate request by Catherine A.
McKinney who has a general power of appointment under the trust.
PETITIONER'S
EXHIBIT
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Patricia A. Walter, Trust Officer
2
February 16,2006
Please contact me if you have any questions.
Very truly yours,
Michael L. Bangs
wks
Enclosures
cc: Mrs. Patricia M. Kilkenny
Mrs. Catherine A. McKinney
BANGS LAy{ OFFICE
PHONE: 717-730-7310
FAX: 717-730-7374
429 SOUfH ISTH STREET
CAMP HILL, P A 17011
E-mail: mikebangs(Civerizon.net
MICHAEL L. BANGS, Attorney-at-Law
WENDY K. STRAUB, Paralegal
WILLIAM E. MILLER, JR.
Of Counsel
March 10,2006
VIA FACSIMILE 737-7834
AND REGULAR MAIL
r=:: ~, ~."_ E
Patricia A. Walter, Trust Officer
Community Trust Company
3907 Market Street
Camp Hill, PA 17011
RE: The Patricia M Kilkenny Family Irrevocable Trust
Dear Ms. Walter:
Three weeks have now passed and I have not received the Deed or the signed annuity document
that I sent to you under cover letter of February 16, 2006. The delay in returning these items is
inexcusable and I request that they be returned to us immediately so that we can make the transfers as
indicated in my letter of February 16,2006.
I expect to receive those documents within the next week. If for some reason you do not expect to
send those documents to me within the next week, I need to hear from you immediately as to why that
is not occurring.
Please give this matter your immediate attention.
Very truly yours,
Michael L. Bangs
wks
cc: Mrs. Patricia M. Kilkenny
Mrs. Catherine A. McKinney
PETITIONER'S
EXHIBIT
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3907 Market Street Camp Hill, PA 17011 Telephone 717.731.9604 888.442.9604 Fax 717.737.7834 www.communitytrustco.com
March 13,2006
TRUST
COMPANY
Bangs Law Office
429 South 18th Street
Camp Hill, PA 17011
Attention: Michael L. Bangs
RE: The Patricia M. KilkemlY Family
Irrevocable Trust
Dear Mr. Bangs:
In answer to your letter dated February 16, 2006 with attachments, we have reviewed
the attachments and we have some concerns.
First, we are not satisfied with the deed you prepared for the transfer of Mrs.
Kilkenny's property from the trust back to her. Our standard practice is to use a
Trustees Fiduciary Deed, and we have contacted an attorney to prepare such a Deed.
Second, the termination fee will now be $3,098.10. This termination fee is
calculated by using the market value of the assets which are being removed from the
above referenced trust. The funds remaining in the account will be charged our standard
$1,500.00 annual fee.
Upon receipt of the Trustees Fiduciary Deed, we will execute the deed and the
paperwork from MetLife and send both documents to you, along with a Receipt and
Release
If you have any questions concerning this information I can be reached at (717) 731-
9604.
G~~~::~ tic ~ d~
Pa 'ciaA. Walt~1
Trust Officer
cc: Catherine A. McKinney
Patricia M. Kilkenny
PETITIONER'S
EXHIBIT
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Catherine McKinney
6 Coover Court
Dillsburg, P A 17019
(717) 432-4553
May 19,2004
Via Fax 717-737-7834
Pat Walter
. Community Trust Company
3907 Market Street
Camp Hill, PA 17011
Re: Patricia M. Kilkenny Irrevocable Trust
Dear Pat:
Please forward a copy of the amended tax return.
My mother would like to withdraw approximately $20,000 in August when the
disbursements from the trust are made for taxes. She would like to do it at that time because it is
her understanding that there can only be one withdrawal per year from the annuity. Please
contact me before any money is withdrawn from the trust.
I understand any income generated from the trust is taxed. How much of the $20,000 will
be taxable as there really has been no income generated because ofthe Trust's fees? Am I
responsible for those taxes pursuant to the terms of the trust?
I will look forward to receiving this information.
Very truly yours,
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Catherine McKinney
PETITIONER'S
EXHIBIT
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September 12, 2006
COMMUNITY
TRUST
Bangs Law Office
429 South 18th Street
Camp Hill, P A 17011
Attention: Michael L. Bangs, Esquire .
RE: The Patricia M. Kilkenny Family
Irrevocable Trust
Dear Mr. Bangs:
Enclosed is our check #16304, in the amount of$11,120.00, representing the funds
requested by Mrs. Kilkenny, for the following expenses:
Long Term Care Insurance
Blue Cross Hospitalization
09/06 & 01/07
House Painting
Country Club Dues
Gifts
$4,900.00
820.00
1,200.00
3,200.00
1,000.00
Also, we have paid the 2006-07 School Real Estate Tax directly to Debbie LupoId,
Treasurer. If you have any questions concerning these distributions, I can be reached at
the address and phone numbers below
Cordially, j /. i/
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Trust Officer
Enclosures
Cc: Patricia M. Kilkenny
Catherine A. McKinney
3907 Market Street Camp Hill, PA 170ll Telephone 717.731.9604 888.442.9604 Fax 717.737.7834 www.communitytrustco.com
BANtiS LAW OFFICE
429 SOUTH ISTH STREET
CAMP HILL, PA 17011
E-mail: mikebangs@verizon.net
PHONE: 717-730-7310
FA}(: 717-730-7374
WILLIAM E. MILLER, JR.
Of Counsel
MICHAEL L. BANGS, Attorney-at-Law
WENDY K. STRAUB, Paralegal
March 16, 2006
VIA FACSIMILE 737-7834
Patricia A. Walter, Trust Officer
Community Trust Company
3907 Market Street
Camp Hill, PA 17011
t::
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RE: The Patricia M Kilkenny Family Irrevocable Trust
Dear Ms. Walter:
I am in receipt of your letter of March 13, 2006 and quite frankly am very surprised by its
contents. The Kilkennys contacted me to provide the deed and if it is your intention to have your own
attorney do that, you may do so but we do not expect the trust to be charged for that work.
More importantly, there is nothing in any documentation that I have received that allows the trust
to charge a termination fee on the removal of these assets. The trust is not being terminated. The
documentation that I have seen indicates that you may charge an account termination fee; you may not
simply charge a fee for having assets removed.
If you have some written authority that permits Community Trust to charge those fees, I would be
interested in reviewing that documentation. You are not authorized to charge the termination fee until
such time as I have the opportunity to review that documentation.
In the meantime, we expect these assets to be removed immediately. There is no reason for this
delay and I hope that Community Trust can act in its appropriate fiduciary responsibility and get these
assets removed now without further delay.
I look forward to hearing from you on the termination fee issue.
f Very truly yours;
V 'f
Vw.~~.
Michael L. Bangs
wks
cc: Mrs. Patricia M. Kilkenny
Mrs. Catherine A. McKinney
PETIlIONER'S
EXHIBIl
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BAN6S LAW OFFICE
429 SOUTH 18'1'11 STREET
CAMP HILL, PA 17011
E-mail: mikebangscw.verizon.net
PHONE: 717-730-7310
FAX: 717-730-7374
MICHAEL L. BANGS, Attorney-at-Law
WENDY K. STRAUB, Paralegal
WILLIAM E. MILLER, JR.
Of Counsel
April 5,2006
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VIA FACSIMILE AND REGULAR MAIL
Patricia A. Walter, Trust Officer
Community Trust Company
3907 Market Street
Camp Hill, P A 17011
RE: The Patricia M Kilkenny Family Irrevocable Trust
Dear Ms. Walter:
Over six weeks have now passed and Community Trust Company has failed to send us the
documentation that I provided to you under cover letter of February 16,2006 so we could remove the
real estate and Annuity No. 5008223 under the Patricia M. Kilkenny Family Irrevocable Trust.
I have advised my clients that I believe that Community Trust Company has breached its fiduciary
responsibilities under this trust by its repeated failure to follow the terms of the trust in a timely
manner. If we don't receive those documents within the week, my clients will consider filing an action
against the trust company for this breach of fiduciary duties and include a claim for counsel fees.
It is unfortunate that Community Trust has delayed this rather simple process for well over three
months while continuing to collect fees. Hopefully you will follow through with your fiduciary
responsibilities immediately and not force this matter into court.
Very truly yours,
Michael L. Bangs
wks
cc: Mrs. Patricia M. Kilkenny
Mrs. Catherine A. McKinney
PETITIONER'S
EXHIBIT
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4-29 SOUTH 18TH STREET
CAMP HILL, PA 17011
E-mail: mikebangs@verizon.net
BANGS LAW OFFICE
PHONE: 717-730-7310
lPAJ{: 717-730-7374-
MICHAEL L. BANGS, Attorney-at-Law
WENDY K. STRAUB, Paralegal
WILLIAM E. MILLER, JR.
Of Counsel
April 25, 2006
VIA FACSIMILE (737-7834) AND REGULAR MAIL
Patricia A. Walter, Trust Officer
Community Trust Company
3907 Market Street
Camp Hill, PA 17011
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RE: The Patricia M Kilkenny Family Irrevocable Trust
Dear Ms. Walter:
I am following up on my phone conversation with you today. I received the Receipt and Release
Agreement and was astounded to find out that the trust company was continuing to assert that it could
charge a termination fee on the removal ofthese assets from the trust.
I want you to provide me with some written authority wherein you believe that the trust is
authorized to charge this termination fee. Catherine McKinney is simply exercising her power of
appointment over the assets of the trust; the trust is not being terminated and therefore no termination
fee can be charBed. Therefore, we expect these assets to be removed immediately.
Secondly, there is absolutely no basis for a Receipt and Release Agreement to occur in this case.
This is not a termination or an ending of the trust. A Receipt and Release Agreement is not necessary.
Weare merely exercising a power of appointment and under the direct language of the trust,
Community Trust Company is required to distribute those trust assets.
You need to forward to me the MetLife Annuity and the Trustee's Fiduciary Deed immediately. If
you will not do so, you need to advise me of that in writing as well.
I am also advised by Catherine McKinney that a charge had accrued for the preparation of a tax
return yet my clients have never received a copy of the tax return. I expect to receive that tax return
immediately.
I have been advised that the law offices of Lowell Gates, Esquire, has sent a charge for the
preparation of the deed directly to Mrs. Kilkenny. Mrs. Kilkenny will not be paying that charge in that
we did not authorize that office to prepare the deed.
PETITIONER'S
EXHIBIT
#17
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Patricia A. Walter, Trust Officer
2
April 25, 2006
Finally, Community Trust Company has continued to charge this trust approximately $400.00 per
month even though the delay in withdrawing these assets has been entirely the responsibility of
Community Trust Company. Under the fee schedule that I have reviewed, it appears that the
maximum the trust company can charge is $1,500.00 which equates to $125.00 per month. We expect
that the trust will be reimbursed the amount of $275.00 per month for the months of January, February,
March and April for a total of$1,100.00 and that for the month of May, the trust will be charged only
$125.00 since the assets that are remaining in the trust, per our previous request, would only invoke a
minimum fee.
I have copied Mr. Gates with this letter and will expect to receive from Community Trust
Company an acknowledgment of the refunding of this money and the MetLife Annuity and Trustee's
Fiduciary Deed so that these assets can be removed from the trust before weeks end. Otherwise, we
will file an action in the Court of Common Pleas of Cumberland County seeking this relief as well as
compensating Mrs. Kilkenny and the trust for all fees incurred in this matter.
Very truly yours,
Michael L. Bangs
wks
cc: Mrs. Patricia M. Kilkenny
Mrs. Catherine A. McKinney
Lowell R. Gates, Esquire
~
BANEiS LAy/. offlCE
PHoNE: 717_730-7310
FAX.: 717_730-7374
429 so\Yfll1Sf\l STREET
cAlAP Hu..L, P A 17011
E-roail: ~
1\1l~L L. BANGS, A.ttorney.at-LaW
WENDY K. STRAlTB, "Paralegal
WILLIA.M. E. M.ILLER, JR.
Of Counsel
April 26, 2006
VIA. F A.CSIMlLE i\ND REGllLAR MAIL
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susan A. Russell, CEO
conununity Trust Company
3901 Market Street
camp Hill, PA 11011
RE: The Patricia M. Kilkenny Family Irrevacable Trust
Dear Ms. Russell'.
I am contactin .
Thl~ UT~C f{'\l1nm~...= )Iou m response to ~ .
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'CJ'.i."'O" , ,',_..'A_
BANEiS LAy{ OFFICE
PHONE: 717-730-7310
FAX: 717-730-7374-
4-29 SOUTH 18TH STREET
CAMPHILL,PA 17011
E-mail: mikebangs((j}yerizon.net
MICHAEL L. BANGS, Attorney-at-Law
WENDY K. STRAUB, Paralegal
WILLIAM E. MILLER, JR.
Of Counsel
April 26, 2006
VIA FACSIMILE AND REGULAR MAIL
-- -;:;'.
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Susan A. Russell, CEO
Community Trust Company
3907 Market Street
Camp Hill, P A 17011
RE: The Patricia M Kilkenny Family Irrevocable Trust
Dear Ms. Russell:
I am contacting you in response to a phone conversation that I had with Lowell Gates, Esquire.
This was following receipt by Mr. Gates of a letter that I had faxed to your Trust Officer, Patricia A.
Walter, dated April 25, 2006, and correspondence to Mr. Gates directly. He suggested that I call you
to try to resolve these issues. However, I thought it would be best that you have this information to
review before we discuss it by phone.
Enclosed you will find the most recent letter I sent to your Trust Officer. In case you are unaware
ofthe history of this case, I will repeat it for you in this letter.
By letter dated December 27 , 2005, sent via facsimile to your Trust Officer, I advised her that
Catherine A. McKinney was exercising her general power of appointment over all of the principal of
the trust which is comprised of a house and two separate annuities. I asked her what steps were needed
in order to effectuate the termination of the trust.
Well over a month later, by letter dated February 3, 2006 (which I received a day or so later),
Ms. Walter advised us of a termination fee that would be assessed for the termination of the trust. I
found the delay in response to be inexcusable.
By letter dated February 16,2006, I advised Ms. Walter that we would not be terminating the trust
but rather, the Settlor, Catherine A. McKinney, would be exercising her general power of appointment
under Section 5.02 over two assets within the trust, the house and one of the annuities, and asked that
those be withdrawn from the trust. I forwarded with that letter a copy of the information that I
received from MetLife which was a form that simply needed to be signed by Community Trust
Company and forwarded back to me. I also forwarded a Deed transferring the house.
PETITIONER'S
EXHIBIT
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Susan A. Russell, CEO
2
April 26, 2006
Almost a month passed when I faxed a follow up letter to Patricia Walter dated March 10, 2006
asking the status of this matter. Again, I did not receive the courtesy of any response in the interim.
I finally received a letter dated March 13, 2006, some two and a half months from the initial
inquiry, advising me that the trust company was going to charge a termination fee on the assets that we
were removing and also that Community Trust was not satisfied with my Deed but would have a deed
prepared by its own attorney. The annuity document was not sent back.
I advised your Trust Officer by letter dated March 16,2006, that Community Trust had no
authority to charge a termination fee since the trust was not being terminated. I also advised her that
we would not be paying any legal costs associated with the preparation of the deed and if Community
Trust had any changes to be made to the deed, they certainly could advise me accordingly.
I received no response from that letter.
Catherine McKinney made numerous phone calls to the Trust Officer and did not receive any
response.
Finally, on April 25, 2006, I received a letter from Patricia Walter with a proposed Receipt and
Release Agreement which again contained the termination fees as indicated. This was another month
and a half from my previous inquiry.
My letter to Patricia Walter is self-explanatory. The delay in responsiveness by the trust company
is incomprehensible to me. It has taken four months and still a very simple process has not been
accomplished, namely the removal of one of the annuities and the house from the trust. My clients'
patience, as well as mine, has now ended.
I welcome the opportunity to discuss a resolution of this matter if you wish. If it is the trust
company's position that they will not resolve the matter in accordance with what is outlined in the
letter dated April 25, 2006 to Ms. Walter, you need to advise me of that as well.
I look forward to your attention to this matter and hearing from you.
Very truly yours,
Michael L. Bangs
wks
Enclosure
cc: Mrs. Patricia M. Kilkenny
Mrs. Catherine A. McKinney
BANEiS LAW OFFICE
PHONE: 717-730-7310
FA){: 717-730-7374
429 SOUTH ISTH STREET
CAMPHILL,PA 17011
E-mail: mikebanp@verizon.net
MICHAEL L. BANGS, Attorney-at-Law
WENDY K. STRAUB, Paralegal
WILLIAM E. MILLER, JR.
Of Counsel
Mrs. Patricia M. Kilkenny
603 Fairway Drive
Camp Hill, P A 17011
FOR PROFESSIONAL SERVICES:
Costs Advanced to October 1,2006
HourslRate Amount
25.42
$185.001hr $4,702.00
$102.34
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EXHIBIT
I
TRUST
COMPANY
June 9, 2006
Walter F. Gaige
Consumer Services Specialist
Pennsylvania Department of Banking
333 Market Street, 16th Floor
Harrisburg, P A 17101-2290
Re: Catherine McKinney;
Patricia M. Kilkenny Family Irrevocable Trust;
Patricia M. Kilkenny, trust beneficiary
Dear Mr. Gaige:
We are in receipt of your letter dated April 24, 2006 regarding a complaint filed with the
Pennsylvania Department of Banking (Department) by Ms. Catherine McKinney (Ms. McKinney)
relating to the Patricia M. Kilkenny Family Irrevocable Trust dated September 6, 2002 (trust) Ms.
McKinney established for her mother Patricia M. Kilkenny (Mrs. Kilkenny). Ms. McKinney named
Community Trust Company (CTC) as trustee ofthe trust and CTC has been serving in the capacity
as trustee since accepting the trust on September 24, 2002. This letter is our response to Ms.
McKinney' complaint.
Patricia M. Kilkenny, mother of Catherine McKinney met with Lowell Gates, Esquire of
Gates, HaIbruner & Hatch, P.c. (GHH) in August 2002 for various estate planning purposes. The
Patricia M. Kilkenny Family Irrevocable Trust (Trust) was created as part of her estate plan. Prior
to it's creation, Community Trust Company, (CTC) met with Mrs. Kilkenny and Mr. Gates at the
law offices of Mr. Gates for purposes of discussing CTC potentially serving as trustee of the Trust
that was to be created. As evidenced by the governing instrument that was executed, Ms.
McKinney as grantor named CTC as Trustee of the Trust.
As Trustee, we were supplied with various supporting documents that supported the estate
planning options that Mrs. Kilkenny was provided and subsequently elected. Please refer to the
attached "Estate Planning Analysis and Contractfor Patricia M. Kilkenny" dated August 23,2002
as prepared by GHH. This document has been redacted to illustrate only matters pertaining to the
Trust. Also attached is a copy of the "Legal Fee Contract Option B"between GHH and Mrs.
Kilkenny. This contract was executed by Mrs. Kilkenny on August 26, 2002.
)7 Market Street Camp Hill, PA 17011 Telephone 717.731.9604 888.442.9604 Fax 717.737.7834 www.communitvtrustcornm
Walter F. Gaige
Consumer Services Specialist
Pennsylvania Department of Banking
June 9, 2006
Page -2-
Mrs. Kilkenny, through her attorney, Mr. Gates elected to create a special needs trust for the
purposes of protecting trust assets from long term costs and to allow for P A inheritance tax savings,
see page 5 of Estate Planning Analysis.
Community Trust Company is a Pennsylvania corporation regulated by the Department of
Banking and wholly owned by its holding company, Community Financial, Inc. Community
Financial, Inc. is owned by approximately 80 shareholders. Mr. Gates is a shareholder of
Community Financial, Inc.
The executed Trust documents as executed by Ms. McKinney on September 6, 2002 and
were delivered to CTC for acceptance. CTC began their administration of the Trust when the real
estate was deeded to the Trust on October 2, 2002.
Under Article 9.01 Compensation the trust document defines compensation to the trustee.
This section states "The Trustee shall receive as its compensation for the services performed
hereunder that sum of money which the Trustee normally and customarily charges for performing
similar services during the time which it performs these services. " Please refer to the attached copy
of the fee schedule for Irrevocable and Revocable Trusts. This fee schedule has remained
unchanged during the entire administration of this trust.
CTC as a corporate fiduciary has many responsibilities in administering a trust account.
Those responsibilities and liabilities can often be little understood or acknowledged by those
persons associated with a particular trust. Ms. McKinney actions to terminate the trust seem to be
in conflict with Mrs. Kilkenny's original intent in creating the trust.
By letter dated December 27,2005 from Attorney Michael Bangs representing Catherine
McKinney requested that the trust be terminated through the exercise ofMc McKinney's general
power of appointment. We apprised the client of the impact of this action and the costs associated
with termination the trust by letter dated February 3,2006. Their response by letter dated February
16, 2006 was to exercise power of appointment over two of the three assets in the trust, which CTe
would obviously consider a partial termination, based on their original intent to terminate the trust.
The three aforementioned letters are attached.
Attorney Bangs, by his own initiative prepared a deed for CTC execution and filing with
respect to Ms. McKinney's exercise over the general power of appointment. This fiduciary deed
was not properly drafted and as such, as Trustee, we engaged GHH on behalf of the trust to draft the
proper fiduciary deed for transfer, since GHH drafted the deed when it was deeded into the Trust.
GHH did inadvertently mail their invoice to Mrs. Kilkenny for this service, when it was an expense
Walter F. Gaige
Consumer Services Specialist
Pennsylvania Department of Banking
June 9, 2006
Page -3-
of the trust and should have been mailed to the trustee.
CTC has explained to Mr. Bangs that in terminating a trust or in partially terminating a trust
the proper method of closure would be to file a formalized accounting with the Cumberland County
Orphans Court. However, to reduce the costs and time frame for disposition of assets, a Receipt
and Release document with Schedule of Distribution may be an alternative.
A Receipt and Release agreement was sent to Mr. Bangs on April 24, 2006 for execution by
Ms. McKinney. To date we have not received the executed document and may need to proceed
with the formalized accounting.
In conclusion, at all times CTC has acted in a manner proper for the management of this
trust relative to the terms of the Trust, the Trust beneficiary and the intent of the Trust's creation.
Ms. McKinney's derogatory remarks against the company are baseless.
If you have any questions or comments regarding this response letter or the attachments, or
if you require additional information or documentation, please do not hesitate to contact me.
Sincerely,
.._-"..... ~.-
..._.r " ~\ _..-.~-':;;::'-..-..;7._.;;a--~ ~
~<. -"r""
............../
Susan A. Russell
President & CEO
April 24, 2006
Bangs Law Office
429 South 18th Street
Camp Hill, P A 17011
Attention: Michael L. Bangs
Attorney At Law
RE: The Patricia M. Kilkenny Family
Irrevocable Trust
Dear Mr. Bangs:
. As I mentioned in my letter of February 3, 2006, in lieu of filing a Court Accounting,
we will distribute this partial termination by the signing of a Receipt and Release
Agreement. Therefore, I have enclosed three copies of a Receipt and Release Agreement
for the Patricia M. Kilkenny Family Irrevocable Trust.
Please have Catherine A. McKinney sign two copies, and have her signature
notarized. . The third copy is her record.
UpOIJ receipt of the gned and notarized Receipt and Release Agreements, I will
forw1ird the paperwork for the MetLife Annuity and the Trustee's Fiduciary Deed.
If you have any questions concerning the enclosed document, I can be reached at the
address and phone number below.
Sincerely, /
/(~~::q&
Trust Officer
Enclosures
87 Market Street Camp Hill, PA 17011 Telephone 717.731.9604 888.442.9604 Fax 717.737.7834 www.communitytrustco.com
INRE: THE PATRICIAM. KILKENNY:
FAMILY IRREVOCABLE
TRUST
Dated: SEPTEMBER 6, 2002
IN THE COURT OF COMMON
PLEAS OF CUMBERLAND
COUNTY
ORPHANS COURT DIVISION
RECEIPT AND RELEASE AGREEMENT
THIS RECEIPT AND RELEASE AGREEMENT is signed by the Undersigned,
Catherine A. McKinney, on this day of April, in the year Two Thousand and Six
(2006),
WHEREAS, Catherine A. McKinney, as Settlor, entered into an Agreement with
Community Trust Company, as Trustee of the Patricia M. Kilkenny Family Irrevocable
Trust, dated September 6, 2002; and
WHEREAS, under Article 9.02 of the Patricia M. Kilkenny Family Irrevocable Trust,
the Settlor may remove the Trustee at any time or times, with or without cause, upon
thirty (30) days' written notice given to the current Trustee.
WHEREAS, Settler, Catherine A. McKinney, through her attorney, Michael L. Bangs,
Attorney at Law, by his letter dated December 27, 2005, notified the Community Trust
Company of her intent to exercise her general power of appointment over all principal of
the trust; and
WHEREAS, Settlor, Catherine A. McKinney and her attorney, Michael L. Bangs, have
been advised of the consequences of transferring the assets to her mother, Patricia M.
Kilkenny, by letter dated February 3,2006; and
WHEREAS, Settlor, Catherine A. McKinney, through her attorney, Michael L. Bangs,
Attorney at Law, by his letter dated February 16, 2006, notified the Community Trust
Company of her intent to modify her exercise a general power of appointment. The
modified request included exercise of the power of appointment over the residence at
605 Fairway Drive, Camp Hill, P A and a MetLife Annuity No. 55008223, and
WHEREAS, Settlor, Catherine A. McKinney, intends to appoint the partial withdrawal
of assets to her mother, Patricia M. Kilkenny; thus partially terminating the trust; and
WHEREAS, under Article 9.01 of the Patricia M. Kilkenny Family Irrevocable Trust,
the Trustee shall receive as its compensation for the services performed hereunder that
sum of money which the Trustee normally and customarily charges for performing
similar services during the time which it performs these services. Settlor, Catherine A.
McKinney is partially terminating the trust; therefore, the Community Trust Company
will charge a termination fee, in the amount of$3,098.10, on the assets removed from the
trust.
NOW THEREFORE, the said Settlor, Catherine A. McKinney, hereby states that she
received quarterly statements from Community Trust Company and are satisfied that the
statements were proper and correct and hereby waive the filing of a formal account in the
Orphan's Court of Cumberland County, Pennsylvania and do hereby remise, release,
quitclaim and forever discharge Community Trust Company, Trustee as aforesaid, its
successors and assigns of and from the duties of said Trust and of and from all actions,
suites, payments, accounts, reckonings, claims and demands whatsoever, for or by reason
thereof.
SCHEDULE OF DISTRIBUTION
FOR
THE PATRICIA M. KILKENNY FAMILY IRREVOCABLE TRUST
DATED: SEPTEMBER 6, 2002
Residence at 605 Fairway Drive,
Camp Hill, PA 17011
(Appraised value as of 12/13/04)
176,000.00
Metropolitan Life Variable Annuity
#550008223
(per statement dated 03/31/06)
86,652.36
Total of Partial Termination:
262,652.36
THE UNDERSIGNED, further agrees to indemnify and hold harmless Community
Trust Company, Trustee aforesaid, its successors and assigns, from and against all claims,
loss, liability or damage which it may suffer or to which it may be subject by reason of
the distribution without the approval of the Court having jurisdiction. In consideration of
the distribution described above, the undersigned agrees to pay the fiduciary any amount
up to the value of the above-described distribution that may be necessary in the future to
discharge any liabilities of the above-described Trust.
IN WITNESS THEREOF, I have hereunto set my hand this
day of April 2006.
WITNESS
Catherine A. McKinney
COMMONWEALTH OF PENNSYLVANIA)
) SS:
COUNTY OF )
On this, the day of April 2006, before me, a Notary Public, the undersigned officer,
personally appeared Catherine A. McKinney, known to me (or satisfactorily proven) to
be the person whose name, is subscribed to the foregoing Receipt and Release, and
acknowledged that she has executed the same for the purposes therein contained.
WITNESS my hand and Official Seal.
Notary Public
My Commission Expires:
KEEFER WOOD ALLEN & RAHAL, LLP
210 Walnut Street
P.O. Box 11963
Harrisburg, P A 17108-1963
Ph: (717) 255-8000
Fax:717/255-8042
Community Trust Company
3907 Market Street
Camp Hill, PA 17011
Attn: James E. White, Vice President
RE: Various Trust Matters
DATE DESCRIPTION
Nov-01-06 Telephone conference with L.Gates; draft
emai1 to S.Russe1 regarding litigation strategy;
office conference with E.Augustine regarding
strategy; review and respond to emai1 from
L.Gates regarding Kilkenny file; email to
M.Bangs regarding file documents
Nov-02-06 Review correspondance from M.Bangs; draft
response to same
Nov-03-06 Review/analyze ltr from TFT to M.Bangs
Review correspondance from L.Gates;
telephone call to L.Gates regarding privilege
issues; telephone conference with lWhite;
review and revise letter to M.Bangs; draft
email to L.Gates; draft email to S.Russell
regarding hearing testimony
Nov-06-06 Review of discovery issues with T. Truntz
NO CHARGE: Office conference with
R. Church regarding status of litigation; review
letter to M.Bangs
Research evidence in preparation for hearing;
office conference with E.Augustine regarding
evidentiary issues
Nov-07-06 Review discovery responses; telephone
conference with CTC officers regarding
Answers to Interrogatories; prepare Answers
to Interrogatories; prepare response to
(second) Request for Production of Documents
Nov 28, 2006
File #:
Inv #:
62581
55551
HOURS AMOUNT LAWYER
1.20 210.00 TFT
1.00 175.00 TFT
0.20 35.00 ERA
1.40 245.00 TFT
0.10 22.00 RRC
0.40
0.00 TFT
0.40
70.00 TFT
2.40
420.00 TFT
RESPONDENT'S
EXHIBIT
tI If,
" . aft- 0(, f t!/5
Invoice #: 55551 Page 2 November 28.2006
Nov-08-06 Review and revise response to Petitioner's 2.80 490.00 TFT
(second) set of Interrogatories; review
documents provided by CTC, review
documents in file and compare with previously
produced; draft response to Request (second)
for Production of Documents [continued];
email to R.Church regarding supplemental
discovery response providing invoice;
instructions to W. Wirth regarding discovery
responses; draft supplemental response to
Petitioners' First Request for Production of
Documents
Nov-09-06 Consultation w/TFT re: hearing strategy 0.30 52.50 ERA
Final review of discovery responses; 0.40 70.00 TFT
instructions to W.Wirth regarding same
NO CHARGE: office conference with 0.30 0.00 TFT
E.Augustine regarding hearing tactics
Meeting with lWhite and S.Russell at client's 1.00 175.00 TFT
location regarding discovery and hearing
strategy
Nov-l0-06 Research legal issues in preparation for 2.50 437.50 TFT
hearing
Nov-13-06 Prepare for hearing 0.50 87.50 TFT
Nov-14-06 Hearing preparation 3.00 525.00 TFT
Nov-15-06 Communicate (in firm) wTFT re: 0.30 52.50 ERA
hearing/evidence strategy
Prepare for Hearing 2.50 437.50 TFT
NO CHARGE: office conference with 0.40 0.00 TFT
E.Augustine regarding witness strategy
Nov-16-06 Review and respond to email from S.Russell; 0.20 35.00 TFT
review attachment to same
Nov-18-06 Draft supplementary discovery responses; 5.80 1,015.00 TFT
hearing preparation
Totals 27.10 $4,554.50
Total Fees, Disbursements
$4,554.50
Previous Balance
Previous Payments
$11,706.35
$0.00
Balance Due Now
$16,260.85
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COMMUNITY
TRUST
November 29, 2006
The Honorable J. Wesley Oler, Jr.
Orphans Court Division of the
Court of Common Pleas of
Cumberland County, Pennsylvania
1 Courthouse Square
Carlisle, P A 17013
Re: Catherine A. McKinney et al. vs. Community Trust Company No. 21-06-553
Dear Judge Oler:
This letter concerns certain changes, arising from the passage of time, that may be made
in the Proposed Schedule of Distribution attached to the First and Final Account of
Community Trust Company, Trustee ofthe Patricia M. Kilkenny Family Trust. The said
Account was filed on 8-Sep-06 at the above number and will be called for audit today.
Those changes occurred in section 1. Reserved for the Account, To: Community Trust
Company item "1. Trustee's Monthly Commissions for the months of August 2006
through October 2006 (Estimated)" that we expressed as the total sum of $1 ,050.00. The
actual sum is $1,037.50, which is comprised of accrued commissions of $350.45 for
August 2006, of$350.08 for September 2006 and of$336.97 for October 2006.
Based on the above commissions, the Trustee's estimated monthly commission will be
$345.83 per month from November 2006 to the month in which the Trust terminates.
Sincerely,
~.c 4/.hZz
~ames E.-White
Vice President & Trust Officer
cc:
Michael Bangs, Esquire
Todd Truntz, Esquire
Original and all copies HAND DELIVERED at Carlisle, Pennsylvania.
RESPONDENT'S
EXHIBIT
/'1-
tI ~ all .(J~ Pt!15
3907 Market Street Camp Hill, PA 17011 Telephone 717.731.9604 888.442.9604 Fax 717.737.7834 www.communitytrustco.com
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