The Pennsylvania Uniform Trust Act _ What Trustees Need To Know Now

Pennsylvania Uniform Trust Act November 6, 2008 Notice Deadline has passed.  Make sure you comply and give annual reports.

    At Unruh Turner Burke and Frees, the Trust Estates and Wealth Preservation section has developed a number of valuable resources for our clients to both understand and to manage their Estates. An important act called the UTA was just passed and is explained in detail in this blog. If you are a trustee of a Pennsylvania trust you should be familiar with this Notice requirement imposed by the UTA.
    As of November 6, 2008 the Pennsylvania’s Uniform Trust Act imposes a duty on trustees of Pennsylvania trusts to inform trust beneficiaries, in specific “ Triggering Events”,  about the existence of  a  trust and the right of the beneficiaries to be given financial information on the trust. A trustee can protect themselves from liability with the administration of the trust dependant upon the extent of the financial information disclosed to beneficiaries.

The Notice:
      A Notice is now required within 30 days of any Triggering Event to inform beneficiaries that the trust exists, state who created the trust, provide trustee’s contact information, and advise the beneficiaries that they have the right to request a copy of the trust. A current beneficiary may request and receive at least an annual written financial report about the trust. A Notice is also required for a person who becomes a beneficiary and did not already receive a Notice.

The Specific Triggering Events:
    A Triggering Event requiring a Notice is as follows, if the creator of the trust died, if the creator of the trust was adjudicated incapacitated, or there was a change in the trustees of the trust. Also anyone who had not previously received Notice, such as a new beneficiary, must be sent a Notice.
   
The recipients of a Notice:
1.  If the creator of an irrevocable trust died prior to November 6, 2006, the trustee must provide Notice to beneficiaries of the trust, that as of November 6, 2008 are 18 years or older and for whom income or principal of the trust must be distributed, and or are 25 years or older whom income or principal of the trust, in the trustee’s discretion,  may be distributed.
2. If the creator of the revocable trust died prior to November 6, 2006, the trustee must send Notice by November 6 2008 to; the current beneficiaries, the executor of the estate of the creator of the trust, and the creator of the trusts spouse, children, or their guardian if they are incapacitated or a minor.
3. If the creator of the trust was adjudicated incapacitated before November 6, 2006, the trustee must send Notice by November 6 2008 to the current beneficiaries of an irrevocable trust and to the creator’s guardian of a revocable trust.
4. If there was a change in trustees prior to November 6, 2006, the trustees must send Notice of the change to the creator of the trust by November 6, 2008. If the creator of the trust is deceased or adjudicated incapacitated the trustee must send Notice to the current beneficiaries by November 6, 2008.  The Notice of a change of trustee’s need only contain the trustee’s name and contact information.
5. If a person became a new beneficiary of a trust prior to November 6, 2008 the trustee has until November 6, 2008 to send Notice of the trust’s existence.

Senate Bill No. 1203
    The UTA has left issues open.  Senate Bill No. 1203 would clarify that Notice requirements can be limited to the trustee’s name, address, and telephone number when sending Notice to a new beneficiary. The Senate Bill also clarifies provisions of the UTA that give incentives to trustees to provide voluntary Annual Reports to all trust beneficiaries by barring a beneficiary from challenging a transaction or asserting a claim against the trustee if the reports contain the required information given to the beneficiary at least annually. At this time there is no required format for an Annual Report. But a trustee will not be relieved of liability to any information not disclosed in the Annual Report.

Important:
    If you are a trustee of a Pennsylvania trust you should be familiar with this Notice requirement by the UTA. Remember the deadline of November 6, 2008 has passed. Make sure you are in compliance with the act.  Consult us today on your trust requirements created by the UTA. We have a wealth of knowledge dealing with trust administration issues such as trustee liability and other estate issues. We look forward to assisting your trust and estate administration.

Notice: The purpose of this newsletter is to review the latest developments which are of interest to clients of Unruh, Turner, Burke and Frees. The information contained herein is abridged from legislation, court decisions and/or other sources and may not be construed as legal advice or investment advice or opinion, and is not a substitute for the advice of counsel or an investment adviser. Any Federal tax advice contained herein is not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Code. This disclosure is made in accordance with the rules of Treasury Department Circular 230 governing standards of practice before the Internal Revenue Service. Any written statement contained herein relating to any Federal tax transaction or matter may not be used by any person without the express prior written permission in each instance of a partner of this firm to support the promotion or marketing of or to recommend any Federal tax transaction(s) or matter(s) addressed herein.

David M Frees III
610-933-8069

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Research:  Whitney O'Reilly
David M. Frees, III
Attorney, Speaker and Author