8.8
Petition For Approval of Gifts on Behalf of Incapacitated Person Pursuant to 20 Pa. C.S.A. 5536(b)

 
 
 
 

[SEE CAPTION AT 1.3.1]

 
 

DECREE

 
 

Now, this _____ day of ______________, 20____, upon consideration of the annexed Petition and pursuant to 20 Pa. C.S.A. 5536(b), it is hereby ORDERED and DECREED that Henry Doe, Guardian of the Estate of Jane R. Dunn, an Incapacitated Person, is authorized and directed to make, prior to the end of 2000 and at the beginning of each subsequent year without further court approval, equal annual gifts on the incapacitated person's behalf to or for the benefit of each of the issue of Joan Smith, sister of the incapacitated person, living on the date set for distribution of such gifts, in an amount not to exceed as to each donee the annual exclusion amount set forth in section 2503(b) of the Internal Revenue Code of 1986, as amended, or any successor provision.

 
 
 
   
 
J.
 
 
 

 
 
 

[SEE CAPTION AT 1.3.2]

 
 

PETITION

 
 

Petitioner, Henry Doe, Guardian of the Estate of Jane R. Dunn, an Incapacitated Person, respectfully submits this Petition to Approve Annual Exclusion Gifts on Behalf of Jane R. Dunn, an incapacitated person, and in support thereof, avers the following:

 
1.

By Decree dated September 1, 2000 of the Honorable John Jones, Judge of the Orphans' Court Division of the Court of Common Pleas of Philadelphia County, Pennsylvania, Jane R. Dunn ("the incapacitated person") was adjudicated an incapacitated person, and the Court appointed Petitioner as guardian of the incapacitated person's estate and Joan Smith as guardian of her person. A copy of the said Decree is attached hereto as Exhibit "A."
 
2.
The incapacitated person is 60 years old and resides at the Best Nursing Home, 900 Lombard Street, Philadelphia, Pennsylvania.
     
3.
The incapacitated person is divorced and has no children or other dependents and her parents are deceased. Her next of kin are her sister, Joan Smith, and her brother, Henry Doe. Joan Smith has three children; Henry Doe has no children.
     
4.
Petitioner, as guardian of the incapacitated person's estate, filed an Inventory for the guardianship estate on September 15, 2000. The Inventory reflected assets of approximately $1,500,000. A copy of the Inventory is attached hereto as Exhibit "B."
     
5.
  The incapacitated person's current assets and income are summarized as follows: [list assets]
     
6.
  The projected annual expenses for the incapacitated person's care and comfortable maintenance based upon 1999 figures total approximately $58,000, as follows:
     
   
 

The Best Nursing Home

$42,000
 
 
 
  Medical, medications & incidental expenses
10,000
 
   
 
  Income Taxes (federal and state)
6,000
 
   
 
  TOTAL ANNUAL EXPENSE
$58,000
 
       
7.
  Based on the information set forth in the preceding paragraphs, the incapacitated person's income alone will exceed her expenses by over $30,000 in 2000. Such income will accumulate and be subject to taxes upon her death.
     
8.
  In addition to excess income, the incapacitated person has more than enough principal available for her needs. She has access to approximately $1.5 million in assets for her support and maintenance.
     
9.
  Section 5536(b) of the Pennsylvania Probate, Estates and Fiduciaries Code provides, in relevant part, as follows: [quote relevant provisions]
     
10.
  Assets exist which are not required for the maintenance, support and well-being of the incapacitated person. In light of the substantial financial security of the incapacitated person from various sources there is no reason to allow her guardianship estate to grow; to the contrary, Petitioner, as Guardian of the Estate, should attempt to reduce the size of the incapacitated person's gross taxable estate and benefit the various members of her family in an appropriate way.
     
11.
  This Petition requests the Court to substitute its judgment for the incapacitated person in accordance with Pa. C.S.A. 5536(b) by adopting an annual plan of giving by which Petitioner, as Guardian of the Estate, would make gifts in amounts not to exceed, as to each donee, the annual exclusion amount set forth in 2503(b) of the Internal Revenue Code of 1986, as amended, ("annual exclusion gifts") to reduce future death taxes on the incapacitated person's estate without the imposition of any gift tax or utilization of her unified estate and gift tax credit ($675,000 under present law). Such annual exclusion gifts will save death taxes and carry out the incapacitated person's plan of lifetime giving.
   
12.
  Petitioner believes that he is constrained by Pa. C.S.A. 5536(b) to make annual exclusion gifts only to some of the incapacitated person's family members. Section 5536(b) requires that the proper donees of the gifts in question be limited to those beneficiaries expressly identified in the incapacitated person's estate plan (as established by her Will) and her pattern of lifetime giving. The beneficiaries of the incapacitated person's estate plan and lifetime giving are the issue of her sister, Joan Smith. A copy of both the incapacitated person's Will is being forwarded privately and separately to the Court to assist in its consideration of this Petition.
   
13.
  By her Will, the incapacitated person leaves her entire estate to the children of her sister, Joan Smith. [Note that if the estate plan is not known generally to the parties it should not be revealed by the Guardian, but should remain private, although the original or copy of the Will should be lodged privately with the Court.]
   
14.
  In addition, in each year from 1995 to 1999 the incapacitated person made inter vivos gifts of $5,000 to each of Joan Smith's three children.
   
15.
  In accordance with the incapacitated person's estate plan and her established pattern of lifetime giving, Petitioner proposes that prior to the end of 2000 and at the beginning of each subsequent year, without further court approval, Petitioner make equal annual exclusion gifts on behalf of the incapacitated person to each of the three children of Joan Smith.
   
16.
  The proposed annual exclusion gifts requested herein are advisable and will not materially prejudice or harm the incapacitated person or her creditors, or any other party in interest.
   
17.
  As noted above, the incapacitated person is a widow and has no children or other dependents, and her parents are deceased. The only persons who would be entitled to the incapacitated person's estate if she should die at this time under her present Will are:
   
 

Issue of Joan Smith:
John Smith
P.O. Box 1
Way, Utah 84040

Nephew
   

Robert Smith Nephew
123 Park Rd.
Cleveland, Ohio 45750

Nephew
   

Theresa Smith
4 Orr Road
Philadelphia, PA 19118

Niece
   
18.
  If the incapacitated person had no Will, her intestate heirs would be her sister, Joan Smith, and her brother, Henry Doe, Petitioner herein.
   
19.
  The consents of all parties interested in this Petition (i.e., the children of Joan Smith, and Joan Smith) are attached collectively hereto as Exhibit "C."
 

Wherefore, in accordance with 20 Pa. C.S.A. 5536(b) Petitioner respectfully requests that this Court enter the proposed Decree attached hereto which directs Petitioner, as Guardian of the Estate of Jane R. Dunn, an Incapacitated Person, to make, prior to the end of 2000 and at the beginning of each subsequent year, without further court approval, equal annual gifts on the incapacitated person's behalf to or for the benefit of each of the children of Joan Smith, sister of the incapacitated person, living on the date set for distribution of such gifts, in an amount not to exceed as to each donee the annual exclusion amount set forth in 2503(b) of the Internal Revenue Code of 1986, as amended, or any successor provision.

 
 
 
    Respectfully submitted,
 
   
   
Dated:    
  Henry Doe
Guardian of the Estate of
Jane R. Dunn, An Incapacitated Person
 
 
 
 
 
 

 
 
 

[SEE CAPTION AT 1.3.1]

 
 

CONSENT AND JOINDER

 
 

I, John Smith, a nephew of Jane R. Dunn, and a party-in-interest in the foregoing Petition for Approval of Annual Exclusion Gifts on Behalf of the Incapacitated Person Pursuant to 20 Pa. C.S.A. 5536(b), upon review of said Petition, hereby consent to and join in the said Petition for myself individually.

 
 
 
 
Dated:      
   
John Smith
 
 
 

 
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