CHAPTER 3
 
ACCOUNTS, AUDITS AND DISTRIBUTION
 

 
 
 
 

B.

Audits
     
   
1. Notice
         
    The accountant must give written notice of the filing of the account and of the place, time and date of audit by regular, first class mail at least fifteen (15) days prior to the audit date to every unpaid claimant who has given written notice of a claim to the accountant and to every other person known to the accountant to have or claim an interest in the estate as creditor, beneficiary, heir or next of kin. See Phila.O.C. Rule 6.3.A. See PEPH, Green Book 6.8 for a sample form of the notice letter. Notice must also be given to:
         
      a.   The Attorney General of the Commonwealth of Pennsylvania must receive notice if there are any charitable beneficiaries (except in the case of a charitable pecuniary legacy of $25,000 or less which has been or will be paid in full). The notice, in the special form of Notice of Charitable Gift, is available from the Clerk of the Orphans’ Court and in PEPH, Green Book 6.7. The completed form should be sent to the Deputy Attorney General, whose office is in Philadelphia, rather than to the Office of the Attorney General in Harrisburg. See Chapter 8.
       
      b.   The Department of Revenue must receive notice and a copy of the account in the case of a decedent who died in a state-owned institution in the Commonwealth. See Pa.O.C. Rule 6.7.
         
      c.   The United States Veterans Administration must receive notice and a copy of the account of the estate of a deceased veteran or of the minor child of a veteran who was entitled to veteran’s benefits. See Pa.O.C. Rule 6.8.
             
    The audit notice must state that a copy of the account and a copy of the will or trust instrument will be sent upon request, unless these documents are enclosed with the notice, or have been furnished previously. The notice must: describe the nature of any claim, interest or objection of the recipient; state whether the claim is admitted or contested; include an interpretation of any dispute or question to be presented at the audit; and state that the recipient of the notice must file written objections and appear at audit in person or by counsel under penalty that, in the absence of such appearance, the Court may adopt the accountant’s position. See Phila.O.C. 6.3.A.(5).

Questions may arise as to whether it is sufficient to send notice to a fiduciary who represents possible parties in interest and not also to the parties themselves (e.g., notice sent to trustee of the trust to which decedent’s estate will be distributed, rather than to the beneficiaries of the trust). In some cases, the Court has continued the audit until notice has been given to all known parties in interest. Where a doubt exists, the safest course is to provide notice to the parties in addition to the fiduciary.
     
2.   Forms
     
    The forms used in connection with an account filing and audit may be obtained free of charge in the Orphans’ Court Clerk’s office, on the Court’s website, or in PEPH, Green Book, 6.10.

There are specific forms of petition for adjudication for each type of account: decedent’s estate, trust, guardian of a minor or incapacitated person, and agent under a power of attorney. The instructions on each form should be followed carefully. Several attachments are required with the petition for adjudication. Certain original documents may not be required if they have been submitted at the audit of a prior account in the same matter.

The petition for adjudication ends with a proposed distribution. The petition must be signed by all accountants and verified by the affidavit of at least one accountant. When principal will be distributed in kind, an accountant may include in the petition a request that the Court order the filing of a schedule of distribution. When the assets are all in cash or will be distributed to a single distributee, counsel may request that the Court not require a schedule of distribution. See Chapter 9 if real property is to be distributed.
     
3.   Procedure at Audit
     
    If the audit of a matter is continued, the accountant must give notice of the rescheduled audit to the parties in interest or others, as the Court may direct. See Phila.O.C. Rule 6.3.B. Counsel for the accountant and each attorney representing a party in interest at the audit must present an appearance slip on a form supplied by the Court, signed by the attorney actually present at the audit, with the attorney’s name, attorney identification number, address and telephone number and identifying the client by name and by the nature of the party’s interest. For example, if the attorney represents an unpaid creditor, the attorney’s appearance slip must list the client’s name, identify the client as an unpaid creditor and show the dollar amount of the claim. Counsel for the accountant may note additional items of receipts and disbursements on the appearance slip, but should not list major items of disbursement, such as accountant’s commissions or counsel fees, unless such items were included in the notice to the parties in interest.

Written objections to an account must be filed with the Clerk of the Orphans’ Court no later than the date and time of the call of the audit, unless the Court orders otherwise. See Phila.O.C. Rule 6.10.A. The objectant generally hands a copy of the objections to the Court and parties in interest (or their counsel) when the matter is called. In a contested matter, the Court may fix a date for the audit or continue the matter to a later date.

If the petition includes a question for adjudication by the Court and there is no contest, on the first call of the list counsel should request that the matter be placed on the second call. On the second call, counsel will be given an opportunity to present the question and a proposed solution. The same procedure is followed when counsel wishes to make a statement about an item not appearing in the account or in the petition for adjudication that should be included in the Court’s adjudication.

In an uncontested matter with no questions, on the first call of the audit list counsel for the accountant usually says “Ready, your Honor, no questions” and hands up counsel’s appearance slip and any other documents not previously filed.

 

 


 
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