Regular Session 2015-2016 Senate Bill 1104 P.N. 1645

PRIOR PRINTER'S NO. 1498

PRINTER'S NO. 1645

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1104

Session of

2015

INTRODUCED BY GREENLEAF, RAFFERTY AND COSTA, JANUARY 13, 2016

AS AMENDED ON THIRD CONSIDERATION, MARCH 22, 2016

AN ACT

Amending Title 20 (Decedents, Estates and Fiduciaries) of the

Pennsylvania Consolidated Statutes, in orphans' court

divisions, further providing for nonmandatory exercise of

jurisdiction through orphans' court division; in wills,

further providing for rules of interpretation; in

dispositions independent of letters, family exemption,

probate of wills and grant of letters, providing for

submission to jurisdiction; in administration and personal

representatives, further providing for continuation of

business and for incorporation of estate's business; in

accounts and distribution, further providing for

determination of title to decedent's interest in real estate;

in health care, further providing for definitions, FOR WHEN

HEALTH CARE POWER OF ATTORNEY IS OPERATIVE, for authority of

health care agent and for relation of health care agent to

court-appointed guardian and other agents; in powers of

attorney, further providing for general provisions, FOR

AUTHORITY THAT REQUIRES SPECIFIC AND GENERAL GRANT OF

AUTHORITY, for form of power of attorney, for implementation

of power of attorney, for durable powers of attorney and for

account; providing for meaning and effect of power of

attorney and for jurisdiction and venue; in estates, further

providing for release or disclaimer of powers or interests;

in estates, providing for release of powers and interests and

disclaimer of powers; providing for powers of appointment; in

trusts, further providing for nonjudicial settlement

agreements - UTC 111, for representation of parties in

interest in general, for division of trusts, for resignation

of trustee and filing resignation, for duty to inform and

report, for limitation of action against trustee and for

powers, duties and liabilities identical with personal

representatives; codifying provisions of the Charitable

Instruments Act of 1971; in principal and income, further

providing for charitable trusts; and making a related repeal.

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The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Sections 712(1) and 2514(13) of Title 20 of the

Pennsylvania Consolidated Statutes are amended to read:

§ 712. Nonmandatory exercise of jurisdiction through orphans'

court division.

The jurisdiction of the court of common pleas over the

following may be exercised through either its orphans' court

division or other appropriate division:

(1) Title to real estate.--The determination of the

persons to whom the title to real estate of a decedent or of

the creator of an estate or trust has passed by devise or

descent or by the terms of the trust instrument where

jurisdiction of such estate or trust is exercised through the

orphans' court division: Provided, That nothing herein shall

be construed to restrict the provisions of section 711

(relating to mandatory exercise of jurisdiction through

orphans' court division in general) relating to distribution

of real estate in an estate or trust. If section 3546

(relating to determination of title to decedent's interest in

real estate) applies, the procedures under that section shall

govern. For other actions to quiet title to real estate, this

section shall govern.

* * *

§ 2514. Rules of interpretation.

In the absence of a contrary intent appearing therein, wills

shall be construed as to real and personal estate in accordance

with the following rules:

* * *

[(13) Power of appointment.--A general devise of the

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real estate of the testator, or of the real estate of the

testator in any place, or in the occupation of any person

mentioned in his will, or otherwise described in a general

manner, shall be construed to include any real estate, or any

real estate to which such description shall extend, as the

case may be, which he shall have power to appoint in any

manner he shall think proper, and shall operate as an

execution of such power. In like manner, a bequest of the

personal estate of the testator, or any bequest of personal

property described in a general manner, shall be construed to

include any personal estate, or any personal estate to which

such description shall extend, as the case may be, which he

shall have power to appoint in any manner he shall think

proper, and shall operate as an execution of such power. In

like manner, a general pecuniary legacy, when the assets of

the individual estate of the testator are not sufficient for

its payment, shall, to the extent necessary to make possible

the payment of the legacy, be construed to include any estate

which the testator shall have power to appoint in any manner

he shall think proper, and shall to such extent operate as an

execution of such power.]

* * *

Section 2. Title 20 is amended by adding a section to read:

§ 3163. Submission to jurisdiction.

(a) General rule.--By accepting appointment by the register

of wills, the personal representative submits personally to the

jurisdiction of the orphans' court division of the county where

letters testamentary or letters of administration are granted in

all matters involving the performance of the personal

representative's duties as personal representative, and an

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action by any interested party seeking an accounting by, or

removal of, the personal representative, or alleging breach of

duty by the personal representative, shall be commenced by

notice to the personal representative.

(b) Criminal contempt.--Notwithstanding subsection (a), no

personal representative shall be held in criminal contempt of an

order of the orphans' court division without the prior issuance

of a citation and service of process.

Section 3. Sections 3314, 3315 and 3546 of Title 20 are

amended to read:

§ 3314. Continuation of business.

[The court,] Giving due regard to the provisions of the

governing instrument and any other factor that the court deems

relevant, and aided by the report of a master if necessary, the

court may authorize the personal representative to continue any

business of the estate for the benefit of the estate [and in

doing so the court, for cause shown, may disregard the

provisions of the governing instrument, if any]. The order may

be with or without notice. If prior notice is not given to all

parties in interest, it shall be given within five days after

the order or within such extended time as the court, for cause

shown, shall allow. Any party in interest may, at any time,

petition the court to revoke or modify the order. The order may

provide:

(1) for the conduct of business, by the personal

representative alone or jointly with others, or, unless

restricted by the terms of the governing instrument, as a

corporation, partnership, limited liability company or other

entity to be formed;

(2) the extent of the liability of the estate or any

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part thereof, or of the personal representative, for

obligations incurred in the continuation of the business;

(3) whether liabilities incurred in the conduct of the

business are to be chargeable solely to the part of the

estate set aside for use in the business or to the estate as

a whole;

(4) the period of time the business may be conducted;

[and]

(4.1) for the compensation of a personal representative

actively managing, supervising or engaging in the operation

of an entity or business, from the estate's assets or from

the entity or business, as appropriate, provided that the

compensation is reasonably based upon the actual

responsibilities assumed and performed; and

(5) such other regulations, including accountings, as

the court shall deem advisable.

§ 3315. Incorporation of or formation of entity to operate

estate's business.

After notice to all parties in interest, aided by the report

of a master if necessary, and giving due regard to the

provisions of the governing instrument and any other factor that

the court deems relevant, the court[, unless restricted by the

terms of the governing instrument,] may authorize the personal

representative alone or jointly with others, to organize a

corporation, or form a partnership, limited liability company or

other entity, to carry on the business of the estate, whether

the business was owned solely or with others, and may contribute

for stock of the corporation, as capital, or for an interest in

a partnership, limited liability company or other entity, all or

part of the property of the estate which was invested in the

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business.

§ 3546. Determination of title to decedent's interest in real

estate.

[When a person shall die leaving an interest in real estate

within the Commonwealth and no letters testamentary or of

administration have been granted on the estate of the decedent

in the Commonwealth, and one year has expired since the

decedent's death, or if a personal representative has been

appointed and has not filed his account within six years of the

death of the decedent, any person claiming an interest in the

real estate as or through an heir or devisee of the decedent may

present a petition to establish title thereto in the orphans'

court division of the county where the letters testamentary or

of administration have been granted, or should no letters have

been granted, then in the orphans' court division of the county

within which was the family or principal residence of the

decedent. If the decedent was a nonresident of the Commonwealth,

the petition may be presented in the orphans' court division of

any county wherein any of the real estate shall lie. The court,

aided if necessary by the report of a master, may enter its

decree nisi adjudging that the title to the decedent's interest

in the real estate is in such person or persons as the court

shall determine. Notice of the decree nisi shall be given to

creditors and other parties in interest, by advertisement and

otherwise, as the court shall direct. If no exception to the

decree is filed within three months, it shall be confirmed

absolutely, free of all decedent's debts not then liens of

record, and regardless of the provisions of any testamentary

writing of the decedent thereafter probated. A certified copy of

the decree shall be recorded in the office of the recorder of

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deeds of each county where real estate included in the decree

shall lie, shall be indexed by the recorder in the grantor's

index under the name of the decedent and in the grantee's index

under the name of each distributee, and shall be registered in

the survey bureau or with the proper authorities empowered to

keep a register of real estate in the county.]

(a) Applicability.--This section shall apply if:

(1) A person dies leaving an interest in real estate

within this Commonwealth.

(2) Either of the following occurs:

(i) No letters testamentary or letters of

administration have been granted on the estate of the

decedent in this Commonwealth and one year has expired

since the decedent's death.

(ii) A personal representative has been appointed

but has not filed an account within six years of the

decedent's death.

(3) There is a conflict between this section and either

section 2103(6) (relating to shares of others than surviving

spouse) or Article XIII.1 of the act of April 9, 1929

(P.L.343, No.176), known as The Fiscal Code, with respect to

a petition by an entity under subsection (c)(2). The rights

granted under this section shall supersede any right of the

Commonwealth created under section 2103(6) or Article XIII.1

of The Fiscal Code.

(b) Subject of petition.--A person or entity authorized by

subsection (c) may present a petition under this section to:

(1) terminate an interest in the real estate of other

heirs or devisees of the decedent who, after being given

proper notice under subsection (f) ; or

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(2) have declared as void, unenforceable and canceled of

record a fraudulent conveyance of the decedent's interest in

the real estate and to the extent otherwise authorized by law

any lien, title, claim or interest arising in the property

by, from or under the fraudulent conveyance, including any

subsequent transfers of property following the fraudulent

conveyance and any liens to the extent that they have

attached to the property as a result of the fraudulent

conveyance, after all interested parties have been given

proper notice under subsection (f).

may petition to establish title to the decedent's real estate:

(1) A person claiming an interest in the real estate:

(i) as an heir or devisee of the decedent;

(ii) through the decedent; or

(iii) through an heir or devisee of the decedent,

when the heir or devisee is deceased or has conveyed all

or part of the heir or devisee's interest in the property

to the person.

(2) A nonprofit corporation organized for community

development purposes under section 501(c)(3) of the Internal

Revenue Code (Public Law 99-514, 26 U.S.C. § 1 et seq.), a

municipality in which the real estate is located or a

redevelopment authority created and organized under the act

of May 24, 1945 (P.L.991, No.385), known as the Urban

Redevelopment Law, having jurisdiction in the municipality in

which the real estate is located upon a showing by clear and

convincing evidence to the court that:

(i) No heirs or devisees exist or have taken action

with respect to the real estate for at least five years

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since the decedent's death.

(ii) The real estate is not occupied by a person

claiming rights by adverse possession.

(d) Priority of petitions.--Where there are two or more

petitions for the same real estate under subsection (c)(2), the

court shall give priority in entering its order to one of the

petitioners in the following order:

(1) The municipality.

(2) The redevelopment authority.

(3) The nonprofit corporation.

(e) Where to petition.--A petition under this section shall

be filed in the orphans' court division of the county where:

(1) the letters testamentary or letters of

administration have been granted;

(2) the principal residence of the decedent was located,

if no letters testamentary or letters of administration have

been granted; or

(3) any of the real estate is located, if the decedent

was a nonresident of this Commonwealth.

(f) Notice of petition.--

(1) Notice shall be given to all persons reasonably

identifiable as eligible to file a petition under subsection

(c), creditors that do not have liens of record, to the

extent known, and all other persons and parties in interest

reasonably known to hold or claim a lien, title, claim or

other interest in the property in accordance with the

Pennsylvania Orphans' Court Rules. Notice shall also be given

by:

(i) publication once a week during three successive

calendar weeks in the legal periodical, if any, and in a

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newspaper of general circulation published at or near the

location of the real estate;

(ii) posting a copy of the petition on the most

public part of the property; and

(iii) such other methods, if any, as the court deems

appropriate to give notice.

(2) If letters testamentary or letters of administration

have been granted on the estate of the decedent, notice of

the petition under this section shall be given to the

personal representative of the decedent.

(3) A lis pendens notice shall be given in each county

where the real estate is located in the same manner and place

as provided in section 3390 (relating to specific performance

of contracts) for an action of specific performance.

(g) Order .--

(1) Aided if necessary by the report of a master, the

court may enter an order adjudging that the title to the

decedent's interest in the real estate is in the petitioner,

free of all decedent's debts not then liens of record, and

regardless of the provisions of any testamentary writing of

the decedent thereafter probated, or an order directing other

appropriate relief as the court determines.

(2) A certified copy of the order shall be:

(i) Recorded in the office of the recorder of deeds

of each county where real estate included in the decree

or order shall lie.

(ii) Indexed by the recorder in the grantor's index

under the name of the decedent and in the grantee's index

under the name of each distributee.

(iii) Registered in the survey bureau or with the

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proper authorities empowered to keep a register of real

estate in the county.

(iv) Served by the petitioner upon each party who

has entered an appearance in the proceeding.

(h) Parcel number or identifier.--

(1) A petition filed under subsection (b) and notice of

petition given under subsection (f) shall include the county

tax parcel number or Uniform Parcel Identifier for each

parcel included. A party alleging any failure to comply with

the requirements of this paragraph must do so in the manner

provided for raising an affirmative defense.

(2) An order presented for recording under subsection

(g) shall comply with section 3 of the act of April 24, 1931

(P.L.48, No.40), entitled "An act requiring the recording of

certain written agreements pertaining to real property, and

prescribing the effect thereof as to subsequent purchasers,

mortgages, and judgment creditors of the parties thereto."

(i) Definition.--For the purposes of this section,

"fraudulent conveyance" shall mean a transfer of an interest,

lien, title or claim in real estate that occurs as a result of:

(1) a forgery of the grantor's signature on a document

purporting to make such transfer;

(2) the grantor being induced by fraud,

misrepresentation, duress or coercion to sign a document

purporting to make such transfer; or

(3) some other inappropriate means used to obtain the

grantor's signature on the document purporting to make such

transfer, as determined by a court.

Section 4. The definition of "health care decision" in

section 5422 of Title 20 is amended by adding paragraphs to

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read:

§ 5422. Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Health care decision." A decision regarding an individual's

health care, including, but not limited to, the following:

* * *

(4) Admission to a medical, nursing, residential or

similar facility, or entering into agreements for the

individual's care.

(5) Making anatomical gifts, or after the death of the

individual, disposing of the remains or consenting to

autopsies.

* * *

Section 5. Sections 5454(D), 5456(a) and 5460(a) of Title 20

are amended to read:

§ 5454. WHEN HEALTH CARE POWER OF ATTORNEY OPERATIVE.

* * *

(D) DURATION.--UNLESS THE HEALTH CARE POWER OF ATTORNEY

STATES A TIME OF TERMINATION, [IT IS VALID UNTIL REVOKED BY THE

PRINCIPAL OR THE PRINCIPAL'S GUARDIAN OF THE PERSON,

NOTWITHSTANDING THE LAPSE OF TIME SINCE ITS EXECUTION.]

NOTWITHSTANDING THE LAPSE OF TIME SINCE THE HEALTH CARE POWER OF

ATTORNEY WAS EXECUTED, THE HEALTH CARE POWER OF ATTORNEY IS

VALID UNTIL REVOKED BY ANY OF THE FOLLOWING:

( 1) THE PRINCIPAL.

(2) THE COURT.

(3) IF AUTHORIZED BY THE COURT, THE PRINCIPAL'S GUARDIAN

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OF THE PERS ON.

* * *

§ 5456. Authority of health care agent.

(a) Extent of authority.--Except as expressly provided

otherwise in a health care power of attorney and subject to

subsection (b) and section 5460 (relating to relation of health

care agent to court-appointed guardian and other agents), a

health care agent shall have the authority to make any health

care decision and to exercise any right and power regarding the

principal's care, custody and health care treatment that the

principal could have made and exercised. The foregoing power

shall include the power to authorize admission to a medical,

nursing, residential or similar facility, or to enter into

agreements for the principal's care. The health care agent's

authority may extend beyond the principal's death to make

anatomical gifts, dispose of the remains and consent to

autopsies.

* * *

§ 5460. Relation of health care agent to court-appointed

guardian and other agents.

(a) Accountability of health care agent.--If a principal who

has executed a health care power of attorney is later

adjudicated an incapacitated person and a guardian of the person

to make health care decisions is appointed by a court, the

health care agent is accountable to the guardian as well as to

the principal. [The guardian shall have the same power to revoke

or amend the appointment of a health care agent that the

principal would have if the principal were not incapacitated but

may not revoke or amend other instructions in an advance health

directive absent judicial authorization.] In its guardianship

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order and determination of a person's incapacity, the court

shall determine the extent to which the health care agent's

authority to act remains in effect.

* * *

Section 6. Sections SECTION 5601(b)(3) and 5602(a) of Title

20 are IS amended to read:

§ 5601. General provisions.

* * *

(b) Execution.--

* * *

(3) For a power of attorney executed on or after the

effective date of this paragraph, the signature or mark of

the principal, or the signature [or mark] of another

individual signing a power of attorney on behalf of and at

the direction of the principal, shall be:

(i) Acknowledged before a notary public or other

individual authorized by law to take acknowledgments. The

notary public or other individual authorized by law to

take acknowledgments shall not be the agent designated in

the power of attorney.

(ii) Witnessed by two individuals, each of whom is

18 years of age or older. A witness shall not be the

individual who signed the power of attorney on behalf of

and at the direction of the principal, the agent

designated in the power of attorney or the notary public

or other person authorized by law to take acknowledgments

before whom the power of attorney is acknowledged. For

acknowledgments by an attorney subject to this

subparagraph, the provisions of 57 Pa.C.S. § 316(2.1)

(relating to short form certificates) insofar as they

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relate to an attorney as subscribing witness do not

apply.

* * *

SECTION 6.1. SECTION 5601.4(C), (D) AND (E) OF TITLE 20 ARE

AMENDED AND THE SECTION IS AMENDED BY ADDING A SUBSECTION TO

READ:

§ 5601.4. AUTHORITY THAT REQUIRES SPECIFIC AND GENERAL GRANT OF

AUTHORITY.

* * *

(D), (D.1) AND (E), IF A POWER OF ATTORNEY GRANTS TO AN AGENT

AUTHORITY TO DO ALL ACTS THAT A PRINCIPAL IS AUTHORIZED TO

PERFORM, THE AGENT HAS ALL OF THE POWERS WHICH MAY BE

INCORPORATED BY REFERENCE PURSUANT TO SECTION 5602(A).

(D) GIFTS.--

(1) UNLESS THE POWER OF ATTORNEY OTHERWISE PROVIDES, [A

GRANT OF AUTHORITY TO MAKE A GIFT IS SUBJECT TO SECTION

5603(A.1) (RELATING TO IMPLEMENTATION OF POWER OF ATTORNEY).]

THE POWER TO MAKE LIMITED GIFTS OR OTHER LANGUAGE IN A POWER

OF ATTORNEY GRANTING GENERAL AUTHORITY WITH RESPECT TO GIFTS

AUTHORIZES THE AGENT ONLY TO:

(I) MAKE OUTRIGHT TO OR FOR THE BENEFIT OF A PERSON,

A GIFT OF ANY OF THE PRINCIPAL'S PROPERTY, INCLUDING BY

THE EXERCISE OF A PRESENTLY EXERCISABLE GENERAL POWER OF

APPOINTMENT HELD BY THE PRINCIPAL:

(A) IN AN AMOUNT PER DONEE NOT TO EXCEED THE

ANNUAL DOLLAR LIMITS OF THE FEDERAL GIFT TAX

EXCLUSION UNDER SECTION 2503(B) OF THE INTERNAL

REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. §

2503(B)), WITHOUT REGARD TO WHETHER THE FEDERAL GIFT

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TAX EXCLUSION APPLIES TO THE GIFT; OR

(B) IF THE PRINCIPAL'S SPOUSE AGREES TO CONSENT

TO A SPLIT GIFT PURSUANT TO SECTION 2513 OF THE

INTERNAL REVENUE CODE OF 1986 (26 U.S.C. § 2513), IN

AN AMOUNT PER DONEE NOT TO EXCEED TWICE THE ANNUAL

FEDERAL GIFT TAX EXCLUSION LIMIT.

(II) CONSENT, PURSUANT TO SECTION 2513 OF THE

INTERNAL REVENUE CODE OF 1986, TO THE SPLITTING OF A GIFT

MADE BY THE PRINCIPAL'S SPOUSE IN AN AMOUNT PER DONEE NOT

TO EXCEED THE AGGREGATE ANNUAL GIFT TAX EXCLUSIONS FOR

BOTH SPOUSES.

(2) AN AGENT MAY MAKE A GIFT OF THE PRINCIPAL'S PROPERTY

ONLY AS THE AGENT DETERMINES IS CONSISTENT WITH THE

PRINCIPAL'S OBJECTIVES IF ACTUALLY KNOWN BY THE AGENT AND, IF

UNKNOWN, AS THE AGENT DETERMINES IS CONSISTENT WITH THE

PRINCIPAL'S BEST INTEREST BASED ON ALL RELEVANT FACTORS,

INCLUDING:

(I) THE VALUE AND NATURE OF THE PRINCIPAL'S

PROPERTY.

(II) THE PRINCIPAL'S FORESEEABLE OBLIGATIONS AND

NEED FOR MAINTENANCE.

(III) MINIMIZATION OF TAXES, INCLUDING INCOME,

ESTATE, INHERITANCE, GENERATION-SKIPPING TRANSFER AND

GIFT TAXES.

(IV) ELIGIBILITY FOR A BENEFIT, PROGRAM OR

ASSISTANCE UNDER A STATUTE OR REGULATION.

(V) THE PRINCIPAL'S PERSONAL HISTORY OF MAKING OR

JOINING IN MAKING GIFTS.

(3) AS USED IN THIS SUBSECTION, THE PHRASE "A GIFT FOR

THE BENEFIT OF A PERSON" INCLUDES A GIFT TO A TRUST, AN

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ACCOUNT UNDER CHAPTER 53 (RELATING TO PENNSYLVANIA UNIFORM

TRANSFERS TO MINORS ACT) AND A TUITION SAVINGS ACCOUNT OR

PREPAID TUITION PLAN AS DEFINED UNDER SECTION 529 OF THE

INTERNAL REVENUE CODE OF 1986 (26 U.S.C. § 529).

(D.1) DISCLAIMERS.--

(1) UNLESS THE POWER OF ATTORNEY OTHERWISE PROVIDES, THE

GRANT OF THE POWER TO DISCLAIM ANY INTEREST IN PROPERTY OR A

GRANT OF GENERAL AUTHORITY WITH DISCLAIMERS AUTHORIZES THE

AGENT TO RELEASE OR DISCLAIM ANY INTEREST IN PROPERTY ON

BEHALF OF THE PRINCIPAL IN ACCORDANCE WITH CHAPTER 62

(RELATING TO DISCLAIMERS) OR SECTION 6103.1 (RELATING TO

RELEASE OF POWERS AND INTERESTS AND DISCLAIMER OF POWERS),

PROVIDED THAT ANY DISCLAIMER UNDER CHAPTER 62 SHALL BE IN

ACCORDANCE WITH THE PROVISIONS OF SECTION 6202 (RELATING TO

DISCLAIMERS BY FIDUCIARIES OR AGENTS) IN THE CASE OF A

PRINCIPAL WHO IS AN INCAPACITATED PERSON AT THE TIME OF THE

EXECUTION OF THE DISCLAIMER.

(2) AN AGENT MAY MAKE A DISCLAIMER AS THE AGENT

DETERMINES IS CONSISTENT WITH THE PRINCIPAL'S OBJECTIVES IF

ACTUALLY KNOWN BY THE AGENT AND, IF UNKNOWN, AS THE AGENT

DETERMINES IS CONSISTENT WITH THE PRINCIPAL'S BEST INTEREST

BASED ON ALL RELEVANT FACTORS, INCLUDING:

(I) THE VALUE AND NATURE OF THE PRINCIPAL'S

PROPERTY.

(II) THE PRINCIPAL'S FORESEEABLE OBLIGATIONS AND

NEED FOR MAINTENANCE.

(III) MINIMIZATION OF TAXES, INCLUDING INCOME,

ESTATE, INHERITANCE, GENERATION-SKIPPING TRANSFER AND

GIFT TAXES.

(IV) ELIGIBILITY FOR A BENEFIT, PROGRAM OR

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ASSISTANCE UNDER A STATUTE OR REGULATION.

(V) THE PRINCIPAL'S PERSONAL HISTORY OF MAKING OR

JOINING IN MAKING GIFTS.

(E) SIMILAR OR OVERLAPPING SUBJECTS.--SUBJECT TO SUBSECTIONS

(A), (B) [AND], (D) AND (D.1), IF THE SUBJECTS OVER WHICH

AUTHORITY IS GRANTED IN A POWER OF ATTORNEY ARE SIMILAR OR

OVERLAP, THE BROADEST AUTHORITY CONTROLS.

* * *

SECTION 6.2. SECTION 5602(A) OF TITLE 20 IS AMENDED TO READ:

§ 5602. Form of power of attorney.

(a) Specification of powers.--A principal may, by inclusion

of the language quoted in any of the following paragraphs or by

inclusion of other language showing a similar intent on the part

of the principal, empower an agent to do any or all of the

following, each of which is defined in section 5603 (relating to

implementation of power of attorney):

[(1) "To make limited gifts."]

(2) "To create a trust for my benefit."

(3) "To make additions to an existing trust for my

benefit."

(4) "To claim an elective share of the estate of my

deceased spouse."

(6) "To renounce fiduciary positions."

(7) "To withdraw and receive the income or corpus of a

trust."

[(8) "To authorize my admission to a medical, nursing,

residential or similar facility and to enter into agreements

for my care."

(9) "To authorize medical and surgical procedures."]

(10) "To engage in real property transactions."

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(11) "To engage in tangible personal property

transactions."

(12) "To engage in stock, bond and other securities

transactions."

(13) "To engage in commodity and option transactions."

(14) "To engage in banking and financial transactions."

(15) "To borrow money."

(16) "To enter safe deposit boxes."

(17) "To engage in insurance and annuity transactions."

(18) "To engage in retirement plan transactions."

(19) "To handle interests in estates and trusts."

(20) "To pursue claims and litigation."

(21) "To receive government benefits."

(22) "To pursue tax matters."

[(23) "To make an anatomical gift of all or part of my

body."]

(24) "To operate a business or entity."

(25) "To provide for personal and family maintenance."

* * *

Section 7. Section 5603(d) 5603(A.1), (D), (h), (r) and

(u.1) of Title 20 are amended and the section is amended by

adding subsections to read:

§ 5603. Implementation of power of attorney.

[(A.1) POWER TO MAKE LIMITED GIFTS.--

(1) UNLESS THE POWER OF ATTORNEY OTHERWISE PROVIDES, THE

POWER TO MAKE LIMITED GIFTS OR OTHER LANGUAGE IN A POWER OF

ATTORNEY GRANTING GENERAL AUTHORITY WITH RESPECT TO GIFTS

AUTHORIZES THE AGENT ONLY TO:

(I) MAKE OUTRIGHT TO OR FOR THE BENEFIT OF A PERSON,

A GIFT OF ANY OF THE PRINCIPAL'S PROPERTY, INCLUDING BY

20160SB1104PN1645 - 19 -

<--

THE EXERCISE OF A PRESENTLY EXERCISABLE GENERAL POWER OF

APPOINTMENT HELD BY THE PRINCIPAL:

(A) IN AN AMOUNT PER DONEE NOT TO EXCEED THE

ANNUAL DOLLAR LIMITS OF THE FEDERAL GIFT TAX

EXCLUSION UNDER SECTION 2503(B) OF THE INTERNAL

REVENUE CODE OF 1986 (PUBLIC LAW 99-514, 26 U.S.C. §

2503(B)), WITHOUT REGARD TO WHETHER THE FEDERAL GIFT

TAX EXCLUSION APPLIES TO THE GIFT; OR

(B) IF THE PRINCIPAL'S SPOUSE AGREES TO CONSENT

TO A SPLIT GIFT PURSUANT TO SECTION 2513 OF THE

INTERNAL REVENUE CODE OF 1986 (26 U.S.C. § 2513), IN

AN AMOUNT PER DONEE NOT TO EXCEED TWICE THE ANNUAL

FEDERAL GIFT TAX EXCLUSION LIMIT.

(II) CONSENT, PURSUANT TO SECTION 2513 OF THE

INTERNAL REVENUE CODE OF 1986, TO THE SPLITTING OF A GIFT

MADE BY THE PRINCIPAL'S SPOUSE IN AN AMOUNT PER DONEE NOT

TO EXCEED THE AGGREGATE ANNUAL GIFT TAX EXCLUSIONS FOR

BOTH SPOUSES.

(2) AN AGENT MAY MAKE A GIFT OF THE PRINCIPAL'S PROPERTY

ONLY AS THE AGENT DETERMINES IS CONSISTENT WITH THE

PRINCIPAL'S OBJECTIVES IF ACTUALLY KNOWN BY THE AGENT AND, IF

UNKNOWN, AS THE AGENT DETERMINES IS CONSISTENT WITH THE

PRINCIPAL'S BEST INTEREST BASED ON ALL RELEVANT FACTORS,

INCLUDING:

(I) THE VALUE AND NATURE OF THE PRINCIPAL'S

PROPERTY.

(II) THE PRINCIPAL'S FORESEEABLE OBLIGATIONS AND

NEED FOR MAINTENANCE.

(III) MINIMIZATION OF TAXES, INCLUDING INCOME,

ESTATE, INHERITANCE, GENERATION-SKIPPING TRANSFER AND

20160SB1104PN1645 - 20 -

GIFT TAXES.

(IV) ELIGIBILITY FOR A BENEFIT, PROGRAM OR

ASSISTANCE UNDER A STATUTE OR REGULATION.

(V) THE PRINCIPAL'S PERSONAL HISTORY OF MAKING OR

JOINING IN MAKING GIFTS.

(3) AS USED IN THIS SUBSECTION, THE PHRASE "A GIFT FOR

THE BENEFIT OF A PERSON" INCLUDES A GIFT TO A TRUST, AN

ACCOUNT UNDER CHAPTER 53 (RELATING TO PENNSYLVANIA UNIFORM

TRANSFERS TO MINORS ACT) AND A TUITION SAVINGS ACCOUNT OR

PREPAID TUITION PLAN AS DEFINED UNDER SECTION 529 OF THE

INTERNAL REVENUE CODE OF 1986 (26 U.S.C. § 529).]

* * *

(d) Power to claim an elective share.--A power "to claim an

elective share of the estate of my deceased spouse" shall mean

that the agent may elect to take against the will and

conveyances of the principal's deceased spouse, disclaim any

interest in property which the principal is required to disclaim

as a result of such election, retain any property which the

principal has the right to elect to retain, file petitions

pertaining to the election, including petitions to extend the

time for electing and petitions for orders, decrees and

judgments in accordance with section 2211(c) and (d) (relating

to determination of effect of election; enforcement), and take

all other actions which the agent deems appropriate in order to

effectuate the election: Provided, however, That the election

shall be made only upon the approval of the court having

jurisdiction of the principal's estate in accordance with

section 2206 (relating to right of election personal to

surviving spouse) in the case of a principal who [has been

adjudicated] is an incapacitated person, or upon the approval of

20160SB1104PN1645 - 21 -

the court having jurisdiction of the deceased spouse's estate in

the case of a principal who [has not been adjudicated] is not

an incapacitated person.

* * *

[(h) Power to authorize admission to medical facility and

power to authorize medical procedures.--

(1) A power "to authorize my admission to a medical,

nursing, residential or similar facility, and to enter into

agreements for my care" shall mean that the agent may apply

for the admission of the principal to a medical, nursing,

residential or other similar facility, execute any consent or

admission forms required by such facility which are

consistent with this paragraph, and enter into agreements for

the care of the principal by such facility or elsewhere

during his lifetime or for such lesser period of time as the

agent may designate, including the retention of nurses for

the principal.

(2) A power "to authorize medical and surgical

procedures" shall mean that the agent may arrange for and

consent to medical, therapeutical and surgical procedures for

the principal, including the administration of drugs.]

* * *

(r) Power to handle interests in estates and trusts.--A

power to "handle interests in estates and trusts" shall mean

that the agent may receive a bequest, devise, gift or other

transfer of real or personal property to the principal in the

principal's own right or as a fiduciary for another and give

full receipt and acquittance therefor or a refunding bond

therefor; approve accounts of any estate, trust, partnership or

other transaction in which the principal may have an interest;

20160SB1104PN1645 - 22 -

[and] enter into any compromise and release in regard

thereto[.]; and receive on behalf of the principal all notices

and reports required by section 7780.3 (relating to duty to

inform and report) or permitted by section 7785(a) (relating to

limitation of action against trustee).

* * *

[(u.1) Power to make anatomical gift.--A power "to make an

anatomical gift of all or part of my body" shall mean that the

agent may arrange and consent, either before or after the death

of the principal, to procedures to make an anatomical gift in

accordance with Chapter 86 (relating to anatomical gifts).]

(u.2) Power to operate a business or entity.--A power "to

operate a business or entity" shall mean that the agent may:

(1) Continue or participate in the operation of any

business or other entity in which the principal holds an

interest, whether alone or with others, by making and

implementing decisions regarding its financing, operations,

employees and all other matters pertinent to the business or

entity.

(2) Change the form of ownership of the business or

entity to a corporation, partnership, limited liability

company or other entity, and initiate or take part in a

corporate reorganization, including a merger, consolidation,

dissolution or other change in organizational form.

(3) Compensate an agent actively managing, supervising

or engaging in the operation of a business or entity, as

appropriate, from the principal's assets or from the business

or entity, provided that the compensation is reasonably based

upon the actual responsibilities assumed and performed.

(4) In general, exercise all powers with respect to

20160SB1104PN1645 - 23 -

operating a business or entity that the principal could if

present.

(u.3) Power to provide for personal and family

maintenance.--

(1) A power "to provide for personal and family

maintenance" shall mean that the agent may provide for the

health, education, maintenance and support, in order to

maintain the customary standard of living of the principal's

spouse and the following individuals, whether living when the

power of attorney is executed or later born:

(i) The principal's minor children.

(ii) Other individuals legally entitled to be

supported by the principal.

(iii) The individuals whom the principal has

customarily supported and intends to support.

(2) In acting under this subsection, the agent shall:

(i) Take into account the long-term needs of the

principal.

(ii) Consider any independent means available to

those individuals apart from the support provided by the

principal.

(3) Authority with respect to personal and family

maintenance is in addition to and not limited by authority

that an agent may or may not have with respect to gifts under

this chapter.

(u.4) Implied powers.--Except as provided by a power of

attorney, each of the specific powers listed in this section

included in a power of attorney include the other powers listed

in this section to the extent necessary to exercise the

specifically designated power.

20160SB1104PN1645 - 24 -

<--

Section 8. Section 5604(c)(1) of Title 20 is amended and

subsection (c) is amended by adding a paragraph to read:

§ 5604. Durable powers of attorney.

* * *

(1) If, following execution of a durable power of

attorney, the principal [is adjudicated] becomes an

incapacitated person and a guardian is appointed for his

estate, the agent is accountable to the guardian as well as

to the principal. [The guardian shall have the same power to

revoke or amend the power of attorney that the principal

would have had if he were not an incapacitated person.]

* * *

(3) In its guardianship order and determination of a

person's incapacity, the court shall determine whether and

the extent to which the incapacitated person's durable power

of attorney remains in effect.

* * *

Section 9. Section 5610 of Title 20 is amended to read:

§ 5610. Account.

An agent shall file an account of his administration whenever

directed to do so by the court and may file an account at any

other time. All accounts shall be filed in the office of the

clerk in the county where the principal resides. The court may

assess the costs of the accounting proceeding as it deems

appropriate, including the costs of preparing and filing the

account.

Section 10. Title 20 is amended by adding sections to read:

§ 5613. Meaning and effect of power of attorney.

The meaning and effect of a power of attorney is determined

20160SB1104PN1645 - 25 -

by the law of the jurisdiction indicated in the power of

attorney and, in the absence of an indication of jurisdiction,

by the law of the jurisdiction in which the power of attorney is

executed.

§ 5614. Jurisdiction and venue.

(a) County having venue.--Venue of any matter pertaining to

the exercise of a power by an agent acting under a power of

attorney as provided in this chapter shall be in the county in

which the principal is domiciled, a resident or residing in a

long-term care facility.

(b) Declining jurisdiction.--

(1) A court having jurisdiction may decline to exercise

jurisdiction if at any time it determines that a court of

another county or state is a more appropriate forum.

(2) If a court of this Commonwealth declines to exercise

jurisdiction, it shall either dismiss the proceeding or stay

the proceeding upon condition that a proceeding be promptly

commenced in another county or state. A court may impose any

other condition that it deems appropriate.

Section 11. Section 6103 of Title 20 is repealed:

[§ 6103. Release or disclaimer of powers or interests.

(a) Powers and interests releasable.--Any power of

appointment, or power of consumption, whether general or

special, other than a power in trust which is imperative, and

any interest in, to, or over real or personal property held or

owned outright, or in trust, or in any other manner which is

reserved or given to any person by deed, will or otherwise, and

irrespective of any limitation of such power or interest by

virtue of any restriction in the nature of a so-called

spendthrift trust provision, or similar provision, may be

20160SB1104PN1645 - 26 -

released or disclaimed, either with or without consideration by

written instrument signed by the person possessing the power or

the interest and delivered as hereinafter provided, but nothing

in this section shall authorize an income beneficiary of a

spendthrift trust to release or disclaim his right to such

income, unless as a result of the release or disclaimer the

released or disclaimed income will pass to one or more of the

beneficiary's descendants. This section shall not apply to an

interest that may be disclaimed under Chapter 62 (relating to

disclaimers).

(b) Form of release or disclaimer.--A power or interest

which is releasable or disclaimable may be released or

disclaimed either absolutely or conditionally, and may also be

released or disclaimed with respect to the whole or any part of

the property subject to such power or interest, and may also be

released or disclaimed in such manner as to reduce or limit the

persons or objects or classes of persons or objects in whose

favor such power or interest would otherwise be exercisable. No

release or disclaimer of a power or of an interest shall be

deemed to make imperative a power or interest which was not

imperative prior to such release or disclaimer unless the

instrument of release or disclaimer expressly so provides.

disclaimer may be delivered to any one of the following:

(1) Any person specified for such purpose in the

instrument creating the power or interest.

(2) Any trustee of the property to which the power or

interest relates.

(3) The clerk of the court having jurisdiction of the

trust for filing in said court.

20160SB1104PN1645 - 27 -

(4) The recorder of deeds for recording in the county in

which the person possessing the power or interest resides, or

in which the deed, will, or other instrument creating the

power or interest is recorded or filed.

(d) Grantee or lienholder.--A release or disclaimer shall be

void as against a bona fide grantee of or holder of a lien on

real estate in any county unless the release or disclaimer or a

duplicate original or certified copy thereof is recorded in the

county where the real estate lies before the recording or

entering of the instrument or lien under which such grantee or

lienholder claims.]

Section 12. Title 20 is amended by adding a section to read:

§ 6103.1. Release of powers and interests and disclaimer of

powers.

(a) Interests releasable.--

(1) Subject to paragraph (2), an interest in property

that has been accepted may be released.

(2) An income interest in a spendthrift trust may be

released only if the released income passes to one or more of

the releasor's descendants.

(b) Effect of release of interest.--A releasor of an

interest in property shall be treated as having died at the time

of the release for purposes of determining and accelerating the

interests of other parties in the property.

of appointment, power of withdrawal or other power held in a

nonfiduciary capacity may be disclaimed prior to its acceptance

or released after its acceptance.

(d) Terms of disclaimer or release.-- A release of a power or

interest or a disclaimer of a power under this section may:

20160SB1104PN1645 - 28 -

(1) Be absolute or conditional.

(2) Be made with respect to the whole or any part of the

property subject to the power or interest.

(3) Reduce or limit the persons or objects or classes of

persons or objects in whose favor the power or interest would

otherwise be exercisable.

(e) Procedural requirements.--A release and a disclaimer

under this section shall be in writing and filed, delivered and

recorded in a similar manner as a disclaimer under section 6204

(relating to filing, delivery and recording).

Section 13. Title 20 is amended by adding a chapter to read:

CHAPTER 76

POWERS OF APPOINTMENT

Sec.

7601. Definitions.

7602. Exercise of powers of appointment.

7603. Contract to exercise power.

7604. Manner of appointment.

7605. Antilapse provision.

7606. Partially effective exercise.

§ 7601. Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Broad power of appointment." A power of appointment that

the donee may exercise in favor of any one or more of the

following:

(1) One or more persons selected by the donee.

(2) The donee.

(3) The donee's estate.

20160SB1104PN1645 - 29 -

(4) Every person other than the donee, the donee's

creditors, the donee's estate or the creditors of the donee's

estate.

"Limited power of appointment." A power of appointment that

is not a broad power of appointment. The term includes a power

to appoint to the donee's creditors or the creditors of the

donee's estate.

§ 7602. Exercise of powers of appointment.

(a) Broad power of appointment.--Subject to subsection (c),

in the absence of a contrary intent appearing in the instrument

creating a broad power of appointment or in the donee's

instrument exercising the power, a broad power of appointment

may be exercised only by the donee's instrument making:

(1) specific reference to the power;

(2) general reference to any or all powers of

appointment held by the donee;

(3) a testamentary or inter vivos gift specifically

describing the appointive property;

(4) an insufficiently funded testamentary pecuniary

legacy, to the extent to satisfy the legacy;

(5) a general testamentary gift; or

(6) a testamentary residuary gift.

(b) Limited power of appointment.--

(1) Subject to paragraph (2) and subsection (c), in the

absence of a contrary intent appearing in the instrument

creating a limited power of appointment or in the donee's

instrument exercising the power, a limited power of

appointment may be exercised only by the donee's instrument

making:

(i) specific reference to the power;

20160SB1104PN1645 - 30 -

(ii) a testamentary or inter vivos gift specifically

describing the appointive property;

(iii) a general testamentary gift to all, and only

to all, the objects of the power; or

(iv) a testamentary residuary gift to all, and only

to all, the objects of the power.

(2) The objects of the power described in paragraph (1)

(iii) and (iv) who have a common ancestor shall be only those

descendants of the common ancestor determined on a per

stirpes basis.

power of appointment may be exercised only by specific reference

to the power if the instrument creating the power so requires.

(d) Exercise before testamentary power granted.--In the

absence of a contrary intent appearing in the instrument

creating a power of appointment exercisable at the donee's death

or in the donee's instrument exercising the power, the donee's

instrument may exercise a power of appointment existing at the

donee's death even though the power was granted after the date

of the donee's instrument.

(e) Testamentary powers.--

(1) Notwithstanding any contrary provision in an

instrument creating a power of appointment, a testamentary

power of appointment shall not be exercisable in favor of the

donee or the donee's creditors.

(2) A grant of a testamentary power to appoint to the

donee's creditors shall be construed as a power to appoint to

the creditors of the donee's estate.

(3) An attempted exercise of a testamentary power of

appointment in favor of the donee's creditors shall be

20160SB1104PN1645 - 31 -

construed as an exercise in favor of those creditors of the

donee's estate who were also creditors of the donee at the

time of the donee's death.

(4) If the donee is an issue of the donor, a

testamentary power of appointment to appoint to the donor's

issue shall not be exercisable in favor of the donee or the

donee's estate.

§ 7603. Contract to exercise power.

(a) Contract prohibited.--Unless the donor and donee are the

same person, the donee of a power of appointment that is not

presently exercisable may not contract to exercise the power.

(b) Actions for recovery.--A prohibited contract under

subsection (a), if made, may not be the basis of an action for

specific performance or damages, but the promisee can obtain

restitution from the donee of the value given for the promise,

unless the donee has exercised the power pursuant to the

contract.

does not limit the power of a donee to disclaim or release a

power of appointment in whole or in part.

§ 7604. Manner of appointment.

(a) Outright or in trust.--Subject to section 7602(e)

(relating to exercise of powers of appointment), unless

expressly prohibited by the instrument creating a power of

appointment, a donee may exercise a power by appointing in any

manner, including, but not limited to:

(1) Appointing outright to one or more objects of the

power.

(2) Appointing to one or more trustees to hold the

appointive property in trust for the benefit of one or more

20160SB1104PN1645 - 32 -

objects of the power and specifying the terms and

administrative provisions of the trust and the powers and

duties of the trustees, even if the trustees themselves are

not objects of the power.

(3) Creating a broad or limited power of appointment

exercisable by any one or more objects of the original power

to whom the donee could have appointed outright, even if some

of the objects of the new power are not among the objects of

the original power, provided that if the original power is a

limited power, other than a power to appoint to the donee's

creditors or the creditors of the donee's estate:

(i) All the objects of the original power are among

the objects of the new power.

(ii) All the takers in default of exercise of the

new power are among the objects of the original power.

(b) Exclusive and nonexclusive powers.--Unless the

instrument creating a power of appointment expressly specifies a

minimum share of, a minimum pecuniary amount of or a particular

item of appointive property to be appointed to an object of the

power, the donee may exclude any object of the power as the

donee deems appropriate.

§ 7605. Antilapse provision.

(a) General rule.--

(1) Subject to paragraphs (2) and (3), in the absence of

a contrary intent appearing in the instrument creating a

power of appointment or, in the donee's instrument,

exercising the power, an exercise of the power of appointment

in favor of any of the following, whether designated by name

or as one of a class, shall not fail if the appointee is not

living at the time the appointment becomes effective:

20160SB1104PN1645 - 33 -

(i) A child or other issue of the donee.

(ii) A brother or sister of the donee.

(iii) A child of a brother or sister of the donee.

(2) Paragraph (1) applies if:

(i) One or more issues of the appointee are living

at the time the appointment becomes effective.

(ii) The issue under subparagraph (i), per stirpes,

are objects of the power.

(3) The property appointed to the deceased appointee

shall pass per stirpes to the appointee's issue living at the

time the appointment becomes effective, but the appointment

to a brother or sister or child of a brother or sister of the

donee shall fail to the extent the property would pass to the

spouse or issue of the donee if the appointment were to

lapse.

(b) Lapsed share of residue.--In the absence of a contrary

intent appearing in the donee's instrument exercising a power of

appointment, if an appointment of an amount or share of the

residue of the property subject to the power fails, the amount

or share shall pass to the other appointees of the residue of

the property subject to the power, if any, in proportion to

their shares in the residue of the property subject to the

power.

§ 7606. Partially effective exercise.

In the absence of a contrary intent appearing in the

instrument creating a power of appointment or in the donee's

instrument exercising the power, a partially ineffective

exercise of a power of appointment shall not make ineffective

any otherwise effective portion of the exercise, unless the

appointment regarded as a whole constitutes such an integrated

20160SB1104PN1645 - 34 -

plan that the parts cannot be separated without defeating the

plan.

Section 14. Sections 7710.1(c), 7722 and 7740.7(b) of Title

20 are amended to read:

§ 7710.1. Nonjudicial settlement agreements - UTC 111.

* * *

only to the extent it [does not violate] is not inconsistent

with a material purpose of the trust and includes terms and

conditions that could be properly approved by the court under

this chapter or other applicable law.

* * *

§ 7722. Representation of parties in interest in general.

(a) Judicial proceeding.--In a judicial proceeding involving

a trust matter, an order or decree of the court that binds the

representative [or representatives] is binding upon a person,

class of persons or both represented in accordance with section

7723 (relating to representatives and persons represented) if:

(1) the trustee notifies the [representatives]

representative in writing whom [they represent, they do] he

represents and the representative does not decline the

representation as provided in section 7725 (relating to

notice of representation) [and they act in good faith.];

(2) a petitioner, whether or not a trustee, avers the

representation in a petition before the court , the

representative is the petitioner or a respondent over whom

the court has jurisdiction and, if a respondent, the

representative does not decline the representation in a

responsive pleading filed and served as required by law; or

(3) the representative has signed a certification of

20160SB1104PN1645 - 35 -

representation described in subsection (d) and has not

rescinded the certification on the court's records by the

time the court acts upon the petition .

(b) Nonjudicial resolution.--In a nonjudicial resolution of

a trust matter, notice to, the consent or approval of or the

waiver or release by the representative [or representatives] is

binding upon a person, class of persons or both represented in

accordance with section 7723 if:

(1) the trustee notifies the [representatives]

representative in writing whom [they represent, they do] he

represents and the representative does not decline the

representation as provided in section 7725 [and they act in

good faith.]; or

(2) the representative has signed a certification of

representation described in subsection (d) and has not

rescinded the certification in a writing received by the

trustee by the time of the nonjudicial settlement.

representative may consider the general benefit accruing to the

living members of the family of the person represented.

(d) Certification of representation.--

(1) A certification signed by the representative

describing his representation of another person, class of

persons or both in accordance with section 7723 may be filed

with:

(i) the court, in the case of a judicial proceeding;

(ii) the trustee, in the case of a nonjudicial

resolution of a trust matter.

(2) Subject to paragraph (3), a certification of

20160SB1104PN1645 - 36 -

representation may be rescinded in a writing signed by the

representative and filed with:

(i) the court at any time before the court acts in

reliance upon the certification, in the case of a

judicial proceeding; or

(ii) the trustee before a trust matter is resolved

without application to the court.

(3) A representative's rescission of a certification of

representation shall have no effect upon actions taken by a

trustee in good faith reliance upon the certification.

§ 7740.7. Division of trusts.

* * *

(b) With court approval.--The court, for cause shown, may

authorize the division of a trust into [two] separate trusts

upon such terms and conditions and with notice as the court

shall direct.

* * *

Section 15. Section 7765(a), (b) and (c) of Title 20 are

amended and the section is amended by adding a subsection to

read:

§ 7765. Resignation of trustee; filing resignation.

[(a) Court approval.--A trustee may resign with court

approval.

(b) Without court approval if authorized by trust

instrument.--A trustee may resign without court approval if

authorized to resign by the trust instrument.

trust instrument.--

(1) Unless expressly provided to the contrary in the

trust instrument, an individual trustee may resign without

20160SB1104PN1645 - 37 -

court approval and without authorization in the trust

instrument if:

(i) there is at least one cotrustee and all

cotrustees consent in writing to the resignation; and

(ii) all the qualified beneficiaries consent in

writing to the resignation.

(2) This subsection shall not authorize the sole trustee

of a trust to resign unless the trust instrument names a

successor trustee or provides a method for appointing a

successor trustee, and in either case the resignation shall

not be effective until the successor trustee accepts the

appointment in writing.]

(a.1) General rule.--A trustee may resign:

(1) with court approval;

(2) without court approval if authorized to resign by

the trust instrument; or

(3) pursuant to a nonjudicial settlement agreement

described in section 7710.1 (relating to nonjudicial

settlement agreements - UTC 111).

* * *

Section 16. Section 7780.3 of Title 20 is amended by adding

subsections to read:

§ 7780.3. Duty to inform and report.

* * *

(k.1) Nomination by current beneficiary.-- In a writing given

to the trustee, a current beneficiary of a trust may nominate

another person to receive, on behalf of the current beneficiary,

the notices required by this section. By giving the notices

required by this section to the nominee of the current

beneficiary, the trustee satisfies the trustee's duty to give to

20160SB1104PN1645 - 38 -

the current beneficiary the notices required by this section if:

(1) the trustee notifies the nominee that the notice is

being given to the nominee as representative of the current

beneficiary and that future notices required by this section

will be given to the nominee in the same capacity; and

(2) the nominee does not decline to receive the notices

on behalf of the current beneficiary in a writing given to

the trustee no later than 60 days after receipt of the notice

described in paragraph (1).

(k.2) Reliance on nomination.--The trustee may rely upon the

current beneficiary's nomination of another person to receive

the notices required by this section on behalf of the current

beneficiary and the nominee's presumed acceptance of that

representation under subsection (k.1)(2) until the trustee

receives a written rescission of the nomination from the current

beneficiary or a written declination to receive further notices

from the nominee. No such rescission or declination shall render

ineffective any notice given by the trustee to the nominee

before the trustee received the rescission or declination.

* * *

Section 17. Section 7785(a) of Title 20 is amended by adding

paragraphs to read:

§ 7785. Limitation of action against trustee.

(a) Imposed by trustee's written reports.--

* * *

(3) In a writing given to the trustee, a beneficiary of

a trust may nominate another person to receive, on behalf of

the beneficiary, the reports required by this section. By

giving the reports required by this section to the nominee of

the beneficiary, the trustee satisfies the trustee's duty to

20160SB1104PN1645 - 39 -

give the beneficiary the reports required by this section if:

(i) the trustee notifies the nominee that the report

and future reports required by this section are being

given to the nominee as representative of the

beneficiary; and

(ii) the nominee does not decline to receive reports

on behalf of the beneficiary in a writing given to the

trustee no later than 60 days after receipt of the notice

described in this subsection.

(4) The trustee may rely upon the beneficiary's

nomination of another person to receive the reports required

by this section on behalf of the beneficiary and the

nominee's presumed acceptance of that representation under

this subsection until the trustee receives a written

rescission of the nomination from the beneficiary or a

written declination to receive further reports from the

nominee. No such rescission or declination shall render

ineffective any report given by the trustee to the nominee

before the trustee received the rescission or declination.

* * *

Section 18. Section 7792 of Title 20 is amended to read:

§ 7792. Powers, duties and liabilities identical with personal

representatives.

The provisions concerning the powers, duties and liabilities

of a trustee shall be the same as those set forth in the

following provisions of this title for the administration of a

decedent's or a minor's estate:

Section 3184 (relating to discharge of personal

representative and surety).

Section 3321(d) and (e) (relating to nominee registration;

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corporate fiduciary as agent; deposit of securities in a

clearing corporation; book-entry securities).

Section 3323 (relating to compromise of controversies).

Section 3324 (relating to death or incapacity of fiduciary).

Section 3332 (relating to inherent powers and duties).

Section 3353 (relating to order of court).

Section 3354 (relating to power given in governing

instrument).

Section 3355 (relating to restraint of sale).

Section 3356 (relating to purchase by personal

representative).

Section 3358 (relating to collateral attack).

Section 3359 (relating to record of proceedings; county where

real estate lies).

Section 3532(c) (relating to at risk of personal

representative).

Section 19. Title 20 is amended by adding a chapter to read:

CHAPTER 79

CHARITABLE INSTRUMENTS

Sec.

7901. Short title of chapter.

7902. Definitions.

7903. Deemed provisions of governing instrument.

7904. Power to amend governing instrument.

7905. Court authority.

7906. Applicability.

§ 7901. Short title of chapter.

This chapter shall be known and may be cited as the

Charitable Instruments Act.

§ 7902. Definitions.

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The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Charitable organization." A corporation, trust or other

instrumentality governed by Pennsylvania law, including:

(1) A trust described in section 4947(a)(1) or (2) of

the Internal Revenue Code of 1986 (Public Law 99-514, 26

U.S.C. § 4947(a)(1) or (2)), which is or is treated as a

private foundation under section 509 of the Internal Revenue

Code of 1986 (26 U.S.C. § 509).

(2) A trust governed by Pennsylvania law that is or is

treated as a pooled income fund under section 642(c)(5) of

the Internal Revenue Code of 1986 (26 U.S.C. § 642(c)(5)).

§ 7903. Deemed provisions of governing instrument.

(a) Effect of deemed provisions.--The governing instrument

of a charitable organization is deemed to include provisions,

the effects of which are to:

(1) Require distributions for each taxable year in such

amounts and at such times and in such manner as not to

subject the organization to tax under section 4942 of the

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

4942).

(2) Prohibit the organization from:

(i) Engaging in an act of self-dealing, as defined

in section 4941(d) of the Internal Revenue Code of 1986

(26 U.S.C. § 4941(d)).

(ii) Retaining excess business holdings, as defined

in section 4943(c) of the Internal Revenue Code of 1986

(26 U.S.C. § 4943(c)).

(iii) Making an investment in such manner as to

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subject the organization to tax under section 4944 of the

Internal Revenue Code of 1986 (26 U.S.C. § 4944).

(iv) Making a taxable expenditure, as defined in

section 4945(d) of the Internal Revenue Code of 1986 (26

U.S.C. § 4945(d)).

(b) Effect of contrary provision.--The deemed provisions

under subsection (a) supersede any contrary provision of the

governing instrument.

that the charitable organization is subject to one or more of

the sections of the Internal Revenue Code of 1986 set forth in

subsection (a).

§ 7904. Power to amend governing instrument.

The trustees or directors of every charitable organization

have the power, acting alone, without the approval of a member,

court, donor or beneficiary, to amend the instrument governing

the charitable organization in any manner required for the sole

purpose of ensuring that:

(1) Gifts and bequests to the charitable organization

qualify for charitable deductions available for Federal

income, gift and estate tax purposes.

(2) The charitable organization qualifies for tax

exemptions available for Federal income tax purposes.

§ 7905. Court authority.

Nothing in this chapter precludes a court of competent

jurisdiction from authorizing a deviation from the express terms

of an instrument governing a charitable organization.

§ 7906. Applicability.

This chapter shall apply to:

(1) A charitable organization created after December 31,

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1969.

(2) A charitable organization created before January 1,

1970, unless a court of competent jurisdiction in a

proceeding instituted before January 1, 1972, explicitly

decided that the operation of this chapter would

substantially impair the accomplishment of the purposes of

the charitable organization involved in that proceeding.

Section 20. Section 8113(f) of Title 20 is amended to read:

§ 8113. Charitable trusts.

* * *

(f) Charitable organizations.--For a charitable organization

defined under [the act of June 17, 1971 (P.L.181, No.23), known

as the Charitable Instruments Act of 1971,] Chapter 79 (relating

to charitable instruments) the provisions of [that act] Chapter

79 shall supersede subsection (c) if necessary to comply with

the minimum investment return requirements.

Section 21. This act shall apply as follows:

(1) Except as set forth in paragraphs (2) and (3), this

act shall apply to all powers of attorney executed on or

after the effective date of this paragraph.

(2) (i) Nothing in this act shall be construed to limit

the effectiveness of powers of attorney in effect prior

to the effective date of this paragraph.

(ii) The amendment or addition of 20 Pa.C.S. §§

5603(r) and (u.4), 5610, 5613 and 5614 shall apply to all

powers of attorney executed before, on or after the

effective date of this paragraph.

(3) The addition of 20 Pa.C.S. Ch. 76 shall apply to all

powers of appointment created before, on or after the

effective date of that chapter.

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(4) The addition of 20 Pa.C.S. Ch. 79 is a continuation

of the act of June 17, 1971 (P.L.181, No.23), known as the

Charitable Instruments Act of 1971. The following apply:

(i) All activities initiated under the Charitable

Instruments Act of 1971 shall continue and remain in full

force and effect and may be completed under 20 Pa.C.S.

Ch. 79. Resolutions, orders, regulations, rules and

decisions which were made under the Charitable

Instruments Act of 1971 and which are in effect on the

effective date of this paragraph shall remain in full

force and effect until revoked, vacated or modified under

20 Pa.C.S. Ch. 79. Contracts, obligations and agreements

entered into under the Charitable Instruments Act of 1971

are not affected nor impaired by the repeal of the

Charitable Instruments Act of 1971.

(ii) Any difference in language between 20 Pa.C.S.

Ch. 79 and the Charitable Instruments Act of 1971 is

intended only to conform to the style of the Pennsylvania

Consolidated Statutes and is not intended to change or

affect the legislative intent, judicial construction or

administrative interpretation and implementation of the

Charitable Instruments Act of 1971.

Section 22. Repeals are as follows:

(1) The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of 20

Pa.C.S. Ch. 79.

(2) The act of June 17, 1971 (P.L.181, No.23), known as

the Charitable Instruments Act of 1971, is repealed.

Section 23. This act shall take effect immediately.

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