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LOHM ESTATE (10/09/70)

decided: October 9, 1970.

LOHM ESTATE


Appeal from decree of Court of Common Pleas, Orphans' Court Division, of Allegheny County, No. 2052 of 1965, in re estate of Robert P. Lohm, deceased.

COUNSEL

Charles D. Coll, for appellants.

No oral argument was made nor brief submitted for appellees.

Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Jones. Mr. Justice O'Brien and Mr. Justice Roberts dissent and would affirm the chancellor's decree without modification, finding record support for the chancellor's result and no abuse of discretion. Mr. Chief Justice Bell took no part in the consideration or decision of this case.

Author: Jones

[ 440 Pa. Page 270]

Robert P. Lohm died on April 25, 1965, leaving a will wherein Ralph S. Kunst, Jr. (a nephew)*fn1 and E. T. Adair, Esq., were appointed co-executors. Although he had been practicing law since 1911, Adair had had very little experience in the administration of estates

[ 440 Pa. Page 271]

    and no experience whatsoever with federal estate tax problems. Accordingly, Adair and Kunst retained Alexander Rosenbaum, Esq., experienced in estate tax matters, to serve as an additional counsel for the estate.

The federal estate tax return, the preparation of which was to be Rosenbaum's major task, was due to be filed on or before July 25, 1966. This return had to be filed by that time in order for the estate to take advantage of the "alternate valuation date" in evaluating for federal estate tax purposes the securities which constituted the bulk of the estate. Adoption of this alternate date required the evaluation of the securities as of April 25, 1966, so that, practically speaking, Rosenbaum had three months from that date within which to prepare and file the return.*fn2

On May 10, 1966, Rosenbaum was hospitalized for surgery, he was released on May 27, 1966, and went back to work in June of 1966.*fn3 The federal estate tax return was not filed until November 15, 1966. The four-month delay in filing prevented the estate from utilizing the "alternate valuation date" so that all the securities had to be evaluated as of the date of the testator's death which resulted in a substantial tax loss. The amount of this loss is still uncertain on the face of this record. The lower court computed a federal estate tax loss of $30,389.92, plus interest, and a Pennsylvania estate tax loss of $5,431.64, plus interest. The executors claim a loss of only $16,315.59 in federal taxes and no Pennsylvania tax loss, and have appealed

[ 440 Pa. Page 272]

    the federal tax assessment to the United States Tax Court which appeal was still pending when the instant appeal was argued.

On March 1, 1967, Adair and Kunst filed their "First and Final Account," which listed, inter alia, an attorney's fee, paid to Rosenbaum, of $22,285.45,*fn4 and executors' commissions of $21,838.78 each, or a total of $43,677.56, paid to Adair and Kunst. No counsel fee had in fact been paid to Rosenbaum, and he filed exceptions to the account, alleging non-payment of the listed attorney's fee and requesting $23,500.00 as payment for his services as co-counsel for the estate. On April 13, 1967, the executors ...


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