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FAWCETT ESTATE (11/30/72)

decided: November 30, 1972.

FAWCETT ESTATE


Appeal from decree of Court of Common Pleas, Orphans' Court Division, of Washington County, No. 902 of 1969, in re estate of F. K. Fawcett, deceased.

COUNSEL

Harold V. Fergus, with him Scott H. Fergus, and Fergus, Martin and Fergus, for appellants.

Vincent J. Dopko, Deputy Attorney General, for Commonwealth, appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Chief Justice Jones. Dissenting Opinion by Mr. Justice Roberts. Mr. Justice Eagen joins in this dissenting opinion.

Author: Jones

[ 449 Pa. Page 498]

On July 26, 1969, F. K. Fawcett, a wealthy, eighty-seven-year-old Washington County industrialist, was murdered in his home. Despite his age, Mr. Fawcett, who had been a widower for some years, was still actively engaged in business and community affairs, serving as president of Penn Manufacturing Company at the time of his death.

Late in 1965, while serving on the board of the local Y.M.C.A., Mr. Fawcett met Mrs. Ann Shuman, a thirty-eight-year-old widow employed by the Association. Their relationship remained casual until March of 1967 when Mr. Fawcett developed a romantic interest in Mrs. Shuman and became a frequent guest at her home. Mr. Fawcett visited Mrs. Shuman at least twice a week until the time of his death and offered to marry her many times during that period. Although Mrs.

[ 449 Pa. Page 499]

Shuman consistently refused all marriage proposals, Mr. Fawcett was undaunted and continued to visit her, propose to her and give her substantial monetary gifts. It is the latter manifestation of Mr. Fawcett's affection that is the subject of this appeal.

In the two years preceding his death, Mr. Fawcett gave Mrs. Shuman over $177,000. When the executors of his estate filed the Pennsylvania Inheritance Tax returns they listed the gifts as transfers and did not include the amount in the taxable estate. The Commonwealth revised the appraisement and included the value of the gifts in the taxable estate under the provisions of Article II, Section 222 of the Inheritance and Estate Tax Act of 1961,*fn1 contending that the gifts were made in contemplation of death. The executors appealed the Commonwealth's ruling to the Orphans' Court Division of the Washington County Court of Common Pleas, which determined, after a hearing, that the gifts to Mrs. Shuman and her daughter were made in contemplation of death as defined in the statute and were properly included in the decedent's taxable estate. This appeal followed and we reverse.

Although there have been numerous lower court opinions interpreting and applying Section 222 of the

[ 449 Pa. Page 500]

Inheritance and Estate Tax Act of 1961,*fn2 this is the first time the provisions of that section have been before this Court.*fn3 Nevertheless, we are not totally without guidance in determining what transfers should be considered as made "in contemplation of death" under the 1961 Act. First, the Act itself defines a transfer in contemplation of death as one in which "the dominant or impelling motive, but not necessarily the sole motive of the transferor, was prompted by the thought of death." Secondly, the official comments to Section 222 of the ...


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