Robert K. Greenfield, Esquire, for Accountants
John A. Eichman, III, Esquire for Albert M. Greenfield, Jr.
John J. Lombard, Jr., Esquire, for Elizabeth Petrie
Mervin J. Hartman, Esquire, Guardian and Trustee ad Litem
The matter before the court arises by virtue of objections filed by Albert M. Greenfield, Jr., and Elizabeth M. Petrie to the schedule of distribution which has been filed in the estate of Albert M. Greenfield.
Albert M. Greenfield died on January 5, 1967, survived by a widow and five children. The decedent left a will and codicils wherein he gave his widow, among other things, a life interest and a testamentary power of appointment in one-third of his estate, and after providing for numerous gifts, he divided the residue of his estate into five separate trusts for the benefit of his children and their issue. His widow, Elizabeth M. Greenfield, now Elizabeth M. Petrie, filed a timely election to take against the will. The executors filed an account which was confirmed on May 22, 1972 by adjudication of BOLGER, J. The balance for distribution was "awarded in accordance with the statement of proposed distribution." On October 10, 1972, Judge BOLGER filed a supplemental adjudication concerning issues not relevant here and confirmed the prior adjudication in all other respects. The only exception taken was to the award of certain art objects to the Philadelphia Museum of Art. The court en banc sustained this exception. Greenfield Estate, 61 D.&C. 2d 243 (1973). However, on appeal, the Supreme Court sustained the auditing judge. Greenfield Estate, 457 Pa. 114 (1974).
Thereafter, a schedule of distribution was filed, certified by counsel to be in accordance with the adjudication. The schedule was filed without the joinder of Albert M. Greenfield, Jr., a co-executor and co-trustee. Mrs. Petrie filed timely objections to the schedule. Objections were also filed by Albert M. Greenfield, Jr. Mrs. Petrie then filed preliminary objections to the objections of Albert M. Greenfield,
Jr. The preliminary objections were subsequently withdrawn.
On October 9, 1975, the court, upon petition of the executors and trustees, appointed Mervin J. Hartman, Esquire, as guardian ad litem for minors and trustee ad litem for unborn and unascertained beneficiaries having an interest in the matter, to represent them in proceedings relating to the schedule of distribution and the objections thereto.
Hearings were held on the disputed issues. Counsel for the parties entered into a stipulation dated June 16, 1976 and a second stipulation dated September 23, 1976, which are annexed hereto.
We shall first deal with the objections of Mrs. Petrie, which are, in essence, a claim for reimbursement of the Pennsylvania inheritance taxes which were charged against her distributive share in the schedule of distribution. She admits that due to the election to take against the will, the widow's share is initally chargeable with the Pennsylvania inheritance tax. However, she contends that the Pennsylvania inheritance tax charged to her was included as part of the maximum credit for state death taxes under the applicable federal estate tax regulations*fn1 to reduce the federal estate tax for which only the non-elective share was liable.*fn2 As a result, she argues that she is entitled to have the amount of Pennsylvania inheritance tax charged against her reduced dollar for dollar by the amount of credit received by the non-elective share toward the federal estate tax. She cites § 4(b)(3) of the Estate Tax Apportionment Act of 1951; Mellon Estate, 347 Pa. 520 (1943); and Clark Estate, 8 D.&C. 2d 665, 7 Fiduc. Rep. 73 (1957),
as authority for her position and as determinative of the issue.
We see no need for an extensive discussion of this complex problem as the parties are not really contesting the legal position advanced by Mrs. Petrie in her claim for reimbursement. The guardian ad litem has acquiesced "in the position taken by the electing widow with regard to the Pennsylvania inheritance tax credit." His reasons are set forth at length in his comprehensive report. Counsel for Albert M. Greenfield, Jr., also does not challenge the legal validity of the widow's argument. However, he does argue that Mrs. Petrie is estopped from asserting these objections. He states that when the widow filed her election to take against the will, she and her attorney made oral representations to the other executors that the estate would not suffer any disadvantage as a result of her taking against the will in order to induce them not to contest the election. He then concludes that the executors relied on this representation and did not contest the election, and, if Mrs. Petrie is permitted to assert her objections and they are sustained, there will be less money available for distribution to the residuary trusts and, thus, they are disadvantaged.
Counsel for Mr. Greenfield has emphasized in his brief the following testimony of Mrs. Petrie in support of his argument:
That I wanted him (Dean Wolfman) to make the statement to the executors, which you have referred to -- make it clear that what I was electing to do was not in any way to make them suffer financially. So, after that it became, so far as I was concerned, a matter for the lawyers to work out. (N.T. 163) (Parenthesis added.)
He would have us interpret this and similar statements of Mrs. Petrie to mean that if there were
a transaction which resulted in a benefit to her and a detriment to the residue, she would then reimburse the residue without regard to any transactions which benefited the residue at the expense of Mrs. Petrie. We find ...