No. 204 March Term, 1978, Appeal by Commonwealth of Pennsylvania, Department of Revenue, from Order of the Court of Common Pleas of Allegheny County, Orphans' Court Divisions, dated November 27, 1978 at No. 4121 of 1973.
John M. Duff, Deputy Atty. Gen., Pittsburgh, for appellant.
Alan H. Finegold, Marlee S. Myers, Kirkpatrick, Lockhart, Johnson & Hutchison, Pittsburgh, for appellee.
Eagen, C. J., and O'Brien, Roberts, Nix, Manderino, Larsen and Flaherty, JJ. Manderino, J., did not participate in the decision of this case. Roberts, J., filed a concurring and dissenting opinion in which Nix, J., joined.
This tax case involves the question of whether certain transfers made by the decedent more than two years prior to her death irrevocably divested her of all beneficial interest in various savings accounts and are, therefore, not subject to the inheritance tax.
On February 9, 1970, the decedent, Marie C. Tippins, delivered sixteen savings account passbooks to her son, George W. Tippins. Fourteen of these accounts were in the name of the decedent "in trust for" others, and the remaining two accounts were joint accounts with right of survivorship in the name of decedent and her son. The decedent, who supported herself with a substantial dividend income, was 79 years of age at the time she transferred possession of the savings passbooks and had decided that she required the
type of care which she would receive in a nursing home. As decedent gave the passbooks to her son, she stated that she had no need for the funds, and that her son should take charge of the accounts and see to it that the money was paid to the named beneficiaries at such time as they displayed a need for it.
Her son placed the passbooks in his office safe and called the respective banks, requesting instructions as to what steps he should take to transfer the accounts into his name. He was told to supply a power of attorney. He complied with this request, and the banks sent him signature cards which he completed and returned to them. From that time forward, the bank statements and correspondence pertaining to the accounts were mailed to the son at his office. However, unbeknownst to the son, these steps had not effected a change in the names or form of the accounts, but had merely added his name to them as his mother's attorney in fact.
The decedent passed away on August 19, 1973. As of that date, decedent's son had not become aware of any circumstances which would indicate a need on the part of the beneficiaries, several of whom were minors, for the monies. Consequently, no distributions had been made to the beneficiaries during decedent's lifetime, and the funds on deposit in the accounts as of February 9, 1970 (the date of the transfer of the passbooks), along with the accrued interest thereon, were intact as of the date of decedent's death.
The Commonwealth included the value of both the trust accounts and the joint accounts in its appraisement of the decedent's estate. Decedent's personal representative elected to have the correctness of this appraisement determined at the audit of his account. The auditing judge held that none of the savings accounts should be included in the appraisement, and denied the Commonwealth's claim for inheritance ...