No. 80-1-29, Appeal from Decree dated January 16, 1980 of the Court of Common Pleas of Allegheny County, Pennsylvania, Orphans' Court Division at No. 4425 of 1976.
Robert E. McKee, Jr., Feldstein, Grinberg, Stein & McKee, Pittsburgh, for appellant.
Carl Max Janavitz, Pittsburgh, for Executor of Estate.
John J. Hickton, John J. Dean, Pittsburgh, for Ursula Corso.
O'Brien, C. J. and Roberts, Nix, Larsen, Flaherty and Kauffman, JJ. Kauffman, J., filed a dissenting opinion.
On February 1, 1957, Anthony C. Corso ("testator") executed his will. The will provided that his wife Helen Corso receive in trust an amount equal to the maximum allowable marital deduction under federal estate tax laws and that their daughter Carol receive the residue of the estate in trust. The will also contained a tax allocation clause directing that all inheritance and estate taxes be paid from the residuary estate.*fn1 Some fifteen years after the execution of this will, testator and his wife Helen were divorced. As a consequence, under section 2507(2) of the Probate, Estates and Fiduciaries Code, all provisions in testator's will "in favor of or relating to" his divorced spouse were rendered "ineffective for all purposes."*fn2 Thereafter, testator married
again, but did not alter his will. Testator died on September 19, 1976. His second wife, as an after-married spouse, received one half of the estate, "the share of the estate to which . . . [she] would have been entitled had the testator died intestate . . . ." 20 Pa.C.S. § 2507(3).*fn3 The remainder of the estate went to testator's daughter Carol as residuary beneficiary.
On August 27, 1979, the Orphans' Court Division of the Court of Common Pleas of Allegheny County entered a decree of distribution confirming the executor's final account, which, relying upon the pay-tax clause, charged all the taxes on the after-married spouse's intestate share to the residuary estate. Appellant Carol Corso filed exceptions to the decree, contending that since the pay-tax clause was intended to benefit only testator's former spouse, it was rendered ineffective upon testator's divorce by section 2507(2), along with all the other provisions "in favor of or relating to" his former spouse and thus could not benefit his second spouse's intestate share. The orphans' court en banc, Judge Boyle dissenting, dismissed appellant's exceptions and this appeal followed.*fn4
Relying upon this Court's decision in Neamand Estate, 456 Pa. 22, 318 A.2d 730 (1974), the orphans' court held that the pay-tax clause was not revoked in toto by testator's divorce and thus applied to relieve testator's second spouse, taking by operation of law, of her share of estate and inheritance taxes. In fact, the issue here is not the extent to which section 2507(2) revokes the pay-tax clause but, rather, ...