429 Pa. 27 | Pa. | 1968
Opinion by
On December 23, 1953, the decedent, William E. Klein, executed his will. This will created two trusts, each to contain one-half of the residue of his estate after payment of taxes. Decedent’s then wife, Mabel E. Klein, was given a life estate in one of the trusts with a power of appointment. The second trust provided for a life estate in Kathryn J. Grier with a limited power to consume, a successor life estate in Mabel L. Klein and then remainder interests to four specified charities. Decedent also created on December 23rd a revocable life insurance trust under which Mabel L. Klein had a life estate, Kathryn J. Grier had the next successor life estate and Gertrude Jordan (decedent’s sister) had a second successor life estate with a remainder to the same four charities as were named in decedent’s will.
Decedent’s marriage to Mabel Klein terminated in a divorce on January 7, 1957. He then executed a codicil to his will dated January 23, 1957 amending his 1953 will to leave the entire residue of his estate to Kathryn J. Grier for life (with a limited power to consume), a successor life estate to Gertrude Jordan and
The auditing judge below concluded, inter alia, in his adjudication (lj that Kathryn J. Klein (nee Grier) was entitled only-to that portion of decedent’s, estate given to her pursuant to the antenuptial agreement and was precluded from taking a life interest-in the residuary trust estate, (2) that the cemetery; lot owned by -decedent was properly included as an asset of the estate and (3). that the interest on a payment made by the executor to cover a federal fax deficiency represents a distribution to Kathryn J. Klein on account of her interest as a creditor in the estate. Each of these conclusions is attacked in this appeal.
■I.
Appellant, the now Mrs. Klein, insists that she is entitled to both one-half of decedent’s estate (as provided in the antenuptial agreement) and a life'estate in the remaining half (under the codicil of 1957). She' cites as support the following general rule found in Annot., Spouse’s Right To Take Under Other Spouse’s Will as Affected by Antenuptial or Postnuptial Agree
This rule, developed primarily from cases in which the antenuptial or postnuptial agreement was executed prior to the execution of decedent’s will, is followed in Pennsylvania. See Brown’s Estate, 340 Pa. 350, 17 A. 2d 331 (1941); Coane’s Estate, 310 Pa. 138, 165 Atl. 2 (1933); cf. Pentz’s Estate, 200 Pa. 2, 49 Atl. 361 (1901). Although the rationale of these cases is not clearly articulated, they seem to be based on either of two alternative theories: a surviving spouse should not be deemed to have waived the right to take bequests under a will not in existence when the antenuptial or postnuptial agreement was signed, or the subsequent will evidences an intention of the testator to bestow an additional bounty upon the survivor.
Appellee insists that the factual pattern here presented, i.e., a will executed well before the signing of
“5. It is hereby declared that this agreement is entered into by the parties hereto with full knowledge on the part of each of . . . all the rights that, but for this agreement, would be conferred by law upon each in the property or estate of the other, by virtue of the consummation of the said proposed marriage; and it is the express intention of the parties hereto that their respective rights in and to each other’s property or estate, of whatsoever character the same may he, shall he determined am,d fixed hy this agreement.” (Emphasis supplied.)
Our research has disclosed four cases dealing with a situation in which the will preceded the antenuptial or postnuptial agreement. In two of these—Estate of Buchman, 132 Cal. App. 2d 81, 281 P. 2d 608 (1955)
The fact that decedent’s will was executed prior to the antenuptial agreement supports a conclusion that Mrs. Klein cannot take under the will. Compare First National Bank of Princeton v. Miley, 3 N.J. Super. 348, 65 A. 2d 553 (1949). As an aid to the determination of the intent of the parties when they signed the agreement we may consider the surrounding circumstances. See McCready’s Estate, 316 Pa. 246, 175 Atl. 554 (1934). Where a husband, after the signing of an antenuptial agreement, executes a will conferring additional benefits upon his wife the inference is great that he intended these benefits to be above and beyond that which is given by the agreement. However, where a will precedes the agreement, the opposite inference is more natural—the husband intends that the agree
The third case, Darrow Estate, 164 Pa. Superior Ct. 25, 63 A. 2d 458 (1949), is appellant’s strongest case. In Darrow, decedent in a 1935 holographic will left his estate to his wife. A 1945 separation agreement provided that neither survivor would claim as “heir to the deceased, nor the heirs of either against the heirs of the other by reason of the parties hereto being husband and wife.” This language, said the Superior Court, should not be extended by implication to include a release of the right to receive a legacy under the will. It seems clear that the contract language in Darrow— that neither party would claim as an “heir” by virtue of their marriage—does not approach the breadth of language contained in the antenuptial agreement at issue for here Mrs. Klein agreed that her rights “of whatsoever character” would be fixed by the agreement.
We believe that Fratoni Estate, 413 Pa. 594, 198 A. 2d 507 (1964), the most recent of the four cases; is controlling. By his 1930 will Mr. Fratoni left his estate to his wife. In 1949, after a separation, a post-nuptial agreement was executed whereby Mrs. Fratoni “release'[d] and relinquishe[d] to husband all her rights or claims of dower, inheritance, descent and distribution, and all other claims or rights growing out of the marriage relation between said parties, and wife shall be forever barred from all rights in the estate of husband . . . now owned or hereafter acquired.” We held that under the above quoted language Mrs. Fratoni was-barred from taking under her husband’s 1930 will
Similarly, Mrs. Klein agreed that her rights “of whatsoever character” were to be fixed by the ante-nuptial agreement. 'The provisions in the Fratoni post-nuptial agreement and the language employed in the antenuptial agreement here at issue appear ito be equally as comprehensive and we thus conclude that Mrs. -Klein may not take under both .the agreement and her husband’s will. Of course, had either the 1957 codicil or the antenuptial agreement clearly demonstrated an intention by decedent that the bequest in the 1957 codicil was to be in addition to that provided for in the agreement, this would be a different case.
II.
Decedent in 1942 had purchased a 4-grave burial lot in the Masonic section of Laureldale Cemetery. No
The few Pennsylvania cases prior to the 1953 amendment do not mention whether there were any burials on the contested lots. See Brewer Estate, 79 Pa. D. & C. 433 (O.C. Fayette Cty. 1951); Herb Estate, 70 Pa. D. & C. 598 (O.C. Allegheny Cty. 1950); cf. Derby Estate, 14 Fiduciary Rptr. 66 (O.C. Philadelphia Oty. 1963). The failure to attach any importance to this factor in prior cases is perhaps explainable in light of the fact that the common law apparently made no distinction between lots upon which there were burials
III.
The parties have stipulated that the 1961 federal income tax joint return for decedent and appellant was prepared by the executor. On the basis of this return a refund of $2,145.49 was paid to the executor and then in turn given to appellant. As a result of an audit of the 1961 return made in December of 1963 it was determined that a deficiency of $2,128.17 was owed.
Under 26 U.S.C. §6013(d) (3) the liability for joint tax returns is joint and several.
The decree of the Orphans’ Court of Berks County is affirmed. Each party to pay own costs.
Cases such as Loesch’s Estate, 322 Pa. 105, 185 Atl. 191 (1936) seem to indicate that the latter theory was probably intended. After an antenuptial agreement had been signed, the husband in Loesch acquired several mortgages in the name of husband and wife as tenants by the entireties. Treating the acquisition of these mortgages as inter vivos gifts to the wife, the Court held that the wife as surviving spouse could take under the agreement and as the surviving entireties tenant. By analogy, a will following an agreement and containing a bequest to the wife could be regarded as the husband’s attempt to give an additional benefit to his wife payable at his death. See Bartle v. Bartle, 121 Colo. 388, 216 P. 2d 649 (1950); Berg v. Berg, 201 Minn. 179, 275 N.W. 836 (1937).
The Buchman court, although relying upon the California rule that expectancies are waived only where it is evident that the parties contracted with these in mind and their intention to disclaim expectancies is made clear in the instrument, stressed that the will was executed while negotiations for the property settlement were taking place.
In Willett the court said that the sequence of execution of' the will and agreement (one week apart) was of no significance
Although not cited by the Court in Fratoni, Marks’s Estate, 297 Pa. 290, 147 Atl. 54 (1929) supports the. conclusion, there reached. In exchange for a yearly annuity of $750.00, Mrs. Marks agreed in an antenuptial agreement “that ‘the use, ownership, control and disposition of all property ... of the parties . . . shall continue and remain in each of them respectively in the same con
Appellant stresses the fact that one day prior to the day the executor’s account was called for audit she, at her own expense, ordered that a monument bearing Masonic symbols be erected in the memory of her husband on the Laureldale lot. She argues that this constitutes a “dedication” of the lot but we fail to see how the principals applying to the dedication of streets and the like are here relevant. Nor can the placing of a stone monument be considered the equivalent of a burial of decedent in the lot.
The deficiency resulted from a redetermination of the net profit of one of decedent’s businesses and from the elimination of a deduction which had been inadvertently taken twice. We are here not concerned with any liability appellant might assert against the executor for improper preparation of the joint .return for the
Respective rights in a refund check for an overpayment on a joint return is a matter apparently left to state law. See York Radio and Refrigeration Parts, 20 Pa. D. & G. 2d 85 (C.P. York Cty. 1959); Routch, Post-Mortem Estate Planning, 65 Dick. L. Rev. 113, 122 (1961). Several lower court decisions have thus held that a refund for an overpayment on & joint return filed by decedent and his surviving spouse belongs to the survivor alone and is not an estate asset. See MacNeill Estate, 21 Pa. D. & C. 2d 480 (O.C. Montgomery Cty. 1959); Green Estate, 14 Pa. D. & C. 2d 595 (O.C. Philadelphia Cty. 1958). By parity of reasoning, any deficiency and interest thereon would thus appear to be an obligation of the survivor not the estate, assuming that the right to any refund was here owned by decedent and appellant as tenants by the entireties. See Jackson Estate, 33 Pa. D. & C. 2d 402 (O.C. Montgomery Cty. 1964).