Riddle v. Commissioner

Estate of Lena L. Riddle, Deceased, Girard Trust Company, Executor, Petitioner, v. Commissioner of Internal Revenue, Respondent Riddle v. Commissioner Docket No. 33876 United States Tax Court 21 T.C. 1109; 1954 U.S. Tax Ct. LEXIS 257; March 31, 1954, Promulgated *257 Decision will be entered for the respondent. Decedent, domiciled in Pennsylvania, executed a will in 1945 containing a charitable bequest. In 1946 decedent executed a second will expressly revoking the 1945 will, but containing the same charitable bequest. Two days thereafter decedent executed a codicil to the 1946 will providing that if she died within 30 days of making the 1946 will, that will should be null and void and the 1945 will should become her last will. Decedent died within 30 days after executing the second will and codicil thereto. Held, by operation of a Pennsylvania statute, Act of 1939, P. L. 141 the charitable bequest was void under the 1946 will and, since the 1945 will was expressly revoked, the gift was made by the codicil and was, therefore, void and not deductible from decedent's gross estate under section 812 (d), Internal Revenue Code. Pierce A. Hammond, Jr., Esq., for the petitioner. Jules I. Whitman, Esq., for the respondent. LeMire, Judge. LEMIRE *1109 The respondent determined a deficiency of $ 42,065.63 in estate tax. In determining the deficiency the respondent disallowed as a charitable bequest a claimed deduction from the gross estate in the amount of $ 202,105.13. In addition, respondent increased by $ 100 the valuation of certain shares of stock, the propriety of which is not contested herein. The single question presented is whether petitioner's decedent made a valid charitable bequest under Pennsylvania law so as to entitle petitioner to a deduction in estate tax under section 812 (d) of the Internal Revenue Code. The facts stipulated are so found. FINDINGS OF FACT. Petitioner is*259 the executor of the estate of Lena L. Riddle, who died testate on December 25, 1946, a resident of Chester County, Pennsylvania. The estate tax return was filed on March 5, 1948, with the collector of internal revenue for the first district of Pennsylvania, at Philadelphia. *1110 On December 6, 1945, Lena L. Riddle, the decedent, executed a will, hereinafter referred to as the 1945 will, under the terms of which she bequeathed certain personal property and $ 5,000 to her niece, Linda Kathryn Bergholdt. The residue of her estate she bequeathed in perpetual trust, the net income therefrom to be distributed forever to the Southeastern Pennsylvania Chapter, American Red Cross, hereinafter referred to as the Red Cross. The will appointed the Girard Trust Company of Philadelphia, Pennsylvania, as executor. On December 18, 1946, the decedent executed a will, hereinafter referred to as the 1946 will, specifically revoking the 1945 will. The 1946 will bequeathed certain personal property to decedent's niece and then provided that the residue of the decedent's estate was to be placed in trust with the Girard Trust Company, trustee, to be applied and administered in accordance with *260 the terms of a revocable deed of trust executed on December 18, 1946. The latter instrument directed the trustee, after paying certain expenses of administration of the decedent's estate, to pay the sum of $ 5,000 to decedent's niece, and then to hold the residue in perpetual trust, the net income therefrom to be distributed forever to the Red Cross. On December 20, 1946, the decedent executed a codicil to her 1946 will directing that should she die within 30 days after the execution of her 1946 will it was her intention that the 1946 will should be null and void and that her 1945 will should be and remain her last will and testament, except that she revoked the bequest of $ 5,000 to her niece by that instrument, and then directed that if she survived more than 30 days after execution of the 1946 will that should be her last will and testament and her 1945 will should be revoked. The decedent, who at all material times was domiciled in Pennsylvania, died on December 25, 1946. Her sole surviving heirs were Linda Kathryn Bergholdt, a niece, and Carl G. Hall, a nephew. Following the decedent's death the account of Girard Trust Company, as trustee under the inter vivos trust executed*261 on December 18, 1946, was audited in the Orphans' Court of Philadelphia County, Pennsylvania, which issued an adjudication by which it was decreed that the gift in remainder for the Red Cross was void by virtue of decedent's death within 30 days of executing her deed of trust. The court then directed that after payment of the legacy of $ 5,000 to the decedent's niece the residue of the decedent's estate be paid to the Girard Trust Company as executor of the decedent's estate. The 1945 and 1946 wills and the codicil of December 20, 1946, were all admitted to probate by the Register of Wills of Chester County, Pennsylvania, the county of decedent's residence. The account of Girard Trust Company, as executor of the decedent's estate, was filed in the Orphans' Court of Chester County which, in *1111 accordance with the statement of proposed distribution, awarded to decedent's niece the bequest of certain personalty and the sum of $ 5,000, and then awarded the balance of the estate, valued at $ 205,200.61, to the Girard Trust Company, trustee for the decedent. 1 The sum of $ 2,824.14, income from the principal, was awarded to the Red Cross. *262 The Southeastern Pennsylvania Chapter, American Red Cross, is a corporation organized and operated exclusively for charitable purposes. OPINION. The question presented is whether petitioner's decedent made a valid charitable bequest under Pennsylvania law so as to entitle petitioner to a deduction in estate tax under section 812 (d) of the Internal Revenue Code. 2*263 The Pennsylvania statute, 3 applicable to the instant proceeding, provides that bequests for religious or charitable uses made by will executed less than 30 days prior to the testator's death "shall be void and go to the residuary legatee or devisee, heirs or next of kin, according to law." The decedent's second will executed on December 18, 1946, contained an express clause revoking all former wills, and was a complete will within its own four corners, was free from ambiguity and required no reference to a prior will. Under such circumstances it is well settled that the 1946 will absolutely revoked the 1945 will. In re Gray's Estate, 365 Pa. 411, 76 A. 2d 169; In re Burtt's Estate, 353 Pa. 217, 44 A. 2d 670;*264 In re Hartman's Estate, 320 Pa. 321, 182 Atl. 234; In re Ford's Estate, 301 Pa. 183, 151 Atl. 789. *1112 The decedent died December 25, 1946, less than 30 days after executing her will of December 18, 1946. The bequest to the Red Cross contained therein was therefore void by operation of law, and the charity takes nothing even though the bequest to it contained in the second will was identical with that contained in the revoked 1945 will. In re Hartman's Estate, supra;In re Hoffner's Estate, 161 Pa. 331, 29 Atl. 33; Price v. Maxwell, 28 Pa. 23 (1857). Accordingly, had the decedent died between the time she executed her second will on December 18 and her codicil on December 20, 1946, the bequest to the Red Cross would have been void. Petitioner contends that as a result of the codicil executed on December 20, 1946, the absolute revocation of the 1945 will contained in the 1946 will was transformed into a conditional revocation and, since the condition of survival*265 for 30 days was not fulfilled, the revocation clause of the 1946 will never became operative. In support of this contention petitioner relies on Hamilton's Estate, 74 Pa. 69 (1873), and Bradish v. McClellan, 100 Pa. 607 (1882). We are of the opinion that the case before us is distinguishable on its facts from Hamilton's Estate, supra, and Bradish v. McClellan, supra.Furthermore, the rationale underlying those cases appears to have been repudiated by later Pennsylvania decisions. In re Gray's Estate, supra;In re Burtt's Estate, supra.See also In re Ford's Estate, supra.We think the settled rule is that a will complete on its face and not requiring reference to a prior will, containing inconsistent provisions as well as an express clause of revocation, revokes the prior will and the latter cannot be made effective as of the date of its execution by a later codicil to the second will. In re Hartman's Estate, supra;*266 In re McClure's Estate, 309 Pa. 370, 165 Atl. 24; In re Melville's Estate, 245 Pa. 318, 91 Atl. 679; and Price v. Maxwell, supra. Petitioner further contends that even if the 1946 will revoked the 1945 will the codicil and the 1945 will must be read together, and that if it was the intention of the decedent that the date of republication be the date of execution of the 1945 will, then such intention is controlling. Such rule may be controlling as to the effect of the codicil of an existing valid will to which it is a codicil. In re Spangenberg's Estate, 359 Pa. 353, 59 A. 2d 103; In re Hartman's Estate, supra;In re Bingaman's Estate, 281 Pa. 497, 127 Atl. 73; In re Edward's Estate, 254 Pa. 159, 98 Atl. 879. Here, however, the codicil of December 20, 1946, was not to the 1945 will but rather, by its own terms, a codicil to the 1946 will. At the time the codicil was executed the *267 first will was revoked, null and void, and depended upon the execution of the codicil to the 1946 will for its existence and validity under the doctrine of republication. The charitable bequest effected by the codicil to the 1946, will, having been executed within 30 days before death, was also *1113 null and void as a result of the Pennsylvania statute. The combination of these two nullities cannot effect a valid charitable bequest. If without the codicil there would have been no gift or bequest, since clearly the gift under the 1946 will was void, the conclusion is inescapable that the gift was made by the codicil and is, therefore, void. Kuntz's Estate, 77 Pa. D. & C. 337 (1950). Accordingly, we hold that the bequest to the Red Cross, being void under Pennsylvania law as having been made less than 30 days before death, is not allowable as a deduction in estate tax under section 812 (d) of the Internal Revenue Code. Estate of William A. Carey, 9 T. C. 1047, affd. 168 F. 2d 400; Lancaster Trust Co., Executor, 3 B. T. A. 298; and Selig v. United States, 73 F. Supp. 886,*268 affd. 166 F. 2d 299. Such a bequest is void and not merely voidable. Estate of Melusina H. Varick, 10 T. C. 318, and Estate of William A. Carey, supra. Decision will be entered for the respondent. Footnotes 1. The award, as stated in the decree and in the release of award, was $ 205,200.61. However, the amount claimed in the estate tax return filed for decedent's estate was $ 202,105.13, and this latter amount was disallowed by respondent in the deficiency notice.↩ 2. SEC. 812. NET ESTATE. For the purpose of the tax the value of the net estate shall be determined, in the case of a citizen or resident of the United States by deducting from the value of the gross estate -- * * * * (d) Transfers for Public, Charitable, and Religious Uses. -- The amount of all bequests, legacies, devises, or transfers (including the interest which falls into any such bequest, legacy, devise, or transfer as a result of an irrevocable disclaimer of a bequest, legacy, devise, transfer, or power, if the disclaimer is made prior to the date prescribed for the filing of the estate tax return or, in the case of a decedent dying on or before October 21, 1942, if the disclaimer is made prior to September 1, 1944), to or for the use of the United States, any State, Territory, any political subdivision thereof, or the District of Columbia, for exclusively public purposes, or to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, * * *↩ 3. 20 Purdon's Penna. Stat. Ann., sec. 195:Charitable bequests or devises; requisites No estate, real or personal, shall be bequeathed or devised to any body politic, or to any person in trust for religious or charitable uses, except the same be done by will at least thirty days before the decease of the testator, which period shall be so computed as to exclude the first and to include the last day thereof; and all dispositions of property contrary hereto shall be void and go to the residuary legatee or devisee, heirs or next of kin, according to law. 1917, June 7, P. L. 403, § 6; 1935, July 2, P. L. 573, § 1; 1939, May 16, P. L. 141, § 1.↩