Opinion ID: 1993423
Heading Depth: 1
Heading Rank: 2

Heading: Gross Estate

Text: Testator's will clearly shows an intention on his part to fulfill the obligations which he had contracted under paragraph 5 of the property settlement agreement. Gross estate is a term which is always used in connection with the estate of a decedent for purposes of Federal Estate taxation, [] but never used in connection with an estate under the law of Pennsylvania (except in the Pennsylvania Estate Tax Apportionment Act [] ). In Pennsylvania, the term gross estate is, we repeat, never used to mean assets which are includable in an accounting by an executor (or administrator) or even to define the assets which belong to, or are a part of, a decedent's estate. In other words, if the parties to this agreement had meant to give the wife only one-third of the estate which came into the possession of the husband's executors and which was subject to their accounting and to State inheritance taxes, they would never have used the words gross estate. This is made especially clear by the fact that if that had been their intention, the husband, after the agreement, could easily have deprived his wife, by various legal devices, of a very large part of his property and estate. We therefore hold that Grace W. Pratt is entitled to receive as a creditor one-third of the gross estate of Leonard C. Pratt, including [all] life insurance policies covering HUSBAND'S life, valued at the time of his death, [] less the deductions spelled out below. This would be computed by first adding together the following assets: Pratt's testamentary estate, including life insurance policies in the amount of $90,558.56 payable to his estate ......... $193,358.45 Life insurance policies which were payable to named beneficiaries ................... 12,712.00 Real estate held in the name of Pratt and his second wife Elizabeth as tenants by the entireties ........................ 34,100.00 A jointly-owned bank account in the name of Pratt and his second wife Elizabeth ................................ 418.47 ___________ $240,588.92 From this figure of $240,588.92, there must be deducted the costs of administration, debts [except, of course, the debt which is created in favor of Grace W. Pratt by this Agreement] and State and Federal Transfer Inheritance, Succession and Estate Taxes, or any other taxes in the nature thereof, all computed and paid on the entire estate . . . When this net figure is ascertained, Pratt's first wife, Grace W. Pratt, is entitled to claim under this agreement one-third of it as a creditor of his estate. Decree affirmed, each party to pay own costs.