Court Opinion

ID: 9476683
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:02:17.543369+00
Date Added: 2024-06-11T17:45:26.983565
License: Public Domain

FLOYD R. GIBSON, Senior Circuit Judge,
dissenting.
I respectfully dissent. I would affirm the Tax Court. The ultimate issue in this case simply is whether Chanoy had “enforceable rights” to her deceased husband’s estate on June 3, 1980. I believe that she did.
On June 3, 1980, Chanoy and representatives of the decedent’s estate entered into an agreement whereby each party compromised its right to the estate. Because the status of the dower election statute was unclear at the time, a legal opinion was prepared by the Research Group, Inc. The Group concluded that the statute was not clearly unconstitutional. In fact, ten months after the opinion was prepared, and six months after the settlement agreement was signed, the Arkansas Supreme Court ruled that the statute was constitutional. Stokes v. Stokes, No. 80-141 (Ark. Dec. 8, 1980).1 Only upon rehearing did the court declare the statute unconstitutional. I agree with the Tax Court that we should not step in to invalidate a good faith agreement which was based on the law as it then existed simply because the law has since changed. The majority’s failure to recognize thé validity of the agreement in this case will discourage out of court settlements of similar matters because without immediate Tax Court approval, subsequent changes in state law may invalidate otherwise valid settlement agreements and result in greater estate tax liability.
Further, even if the Tax Court did not specifically mention Bosch and Ahmanson, it is not necessary to remand for a consideration of the constitutionality of the dower election statute on June 3, 1980. More important than whether the statute was unconstitutional is whether Chanoy’s rights were enforceable. To be sure, the dower election statute was declared unconstitutional on February 23, 1981 in Stokes v. Stokes, 271 Ark. 300, 613 S.W.2d 372 (1981). However, this did not affect the enforceability of Chanoy’s dower interest because the Arkansas Supreme Court later held that its decision in Stokes would not be applied retroactively to strip away dower rights which vested prior to Stokes. See Mobley v. Estate of Parker, 278 Ark. 37, 642 S.W.2d 883 (1982); Hall v. Hall, 274 Ark. 266, 623 S.W.2d 833 (1981), cert. denied, 456 U.S. 916, 102 S.Ct. 1770, 72 L.Ed.2d 175 (1982). In the present case Chanoy’s rights vested on June 3, 1980 when the agreement was reached and approved by the Chancery Court. Because under state law Chanoy’s interest was valid and enforceable, the requirements of Internal Revenue Code § 2506(a) have been met and the estate is entitled to a marital deduction.
This outcome would be different if the executor of the estate had pursued its challenge to Chanoy’s election and had convinced the Arkansas courts that the dower election statute was unconstitutional. Under those circumstances Chanoy’s rights would have been unenforceable. In the present case, however, once a settlement was reached Chanoy’s rights became enforceable, and pursuant to Mobley and Hall, unaffected by the decision in Stokes.

. It is also of interest to note that the later held gender deficient dower state was corrected by the Arkansas legislature making it gender neutral. See Ark.Stat.Ann. § 60-501 (Supp.1985).