Date: 12/22/11
Stock and Leader attorneys
Bruce Wallace and
Mac Brillhart recently won an important tax appeal against the Pennsylvania Department of Revenue.
The decision by Judge Blackwell of the York County Orphans’ Court reversed the Department of Revenue’s assessment of $221,000.00 in additional Pennsylvania inheritance taxes on estate assets passing to grandchildren and great-grandchildren of a former spouse of the decedent.
The Department claimed inheritance tax at the rate of 15% on these beneficiaries, the same rate for inheritances passing to unrelated beneficiaries.
In their appeal to the Court, attorneys
Wallace and
Brillhart argued that the correct tax rate was only 4.5% because the beneficiaries were “step-descendents” of the decedent, and therefore entitled to the lower tax rate applicable to “lineal” descendants, such as children and grandchildren.
This issue had never before been decided by a Pennsylvania court, making this a “case of first impression” in Pennsylvania. Judge Blackwell, early in her 36-page opinion, stated the legal issue very simply: “Once a step-child, is that person always a step-child for inheritance tax purposes?”
After extensive analysis of both sides of the argument, Judge Blackwell ruled that the answer is “yes.” She therefore reversed the Pennsylvania Department of Revenue’s assessment of $221,000.00 in additional inheritance tax.
The Department of Revenue decided not to appeal the Judge’s decision, so the victory by attorneys
Wallace and
Brillhart is final, saving the family $221,000.00.