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In re Estate of O’Connor, 140 A.3d 77

Facts

William A. O'Connor, Jr. died intestate on November 18, 2008, leaving behind his wife Judith and two minor children. Judith, appointed as the Administratrix of the estate, initiated a wrongful death and survival action against medical professionals, which led to a settlement offer of $2.6 million in 2014. The surviving children filed disclaimers renouncing their interests in the estate in May 2014, but the Pennsylvania Department of Revenue assessed inheritance tax on their shares, arguing that the disclaimers were untimely.

Decedent died intestate— i.e., without any will or other instrument designating disposition of his property upon death—on November 18, 2008.

Issue

Did the Orphans' Court err in holding that the decedent's surviving children failed to timely renounce their interests in the estate under Section 2116(c) of the Inheritance and Estate Tax Act?

The only issue before the Court is whether the Orphans' Court erred as a matter of law in holding that the children of William A. O'Connor, Jr. (Decedent) failed to renounce timely their interests in the Estate under Section 2116(c) of the Act.

Rule

Under Section 2116(c) of the Inheritance and Estate Tax Act, any intestate heir may renounce their interest in an estate within nine months after the decedent's death, unless a future interest does not vest until a later date.

Under Section 2116(c) of the Act, any intestate heir, in this case Mrs. O'Connor and Decedent's surviving children, may renounce his or her interest in an estate.

Analysis

The court determined that the surviving children's interests in the estate vested immediately upon the decedent's death, and thus the nine-month period for renunciation applied. The court rejected the argument that the unliquidated survival claim constituted a future interest, stating that the children's rights to their distributive shares were fixed at the time of death, regardless of the pending survival action.

Accordingly, the Estate's unliquidated survival claim was not a 'future interest' of Decedent's children at the time of Decedent's death, such that the children could delay their renunciation of their distributive share of Decedent's Estate beyond nine months after Decedent's death.

Conclusion

The court affirmed the Orphans' Court's decision, concluding that the children's renunciations were untimely and that the inheritance tax assessment by the Department of Revenue was correct.

We, therefore, affirm.

Who won?

The Pennsylvania Department of Revenue prevailed in the case because the court upheld its assessment of inheritance tax on the surviving children's shares, finding that the children did not timely renounce their interests.

The Pennsylvania Department of Revenue prevailed in the case because the court upheld its assessment of inheritance tax on the surviving children's shares, finding that the children did not timely renounce their interests.

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