Tax Type
Individual Income Tax
Description
Mary Scott Blake Birdsall, et al vs. Thomas R. Sheperd, et al
Topic
Court Case
Date Issued
06-16-1987
SUPREME COURT OF VIRGINIA: RICHMOND
June 16, 1987
Mary Scott Blake Birdsall, et al., etc., Appellants against Record No. 860851
Circuit Court No. 5368-C
Thomas R. Shepherd, et al., etc., Appellees
From the Circuit Court of Albemarle County
Upon review of the record in this case and consideration of the arguments submitted in support of and in opposition to the granting of an appeal, the Court is of opinion there is no reversible error in the judgment complained of. Accordingly, the Court refuses the petition for appeal.
A Copy,
Teste:____________________
David B. Beach, Clerk
_____________
Deputy Clerk
VIRGINIA: IN THE CIRCUIT COURT FOR ALBEMARLE COUNTY
Re: ESTATE OF KATHLEEN ANN KELLEY BLAKE
(DISTRIBUTION OF ASSETS CAUSE)
and
MARY SCOTT BLAKE BIRDSALL, et al.,
Plaintiffs, Chancery No. 5368-C
v.
THOMAS R. SHEPHERD, JR., EXECUTOR, et al.,
Defendants.
FINAL ORDER
On April 4, 1986 all parties appeared, by counsel, to be heard on the issues joined in these combined causes. Evidence
was presented to the Court by stipulation and by ore tenus testimony. Oral argument of counsel was heard and the parties submitted memoranda.
After consideration of the issues in light of the evidence the reasons stated in letter opinion and law, the Court, for dated May 12, 1986, is of the opinion that the defendants are not liable to the Evernghim Blake Estate for any more of the Virginia estate taxes assessed against that Estate than the defendants have already paid; and that the defendants have no liability for payment of any Maryland estate tax of the Evernghim Blake Estate.
The Court is further of the opinion that the presence of the Commonwealth of Virginia was not necessary to the adjudication of the issues presented in this cause; accordingly,
It is hereby ORDERED and DECREED
That the motion of the defendant, William H. Forst, Tax Commissioner of the Commonwealth of Virginia to be dropped as a party defendant to the Bill for Declaratory Judgment and Further Relief is granted and this cause of action is dismissed as to that defendant;
That the sill for Declaratory Judgment and Further Relief be and is hereby dismissed as to all other defendants;
That the distribution of assets cause was settled by the parties, excepting Forst, and is therefore dismissed;
That the prayers of all parties for awards of attorney's fees are denied;
Further, being of the opinion it has no jurisdiction so to act, the Court declines to consider the Motion of the defendants, William H. Forst excepted, to participate in any audit procedures initiated by governmental taxing authorities concerning the value of "QTIP" related assets included in the taxable estate of Evernghim H. Blake.
The objections of plaintiffs to the adjudications herein set forth are noted and the objection of defendants, William H. Forst excepted, to the declination of adjudication of attorney's fees is noted.
ENTER:
DATE: 6/12
DATE: 6/12
Julia K. Hatcher
Assistant Attorney General
COMMONWEALTH OF VIRGINIA
Seen and objected to:
L. Frank Chopin
Cadwalader, Wickersham & Taft
249 Royal Palm Way
Palm Beach, Florida 33480
Boyle & Bain
420 Park Street
Charlottesville, Virginia 22901
By:
Robert P. Boyle
Of Counsel for Plaintiffs
Re: Birdsall, et als. v. Shepherd, et als.
Chancery 5368-C Albemarle County Circuit Court
Gentlemen and Ms. Hatcher:
The primary dispute involved in this proceeding is whether the increased Virginia estate tax liability of the Evernghim Blake estate, attributable to the inclusion of "Q-TIP" trust assets in his taxable estate is to be allocated incrementally or proportionately on a prorata basis. I conclude that Virginia Code §64.1-161, as applied to estates of individuals dying prior to July 1, 1986, requires that the tax be apportioned on a prorata basis. The General Assembly of Virginia during its 1986 session gave recognition of no other interpretation of said statute when it made provision for incremental allocation of Virginia's tax attributable to "Q-TIP" trust assets that are included in the taxable estate of a person dying on or after July 1, 1986. I am further of the opinion that there is no constitutional infirmity in the apportionment of the Virginia tax on a prorata basis between those who receive the assets that were included in Mr. Blake's taxable estate.
As for the Maryland tax liability, Mr. Blake's will in its FOURTH paragraph directs the payment of that tax. The asset located in Maryland was solely owned by Mr. Blake at the time of his death.
In summary, the defendants are not liable to the Kathleen Ann Kelley Blake estate for any more of the Virginia estate taxes assessed against Mr. Blake's estate than they have already paid. They have no liability as to the Maryland tax.
As for defendants' request that representatives of Mrs. Blake's beneficiaries be permitted to participate in any audit procedures concerning the value of "Q-TIP" related assets, such request more appropriately is to be addressed to those tax officials who may conduct an audit.
Finally, the presence of the Commonwealth of Virginia was not necessary to the adjudication of the issues presented in this action. Its motion to drop its Tax Commissioner William H. Forst as a party defendant is granted.
Mr. Perkins will draft an order relative to the rulings herein made and will submit it to counsel for endorsement.
Very truly yours,
Rulings of the Tax Commissioner