Frome v. Comm'r (In re Estate of Grossman)
| Decision Date | 27 May 2021 |
| Docket Number | T.C. Memo. 2021-65,Docket No. 9892-18. |
| Parties | ESTATE OF SEMONE GROSSMAN, DECEASED, RICHARD M. FROME, PRELIMINARY EXECUTOR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
Decedent H and W1, who were both Jewish, married in N.Y. in 1955. They separated in 1965, and H attempted to end the marriage by obtaining a unilateral divorce in Mexico. In 1967, H participated in a civil marriage ceremony with W2, who was not Jewish, in N.J.
By 1974, H's relationship with W2 had ended. In that year, W1 sued H and W2 in N.Y., seeking a declaratory judgment that the Mexican divorce was null and void and that she (W1) was still H's lawful wife. W1 prevailed in the suit, but did not reconcile or cohabit with H thereafter.
By 1986, H became engaged to W3. H and W3, who was also Jewish, decided to get married in the State of Israel. Before the wedding, H and W1 appeared before an orthodox rabbinical court in N.Y. to obtain a Jewish religious divorce. H and W3 presented evidence of the divorce to the Israeli authorities and were married in Israel in 1987.
After their marriage in Israel, H and W3 returned to N.Y. and lived there as husband and wife for 27 years, until H's death in 2014. They had two children, filed joint Federal income tax returns, and shared a home and finances. During this time, W1 also lived in N.Y., saw H and W3 socially, and never challenged their marriage. W1 filed Federal income tax returns as single and made no statutory claim against H's estate after his death.
When H died in 2014, he left the bulk of his estate to W3, and the estate claimed a corresponding marital deduction under I.R.C. sec. 2056(a). R denied the deduction and argues in a motion for partial summary judgment that H's religious divorce from W1 was invalid under N.Y. law. Relying on N.Y. law, R argues that W1, rather than W3, was H's surviving spouse when he died.
H's estate disagrees. In its competing motion for partial summary judgment, the estate maintains that N.Y. law is irrelevant to the dispute and that certain IRS revenue rulings and Federal caselaw require the Court to look only to Israeli law to determine W3's status as surviving spouse. The estate further contends that, even if we accept R's premise that N.Y. law provides the rule of decision, the estate prevails because N.Y. courts would respect H's marriage to W3 under their longstanding place of celebration test.
Held: For purposes of deciding the motions, we can assume (as R contends) that N.Y. law applies to determine W3's marital status at the time of H's death;
Held, further, W3's Israeli marriage to H was valid under the place of celebration test that the N.Y. Court of Appeals has applied consistently for 140 years;
Held, further, W3 is H's surviving spouse within the meaning of I.R.C. sec. 2056(a). Megan E. Wernke, Christopher S. Rizek, and Beth Shapiro Kaufman, for petitioner.
Shawna A. Early, Michael J. De Matos, and Marc L. Caine, for respondent.
TORO, Judge: Before the Court are competing motions for partial summary judgment. They present the question of whether Ziona Grossman is the "surviving spouse" of decedent Semone Grossman for purposes of the estate tax marital deduction provided by section 2056(a).1 Semone and Ziona, both Jewish and residents of New York, celebrated their marriage in the State of Israel in 1987 pursuant to that country's laws after Semone obtained a religious divorce from his first wife Hilda, who was also Jewish and a New York resident. After celebrating their marriage, Semone and Ziona returned to New York, had two daughters, and lived together as husband and wife for 27 years until Semone's death in 2014, all without challenge from Hilda, who was familiar with the New York rules forchallenging an invalid marriage. Hilda, in turn, reported in her tax returns that she was single and, after Semone's death, made no statutory claim for an elective share as a surviving spouse against Semone's considerable estate.
Although the parties most directly interested in the status of Semone and Ziona's marriage appear to have been satisfied with the validity of that marriage, and although no New York court has cast any doubts on that score, in his motion for partial summary judgment the Commissioner of Internal Revenue asks us to hold that Semone and Ziona's Israeli marriage was a nullity and that, for Federal estate tax purposes, Hilda, not Ziona, was Semone's "surviving spouse." For the reasons set out below, we decline the Commissioner's invitation.
In its competing motion for partial summary judgment, the Estate of Semone Grossman (the "Estate") contends that, based on the record before us, Ziona is Semone's surviving spouse under section 2056(a). As we explain below, we agree with the Estate.
The following facts are derived from the pleadings, the parties' motion papers, and the declarations and exhibits attached thereto. These facts are stated solely for the purpose of ruling on the motions and not as findings of fact in this case. See Ramey v. Commissioner, 156 T.C. ___, ___ (slip op. at 6) (Jan. 14, 2021). The Preliminary Executor of the Estate, Richard M. Frome, resided in New York when the petition was filed.
Semone Grossman was born in Germany in 1930 and spent most of his childhood in Poland. He and his family were Jewish, and many of his family members, including his parents, perished in the Holocaust. Semone was interned in a series of concentration camps during the war, but ultimately survived and emigrated to the United States in or around 1949. He settled in New York City and got into the business of owning and operating parking garages.
Semone's first wife, Hilda Matrick Grossman, was also Jewish. Semone and Hilda were married in New York City in 1955 and subsequently had two children together.
Semone and Hilda ceased living together in the mid-1960s. In 1965, they entered into a separation agreement that set out their respective property rights and required Semone to make regular payments to Hilda. From that point on, Semone and Hilda never reconciled or cohabited.
By 1967, Semone had commenced a new relationship with Katia Equale, who was not Jewish. Semone traveled to Mexico to obtain a divorce from Hilda and, although Hilda did not appear or otherwise participate in the proceeding, the divorce was granted by the Second Civil Court of the Bravos District, State of Chihuahua, Republic of Mexico, on or about August 24, 1967. After Semone obtained the divorce, Semone and Katia participated in a civil marriage ceremony in New Jersey and subsequently had two children.
By 1974, Semone and Katia's relationship had ended. In that year, Hilda filed suit in the Supreme Court of the State of New York against Semone and Katia seeking a declaratory judgment that the Mexican divorce was null and void and that she (Hilda) remained Semone's lawful wife. After a trial held in 1976, the court ultimately found in Hilda's favor and decided the following:
As already noted, Semone and Hilda did not cohabit after the court issued its decision.
By 1986, Semone was engaged to Ziona. Ziona was born and raised in Israel and by 1986 had become a dual United States-Israeli citizen and a resident of New York. Her parents, siblings, and other family members and friends still lived in Israel at the time of Semone and Ziona's engagement, and Ziona traveled between the United States and Israel several times per year to visit. Semone also had family and friends in Israel, and Semone and Ziona decided to get married there.
Before his marriage to Ziona, Semone asked Hilda to cooperate with him in the giving of a get, which is a religious divorce under rabbinical law. See Linda S. Kahan, "Jewish Divorce and Secular Courts: The Promise of Avitzur," 73 Geo. L. J. 193, 194 (1984). On November 12, 1986, Semone and Hilda appeared before an orthodox rabbinical court (Beth Din)3 of the Lisker Congregation in New York and Semone gave Hilda a get. The Beth Din supervised the get, and several weeks later a rabbi from the Lisker Congregation executed a letter confirming that Semone had obtained a Jewish divorce in the rabbi's presence on November 12, 1986. Semone presented the rabbi's letter to the Beth Din of America in New York, and onDecember 22, 1986, the Beth Din of America issued a second letter confirming that Semone was Jewish and free to be married according to Jewish law.
As part of their marriage registration process, Semone and Ziona traveled to Israel and presented evidence of the get to the Tel Aviv Beth Din. A rabbi from the Tel Aviv Beth Din signed the letter from the Beth Din of America, noting that it was "allowed" on December 25, 1986. Semone and Ziona were then issued a form ketubah (marriage contract), see id. at 193 n.2, 197-198, permitting them to marry in Israel.
On January 14, 1987, Semone and Ziona were married in Herzliya, Tel Aviv, Israel, in a traditional Orthodox Jewish religious ceremony. Semone and Ziona completed and signed the ketubah and were issued a marriage certificate by the Israeli Ministry of Religious Services.4 The certificate noted that, before entering the marriage, Ziona was single and Semone was divorced.
After their marriage ceremony in Israel, Semone and Ziona returned to New York and continued to live there until Semone's death in 2014. During those27 years, Semone and Ziona lived together as husband and wife. They had two children and shared a home and finances. The record includes copies of Semone and Ziona's Federal income tax returns for the...
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