Phellis' Estate, In re
|United States Court of Appeals (Ohio)
|177 N.E.2d 66,113 Ohio App. 439
|, 16 O.O.2d 268 In the Matter of the ESTATE of Verne H. PHELLIS, Deceased. Esther P. GREGG, Executrix of the Estate of Verne H. Phellis, Deceased and Helen Phellis, Appellants, v. DEPARTMENT OF TAXATION of Ohio, Stanley J. Bowers, Tax Commissioner, Marjorie P. McNally and Esther P. Gregg, Appellees.
|08 November 1960
Wallace W. McCoy, Mechanicsburg, Roscoe G. Hornbeck, London, for appellants.
Mark McElroy, Atty. Gen., by Joseph D. Karam, Asst. Atty. Gen., for appellees.
This is an appeal on questions of law from the judgment of the Probate Court of Madison County sustaining exceptions of the tax commissioner of Ohio to the original order determining the inheritance tax in the estate of Verne H. Phellis, deceased.
The record shows that the decedent, a resident of Madison County, State of Ohio, died testate on January 19, 1958, leaving his widow, Helen Phellis, aged 76 years, and two adult daughters, Marjorie P. McNally and Esther P. Gregg, surviving.
The question presented arises under Item II of the will of the testator, which provides as follows:
In the exceptions to the original order the tax commissioner contended that the court erred in the original order in not assessing inheritance tax against the widow on the remainder interest in the real estate by a temporary order under the provisions of Section 5731.28, R.C. The exceptions were sustained.
In assessing the remainder interest against the widow on a temporary order the tax amounts to $3,550.77. The tax under the original order amounted to $2,363.85. The State of Ohio under the temporary order receives as tax $1,186.92 more than it would have received under the original order.
This appeal raises one question which is stated by counsel for appellant: Did the probate court err in sustaining the exceptions of the tax commissioner?
Section 5731.28, R.C., under which the temporary order was made provides as follows:
The appellants contend that the interest taken by the widow was a life estate only, notwithstanding the power conferred under Item II of the will. Appellants further contend that under the will there are only three successions subject to tax, which must be taxed separately, viz.: A life estate in the widow; a vested remainder in Marjorie P. McNally; and a vested remainder in Esther P. Gregg. The tax commissioner recognizes that the interest taken by the widown under the will is a life estate with a power to consume, and the power to consume any or all the real estate, the remainder, if any, to pass equally to the two daughters.
Unquestionably, a contingency exists: Whether the widow will exercise the power to consume, and what portion of the remainder, if any, will pass to the remaindermen.
The Ohio inheritance tax is not a tax on property but on the right of succession to property. In re Estate of Chadwick, 167 Ohio St. 373, 376, 149 N.E.2d 5. Our Supreme Court has interpreted the section under construction in the case of Wonderly v. Tax Commission of Ohio, 112 Ohio St. 233, at page 238, 147 N.E. 509, at page 510, as follows:
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Luce's Estate, In re
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...the contingency that rights in the named beneficiary may be cut off is provided for in the will. See In re Estate of Phellis, 113 Ohio App. 439, 177 N.E.2d 66. But it is not sufficient merely to demonstrate that the right of the named beneficiary is defeated or abridged; it is also necessar......