Geraldine Messick v. Estate of Ronald R. Messick ( 2015 )

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
KIM E. AYVAZIAN CHANCERY COURTHOUSE
MASTER IN CHANCERY 34 The Circle
GEORGETOWN, DELAWARE 19947
AND
NEW CASTLE COUNTY COURTHOUSE
500 NORTH KING STREET, SUITE 11400
WILMINGTON, DELAWARE 19980-3734
February 3, 2015
Stephen E. Smith, Esquire
Baird Mandalas Brockstedt, LLC
6 South State Street
Dover, DE 19901
Steven Schwartz, Esquire
Schwartz & Schwartz
1140 South State Street
P.O. Box 541
Dover, DE 19903
RE: Geraldine Messick v. Estate of Ronald R. Messick
Civil Action No. 6290-MA
Dear Counsel:
Ronald R. Messick passed away on October 6, 2010. The Register of Wills
in Kent County issued letters testamentary to H. Cubbage Brown, Esq. on October
14, 2010. On March 17, 2011, the surviving spouse, Geraldine Messick, filed a
timely petition for an elective share under 12 Del. C. § 906. The Estate of Ronald
R. Messick has filed a petition for instructions, seeking a Court Order instructing
the Estate that it may satisfy Mrs. Messick’s elective share (1) entirely in cash, (2)
entirely in kind, or (3) partially in cash and partially in kind, as the Executor
chooses, and that Mrs. Messick has no right to dictate which assets she receives in
satisfaction of her elective share.
A surviving spouse’s elective share is an amount equal to one third of the
elective estate, less certain transfers1. The elective estate is defined as the amount
of the decedent’s gross estate for federal estate tax purposes, whether or not a
federal estate tax return is filed for the decedent.2 According to a draft United
States Estate Tax Return Form 706 attached to the petition for instructions,
decedent’s total gross estate equals nearly six and one half million dollars. Its
assets include the Ronald R. Messick Revocable Trust,3 real estate, shares in
several corporations, membership in a limited liability company, notes receivable,
life insurance, and miscellaneous tangible personal property.4 Mrs. Messick
believes that the Executor intends to distribute to her a one-third interest in each of
the assets of the Estate,5 and is concerned that as a minority owner, she will have
little or no control over the business entities that she claims are being poorly run by
the Executor/Trustee.6 Mrs. Messick opposes the petition and argues that requiring
1
See 12 Del.C. § 901(a).
2
See 12 Del. C.§ 902(a).
3
Brown is also Substitute Trustee of the Ronald R. Messick Revocable Trust.
4
The parties previously agreed to include certain jointly-titled and solely-titled real
estate interests owned by the decedent in his elective and contributing estates, as
well as all corporate interests owned by decedent at the time of his death. Docket
Item 32.
5
Schedule M of the draft 706 Form (“Bequests, etc. to Surviving Spouse”) shows
Mrs. Messick as receiving one-third of each of the assets listed in Schedules A
through F, including one-third of each item of tangible personal property.
6
Mrs. Messick contends that no income tax returns have been filed for the
decedent’s six business entities for any of the four tax years ending after his death.
Mrs. Messick believes that no filing extensions have been granted, and fears the
the Executor/Trustee to pay her elective share in cash would better promote
decedent’s intent by requiring unprofitable businesses to be sold.
12 Del. C. § 901(a) explicitly provides that “[t]he elective share may be
satisfied in cash or in kind, or partly in each.” This language is clear and
unambiguous. Nevertheless, the amount of Mrs. Messick’s elective share has yet
to be finalized. It would be premature of the Court to issue an order of instruction
that might be construed as foreclosing Mrs. Messick from disputing the valuation
of her elective share or whether the proposed distribution of assets satisfies her
elective share.7 However, since the proposed order also states that Mrs. Messick
retains the right to demand that her elective share be paid in full, I recommend that
the proposed order be approved by the Court.
Sincerely,
/s/ Kim E. Ayvazian
Kim E. Ayvazian
Master in Chancery
KEA/kekz
business entities may be subject to substantial penalties and interest that would
ultimately pass through to her if she became an owner.
7
Under section 901(a), “[a]ssets distributed in satisfaction of the elective share” are
valued as of the date of distribution.”