Hershey v. Bowers , 1 Ohio App. 2d 511 ( 1965 )

In the opinion of the writer, the judgment of the Probate Court of Franklin County imposing the succession tax provided in Section 5731.02, Revised Code, upon the six joint and survivorship accounts should be affirmed upon the authority ofIn re Estate of Evans (1962), 173 Ohio St. 137. In Evans, the constitutionality of the tax was upheld, and while there was a strong dissent by a single judge, six members of the Supreme Court of Ohio concurred in the majority opinion. Most of the important facts having a bearing on this case are set forth in an agreed stipulation and attached exhibits.

William G. Hershey, the decedent, died on December 12, 1961, survived by Edna M. Hershey, his widow and executrix of his last will and testament, and three adult children, Ethel Mae Wilcox, Ruth Faye Knight and Roscoe R. Hershey. By his will Hershey gave his widow a life estate in all his property "real and personal, and all money accounts," and he gave to his three children, share and share alike, "all the rest, residue and remainder" of his estate. In this case, the widow elected to take under the law rather than under the will.

According to the stipulation, Hershey set up joint and survivorship accounts representing substantial deposits of money in five building and loan associations located in Mt. Vernon, Loveland, Columbus, Wooster and Sunbury, Ohio. (Stipulation, paragraphs 4 through 8.) In each case, the joint and survivorship account was set up with two names appearing on the certificates of deposit and the account records. On all five such accounts, the name of William G. Hershey appeared. On three of the accounts the names of Ethel Mae Wilcox also appeared, while on the other two accounts the name of Ruth F. Knight appeared. It was stipulated that the two persons named on each account were joint owners with the right of survivorship. It was also stipulated that none of the funds was contributed either by Ethel Mae Wilcox or Ruth F. Knight, and, further, that neither Mrs. Wilcox nor Mrs. Knight "had any interest in the funds of the decedent in such accounts except by virtue of the survivorship feature in the joint and survivorship accounts with the parties as described." (Stipulation, paragraph 9.)

At the time of Hershey's death on December 12, 1961, the deposits with the five building and loan associations totalled $46,000, of which $18,000 was in accounts in which Ruth F. Knight was the survivor and $28,000 was in accounts in which Ethel Mae Wilcox was the survivor.

It appears that Mrs. Wilcox and Mrs. Knight, subsequent to the death of their father, filed what are described as renunciations and refusals to accept the proceeds of the joint and survivorship accounts in the five building and loan associations. The opinion of the majority holds that these so-called renunciations and refusals have the effect of rebutting the presumption that the two daughters assented to the gift to them of their parts of the five joint and survivorship accounts. With this, the writer disagrees. In the case of exhibit 4, which is a certificate of deposit for $8,000 made out to W. G. Hershey and Ruth F. Knight on July 6, 1959, it would seem clear that the succession to Mrs. Knight accrued as of December 12, 1961, yet it was not until approximately eight months later that the so-called disclaimer took place, to wit, on August 15, 1962.

In the opinion of the writer, the so-called disclaimer was nothing of the kind but was in fact an assignment of the certificate by the then exclusive owner, Ruth F. Knight, to the estate of Mrs. Knight's father. By operation of law, Mrs. Knight was making in effect a partial assignment to herself. She appears certain to share in the estate on a basis which we estimate at approximately 23 per cent. (It would appear that the mother will receive 33 1/3 per cent, plus special allowances, and each of the three children will receive one-third of the remaining 66 2/3 per cent.)

There is no need at this time and place for me to attempt to make an exact determination of the tax results from the action taken by Mrs. Knight or by Mrs. Wilcox. It would be more accurate to describe the action taken by the two daughters as an apparent acceptance and acquiescence in the accrual of the full and exclusive rights as owners of the five joint and survivorship accounts under the agreement with the building and loan associations, and, thereafter, the exercise of the rights of an owner to assign the evidence of the deposits to a named assignee.

This succession and a delayed assignment have little if anything in common with a concept of a disclaimer or refusal to accept referred to in the majority opinion.

The endorsement on the back of exhibit 4 reads as follows:

"TRANSFER OF SHARE ACCOUNT AND MEMBERSHIP "For value received the undersigned hereby * * * [word obliterated] assigns and transfers to Estate of W. G. Hershey, by disclaimer the share account represented by the within certificate and does hereby irrevocably constitute and appoint the officers of said association to * * * [word obliterated] said share account on the books of said association. This 15th day of August, 1962.

[Signed] Ruth F. Knight

"In the presence of [Signed] Roscoe R. Hershey.

"The undersigned is the transferee of the share account represented by the within certificate and has executed application for membership and signature card.

[Signed] Edna M. Hershey, Exrx. Estate of W. G. Hershey, Deceased."

Thus, instead of rejecting and refusing to accept any right, title or interest to the $8,000, Mrs. Knight remained the undisputed owner, possessor and person in control of the $8,000 account for eight months and then made a limited and special assignment of the account to her father's estate from which she would benefit to a substantial degree.

I have been unable to ascertain the dates, language and detail of the other claimed renunciations and refusals. However, the above appears to be consistent with the general plan of action and effectively answers and renders meaningless the so-called renunciations and refusals.

After examination of the authorities relied upon by the majority opinion, it would appear that in most cases the issues had nothing to do with the succession tax under Section 5731.02, Revised Code. It also appears that, with but few exceptions, the rights of the surviving owner were upheld.

The opinion by the majority stresses the absence of direct evidence that the daughters even knew of the establishment of these very large and valuable accounts. I observe that there is no evidence that the matter was kept a secret from them either. I believe that the presumption of acceptance became operative when the accounts were set up, and there is no evidence whatever to question or dispute this. If this be true, the daughters, for a period of years, had the same rights as the father to use all or any part of all of these accounts, and, on the very instant of his death, the taxable succession took place. It was then that the tax became due and the events which followed were, in my opinion, totally insufficient to change this picture in any material respect.

The writer finds it difficult to find anything respecting the gift by Hershey of $18,000 to Mrs. Knight or the gift of $28,000 to Mrs. Wilcox which could be described as onerous or burdensome in any way sufficient to rebut the presumption of acceptance.

On the contrary, it would appear that Hershey was making excellent provision for the financial welfare of his family. The fact that his plan may have resulted in heavy federal inheritance taxes sheds no light whatever in solving questions as to the application of state succession tax laws.

For the reasons above set forth, the writer is of the opinion that the judgment of the Probate Court should be affirmed.