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Estate of Leo J. Goldwater v. Commissioner of Internal Revenue

decided: June 29, 1976.

ESTATE OF LEO J. GOLDWATER, DECEASED, IRVING D. LIPKOWITZ, AND LEE J. GOLDWATER, EXECUTORS, PETITIONERS-APPELLANTS,
v.
COMMISSIONER OF INTERNAL REVENUE, RESPONDENT-APPELLEE



Appeal from an opinion of the United States Tax Court, 64 T.C. 540 (1975), disallowing an estate-tax marital deduction under 26 U.S.C. § 2056 because of a finding that decedent's second wife was not his "surviving spouse" for purposes of that section. Affirmed.

Hays and Mulligan, Circuit Judges, and Palmieri, District Judge.*fn*

Author: Mulligan

MULLIGAN, Circuit Judge:

This appeal presents this court with the problem of determining who is the "surviving spouse" of the decedent Leo J. Goldwater for purposes of the estate-tax marital deduction authorized by the Internal Revenue Code of 1954, 26 U.S.C. § 2056.*fn1

The facts have been stipulated and are as follows: On June 20, 1946 Leo married his first wife Gertrude in New York City, where they resided as man and wife until about June 1955.*fn2 In December 1956 Gertrude was awarded a final decree of separation from Leo by the New York State Supreme Court, New York County. On March 20, 1958, Leo obtained a Mexican decree of divorce from Gertrude, without an appearance by her.

On October 16, 1958, Gertrude commenced an action against Leo in the New York State Supreme Court, based on two causes of action: the first was for a declaratory judgment decreeing the invalidity of the Mexican divorce, and the second sought permanently to enjoin Leo from remarrying, in New York or elsewhere. In addition, Gertrude made a successful motion for a temporary injunction against Leo's remarriage during the pendency of the action. Leo appealed from the granting of the temporary injunction and from the denial of his own cross-motion in the trial court to strike the second cause of action (seeking a permanent injunction against his remarriage). On December 9, 1958, the New York Supreme Court, Appellate Division, First Department issued an opinion reversing the order denying Leo's cross-motion to dismiss the second cause of action, and vacating the temporary injunction against remarriage. Goldwater v. Goldwater, 6 App.Div.2d 561, 180 N.Y.S.2d 383. The court noted that Leo's "answering affidavit admits the invalidity of his Mexican divorce and asserts that he will not oppose plaintiff's [Gertrude's] action for a declaratory judgment." 180 N.Y.S.2d at 384.

Freed of the injunction against his remarriage, on the very same day that the Appellate Division handed down its decision Leo married "wife" number two, Lee, in Connecticut. At all times thereafter and up until his death, Leo resided with Lee as man and wife in New York.

Thereafter, on February 17, 1959, the New York Supreme Court issued a declaratory judgment in the action instituted by Gertrude. Inter alia it declared and adjudged:

- that the Mexican divorce of Gertrude and Leo "was and is fraudulent, null, void and of no force and effect whatsoever;"

- that the alleged marriage of Leo and Lee was likewise null and void;

- "that the plaintiff Gertrude B. Goldwater is, and at all times since June 20, 1946 has been, the lawful wife of the defendant Leo J. Goldwater."

The second cause of action (for an injunction against Leo's remarriage) was dismissed. While both Gertrude and Leo appeared in this declaratory judgment action, second wife Lee was never joined as a defendant in that suit. No appeal was ever taken from this declaratory judgment and hence it has become final.

Leo died on February 21, 1968. His last will and testament, dated January 17, 1964, was admitted to probate in the Surrogate's Court, New York County, approximately one month after his demise. That will bequeathed to Lee an interest in property equal to or greater than fifty per cent of the value of the adjusted gross estate.*fn3

On April 11, 1968, Gertrude filed a notice to take an elective share of Lee's estate pursuant to N.Y. E.P.T.L. (Estates, Powers and Trusts Law) § 5-1.1 ("Right of election by surviving spouse"). This claim was settled by Leo's executors approximately a year later for the amount of ...


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