Werfel v. Franchise Tax Board

DORAN, J. The facts relating to the within appeal are as follows. Decedent died August 26, 1945. The will was admitted to probate September 28,1945, and letters testamentary issued to decedent’s widow Alma Werfel on October 3, 1945.

Appellant Werfel’s brief recites that “On October 17, 1945, the trial court made an order authorizing a family allowance of $1,000.00 per month to be paid to the widow of the decedent for period not to exceed six months from the date of his death. No appeal was ever taken from said order. It became final by the lapse of time. Complying with said order of October 17, 1945, the executrix paid the widow the six monthly payments of $1,000.00 each, which payments were approved in the Order Settling First Account Current and Beport of Executrix.

“On October 28, 1946, the court below made an order authorizing the executrix to pay to the widow $1,500.00 per month beginning from the date of the last payment made under the order of October 17, 1945, and ending upon further order of the court. This order was never appealed from and became final by lapse óf time. Thereafter on September 1,1946, the executrix filed her Second Account Current which reflected the payment of family allowance by the executrix to the widow in the amount of $21,000.00. These payments were for the period beginning February 25, 1946, and ending April 25, 1947. An order was made on May 28, 1948, approving said Second Account Current and the family allowance payments enumerated therein.

“On March 21, 1949, the Collector of Internal Bevenue for the Ninth District served his request for special notice upon the executrix under the provisions of Probate Code, Section 1202. Subsequently, on March 31, 1949, the said Collector filed his claim against the estate in the amount of $16,735.00 for an income tax deficiency of the decedent for the year 1945. On July 7, 1949, the State of Califorina filed a claim against the estate in the amount of $1,137.01 for an income tax deficiency of the decedent for the year 1945.

“The executrix filed her Third Account Current on Oeto[169]ber 28, 1949, which disclosed payment to the decedent’s widow in the amount of $7,500.00 for family allowance for the period beginning April 25, 1947, and ending September 25, 1947.

“Thereafter, after the order settling executrix’ Third Account Current, reducing executrix’ bond and instructing executrix re payment of tax claims was vacated, a hearing was had on the Third Account Current on May 22, 1951. Among the issues raised, the Assistant Franchise Tax Commissioner argued that the executrix should be surcharged for her payments of family allowance to the widow because the estate was insolvent at the time the payments were made. The argument was that said payments deprived the Franchise Tax Commission of the estate assets from which he might satisfy his claim against the estate for the decedent’s alleged income tax deficiency. The United States also appeared at the hearing and objected to the allowance of the Third Account Current.