Cory v. Bank of America

Opinion

LOW, J.* If a transferee is not a surviving spouse, ancestor or issue of the decedent, the transferee cannot gain the most preferred inheritance tax status, unless the decedent stood in the “mutually acknowledged relationship of a parent” to the transferee. This case asks whether this relationship was established where the transferee was not related by [601]blood or marriage and never lived in the decedent’s household. We do not believe the required relationship was established in this case.

Otto Wilts died on November 6, 1974, and his holographic will of June 8, 1961, was admitted to probate. Wilts left his entire estate to Betty Barnes and six of her nine children.

In 1935 or 1936, Mrs. Rockwell (Betty’s mother) divorced her husband and moved to Oakland, California, with her daughters. She was awarded custody of her children. After the move to California, Betty had no contact with her father. In Oakland, they first lived in an apartment building where Otto Wilts was also a tenant. Before Betty was 15, she and Wilts had established a close, cordial relationship. When Betty was placed in an orphanage at age five or six, Wilts partially paid the board, paid dental bills, bought her toys, visited her frequently, and took her to many recreational activities. Mrs. Rockwell testified that when she came to Oakland, her doctors had given her only five years to live and Wilts had agreed to take care of Betty the rest of her life.

When Betty was 11, she moved to Vallejo with her mother and sisters. Wilts continued to visit her three or four times a week and generously bought her clothing, groceries and gifts. He paid for Betty’s business college expenses. As a child, Betty would occasionally stay overnight at Wilts’ house. Wilts attended P.T.A. meetings, conferred with Betty’s teachers, and occasionally disciplined her. He paid for her summer camp expenses for three or four years and visited her when she was at the camp.

Except while in the orphanage or at camp, Betty always lived with her mother and sisters, and Wilts was never a member of their household. In fact, Wilts and Mrs. Rockwell did not get along well, and Wilts was not close to any of Betty’s sisters. At one time, Wilts expressed a desire to adopt Betty, but Mrs. Rockwell opposed this and no further action was taken.

Wilts continued to provide for Betty after she married. He made down payments on various homes for her and her family. Visits continued and Wilts would spend holidays with Betty’s family and made gifts to her children. He lived in her home for a brief time while recovering from a broken hip. At various times Wilts referred to Betty as “his daughter.” On some papers, including rental agreements, hospital admittance papers