TRUSTS AND ESTATES

Inter Vivos Gift • Gift Causa Mortis

North Branch Transfer, Inc. v. Bower, PICS Case No. 14-0388 (C.P. Lycoming Feb. 14, 2014) Gray, J. (6 pages).

In a dispute over the ownership and percentage of ownership of North Branch Transfer, the parties agreed that the question turned on whether John Bower, Sr. gave his shares to John Bower, Jr. before or upon his death. John Bower Jr. claimed an inter vivos gift or a gift mortis causa. Denied.

John Bower, Sr. executed a document entitled “Shareholders Meeting” which stated that on March 29, 2011, John Bower, Sr. called a special meeting of the shareholders to inform the members that he would be “away for a few weeks on vacation” and that he resigned his position as president if he did not return in a “timely fashion.” The document added that if he became ill or died he relinquished all of his shares to the officers and directors of the company: John Bower, Jr., Brenda Bower and Jonathan Bower.

John Bower, Jr. failed to produce sufficient evidence of donative intent and delivery for a valid inter-vivos gift. The document did not establish the intent to make an immediate gift. It explicitly conditioned the relinquishment of John Bower, Sr.’s shares on the “event of his death.” The document suggested that John Bower, Sr. continued to retain control over his shares and, had he returned safely from his vacation, he would not have been required to execute any further documents to evidence such control.

John Bower, Jr. also failed to produce sufficient evidence of a gift causa mortis. The language in the document, “unforeseen reason” shows that John Bower, Sr. did not believe he was about to die or was likely to die soon. The language suggests the possibility of a prolonged vacation or typical travel concerns, but not imminent death. The stipulated facts showed that John Bower, Sr. did suffer from medical conditions, but did not die from any health condition known to him at the time of the meeting. Even if there had been a belief of impending death, there was still insufficient evidence of donative intent and delivery.

The claim for an inter vivos gift or a gift causa mortis was denied. Based upon the stipulations of the parties, the ownership of North Branch is John Bower, Jr. 25 percent, Penelope Bower 25 percent and the estate of John Bower, Sr. 50 percent.

Further the court declined to provide an advisory opinion as to whether the document was testamentary.