Judge rules in favor of Blanche Ash’s estate tax dispute case

By Elisabeth Waldon • Last Updated 11:28 am on Friday, May 18, 2012

Case history

Stanley Ash died on Feb. 29, 2004. His wife, Blanche, died on Aug. 24, 2011. The Greenville couple left a large portion of their $31 million estate to more than 50 local organizations last year.
Their only child, Jennifer Ash of Connecticut, is contesting the endowment, citing a tax payment issue.
Blanche Ash died with an estate worth more than $31 million — including $13.6 million in Stanley Ash’s qualified terminable interest property (QTIP) trust. Jennifer Ash will inherit the entire QTIP trust fund, which has not yet been distributed.
In Blanche Ash’s last will and testament, she left $2 million to Jennifer. She left the remainder of her estate to more than 50 local organizations, plus a few close friends.
Blanche Ash’s estate has an estimated tax liability of $4.3 million. Those taxes are due May 24.
Attorney Robert Brower of Grand Rapids is representing I. William Arntz of Greenville and Theodore Hessler of Belding, both of whom are co-personal representatives of Blanche Ash’s estate, as well as beneficiaries. Attorney Alan Valade of Detroit is representing Jennifer Ash, along with Dale Kris, both of whom are co-trustees of Stanley Ash’s QTIP trust.
If the QTIP trust is not liable to pay the estate taxes, the charitable organizations will have to pay the tax. If the charitable organizations have to pay the tax, the funds are no longer charitable donations, meaning they lose their charitable tax status, meaning the tax owed will increase from $4.3 million to $6.7 million.

STANTON — A Montcalm County judge ruled Thursday that the late Blanche Ash’s estate taxes must be paid from the late Stanley Ash’s qualified terminable interest property (QTIP) trust — but the legal battle is far from over.

Probate Judge Charles Simon III ruled that the co-trustees of the QTIP trust — the Ashes’ daughter, Jennifer Ash of Connecticut, and Dale Kris — must pay Blanche Ash’s estate taxes by May 24. The estate taxes total more than $4.3 million.

The ruling came after Simon heard arguments from attorney Robert Brower on behalf of I. William Arntz of Greenville and Theodore Hessler of Belding, both of whom are co-personal representatives of Blanche Ash’s estate, as well as beneficiaries; attorney Alan Valade on behalf of Jennifer Ash and Kris; attorney Doug Mielock on behalf of the Montcalm Community College Foundation and the Greenville Area Community Foundation; attorney Nick Decker on behalf of four individual beneficiaries; and Assistant Attorney General Will Bloomfield on behalf of Michigan Attorney General Bill Schutte, who is watching the “general charitable interest.”

Brower argued that Stanley Ash’s QTIP trust should pay the estate taxes, based on a provision Stanley Ash made stating all estate taxes would be paid from his QTIP trust. Valade argued the QTIP trust cannot pay the estate taxes due to a statement in Blanche Ash’s will which waived her estate’s right to obtain reimbursement of any of her estate taxes from the QTIP trust.

“I really appreciate the scholarship and the drafting of the briefs presented today,” Simon told the dozen attorneys present. “They were very enlightening and very well written. You can enjoy reading legal briefs and I did enjoy reading them.”

Valade and his attorneys objected to the judge’s ruling, saying they plan to appeal and are concerned about whether Blanche Ash’s representatives will be able to pay the estate taxes in the future if an appeals court rules in Valade’s favor. Valade and his attorneys also argued Simon doesn’t have the authority to make them pay a specific tax amount.

“You may think I don’t have the authority to do this,” Simon said. “You may be right. I’m going to order you do it. You have an appellate remedy. You can pursue that.”

When Valade and his attorneys continued to argue, Simon agreed to compromise and ordered that any of Blanche Ash’s assets that have not yet been distributed remain frozen until the court matter is completely resolved.

Beneficiaries that have not yet been paid include: Alzheimer’s Research Foundation, American Lung Association, Belding’s Belrockton Museum, the Belding Fire Department, the Belding library, Big Brothers Big Sisters of Gratiot and Montcalm Counties, Boy Scouts of America, Girl Scouts of America, Carson City Fire Department, Cherry Street Health Services, EightCAP Inc., Flat River Community Players, Grattan Township Fire Department, Greenville Area Community Foundation, Greenville Area Community Center, Greenville’s Danish Festival, Greenville’s Department of Public Safety, Greenville Public Schools, the Education Foundation of Greenville, Hope Network Foundation, Lakeview District Fire Department, Montcalm Area Reading Council, Montcalm Community College and Foundation, Montcalm County 4-H Fair, Montcalm County Habitat for Humanity, Montcalm Township Fire Department, Oakfield Township Fire Department, Stanton Community Fire Department and United Way of Montcalm and Ionia Counties.

“Our clients are pleased that the judge affirmed our understanding of the law,” Brower told The Daily News after the hearing. “Until the next steps play out, it is too early to comment or predict the future.”
Valade did not return a message seeking comment.

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