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constituted a claim that decedent possessed at the date of her
death. And, as noted previously, the value of any such claim is
included in decedent’s gross estate. (But see infra pp. 40-51 for
deduction of attorney’s fees as an administration expense under
section 2053(a)(2).) Although the decision of the superior court
is not the decision of the State’s highest court, and hence is not
per se conclusive for Federal income tax purposes, we should and
will give proper regard to the superior court’s interpretation of
Pennsylvania substantive law.
Aside from the $247,500 which the Orphans’ Court ordered
returned to the estate, the evidence convinces us that no portion
of the $750,000 settlement amount should be allocated to the value
of any matter other than the malpractice claim that decedent
possessed at the date of her death. We do not believe that the
Glovers had any meritorious claims against the law firm in their
own right. To the contrary, the dismissal of all claims asserted
by the Glovers against Eckell, Sparks (on the grounds that the
Glovers lacked standing to bring any claims) is strong indication
that the value of the Glovers’ claims was negligible at best.
As stated, the parties stipulated that the $750,000 settlement
represents the starting point in determining the value of
decedent’s interest in the malpractice claim as of the date of
decedent’s death. We therefore hold that $502,500 ($750,000 less
$247,500 allocated to the return of fees) is the gross value of
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