The Siebrasse Sage Continues

Among the several issues decided in In re Estate of Siebrasse (Aug. 30, 2006), the Supreme Court of South Dakota confronted the issue of whether an estate tax refund was of substantial benefit to the estate such that [the estate’s devisee] Delbert was entitled to attorney’s fees, expenses, and disbursements he accrued while challenging the Service’s denial of an estate tax refund. The court said that since Delbert lost the case, he had provided no benefit to the estate.
   

This matter was initially remanded for reconsideration of attorney’s fees in light of a tax refund obtained by Delbert. Subsequently, the circuit court found the IRS had denied Delbert’s refund claim, a claim that was of primary importance in deciding Siebrasse III. The circuit court found that as a result of this denial Delbert ultimately provided no benefit to the estate. In addition, because of this denial the circuit court found the personal representative did not act negligently as the IRS ultimately agreed with the personal representative’s rejection of Delbert’s appraisal.
   

The circuit court’s discussion of this second prong concerning whether the personal representative acted negligently in analyzing the request for attorney’s fees was not an application of the correct legal standard. * * * Nevertheless, any analysis of the second prong was superfluous. The circuit court had already determined that Delbert’s action provided no benefit to the estate. This is supported by the fact that his claim for a reduced real estate valuation was denied by the IRS. Consequently, Delbert was not entitled to an award of attorney’s fees, expenses and disbursements pursuant to SDCL 29A-3-720. The circuit court’s decision is affirmed.