Estate of Bernard Shapiro, et al v. USA

Filing

FILED OPINION (ROBERT E. COWEN, A. WALLACE TASHIMA and BARRY G. SILVERMAN) REVERSED IN PART; AFFIRMED IN PART; REMANDED. Judge: AWT Concurring & Dissenting, Judge: BGS Authoring. FILED AND ENTERED Each party shall bear its own costs on appeal. JUDGMENT. [7655311]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ESTATE OF BERNARD SHAPIRO;
CLYDE E. PITCHFORD; STEVEN R.
SCOW,
Plaintiffs-Appellants,
UNITED

v.
STATES OF AMERICA,
Defendant-Appellee.





No. 08-17491
D.C. No.
2:06-cv-01149-RCJLRL
OPINION

Appeal from the United States District Court
for the District of Nevada
Robert Clive Jones, District Judge, Presiding
Argued and Submitted
December 10, 2010—San Francisco, California
Filed February 22, 2011
Before: Robert E. Cowen*, A. Wallace Tashima, and
Barry G. Silverman, Circuit Judges.
Opinion by Judge Silverman;
Partial Concurrence and Partial Dissent by Judge Tashima

*The Honorable Robert E. Cowen, Senior Circuit Judge for the Third
Circuit, sitting by designation.

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COUNSEL
John M. Youngquist (argued), San Francisco, California,
Donald L. Feurzeig of Feurzeig, Mark & Chavin, LLP, San
Francisco, California, for the appellant.
Carol Barthel (argued) and Jonathan S. Cohen, United States
Department of Justice, Tax Division, Washington, DC, for the
appellee.

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OPINION
SILVERMAN, Circuit Judge:
Bernard Shapiro and Cora Jane Chenchark lived together
for twenty-two years, but they never married. Over those
twenty-two years, Chenchark cooked, cleaned, and managed
their household. When they broke up, she filed a palimony
suit against him in state court. While the suit was pending, he
died. In the context of this tax refund lawsuit filed by Shapiro’s estate, the district court held that Chenchark’s homemaking services did not, as a matter of law, provide sufficient
consideration to support a cohabitation contract between Shapiro and Chenchark, and that therefore, an estate tax deduction for the value of Chenchark’s claim was properly
disallowed. Because the district court’s holding was premised
upon a misconstruction of Nevada law regarding contracts
between cohabitating individuals, we reverse.
I.

Background

Shapiro and Chenchark met in 1977 and began dating
shortly thereafter. Chenchark moved in with Shapiro in 1978.
They lived together for the next twenty-two years, but they
never married. During the relationship, Chenchark provided
homemaking services to Shapiro, including cooking, cleaning,
and managing the household employees, such as the gardener
and housekeeper. Shapiro paid for Chenchark’s living
expenses and provided her with a weekly spending allowance.
Chenchark contributed no financial assets to the household.
In 1999, after learning that Shapiro was involved with
another woman, Chenchark sued Shapiro in Nevada state
court, claiming breach of express and implied contract, breach
of fiduciary duty, and quantum meruit. According to Chenchark’s complaint, she and Shapiro had agreed to pool their
resources and to share equally in each others’ assets.

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Shapiro died on February 12, 2000, while Chenchark’s
action was still pending. Shapiro’s estate filed an estate tax
return in May 2001 and paid $10,602,238 in estate tax and
generation-skipping transfer tax. The Estate continued to
defend against Chenchark’s claim, and in September 2001 a
jury returned a verdict in favor of the Estate, specifically finding that Shapiro and Chenchark did not enter into any express
or implied contract. Chenchark appealed, and while the appeal
was pending the parties settled Chenchark’s claim, along with
another lawsuit in which she contested Shapiro’s will, for
approximately $1 million.
In June 2003, some time after settling Chenchark’s claim,
the Estate filed an amended estate tax return seeking, among
other adjustments, to deduct $8 million from the value of the
taxable estate under 26 U.S.C. § 2053(a)(3) for Chenchark’s
claim. Based on the amended return, the Estate claimed a
refund of approximately $3.5 million. The IRS disallowed any
deduction for Chenchark’s claim, and only refunded $361,483
as result of unrelated adjustments.
In August 2006, the Estate brought suit in federal court
seeking a refund of approximately $2 million. According to
the Estate’s complaint, an expert valued Chenchark’s claim at
just over $5 million as of the date of Shapiro’s death. The
Estate later amended its complaint to include an additional
claim for relief, seeking a refund for the decrease in property
value due to notices of lis pendens recorded by Chenchark on
Shapiro’s properties during the pendency of her lawsuit. In its
amended complaint, the Estate sought a total refund of
$4,863,480.
The Estate and the United States filed cross-motions for
summary judgment. The district court ruled in favor of the
United States, holding that, “[w]ithin the uncontested facts, no
evidence exists that Chenchark ever contributed anything
other than love, support, and management of Shapiro’s household to the relationship. These factors do not provide for suf-

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ficient consideration to support a contractual agreement.” The
district court went on to conclude that, “because Chenchark
did not make sufficient contributions to the Estate to provide
consideration for the support she received from Shapiro,”
there “was no contract between them, [and] the money she
sought in the Contract Action was, in fact, a gift from Shapiro.” As a gift, Chenchark’s claim against the Estate did not
qualify as a deduction under § 2053, according to the district
court. The court further held that the Estate was judicially
estopped from arguing that Shapiro and Chenchark entered an
employment agreement of sorts, with Chenchark’s homemaking services as consideration, because the Estate had taken the
opposite position in defending against Chenchark’s lawsuit.
II.
A.

Discussion

Standard of Review

“We review the district court’s grant of summary judgment
de novo, to determine whether, viewing the evidence in the
light most favorable to the non-moving party, there are genuine issues of material fact and whether the lower court correctly applied the relevant substantive law.” Fed. Trade
Comm’r v. Network Servs. Depot, Inc., 617 F.3d 1127, 1138
(9th Cir. 2010).
We review the district court’s application of judicial estoppel for abuse of discretion. Abercrombie & Fitch Co. v.
Moose Creek, Inc., 486 F.3d 629, 633 (9th Cir. 2007).
B.

Consideration

[1] In determining the value of the taxable estate for purposes of calculating the amount of estate tax owed, the tax
code allows a deduction for “claims against the estate . . . as
are allowable by the laws of the jurisdiction . . . under which
the estate is being administered.” 26 U.S.C. § 2053(a). In the
case of claims against the estate that are founded on a promise

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or agreement, this deduction is limited “to the extent that they
were contracted bona fide and for an adequate and full consideration in money or money’s worth.” Id. § 2053(c)(1)(A).
[2] Here, the district court concluded as a matter of law
that Chenchark’s contributions to the Estate—twenty-two
years of cooking, cleaning, and other homemaking services—
did not constitute sufficient consideration to allow the Estate
to deduct her claim against it. The district court did not base
its ruling on an application of § 2053(c)(1)(A)’s requirement
that the underlying promise or agreement be contracted “for
an adequate and full consideration in money or money’s
worth”; instead, the court rejected the Estate’s deduction for
Chenchark’s claim based on an incorrect reading of Nevada
state law regarding contracts between cohabitating partners.
The district court erroneously concluded that Chenchark did
not have a valid contract claim under Western States Construction, Inc. v. Michoff, 840 P.2d 1220 (Nev. 1992), because
her love, support, and homemaking services did not, as a matter of law, provide sufficient consideration to support a contractual agreement.
In recent decades, widespread social acceptance of nonmarital cohabitation has triggered an expansion of cohabitants’ legal rights. In Marvin v. Marvin, 557 P.2d 106 (Cal.
1976), a watershed case concerning such rights, the California
Supreme Court held that courts should enforce express or
implied contracts between nonmarital partners except when
such a contract is inseparably based upon the provision of
sexual services. Id. at 114. “[A]dults who voluntarily live
together and engage in sexual relations are nonetheless as
competent as any other persons to contract respecting their
earnings and property rights. . . . [T]hey may agree to pool
their earnings and to hold all property acquired during the
relationship in accord with the law governing community
property[.]” Id. at 116.
[3] In Hay v. Hay, 678 P.2d 672 (Nev. 1984), the Nevada
Supreme Court adopted Marvin’s holding and ruled that

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unmarried cohabitants may sue to enforce contracts concerning property rights. Id. at 674. Even an implied contract to
share property, in which the terms of the agreement are “manifested by conduct,” rather than stated in words, is enforceable. Id. The court reaffirmed the right of cohabitants to
contract in Western States Construction. 840 P.2d at 1224. In
Western States Construction, the court affirmed the trial
court’s finding that Lois Michoff and Max Michoff impliedly
agreed to hold their property as though they were married,
based on evidence that the couple filed joint tax returns, designated property as community property in their Subchapter
S election form, and signed a spousal consent form for a partnership. Id. at 1224-25.
[4] Here, the district court compared the facts of Chenchark and Shapiro’s relationship to that of Lois and Max
Michoff in Western States Construction, and concluded that
Chenchark “did not make sufficient contributions to the Estate
to provide consideration for the support that she received
from Shapiro.” Because Chenchark did not provide sufficient
consideration, the court held that Chenchark did not have a
valid contract claim. But the Nevada Supreme Court in Western States Construction did not consider the amount or type
of consideration necessary to support a contractual agreement
between cohabitants—instead, the court just examined Lois
and Max’s conduct to determine whether their actions supported the conclusion that they intended to share their property as though married. Nothing in Western States
Construction supports the district court’s conclusion that
“love, support, and management of [a] household” cannot, as
a matter of law, constitute consideration for a promise to
share property under Nevada law.
[5] Although the Nevada Supreme Court has not addressed
the sufficiency of homemaking services as consideration for
a contract to share property, California cases have held that a
promise to perform homemaking services is adequate to support such a contract. See, e.g., Chiba v. Greenwald, 67 Cal.

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Rptr. 3d 86, 92 (Cal. Ct. App. 2007) (citing Marvin, 557 P.2d
at 113 n.5); Whorton v. Dillingham, 248 Cal Rptr. 405, 409
(Cal. Ct. App. 1988). And under Arizona law, which, like
Nevada and California, recognizes the right of unmarried
cohabitants to contract to share property, homemaking services may constitute adequate consideration for such a contract. Carroll v. Lee, 712 P.2d 923, 926-27 (Ariz. 1986). It
makes no difference if the parties exchanged “unlike services.” Id. at 926. Given the Nevada Supreme Court’s adoption of Marvin through Hay and Western States Construction,
we think it is likely that Nevada would join those California
and Arizona courts in holding that homemaking services can
be adequate consideration for a property-sharing agreement
between cohabitants. We therefore disagree with the district
court’s holding that Chenchark did not, as a matter of law,
provide sufficient consideration to support a contract under
Nevada law.
The United States argues that Chenchark’s claim is not
deductible because it is not supported by “adequate and full
consideration in money or money’s worth.” We do not disagree with the government’s point that, under
§ 2053(c)(1)(A), a claim founded on a promise or agreement,
like Chenchark’s claim, is only deductible “to the extent [it
was] contracted bona fide and for adequate and full consideration in money or money’s worth”—but the district court
never reached this specific issue. Homemaking services such
as those provided by Chenchark can be quantified and have
a value attached to them. Our point is simply that these services are not of zero value as a matter of law, as the district
court apparently believed.
[6] This is not to say that, even if a factfinder determines
that Chenchark’s claim was supported by “adequate and full
consideration,” the Estate is necessarily entitled to the full
deduction it seeks. Rather, the value of Chenchark’s claim is
a factual issue that precludes summary judgment. The value
of the claim (and the corresponding allowable estate tax

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deduction) remains for the district court to determine on
remand. Whether her claim was worth $1 million (as it was
eventually settled for) or some other amount is for the district
court to decide. Under this court’s precedent, the claim must
be valued as of the date of Shapiro’s death. See Estate of Van
Horne v. C.I.R., 720 F.2d 1114, 1116 (9th Cir. 1983); Propstra v. United States, 680 F.2d 1248, 1254 (9th Cir. 1982).
For this reason, Chenchark’s deposition testimony from this
case—as quoted by our dissenting colleague—is irrelevant to
the valuation of her claim. Chenchark’s statements were not
made until 2007, more than seven years after Shapiro’s death.
All that was known at the time of Shapiro’s death was that
Chenchark had asserted a plausible claim under Nevada law.
C.

Judicial Estoppel

In addition to holding that the Estate could not deduct any
amount for Chenchark’s claim because of the lack of consideration, the district court also held that judicial estoppel prohibited the Estate from arguing that Chenchark’s homemaking
services provided consideration for the alleged agreement
between Shapiro and Chenchark to share equally in each others’ property. The district court specifically held:
The application of judicial estoppel is appropriate in
this case. The Estate is barred from taking inconsistent positions in accordance with the doctrine of
judicial estoppel. It cannot over-claim the value of
the suit against it. The value is what it paid for suit
in settlement, and no more.
[7] The Estate’s positions in defending against Chenchark’s lawsuit were not inconsistent with any positions it
took before the district court in this case. See Yanez v. United
States, 989 F.2d 323, 326-27. The Estate consistently took the
position that a contract claim had in fact been asserted against
it, a fact that no one denies. The Estate was within its rights
to deduct the value of the yet-to-be-determined claim without

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waiving the right to contest the validity of the claim in state
court. Cf. Treas. Reg. § 20.2053-1(b)(3) (2000) (“An item
may be entered on the return for deduction though its exact
amount is not then known, provided it is ascertainable with
reasonable certainty, and will be paid.”).1
D.

Notices of Lis Pendens

In granting the United States’ motion for summary judgment, the district court did not address the Estate’s claim that
it was entitled to a refund as a result of the reduction in property value caused by the notices of lis pendens filed by Chenchark on a number of Shapiro’s properties. But it entered
judgment against the Estate on this claim, along with the rest
of the case. On appeal, the Estate argues that the district court
erred in granting summary judgment on this claim because it
was not addressed in the summary judgment motions.
We affirm the district court’s grant of summary judgment
on the Estate’s claim for a refund related to the notices of lis
pendens. The Estate abandoned this claim by failing to raise
it in opposition to the United States’ motion for complete
summary judgment. See Shakur v. Schriro, 514 F.3d 878, 892
(9th Cir. 2008) (“We have previously held that a plaintiff has
‘abandoned . . . claims by not raising them in opposition to
[the defendant’s] motion for summary judgment.’ ”) (quoting
Jenkins v. Cnty. of Riverside, 398 F.3d 1093, 1095 n.4 (9th
Cir. 2005)).
E.

Administrative Expenses
As with the Estate’s claim for a refund related to the

1

The regulation in effect at the time of Shapiro’s death required the
Estate to value the claim as of the date of death, even if there were uncertainty about the amount. We note that in 2009, the regulations changed,
requiring an estate to wait and see about the value of a contested, unliquidated claim. See Treas. Reg. § 20.2053-1(d) (as amended in 2009).

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notices of lis pendens, the district court did not address the
Estate’s claim for a deduction of administrative expenses
under § 2053(a)(1)(i). Also like the lis pendens claim, the
Estate failed to raise this issue in opposition to the United
States’ motion for summary judgment. But the United States
noted in its answering brief that it has no objection to a
remand to allow the district court to address the deductibility
of administrative expenses. Therefore we instruct the district
court to address this issue on remand.
III.

Conclusion

For the foregoing reasons, we REVERSE the district
court’s grant of summary judgment on the Estate’s claim that
it is entitled to deduct the value of Chenchark’s claim;
AFFIRM summary judgment on the Estate’s claim for a
refund arising out of the notices of lis pendens recorded on
Shapiro’s properties by Chenchark; and REMAND.
Each party shall bear its own costs on appeal.
REVERSED IN PART, AFFIRMED IN PART, AND
REMANDED.

TASHIMA, Circuit Judge, concurring in part and dissenting
in part:
I agree with the majority’s disposition of the lis pendens
and administrative expenses issues. I therefore concur in Parts
II.D and II.E of the majority opinion. See Maj. Op. at
2732-33. I disagree, however, with the majority’s analysis and
disposition of the primary issue in this appeal, the valuation
of the Chenchark claim for federal estate tax purposes. I
therefore respectfully dissent from Part II.B of the majority opinion.1 See Maj. Op. at 2727-31.
1

Because I would affirm the district court’s disallowance of the Chenchark claim under 26 U.S.C. § 2053, I find it unnecessary to reach the
judicial estoppel issue, discussed in Part II.C. See Maj. Op. at 2731-32.

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The majority reverses the district court because its holding
“was premised upon a misconstruction of Nevada law regarding contracts between cohabiting individuals . . . .” Maj. Op.
at 2725. This case, however, does not turn on issues of state
contract law, but on federal tax law, and the Estate has raised
no genuine issue of material fact as to whether it has met the
requirement of the relevant estate tax provision, i.e., that the
claim underlying its deduction be supported by full consideration in money’s worth.2
The estate tax issue in this case is governed by 26 U.S.C.
§ 2053. Although the majority is correct that 26 U.S.C.
§ 2053(a) “allows a deduction for ‘claims against the estate
. . . as are allowable by the laws of the jurisdiction . . . under
which the estate is being administered,’ ” Maj. Op. at 2727,
a valid state law claim is a necessary condition for the deduction, but not necessarily a sufficient one. Section 2053 also
requires that, to be deductible, claims “founded on a promise
or agreement[ ] be limited to the extent that they were contracted . . . for an adequate and full consideration in money
or money’s worth[.]” 26 U.S.C. § 2053(c)(1)(A).3 This
requirement is not satisfied merely because a claim is “legally
binding and enforceable against [an] estate” under state law.
Taft v. Comm’r, 304 U.S. 351, 355 (1938); see also United
2

The district court’s supposed misconstruction of Nevada law is also
immaterial. In the summary judgment context, our review is de novo and
we “may affirm the district court’s [grant of] summary judgment on any
ground supported by the record.” Hawn v. Exec. Jet Mgmt., Inc., 615 F.3d
1151, 1155 (9th Cir. 2010). Accordingly, even assuming that the district
court was mistaken in its construction of Nevada contract law, we are free
to affirm on alternate grounds. See, e.g., Crowe v. County of San Diego,
608 F.3d 406, 432 (9th Cir. 2010).
3
To be deductible under § 2053, the claim supporting the deduction
must also be “contracted bona fide.” 26 U.S.C. § 2053(c)(1)(A). In this
case, aside from the question of whether Chenchark’s consideration would
have supported a contract under Nevada Law (to say nothing of a deduction under § 2053), it is by no means clear that there was in fact a contract
to support it. There is no need, however, to reach this issue for the reasons
discussed herein.

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States v. Stapf, 375 U.S. 118, 131 (1963) (A deduction for a
claim against an estate “should not be predicated solely on the
finding that a promise or claim is legally enforceable under
the state laws governing the validity of contracts and wills.”).
We have gone so far as to state that “the existence of legal
consideration according to local law is immaterial” for purposes of the estate tax. Giannini v. Comm’r, 148 F.2d 285,
287 (9th Cir. 1945) (emphasis added).4
4

It is neither unusual nor unreasonable for federal tax law to diverge
from state contract law in this regard, because the two bodies of law are
concerned with protecting very different interests. Although state law
often provides protections for unmarried individuals from their partners
through contract, it does so in order to protect the reliance interests of individuals who expected their long-standing relationships would last and held
their property in accordance with this reliance. See, e.g., W. States Constr.
v. Michoff, 840 P.2d 1220, 1224 (Nev. 1992) (“[T]his court must protect
the reasonable expectations of unmarried cohabitants with respect to transactions concerning their property rights.”). The estate tax, by contrast, is
designed to prevent tax avoidance. See, e.g., Bank of N.Y. v. United States,
526 F.2d 1012, 1018 (3d Cir. 1975) (denying a deduction under § 2053
that may be enforceable under state law because it did not meet the
requirements of federal law, even where there was no reason to suspect
that the intent of a transaction “was to establish a situation permitting the
evasion of estate taxes, [because] to sanction a deduction in this type of
a case could encourage tax avoidance”).
More specifically, it is not unreasonable to have different rules in the
different contexts under the facts presented by this case. Cohabiting partners would not lose their protection from an inequitable allocation of property within their domestic relationships because of a failure of the estate
tax to recognize a deduction for their property claims; fair collection of the
estate tax is not hampered by the recognition that unmarried individuals
need legal protection of the economic arrangements made within their
domestic relationships.
Further, rightly or wrongly, as a policy choice of Congress the estate tax
bestows special status on married couples that it does not bestow on
unmarried couples. See, e.g., 26 U.S.C. § 2032A(e)(2) (“The term ‘member of the family’ means, with respect to any individual, only— (A) an
ancestor of such individual, (B) the spouse of such individual, (C) a lineal
descendant of such individual, of such individual’s spouse, or of a parent
of such individual, or (D) the spouse of any lineal descendant described
in subparagraph (C).”); § 2043(b) (providing that relinquishments of mari-

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The statute’s requirement that deductions based on promises or agreements be supported by full consideration in
money’s worth is based on a need to protect the estate tax.
Without this limitation, there would be nothing to “prevent
testators from depleting their estates by transforming bequests
to the natural objects of their bounty into deductible claims.”
Leopold v. United States, 510 F.2d 617, 623 (9th Cir. 1975).
Accordingly, any contract between a decedent and someone
who would be a natural object of his or her bounty is viewed
with suspicion, requiring exceptional circumstances to be
treated as something other than “simply an agreement to make
a testamentary disposition to persons who are the natural
objects of one’s bounty.” Id.
Thus, as we have previously held in the context of deductions under § 2053:
Under exceptional circumstances . . . it may be that
a claim by someone who might otherwise inherit
from the decedent should be deductible under section 2053. If the claim is not simply a subterfuge for
a nondeductible legacy, if the claim is supported by
‘adequate and full consideration,’ and if the consideration is a non-zero sum which augmented the
decedent’s estate, then it would seem that the deduction should be allowed. Whether or not a particular
claim is deductible, then, will depend on the facts in
each case.
Id. at 623-24 (emphasis added) (ellipsis in the original) (quoting Hartshorne v. Comm’r (In re Estate of Hartshorne), 402
tal rights are not consideration “in money or money’s worth” except for
purposes of § 2053 where requirements of § 2516, which governs certain
written divorce agreements, are met); § 2056(a) (“[T]he value of the taxable estate shall . . . be determined by deducting from the value of the
gross estate an amount equal to the value of any interest in property which
passes or has passed from the decedent to his surviving spouse . . . .”).

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F.2d 592, 594-95 n.2 (2d Cir. 1968)).5 Chenchark, as Shapiro’s long-term romantic partner, is a natural object of Shapiro’s bounty, who was provided for in his will.6 Chenchark
testified that her claim was based on Shapiro’s promise that
“if anything happened to him [she] would be taken care of.”
Accordingly, the test set forth in Leopold applies here.
As is clear from the text of § 2053(c)(1)(A) and our decision in Leopold, whether or not exceptional circumstances are
otherwise presented here, the claim must still be supported by
adequate and full consideration that is “a non-zero sum which
augmented the decedent’s estate.” 510 F.2d at 624. The Estate
has adduced no evidence to raise a genuine issue of material
fact as to whether Chenchark provided full consideration that
augmented Shapiro’s estate.
As an initial matter, “money or money’s worth” appears a
number of times in the Internal Revenue Code and regulations, and is generally7 defined by regulation as excluding
5

In the specific context considered by Leopold, that of divorce agreements, the Tax Reform Act of 1984, § 425(a), Pub. L 98-369, 98 Stat. 494
(1984), appears to have supplanted the inquiry by amending 26 U.S.C.
§§ 2043 & 2053 to allow the relinquishment of marital rights to qualify
as consideration supporting deductions if certain criteria are met. See 26
U.S.C. §§ 2043(b)(2) & 2053(e); see also 26 U.S.C. § 2516. No authority,
however, suggests that this has diminished the weight of the principles
Leopold established beyond the limited context of written divorce agreements.
6
Admittedly, Shapiro’s provision for Chenchark in his will was not
without limitation. Shapiro provided for a bequest of $50,000 for Chenchark in his will with the proviso that the gift would lapse if they were not
residing together at the time of his death. As defendant and co-executor
Steven R. Scow noted in a letter to Shapiro, however, although in Scow’s
opinion Chenchark had no legitimate claim to Shapiro’s assets, “[s]ince
she has lived with [Shapiro] for twenty years, it would be a nice gesture
. . . to make some arrangement to put money in an account or trust to pay
for support during her lifetime.”
7
On occasion, the limitation is not express, but the exclusion remains
clear. See, e.g., 26 C.F.R. § 20.2043-1(a) (“To constitute a bona fide sale

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love and affection. See, e.g., 26 C.F.R. § 25.2512-8 (“A consideration not reducible to a value in money or money’s
worth, as love and affection, promise of marriage, etc., is to
be wholly disregarded, and the entire value of the property
transferred constitutes the amount of the gift.”); 26 C.F.R.
§ 301.6323(h)-1(a)(3) (“Nor is love and affection, promise of
marriage, or any other consideration not reducible to a money
value a consideration in money or money’s worth.”); see also
Harris v. Comm’r, 340 U.S. 106, 107-08 (1950) (“The federal
estate tax and the federal gift tax . . . are construed in pari
materia, since the purpose of the gift tax is to complement the
estate tax by preventing tax-free depletion of the transferor’s
estate during his lifetime. Both the gift tax and the estate tax
exclude transfers made for ‘an adequate and full consideration
in money or money’s worth.’ ” (citation and footnotes omitted)). The Tax Court also has observed that love and affection
do not constitute adequate consideration for tax purposes. See,
e.g., Cavett v. Comm’r, 79 T.C.M. (CCH) 1662, 2000 WL
287975, at *7 (2000) (“If the services to decedent sprang from
love and affection, the services themselves are tantamount to
an expression of love and affection, which cannot be reduced
to money or money’s worth.”). Accordingly, any love and
affection provided to Shapiro by Chenchark must not, and
cannot, be treated as consideration for purposes of § 2053,
even if it would support a contract under state law. “Nevada
law regarding contracts between cohabiting individuals,” Maj.
Op. at 2725, is simply irrelevant to determining the adequacy
of consideration under § 2053.
While some of the above-cited authorities appear to suggest
that, where the motivation for services provided was love and
for an adequate and full consideration in money or money’s worth, the
transfer must have been made in good faith, and the price must have been
an adequate and full equivalent reducible to a money value. If the price
was less than such a consideration, only the excess of the fair market value
of the property . . . over the price received by the decedent is included in
ascertaining the value of his gross estate.”).

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affection, the entire value of the services are discounted for
tax purposes even if they had monetary value, there is no reason to decide that issue in this case. Even assuming that anything Chenchark provided to Shapiro out of love and affection
would support a deduction of its full dollar value, the Estate
has presented no evidence here that would create a genuine
issue of material fact that Chenchark enhanced the value of
the Estate in money’s worth. Although there is evidence that
Chenchark supervised Shapiro’s household staff, including a
maid, gardener, and a pool man, and that she cooked, cleaned,
and provided emotional support to Shapiro,8 the Estate presented no evidence that these services have a cash value or
what that cash value would be.
Further, the Estate did not controvert the government’s
statement in support of its motion for summary judgment that
“[d]uring the entire time Chenchark lived with Shapiro, she
. . . never contributed any money or other assets of any material value to the relationship.” Perhaps more importantly, the
Estate itself represented that Chenchark gave nothing of monetary value to the relationship. It represented that Chenchark
“was supportive of [Shapiro] emotionally, and supportive of
him in the business matters . . . which he sometimes discussed
with her. Their association was . . . an intimate, personal association where they shared their lives, hopes and dreams.
[Chenchark] gave no physical asset except herself to the relationship . . . .” Further, Shapiro averred before his death that
Chenchark “ha[d] never contributed anything to the acquisition or maintenance of any of [his] properties,” and Steven R.
Scow, one of the co-executors of the Estate, testified that
there was no agreement between Shapiro and Chenchark to
pool their assets.
Thus, the Estate has not raised a genuine issue of material
fact to support its contention that Chenchark’s claim against
8

I note, however, that Chenchark stated in her deposition that “I didn’t
work in the home. I had a maid.”

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the Estate, assuming arguendo that it was contracted bona fide,9
was supported by full consideration in money’s worth for the
purpose of federal tax law. Accordingly, I would affirm the
district court on this issue.
For the foregoing reasons, I dissent from the majority’s
reversal of the district court’s grant of summary judgment to
the government on the Chenchark claim.

9

See footnote 3, supra.