COURT OF CHANCERY OF THE STATE OF DELAWARE SELENA E. MOLINA LEONARD L. WILLIAMS JUSTICE CENTER 500 NORTH KING STREET, SUITE 11400 SENIOR MAGISTRATE IN CHANCERY WILMINGTON, DE 19801-3734
Final Report: February 5, 2025 Date Submitted: October 23, 2024
Jason C. Powell, Esquire Dane Solberg Thomas J. Reichert, Esquire 11 N. Vine Street Laurel A. LaLone, Esquire Richmond, VA 23220 The Powell Firm, LLC 1813 N. Franklin Street Eric Solberg Wilmington, DE 19802 91B 13th Street Charlestown, MA 02129
Re: In the Matter of the Estate of Elizabeth F. Solberg, Sussex County ROW Folio No. 26236-SEM
Dear Counsel and Parties:
Pending before me are a motion to compel, and exceptions to the first and
final accounting of the estate of Elizabeth F. Solberg. The motion to compel is
baseless and should be denied. Regarding the exceptions, through myriad
complaints, two of Ms. Solberg’s grandchildren contest their uncle’s administration
of the estate and ask me to surcharge their uncle for his alleged failings. I find largely
in favor of the uncle/administrator and recommend that the exceptions be dismissed,
except in small part. That small part, as more fully explained herein, supports a
surcharge against the uncle/administrator to compensate the estate for an ROW 26236-SEM February 5, 2025 Page 2 of 24
uncompleted pre-death gift of $20,000.00, which should have been, but was not,
included in the probate assets. This is my final report.
I. BACKGROUND1
At its core, this case is a family dispute about the disposition of the estate of
Elizabeth F. Solberg (the “Estate” of the “Decedent”). The Decedent died intestate
on March 16, 2022,2 survived by one son, Douglas (Doug) Solberg (the “Personal
Representative”), and predeceased by another son, Halvard Solberg Jr. (“Halvard
Jr.”),3 leaving Halvard Jr.’s children to inherit in his stead: Eric Solberg, Dane
Solberg, and Somerset Fleming (the “Grandchildren”).
A couple of months after the Decedent’s death, Doug petitioned for authority
to act as the Estate’s personal representative.4 The Sussex County Register of Wills
1 The facts in this report reflect my findings based on the record developed at the evidentiary hearing held on October 23, 2024 (the “Hearing”). Citations to the Hearing transcript, Docket Item (“D.I.”) 60, are in the form of “[First name] Tr.” referring to the testimony of the identified person. Defined parties are identified with that designation. I use first names for clarity only and intend no disrespect or familiarity. Citations to the personal representative’s exhibits are in the form of “PRX__,” and citations to the exceptants’ exhibits are in the form of “EX__.” I grant the evidence the weight and credibility I find it deserves. 2 D.I. 2, 5. 3 Personal Representative Tr. 68:1–2; see id. at 68:21–23; D.I. 36 ¶ 3. 4 D.I. 1–5. ROW 26236-SEM February 5, 2025 Page 3 of 24
granted letters of administration to the Personal Representative on May 18, 2022,
and thereupon, he assumed his role and began administration.5
Two of the Grandchildren entered the scene quickly thereafter. On June 14,
2022, less than two months after the Personal Representative assumed his fiduciary
role, counsel entered an appearance on behalf of Eric Solberg and Dane Solberg (the
“Exceptants”).6 The Exceptants, at least for docket purposes, stayed on the sidelines
as the Personal Representative probated the Estate.
The first step was the inventory. The Personal Representative filed an initial
inventory on August 18, 2022.7 Therein, the Personal Representative represented
that the Decedent’s assets consisted of one solely owned piece of real estate, two
solely owned bank accounts (the “Wells Fargo Accounts”), and two vehicles (a 2012
Mini Cooper (the “Mini”), and a 1964 Studebaker Avanti (the “Avanti”)), for a total
of $143,594.60 in probate assets (excluding the real estate, valued at $660,000.00).8
On November 15, 2022, the Personal Representative amended the inventory to
include additional, previously unidentified miscellaneous personal property
5 D.I. 6. 6 D.I. 9. 7 D.I. 11. 8 Id. ROW 26236-SEM February 5, 2025 Page 4 of 24
($6,050.00) and miscellaneous jewelry ($1,208.00).9 These additions brought the
probate assets up to $150,852.60.
After various extensions approved by the Sussex County Register of Wills,
the Personal Representative filed his first and final accounting on December 15,
2023 (the “Accounting”).10 Through the Accounting, the Personal Representative
represented that the value of certain probate assets had changed, such that the probate
assets overall decreased from $150,852.60 to $130,917.60.11 From that revised
starting point, the Personal Representative deducted $10,986.76 in administrative
expenses, $4,383.45 in debts of the Estate, $2,022.49 in funeral expenses, $8,265.00
in attorneys’ fees, and $8,000.00 for his commission.12 These deductions left
$96,039.15 remaining for distribution to the intestate heirs.13
The remaining beneficiaries of the Estate, the Grandchildren, were promptly
provided notice of the Accounting and informed of their right to file exceptions.14
As provided on the standard beneficiary notice form, the Grandchildren had “three
9 D.I. 15. 10 D.I. 17–22, 24. 11 D.I. 24. The largest decrease was for the Wells Fargo Accounts, which decreased by $18,133.00. Id. The values attributed to the Mini and miscellaneous personal property went up, while those for the jewelry and the Avanti went down. Id. 12 Id. 13 Id. 14 D.I. 33. ROW 26236-SEM February 5, 2025 Page 5 of 24
(3) months” from their notice, which was mailed on December 18, 2023, to file
exceptions to the Accounting.15 As that deadline approached, the Exceptants’
counsel withdrew from representing them.16 In doing so, counsel noted the
Exceptants would continue as self-represented litigants, implying that exceptions
may well be forthcoming.17 And they were.
On March 14, 2024, just a few days before the deadline, the Exceptants filed
their exceptions to the Accounting.18 The Exceptants take issue with: (1) allegedly
missing documentation to substantiate various categories identified in the
Accounting (the “First Exception”), (2) assets allegedly missing from the amended
inventory (the “Second Exception”), (3) the exclusion of $40,000.00, which was
purportedly gifted in checks to the Personal Representative and his son (the “Third
Exception”), (4) allegedly unsubstantiated cash reimbursements made to the
Personal Representative (the “Fourth Exception”), (5) the Personal Representative’s
claimed commission (the “Fifth Exception”), (6) the Personal Representative’s
conduct with the Estate’s tangible property (the “Sixth Exception”), (7) allegedly
missing documentation detailing the sale of the Estate’s assets (the “Seventh
15 Id. 16 D.I. 34. 17 Id. 18 D.I. 36. ROW 26236-SEM February 5, 2025 Page 6 of 24
Exception”), and (8) the “likely omission” of additional assets related to a pension
and the estate of Halvard Jr. (collectively the “Exceptions,” and each individually,
an “Exception”).19
Following standard procedure, the Chief Deputy Register of Wills, on March
14, 2024, notified the Personal Representative of the Exceptions and directed him to
respond under Court of Chancery Rule 197(b).20 The Register of Wills further
explained that only after the period for a response (30 days) would the case be
referred to the Court of Chancery for assignment to a judicial officer. The Personal
Representative responded to the Exceptions on April 17, 2024, largely denying the
allegations of wrongdoing, and offering to furnish specific documentation to the
Exceptants.21
After the Personal Representative’s response, this action was sent for
assignment. The Chancellor assigned it to me, and I promptly reviewed the docket
to determine if the matter may be amenable to mandatory mediation under Court of
Chancery Rule 174. Given the nature and extent of the Exceptions, and the relative
size of the Estate, I declined to refer this matter to mediation. Rather, on June 26,
19 Id. 20 D.I. 35. 21 D.I. 41. ROW 26236-SEM February 5, 2025 Page 7 of 24
2024, my chambers scheduled this matter for a final evidentiary hearing (the
Hearing) on October 23, 2024.22
As the parties geared up for the Hearing, the Exceptants, on September 23,
2024, filed a motion to compel (the “Motion”).23 Through the Motion, the Exceptants
seek an order requiring the Personal Representative to produce the Decedent’s bank
statements from the Wells Fargo Accounts from January 2022 through June 2022, a
June 2023 statement for another bank account, and receipts to substantiate the
Personal Representative’s reimbursements.24 The Exceptants also request
authorization to speak to organizations that managed the Decedent’s assets, as well
as the Court’s “support” with the Exceptants’ request for the Decedent’s tax returns
for the past three years.25
With the Hearing so close at hand, I issued a minute order on October 11,
2024, clarifying that the Motion would be addressed at and in connection with the
Hearing; I also set a deadline for the Personal Representative’s response thereto.26
The Personal Representative responded as and when directed, arguing that the
22 D.I. 42. 23 D.I. 43. 24 Id. 25 Id. 26 D.I. 52. ROW 26236-SEM February 5, 2025 Page 8 of 24
Exceptants failed to comply with Court of Chancery Rule 37, that granting the
Motion would burden the Personal Representative with needless additional
litigation, and that the documents requested by the Exceptants exceed the scope of
discovery.27
The Hearing went forward as scheduled. Thereat, I heard oral argument on the
Motion, and the parties built their record in support of, and opposition to, the
Exceptions.28 At the conclusion of the Hearing, I declined to order any post-hearing
briefing or schedule further argument and, instead, took this action under
advisement.
II. ANALYSIS
Through this report I address the Motion and the Exceptions. Both concern
the Personal Representative’s administration of the Estate. As part of estate
management, an administrator “is responsible for compiling the inventory of the
[d]ecedent’s estate, managing the [d]ecedent’s assets, and paying the [d]ecedent’s
debts.”29 Fiduciaries of Delaware estates also owe duties to the estate and its
beneficiaries. Indeed, administrators are “required to use good judgment in the
27 D.I. 55. 28 D.I. 60. 29 In re Nastatos, 2023 WL 8269833, at *7 (Del. Ch. Nov. 30, 2023) (citation and quotation marks omitted). ROW 26236-SEM February 5, 2025 Page 9 of 24
administration of the estate . . . and to act in all ways with good faith. [A personal
representative] is not an insurer of assets which come into his hands but he is
required to use ordinary care, prudence, skill and diligence[.]”30 “The administrator,
like a trustee, must ‘deal fairly with the beneficiaries’ and cannot place her interests
‘ahead of the interests of the [t]rust and its other beneficiaries.’”31
With any estate accounting, heirs and beneficiaries are afforded the
opportunity to object to all or part of an accounting through the exceptions process.
This right stems from the Delaware Constitution, which provides:
Exceptions may be made by persons concerned to both sides of every such account, either denying the justice of the allowances made to the accountant or alleging further charges against him or her; and the exceptions shall be heard in the Court of Chancery for the County; and thereupon the account shall be adjusted and settled according to the right of the matter and the law of the land.32
But this right is not boundless; it relates solely and wholly to challenges to the
financial administration of the probate assets of the Estate. Other estate-related
challenges, such as challenges to a decedent’s capacity to consent to pre-death
30 Del. Tr. Co. v. McCune, 80 A.2d 507, 511 (Del. Ch. 1951). 31 Thomas & Agnes Carvel Found. v. Carvel, 2008 WL 4482703, at *10 (Del. Ch. Sept. 30, 2008) (quoting In re Howell, 2002 WL 31926604, at *2 (Del. Ch. Dec. 20, 2002), aff’d, 970 A.2d 256 (Del. 2009)). 32 Del. Const. art. IV, § 32. ROW 26236-SEM February 5, 2025 Page 10 of 24
transactions, are not appropriate matters for exceptions to an estate accounting.33
Thus, the Exceptants’ allegations of forgery, undue influence, and other allegedly
improper conduct by the Personal Representative before the Decedent’s death and
before he stepped into his fiduciary role will not be addressed.
After quickly disposing of the Motion, I address the merits of the Exceptions
properly before me. Ultimately, I conclude that the Exceptions should be dismissed,
in large part, except for one portion of the Third Exception, which should be
sustained as further explained herein.
A. The Motion should be denied.
After I scheduled the Exceptions for the Hearing, the Exceptants filed the
Motion asking for an order from this Court compelling the production of three
categories of documents: (1) certain of the Decedent’s bank statements, (2) receipts
to substantiate the Personal Representative’s reimbursements, and (3) the
Decedent’s tax returns. Through the Motion, the Exceptants also seek access to
organizations used to manage some of the Decedent’s non-probate assets.
33 See, e.g., In re Fahey, 2022 WL 16556701, at *6 (Del. Ch. Oct. 31, 2022) (explaining that an “[e]xceptant’s attempt to challenge [a testator’s] capacity through exceptions to the [estate’s] inventory [was] procedurally improper” and that the exceptant “should have filed a civil action with the Register in Chancery”); In re Childres, 2021 WL 3283028, at *11, nn.125, 131 (Del. Ch. Aug. 2, 2021) (providing that exceptions to an accounting alleging undue influence and questioning the validity of testamentary documents were improperly brought when, among other reasons, the accounting did not “address, or refer to, any undue influence claim” or address the will’s validity). ROW 26236-SEM February 5, 2025 Page 11 of 24
The Motion was bound to fail from the get-go. A motion to compel requires a
predicate discovery request. Only “[w]hen a party has failed to comply with
reasonable discovery requests, [may] the requesting party . . . apply for an order
compelling discovery.”34 Despite having ample opportunity to engage in discovery
after filing the Exceptions (in March 2024) and before the Hearing (October 2024),
the Exceptants did not serve any discovery requests on the Personal Representative.
Thus, there is no outstanding discovery request to which I should or must compel
the Personal Representative’s compliance. The Motion should be denied.35
B. The Exceptions should be dismissed in part and sustained in part.
Excluding the out-of-bounds inquires, I now turn to the Exceptions, for which
the Exceptants bear the burden of proof. Although “the personal representative bears
34 Grace Bros. v. Siena Hldgs., Inc., 2009 WL 1547821, at *1 (Del. Ch. June 2, 2009). 35 In so holding, I recognize that the Exceptants are self-represented litigants entitled to some leeway and forgiveness. See Deutsche Bank Nat’l Tr. Co. Ams., as Tr. for Residential Accredit Loans, Inc., Mortg. Asset-Backed Pass-Through Certificates, Series 2007-QS6 v. Burley, 2022 WL 17261514, at *4 (Del. Ch. Nov. 29, 2022) (“[T]his Court views pro se filings with forgiving eyes.”). But that only goes so far. Under the circumstances presented here, even if I decided the Motion could and should be converted into a discovery request, I agree with the Personal Representative that such request would exceed the appropriate scope of discovery. In these estate proceedings, the generally broad scope of discovery applies (see Ct. Ch. R. 26), but only insofar as requests are related to the specific and narrow issues involved in exceptions to estate accountings. The Motion, if treated as a discovery request, far exceeds those bounds in, for example, requesting information regarding non-probate assets and taxes. For the in-bounds requests, I find the Personal Representative’s evidence and testimony at the Hearing sufficient to meet such needs. Thus, even with exceedingly forgiving eyes, the Motion, if treated as a pseudo-request, fails. ROW 26236-SEM February 5, 2025 Page 12 of 24
the initial burden of demonstrating that the account was properly prepared[,]”36 that
burden shifts when—as here—the exceptant seeks a surcharge.37 In such instances,
the exceptant “must demonstrate affirmatively that a surcharge is warranted.”38
Here, the parties agreed that the Exceptants bore the burden to prove their
Exceptions, because they sought to surcharge the Personal Representative for
allegedly missing, or misused, Estate assets. Holding the Exceptants to their burden,
I find the First, Second, Fourth, Fifth, Sixth, Seventh, and Eighth Exceptions should
be dismissed, but that the Third Exception should be sustained in part.
1. The Exceptions, in large part, should be dismissed.
The Exceptions largely fail. The Exceptants, through many of the Exceptions,
seek to hold the Personal Representative to an unreasonably high burden. They ask
this Court to find fault in customary and accepted practices that allow for the prompt
and efficient administration of Delaware estates. I decline their invitation to
reconsider, and reverse, these tried-and-true methods. The Exceptants have also
36 In re Rich, 2013 WL 5966273, at *1 (Del. Ch. Oct. 29, 2013); accord Ct. Ch. R. 198. This burden of proof “reflects the fact that the administrator of the estate stands in a fiduciary capacity to the beneficiaries.” In re Stepnowski, 2000 WL 713769, at *1 (Del. Ch. May 2, 2000). 37 “A surcharge is, essentially, a sanction against a personal representative requiring the personal representative to fund (or refund) the estate because the personal representative improperly or poorly handled the estate, engaged in self-dealing, or improperly depleted estate assets.” In re Clark, 2019 WL 3022904, at *7 (Del. Ch. July 9, 2019). 38 Stepnowski, 2000 WL 713769, at *1, n.1. ROW 26236-SEM February 5, 2025 Page 13 of 24
failed to meet their burden to prove that allegedly missing or misused assets existed
at the Decedent’s death, were probate assets, and were not appropriately accounted
for by the Personal Representative in the Accounting. And, finally, I find the
Personal Representative’s commission to be reasonable under the circumstances.
Thus, the bulk of the Exceptions, except for the Third Exception, which is addressed
below, should be dismissed.
a. The First, Second, and Seventh Exceptions should be dismissed because they are unfounded.
The Exceptants first contend that the Personal Representative failed to provide
documentation to support various expense categories identified in the Accounting.
The Accounting lists the expenses by category (such as administrative expenses) and
then breaks down, within each category, the expenses and total amount. Although
the Personal Representative could have been more detailed by listing expenses by
each individual bill, he need not do so; instead, he is required to accurately and fully
represent the Estate’s expenses.39 He did. Furthermore, the Personal Representative
provided a notarized affidavit in lieu of receipts, which is an accepted practice. He
further bolstered the affidavit at the Hearing with several checks and receipts which
39 Cf. In re Chambers, 2020 WL 3173032, at *2 (Del. Ch. June 12, 2020) (finding that the personal representative provided sufficient support for his expenses, which need only “accurately and fully” represent the estate’s expenses). ROW 26236-SEM February 5, 2025 Page 14 of 24
were admitted into evidence.40 Based on this record, the Exceptants have failed to
prove that the Personal Representative lacks the necessary support and, as such, the
First Exception should be dismissed.
The Exceptants next contend that the Personal Representative failed to include
certain assets in the Estate’s inventory—more specifically, an engagement ring and
desk. I see two problems with this grievance. First, I disagree that such a granular
level of detail is required. An administrator of a Delaware estate is not required to
list and have appraised “every scrap of garbage that may be found in a house after
someone dies[.]”41 Rather, a personal representative is required to “compil[e] the
inventory of [the] [d]ecedent's estate, manag[e] the [d]ecedent's assets, and pay[] the
[d]ecedent's debts.”42 Second, the record developed at the Hearing supports that,
more likely than not, neither of these purported assets were in the Decedent’s
possession when she passed.43 Thus, not only was the Personal Representative not
required to list these items in detail, but he cannot be found to have failed to include
40 PRX9–11. 41 In re Lomker, 1997 WL 907995, at *5 (Del. Ch. Dec. 15, 1997). 42 Dixon v. Joyner, 2014 WL 3495904, at *3 (Del. Ch. July 14, 2014). 43 Per the Personal Representative, whose testimony was credible, the Decedent gave the engagement ring to her grandson in or around June 2021, and both the Decedent and her husband gave the desk to their grandson before their deaths. Personal Representative Tr. 101:17–23, 102:2–16. ROW 26236-SEM February 5, 2025 Page 15 of 24
them when they were, most likely, not assets of the Estate anyway. The Second
Exception should be dismissed.
The final exception through which the Exceptants seek to impose an
unreasonably high bar on the Personal Representative is the Seventh Exception.
Through such, the Exceptants take exception to the lack of documentation detailing
the sale of Estate assets. But “[t]here is no obligation for [a personal representative]
affirmatively to seek out additional documentation beyond that necessary to comply
with his duties as administrator.”44 The Personal Representative was not required to
furnish additional documentation substantiating items’ final sale price, and the
record developed at the Hearing dispels any concerns that may arise from the dearth
of support attached to the Accounting.45 The Seventh Exception should be dismissed.
b. The Fourth, Sixth, and Eighth Exceptions should be dismissed because the Exceptants failed to meet their burden.
Through the Fourth Exception, the Exceptants argue that the Personal
Representative paid himself unsubstantiated cash reimbursements totaling over
$10,000.00. The Exceptants bore the burden of demonstrating as much and failed;
44 Dixon, 2014 WL 3495904, at *4. 45 E.g., Personal Representative Tr. 96:13–16 (explaining that the Decedent’s jewelry was sold when the Personal Representative went to the jeweler, who “offered to buy it and absorb the cost of the appraisal. So we just sold it then right there”). ROW 26236-SEM February 5, 2025 Page 16 of 24
they did not present any affirmative evidence or further explanation at the Hearing
in support. Thus, the Fourth Exception should be dismissed.
Through the Sixth Exception, the Exceptants contend the Personal
Representative acted inappropriately by moving and trying to sell certain Estate
assets, in addition to charging the Estate for the expenses incurred in connection
therewith. But the record developed at the Hearing supports that the Personal
Representative was appropriately handling the care and disposition of the Estate
assets.46 The Exceptants presented no credible showing to the contrary. Accordingly,
the Sixth Exception should be dismissed.
Finally, through the Eighth Exception, the Exceptants contend that the
Personal Representative “likely omi[tted]” additional assets from the Estate. As with
the Fourth and Sixth Exceptions, the Exceptants failed to present affirmative
evidence or further explanation at the Hearing. They have, thus, failed to meet their
burden and the Eighth Exception should be dismissed.
c. The Fifth Exception should be dismissed because the Personal Representative’s commission is appropriate.
The Exceptants next challenge the Personal Representative’s requested
$8,000.00 commission. Commissions serve as compensation to a personal
46 E.g., id. at 71:8–24 (explaining that an objected-to expense for the Pennsylvania DMV was the product of the Personal Representative’s efforts to have the Avanti sold). ROW 26236-SEM February 5, 2025 Page 17 of 24
representative for their services in collecting assets, handling bills, performing
required duties, and for any trouble and incidental expenses incurred as a result.47
Under Rule 192, this Court looks at several factors to determine if a commission is
reasonable. Those factors are:
[(1)] the time spent, [(2)] the risk and responsibility involved, [(3)] the novelty and difficulty of the questions presented, [(4)] the skill and experience of the personal representative . . ., [(5)] any provisions of the will regarding compensation, [(6)] comparable rates for similar services in the locality, [(7)] the character and value of the estate assets, [(8)] the character and value of assets which are not part of the probate estate but which must be valued and reported on any federal, state, local, or foreign death tax return, [(9)] the time constraints imposed upon the personal representative and the attorney, [(10)] the loss of other business necessitated by acceptance of the administration, and [(11)] the benefits obtained for the estate by the administration.48
The Exceptants’ challenges do not align with this 11-factor framework. In
essence, their argument is that the Personal Representative acted in an improper
manner at the expense of the Estate and the Grandchildren, rendering the $8,000.00
commission unreasonable; I do not find this argument persuasive. Rather, I find the
requested commission reasonable under the circumstances.
During the Hearing, the Personal Representative testified that he spent
roughly 154 hours organizing the Estate, cleaning the Decedent’s house, preparing
47 In re Whiteside, 258 A.2d 279, 282 (Del. 1969). 48 Ct. Ch. R. 192(b). ROW 26236-SEM February 5, 2025 Page 18 of 24
it for sale, and meeting with various personnel to keep the Estate’s administration
on track, all while handling a number of other obligations.49 The Personal
Representative also incurred out-of-pocket expenses, including in connection with
the travel required to administer the Estate from his home in Tatamy, Pennsylvania,
which is a six-hour round trip drive to the Decedent’s house.50 Further, the Personal
Representative offered into evidence a statement listing, in detail, his performed
duties associated with maintaining the Estate from March 17, 2022 to June 13, 2023,
along with the amount of time spent on each task.51 Those tasks included, for
example, “major clean-up . . . until [2:00 a.m.]” in the Decedent’s house, addressing
various tax needs, and handling title issues.52
On this record, I find that the commission is reasonable, and the Fifth
49 Personal Representative Tr. 93:11–14; see PRX12. 50 Personal Representative Tr. 67:23–24, 88:8–12, 93:11–19; see PRX9 at 95–115. 51 PRX12. At a certain point, perhaps the “day [he] found out [the Exceptants] got a lawyer[,]” the Personal Representative stopped tracking his time spent on the Estate because he recognized he was “under a microscope of scrutiny and everything [he] did was going to be scrutinized” and it was no longer “worth it to [him].” Personal Representative Tr. 94:9–16, 122:14–17. 52 PRX12. ROW 26236-SEM February 5, 2025 Page 19 of 24
2. The Third Exception should be dismissed in part and sustained in part.
Through the Third Exception, the Exceptants argue that checks written shortly
before the Decedent’s death, but cashed thereafter, were improperly excluded from
the Personal Representative’s probate assets.53 I agree, in part.54
The Exceptants’ concerns arise from three checks written from the Wells
Fargo Accounts that total $40,000.00. The first check is Check #4813, which was
dated March 14, 2022, and made payable to the Personal Representative in the
amount of $15,000.00 (“Check One”).55 The second check, Check #4814, was also
dated March 14, 2022 and made payable to the Personal Representative, for
$5,000.00 (“Check Two”).56 Both Checks One and Two were deposited on March
15, 2022 at 2:52 p.m., but did not clear until an unknown time on the Decedent’s
date of death (March 16, 2022).57 The final check, Check #4820, was dated March
1, 2022, and made payable to Christian Solberg, the Personal Representative’s son,
53 See Eric Tr. 49:15–18. 54 As addressed above, I do not reach the Exceptants’ concerns about the Decedent’s motivations for writing or authorizing these checks or any alleged capacity issues or undue influence involved. My analysis, in the exceptions context, is limited to whether the funds withdrawn on these checks are or are not probate assets that should have been included in the Decedent’s Estate. 55 EXE. 56 Id. 57 See id. ROW 26236-SEM February 5, 2025 Page 20 of 24
for $20,000.00 (“Check Three,” and together with Checks One and Two, the
“Checks”).58 Check Three was not deposited until March 16, 2022, at 3:53 p.m.,
nearly 12 hours after the Decedent’s 4:26 a.m. death, and was not paid until the next
day on March 17, 2022.59
The Exceptants argue that the Checks are not valid pre-death gifts and should
have been included in the probate assets. I agree regarding Check Three, but not
Checks One and Two.
To answer whether the Checks should or should not be included in the
Decedent’s probate estate, I look to Delaware gift law. A valid inter vivos gift
generally requires two things: (1) the donor’s manifested intent to make a gift, and
(2) actual or constructive delivery of the gift to the donee.60 The Checks reflect the
Decedent’s manifested intent;61 the more difficult question is delivery.
As revocable instruments, checks are not deemed delivered until the bank
issues payment thereon.62 Stated another way, once a stop-payment order can no
58 Id. 59 Id. 60 See Honaker v. Est. of Haas, 2013 WL 1459196, at *2 (Del. Ch. Apr. 11, 2013). 61 Again, the Exceptants’ allegations and concerns regarding the writing or authorization of the Checks is not something that can be properly prosecuted in connection with exceptions to an estate accounting. Setting these concerns aside, the record from the Hearing supports that the Decedent manifested her intent to make gifts through the Checks. 62 Honaker, 2013 WL 1459196, at *2. ROW 26236-SEM February 5, 2025 Page 21 of 24
longer be issued, a gift by check is complete.63 Under Title 6 of the Delaware Code,
Section 4-303, a stop-payment order, among others, is too late if received after the
earliest of the following:
(1) The bank accepts or certifies the item; (2) The bank pays the item in cash; (3) The bank settles for the item without having a right to revoke the settlement under statute, clearing-house rule, or agreement; (4) The bank becomes accountable for the amount of the item under Section 4-302 dealing with the payor bank’s responsibility for late return of items; or (5) With respect to checks, a cutoff hour no earlier than one hour after the opening of the next banking day after the banking day on which the bank received the check and no later than the close of that next banking day or, if no cutoff hour is fixed, the close of the next banking day after the banking day on which the bank received the check.
Vice Chancellor Glasscock offered further insight in Honaker v. Estate of Haas,
2013 WL 1459196, at *2 (Del. Ch. Apr. 11, 2013), noting that “[i]n Delaware, and
in the majority of jurisdictions, when a personal check is given to a donee with the
intent to make a gift, there is no delivery of the gift until the funds needed to honor
that check are available to be withdrawn from the account and the check is presented
and paid. Because checks are revocable until they are cashed, the transfer is not final,
and there has been no delivery, until payment.” Although the facts of Honaker depart
63 See 6 Del. C. § 4-303(a); see generally Honaker, 2013 WL 1459196, at *2. ROW 26236-SEM February 5, 2025 Page 22 of 24
from those here insofar as in Honaker there was “[in]sufficient funds in the account
on which the check was drawn[,]”64 its rationale still applies.65
That brings me to the Checks. Checks One and Two were deposited before
the Decedent’s death but were paid at an unspecified time on the day of the
Decedent’s passing. The Decedent died at 4:26 a.m. on March 16, 2022, meaning
that for the checks to be delivered and completed gifts, they would have had to be
paid out before 4:26 a.m. Whether that happened remains unknown, and that
uncertainty falls on the parties with the burden of proof—the Exceptants. Absent a
record demonstrating that Checks One and Two were paid out after the Decedent’s
death, the Exceptants have failed to prove that the Personal Representative should
be surcharged for those amounts.
64 Honaker, 2013 WL 1459196, at *1. 65 Although the Personal Representative and Exceptants acknowledged the Honaker case, they fixated moreso on Estate of DeMuth v. Commissioner of Internal Revenue, T.C.M. (RIA) 2022-072, 2022 WL 2679050 (T.C. 2022), which was corrected and superseded by T.C.M. (RIA) 2022-072, 2022 WL 3051544 (T.C. 2022), and then affirmed non- precedentially by the Third Circuit in 132 A.F.T.R.2d 2023-5122, 2023 WL 4486739 (3d Cir. July 12, 2023). In DeMuth, the United States Tax Court was tasked with deciding whether, under a Pennsylvania statute for determining when a stop-payment order is too late, which is nearly identical to Delaware’s, checks, paid after the decedent’s death, constituted completed gifts. Id. at *2; see 13 Pa. Cons. Stat. § 4303(a). Under Pennsylvania law, for there to be completion of a gift there must be “irrevocable delivery, actual or constructive,” which is also akin to Delaware law requiring “actual or constructive delivery.” The court in DeMuth explained that because “a stop-payment order could have theoretically been placed on any of those checks before final payment[,]” none represented completed gifts. 2022 WL 3051544, at *4. I adopt a similar interpretation of our statute, based on my reading of Honaker. ROW 26236-SEM February 5, 2025 Page 23 of 24
Check Three is a different story, though. The record from the Hearing reflects
that Check Three was deposited 12 hours after the Decedent’s death and was not
paid until March 17, 2022.66 As discussed in Honaker, because Check Three was not
cashed (and in fact, was not even deposited) before the Decedent’s death, Check
Three was not a completed gift at the time the Decedent passed, and the funds
transferred post-death should have been recouped and included in the Decedent’s
Estate. Because it was the Personal Representative’s responsibility to marshal the
Estate, the Personal Representative should be surcharged for these improperly
excluded funds ($20,000.00). This surcharge will require an amended accounting,
which should be filed within thirty (30) days of this report becoming an order of the
Court.
III. CONCLUSION
For the foregoing reasons, I recommend the Motion be denied and the
Exceptions be dismissed in part and sustained in part. The Motion is unfounded,
absent any outstanding discovery requests. And, regarding the Exceptions, by and
large, the Personal Representative properly probated the Decedent’s Estate. The only
exception is regarding the last-minute gift to the Personal Representative’s son for
$20,000.00. Because that check was not a completed gift at the time of the
66 EXE. ROW 26236-SEM February 5, 2025 Page 24 of 24
Decedent’s death, those funds should have been recouped by the Personal
Representative and included in the Decedent’s probate Estate. The failure to do so
falls on the Personal Representative, who should be surcharged and required to file
an amended accounting to address same.67
This is a final report, and exceptions may be filed under Court of Chancery
Rule 144.
Respectfully submitted,
/s/ Selena E. Molina
Senior Magistrate in Chancery
67 Through that amended accounting, I expect the Personal Representative will update the requested attorneys’ fees. In doing so, the Personal Representative may include his proposal, raised for the first time at the Hearing, that the fees be attributed to the Exceptants. Tr. 141:1–11. I will not prejudge the propriety of any increased fees or fee shifting and leave the parties to explore the matter through a more appropriate posture (which will include notice to all interested parties and the opportunity for exceptions).