Mellon Heir’s Estate Denied $29 Million Pennsylvania Tax Refund

Billionaire Richard Scaife’s estate owes Pennsylvania $29 million in inheritance taxes on a $200 million settlement resolving his children’s claims to the Mellon banking, oil, and aluminum fortune, a state appeals court affirmed.

The Pennsylvania Commonwealth Court Tuesday rejected the estate’s attempt to deduct payments made under agreements Scaife made to indemnify trustees who kept secret from his children his withdrawal of $400 million from the trust to fund his media interests.

“The conflicts of interest here are manifest,” Judge Patricia A. McCullough wrote in an unpublished opinion, referring to one of the trustees who was also Scaife’s close ...