Estates of Peter Karoly, wife, worth $10 million, docs say
After an epic seven-year legal battle that divided a prominent Lehigh Valley family and contributed to the downfall of its most well-known member, the estates of Allentown medical malpractice attorney Peter Karoly and his wife are worth more than $10.1 million, according to financial filings.
Even with staggering administrative and legal expenses, Karoly's legacy remains worth $5.22 million today, and his wife, Dr. Lauren Angstadt's, is worth $4.93 million, said accountings submitted this week in Northampton County Court on behalf of their estates' court-appointed administrators.
Though a lot of money, that's a far cry from the $40 million suggested by a financial document discovered after Karoly and Angstadt's unexpected deaths in 2007. And an attorney for the beneficiaries said they plan to contest the administrative costs, which reach several million dollars and which he called "astronomical."
"It's excessive and it's shocking and it's our intention to challenge and to object to this accounting," said the lawyer, Robert Goldman.
When Karoly and Angstadt were killed in their 50s in a private plane crash in Massachusetts, they left behind a tangled financial web that included a law practice, a dental practice, real estate holdings and several medical businesses in South Carolina.
Their deaths also sparked a bitter family feud over their wealth, with Karoly's sisters accusing one of their brothers — now disgraced and jailed attorney John Karoly Jr. — of forging the 2006 wills that he submitted after the couple's deaths.
Forgery also was the conclusion reached by a federal grand jury that indicted him, his older son J.P. Karoly, and Dr. John Shane, who witnessed the documents — though a plea bargain by John Karoly Jr. in a larger criminal probe led to charges in the wills being dismissed. And after a lengthy civil trial in 2011, a special master found the 2006 wills were genuine, a recommendation upheld in June by the Superior Court at appeal.
Under the wills, Peter Karoly's and Angstadt's estates will be split eight ways among his nieces and nephews — including John Karoly Jr.'s sons, J.P. and Joshua Karoly. That works out to roughly $1.25 million each before taxes, though those numbers don't include the bills the beneficiaries incurred hiring Goldman and another lawyer, Philip Lauer, for their courtroom fights.
"Phil and I have been working without payment to date," Goldman said Friday. "But I can assure everyone that our fees are much more modest than those of the administrators and estate lawyers."
The administrator of Peter Karoly's estate, retired Lehigh County judge Thomas Wallitsch, did not return a phone call seeking comment, nor did Harry Newman, a Hanover Township, Lehigh County, lawyer who administered Angstadt's estate.
Their final accountings still represent a larger inheritance than the heirs' attorneys had publicly suggested the estates would wind up being worth. Last year, Lauer complained that the administrative costs had depleted the legacy to the point that only roughly $3 million remained, under a preliminary accounting.
The final figures were filed in orphans court on Monday and Tuesday.
Peter Karoly's estate totaled $14.6 million, brought down by reductions that included $3.6 million in debts, $2.2 million in federal and state inheritance taxes, $2 million in administrative expenses and $1.4 million in legal and accounting fees.
Angstadt's estate totaled $8.1 million, tamped in part through $1.2 million in debts; $1 million in taxes; $594,000 in administrative expenses and $445,000 in legal and accounting fees.
The expenses the estates faced included everything from lawn care at properties the couple owned to utility and real-estate tax bills, country club fees, appraisals and locksmiths. The costs spanned several states, given Peter Karoly's and Angstadt's place of death and business interests outside of Pennsylvania.
Among the fees:
•Wallitsch and his former law firm, Norris McLaughlin & Marcus, billed $867,000 to Peter Karoly's estate.
•Angstadt's estate was billed $267,000 from Harry Newman & Associates and $111,000 from Steven Molder, an Easton attorney.
•ParenteBeard, an accounting company, charged $413,000 to the two estates.
Originally, John Karoly Jr. had an interest in the estates, but he renounced it in 2010 as part of a plea agreement with federal prosecutors.
Now 64, he is serving 61/2 years in federal prison for failing to pay taxes on more than $5 million of income and other financial crimes. He is incarcerated at a medium-security facility in Butner, N.C., and isn't scheduled to be released until May 2016, according to the federal Bureau of Prisons.
riley.yates@mcall.com
Twitter @riley_yates
610-253-5751
Peter Karoly's and Lauren Angstadt's estates are valued at $10.1 million, according to financial filings. Here are some of the costs that pushed that number down:
Inheritance taxes: $3.21 million
Administrative expenses: $2.62 million
Legal, accounting fees: $1.85 million
Source: Northampton County Orphans Court filings
Even with staggering administrative and legal expenses, Karoly's legacy remains worth $5.22 million today, and his wife, Dr. Lauren Angstadt's, is worth $4.93 million, said accountings submitted this week in Northampton County Court on behalf of their estates' court-appointed administrators.
"It's excessive and it's shocking and it's our intention to challenge and to object to this accounting," said the lawyer, Robert Goldman.
When Karoly and Angstadt were killed in their 50s in a private plane crash in Massachusetts, they left behind a tangled financial web that included a law practice, a dental practice, real estate holdings and several medical businesses in South Carolina.
Forgery also was the conclusion reached by a federal grand jury that indicted him, his older son J.P. Karoly, and Dr. John Shane, who witnessed the documents — though a plea bargain by John Karoly Jr. in a larger criminal probe led to charges in the wills being dismissed. And after a lengthy civil trial in 2011, a special master found the 2006 wills were genuine, a recommendation upheld in June by the Superior Court at appeal.
"Phil and I have been working without payment to date," Goldman said Friday. "But I can assure everyone that our fees are much more modest than those of the administrators and estate lawyers."
The administrator of Peter Karoly's estate, retired Lehigh County judge Thomas Wallitsch, did not return a phone call seeking comment, nor did Harry Newman, a Hanover Township, Lehigh County, lawyer who administered Angstadt's estate.
Their final accountings still represent a larger inheritance than the heirs' attorneys had publicly suggested the estates would wind up being worth. Last year, Lauer complained that the administrative costs had depleted the legacy to the point that only roughly $3 million remained, under a preliminary accounting.
The final figures were filed in orphans court on Monday and Tuesday.
Peter Karoly's estate totaled $14.6 million, brought down by reductions that included $3.6 million in debts, $2.2 million in federal and state inheritance taxes, $2 million in administrative expenses and $1.4 million in legal and accounting fees.
Angstadt's estate totaled $8.1 million, tamped in part through $1.2 million in debts; $1 million in taxes; $594,000 in administrative expenses and $445,000 in legal and accounting fees.
The expenses the estates faced included everything from lawn care at properties the couple owned to utility and real-estate tax bills, country club fees, appraisals and locksmiths. The costs spanned several states, given Peter Karoly's and Angstadt's place of death and business interests outside of Pennsylvania.
Among the fees:
•Wallitsch and his former law firm, Norris McLaughlin & Marcus, billed $867,000 to Peter Karoly's estate.
•Angstadt's estate was billed $267,000 from Harry Newman & Associates and $111,000 from Steven Molder, an Easton attorney.
•ParenteBeard, an accounting company, charged $413,000 to the two estates.
Originally, John Karoly Jr. had an interest in the estates, but he renounced it in 2010 as part of a plea agreement with federal prosecutors.
Now 64, he is serving 61/2 years in federal prison for failing to pay taxes on more than $5 million of income and other financial crimes. He is incarcerated at a medium-security facility in Butner, N.C., and isn't scheduled to be released until May 2016, according to the federal Bureau of Prisons.
riley.yates@mcall.com
Twitter @riley_yates
610-253-5751
Peter Karoly's and Lauren Angstadt's estates are valued at $10.1 million, according to financial filings. Here are some of the costs that pushed that number down:
Inheritance taxes: $3.21 million
Administrative expenses: $2.62 million
Legal, accounting fees: $1.85 million
Source: Northampton County Orphans Court filings
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