Inheritance Tax is Based in the Transfer as Indicated in the Will and Not Settlement Agreement Involving A Will Contest

• Thursday, August 21, 2014
• Category: Wills, Trusts and Estate Litigation

In the estate tax litigation case of DeRosa v. Director, Div of Taxation, 35-5-4752, Tax Ct, New Jersey, the Defendant, Director of the Division of Taxation, (“Director”) moved for summary judgment on Plaintiff’s, Peter DeRosa’s (“Mr. DeRosa”) complaint that challenged the amount of Transfer Inheritance Tax owed pursuant to N.J.S.A. 54:34-1. Mr. DeRosa filed a cross-motion for summary judgment. The sole legal issue before the court was whether the Director must consider a settlement agreement, which resolved a will contest and affected the transfers to beneficiaries, when calculating the Transfer Inheritance Tax. Following the holding of Pope v. Kingsley, 40 N.J.168 (1963), agreements resolving will contests do not affect the assessment of Transfer Inheritance Tax, which is made based on the transfers as indicated in the will. Accordingly, the court granted the Director’s Motion for Summary Judgment and denied Mr. DeRosa’s Cross-Motion.

Reference: Case & Analysis, New Jersey Law Journal, 217N.J.L.J.467 (August 11, 2014)

Filed Under: Estate Law; Trust & Estates; Tax Controversy and Litigation

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