NJ Inheritance Tax is computed on the clear market value of property transferred, valued at the date of death. In the Estate of Claire Schinestuhl,the NJ Division of Taxation determined that the shares of a publicly traded company inherited by the decedent, Claire, from her brother, Prescott Schinestuhl must be separately valued as of the date of Claire\u2019s death and not about two years later when the sale proceeds of the shares were distributed by her brother\u2019s estate.\u00a0<\/p>\n
On September 13th<\/sup>, 2004, Prescott Schinestuhl died, and left\u00a0 his entire estate to his sister, Claire and appointed her Executrix of his Will. As Executrix, Claire applied to Essex County Surrogate\u2019s Court for probate of Prescott\u2019s will. Probate was denied, on October 28, 2004 because\u00a0 Prescott\u2019s Will was \u201cnot executed in manner and form as required by law.\u201d Soon after the denial, on November 7th<\/sup>, 2004, Claire died testate. Her will, probated December 22, 2004 appointed her cousin, Mary Acquardo (\u201cPlaintiff\u201d), as executrix. On September 16, 2005, the New Jersey Superior Court granted Plaintiff letters of administration to Prescott\u2019s Will in addition to Claire\u2019s estate. When Plaintiff filed the New Jersey Resident Inheritance Tax Return for the Estate of Prescott in October 2005, 22,121 shares of Paxar, a publicly traded company, \u00a0were valued at $477,371; the value at the time of Prescott\u2019s death.<\/p>\n In January 2007, Plaintiff filed a New Jersey residence inheritance tax return for Claire\u2019s estate. Included in Claire\u2019s estate were the 22,121 of Paxar valued at $395,046, the value of the Paxar shares on October 12, 2006, the day the shares (from Prescott\u2019s inheritance) were liquidated to distribute the proceeds to Claire\u2019s estate.<\/p>\n Plaintiff argued that there could be simply \u201cno value\u2026.on Claire\u2019s inheritance until after her interest was determined by the judicial decision\u201d.\u00a0 Furthermore, Plaintiff contended that the value of Claire\u2019s interest was a contingent interest, with an unascertainable value as of her death because the Surrogate denied\u00a0 probate.<\/p>\n In Estate of Claire Schinestuhl v. Director, Division of Taxation, February 2, 2012, the plaintiff unsuccessfully attempted to misconstrue this contingency concept as well as other valuation rules. The Court refuted her claims, citing a previous case, Estate of Franko v. Director, in which the court interpreted the term \u201ccontingent interest\u201d as one where \u201cno present interest exists, and that whether such interest or right will ever exist depends on a future uncertain event.\u201d<\/span> An interest is contingent when the Will itself makes a conditional bequest. The fact that Prescott\u2019s Will was not probated as of Claire\u2019s death did not make Claire\u2019s interest in Prescott\u2019s assets contingent or conditional.<\/p>\n The Court valued the stock at the market value at the date of Claire\u2019s death and not about two years later when the sale of the proceeds were distributed by her brother\u2019s estate. The valuation date for NJ Inheritance Tax purposes is the date of death and neither appreciation nor decline in asset values thereafter has any bearing on the determination of the tax.<\/p>\n","protected":false},"excerpt":{"rendered":" NJ Inheritance Tax is imposed on fair market value of assets as of decedent’s date of death. Neither appreciation nor decline in asset values thereafter has any bearing on the determination of the tax. A Will dispute or Probate issue doesn’t make an interest in an inheritance contingent or conditional.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30,31,35,6,13,25],"tags":[52,82,150],"class_list":{"0":"post-423","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business-valuations","7":"category-business-valuations-litigation-support","8":"category-estate-taxes","9":"category-estate-trusts-guardianships","10":"category-litigation-support","11":"category-taxes-litigation-support","12":"tag-business-valuations","13":"tag-estate-taxes","14":"tag-nj-inheritance-taxes","15":"entry"},"_links":{"self":[{"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=423"}],"version-history":[{"count":0,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/423\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ua-cpas.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}