In re Estate of Bracken

The Estates of Barbara J. Nelson and Sharon M. Bracken challenged the efforts of the Washington State Department of Revenue (DOR) to treat them as having engaged in a present taxable transfer of assets that were actually transferred years ago by Ms. Nelson’s and Ms. Bracken’s late husbands’ estates. DOR relied on the legislature’s adoption in 2005 of definitions from the federal estate tax regime. Upon review, the Supreme Court held that DOR exceeded its authority in enacting regulations that allowed it to treat transfers completed by William Nelson and Jim Bracken years ago as if the estates had elected to defer state estate tax on the transfers, to be paid by their wives’ estates. DOR stood on a different footing than the United States Treasury; "DOR must rely on the asserted authority of our legislature to tax transfers years after the fact absent any deferral agreement by the taxpayer." The Court reversed the trial court and directed summary judgment be entered in favor of the Estates. View "In re Estate of Bracken" on Justia Law