Justia Trusts & Estates Opinion Summaries

Articles Posted in Supreme Court of New Jersey
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Walter and Mary Van Riper transferred ownership of their marital home to a single irrevocable trust. Walter passed away shortly after transfer of the property to the trust. Six years later, after Mary passed away, the trustee distributed the property to the couple’s niece. In this appeal, the issue presented for the New Jersey Supreme Court was whether the New Jersey Division of Taxation (Division) properly taxed the full value of the home at the time of Mary’s death. Walter and Mary directed that, if sold, all proceeds from the sale of their residence would be held in trust for their benefit and would be utilized to provide housing and shelter during their lives. Walter died nineteen days after the creation of the Trust. Mary died six years later, still living in the marital residence. Mary’s inheritance tax return reported one-half of the date-of-death value of the marital residence as taxable. However, the Division conducted an audit and imposed a transfer inheritance tax assessment based upon the entire value of the residence at the time of Mary’s death. Mary’s estate paid the tax assessed but filed an administrative protest challenging the transfer inheritance tax assessment. The Division issued its final determination that the full fair market value of the marital residence held by the Trust should be included in Mary’s taxable estate for transfer inheritance tax purposes. The Appellate Division affirmed the Tax Court’s conclusion, rejecting the estate’s argument that transfer inheritance tax should only be assessed on Mary’s undivided one-half interest in the residence. The Supreme Court agreed with both the Tax Court and the Appellate Division that the Division properly taxed the entirety of the residence when both life interests were extinguished, and the remainder was transferred to Marita. The property’s transfer, in its entirety, took place “at or after” Mary’s death, and was appropriately taxed at its full value at that time. “In light of the estate-planning mechanism used here, any other holding would introduce an intolerable measure of speculation and uncertainty in an area of law in which clarity, simplicity, and ease of implementation are paramount.” View "Estate of Mary Van Riper v. Director, Division of Taxation" on Justia Law

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This appeal centered on challenges to several documents and disbursements that were purportedly executed by Adrian Folcher in the closing days of his life. Petitioner Bernice Tambascia-Folcher, Folcher's wife and a beneficiary, used that relationship to commit a pattern of fraud, forgery, and undue influence near the end of his life. After the conclusion of a lengthy estate contest, the trial court invoked that relationship, coupled with its finding of undue influence, to shift the Estate's counsel fees to Bernice. The issue for the Supreme Court's review was whether it should expand the narrow exception to the American Rule created in "In re Niles Trust," (176 N.J. 282 (2003)). After review of the trial court record, the Supreme Court declined to expand the Niles exception to a person who did not owe a fiduciary responsibility to the Estate and its beneficiaries, no matter how repugnant the conduct. "Because that confidential relationship endowed Bernice with an obligation to only her husband, and not the Estate, a fee award was not the proper vehicle to do equity. The trial court had other, unused means at its disposal for that." The Court remanded this case back to the trial court to vacate the fee award and to allow the court to consider other equitable relief that was foregone because fee-shifting mistakenly became an integral part of the court's equitable remedy. View "In the Matter of the Estate of Adrian J. Folcher" on Justia Law