Legal Question in Wills and Trusts in New Jersey
Inheritance taxes - No instructions in will
My uncle recently died. His will isn't specific about state inheritance taxes.
He left me (Co-executor/nephew) his fully paid condo. He left two nieces $10,000 each. Monies to be split between me and 4 other nephews. (about $40,000 each)
Question - Since I was the only one left the condo, the other four nephews are claiming that I should pay the estate's taxes for appraised amount of condo (15% of approx. $60M).
It is my understanding that ALL of the estate's taxes on property and monies are paid by estate and then the remainder of the money is distributed to the 4 nephews. (2 nieces still get $10,000 net each)
Any advice appreciated.
1 Answer from Attorneys
Apportionment of Inheritance Taxes
The general rule is that a beneficiary is obligated to pay that percentage of the total tax as the value of his bequest is in comparison to the value of the taxable estate. Read literally, this would mean that not only do your cousins owe their proportionate share of the total tax but that the 2 nieces do also. However, it could be argued that a specific bequest of $10.000.00 each amounts to an 'instruction' that the nieces receive the stated amounts without deduction for taxes and that what would've been their share is paid from the residuary estate (i.e. the balance of the estate assets). This is set out in a statute at N.J.S. 3B:24-1 and the sections that follow which contain a formula for computation of the tax but you should consult a NJ attorney for specific guidance and possible further research on this issue before taking action.
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