Also known as: death taxes · estate tax · inheritance tax
Written by attorneys · grounded in primary & secondary sources — see below
A tax imposed on the transfer of property upon a person's death. The term encompasses both estate taxes levied on the decedent's estate and inheritance taxes levied on recipients.
Devon Drake serves as personal representative for his uncle's estate. After paying all presented claims and administration expenses, Devon files a sworn closing statement that fails to address the federal estate tax due on the probate assets. Because the statement does not specify any arrangement for the unpaid death tax, the court holds the filing ineffective and refuses to terminate Devon's appointment.
David Dawson's estate claims a marital deduction for a trust benefiting his surviving spouse. The probate court interprets state law to allow the deduction. Federal authorities later challenge the deduction amount. The Supreme Court holds that the state court's construction controls only if it reflects the highest state court's probable ruling on the death tax issue.
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Dylan Duffy creates a trust giving the trustee broad powers to invade principal for the beneficiary's comfort. After Duffy's death, the IRS includes the trust assets in his gross estate. The court finds the powers equivalent to ownership and therefore subject to federal death tax.
Damian Decker donates land to a church that uses part of the parcel for religious purposes and leases the remainder commercially. The city denies a full property tax exemption. The Supreme Court upholds the partial exemption, distinguishing the death tax context from ongoing property taxation of mixed-use religious holdings.
Dustin Donovan inherits an apartment building from his mother with a low original basis. Upon her death the property receives a stepped-up basis equal to fair market value. When Dustin later sells the building, the court applies the death tax valuation rules to determine his taxable gain.
Derek Douglas names his estate as beneficiary of a large life insurance policy. After his death the proceeds are paid directly to the estate. The court includes the full amount in the taxable estate, confirming that the death tax reaches insurance payable to the decedent's estate.
The term refers to estate taxes and inheritance taxes that must be paid or provided for before an estate can be closed under the Uniform Probate Code. A closing statement must address these taxes unless an exception is noted.
The representative must either state that the estate was distributed subject to possible liability with distributee consent or describe in detail other arrangements made to accommodate the taxes. Failure to do so renders the statement ineffective.
No. The federal estate tax reaches both probate assets and certain nonprobate transfers such as revocable trust property and life insurance proceeds payable to the estate.
A court may modify the document when the donor's tax objectives are established by a preponderance of the evidence and the modification does not violate the donor's probable intent.
…to Alamo Heights and like school districts but almost none to Edgewood and those other districts with a low per-pupil real estate tax base. In these latter districts, no matter how desirous parents are of supporting their schools with greater revenues, it is impossible to do so through the use of the real estate property…