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In estate case, Tax Court upholds ruling against state

August 12, 2015

A probate court ruled correctly when it denied the state’s argument that distributions to heirs from a trust established in 2008 should have been subject to Indiana’s estate tax, which has since been abolished.

The Indiana Tax Court on Wednesday affirmed a Fountain Circuit Court ruling in favor of the heirs in Indiana Department of State Revenue, Inheritance Tax Division v. Steven B. McCombs, Executor of the Estate of Janice Hamblin, 49T10-1403-TA-6. The court ordered that the estate was entitled to a refund of inheritance tax paid.

The issue before the Tax Court was whether it was Janice Hamblin’s intent to transfer interests in life estates rather than annuities to her husband, Larry Hamblin, and daughter, Misty Snuffer. Terms of the will called for weekly payments from a trust; the Department of Revenue claimed this was a taxable annuity.

“The Court finds that the language of Janice’s Will as a whole demonstrates her intent to convey life estates to Larry and Misty,” senior Judge Thomas Fisher wrote. “As a result, the Probate Court did not err when it determined that for Indiana inheritance tax purposes, those interests where to be valued as life estates and not annuities.”


 

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