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Decedent Intended for Estate to Cover Inheritance Taxes

The Supreme Court of Nebraska holds that a trust showed clear intent for the decedent’s estate to pay the inheritance taxes. In re the Michael Hessler Living Trust (Neb. No. S-23-472, May 10, 2024).

Michael Hessler created a trust, leaving his home to his girlfriend, Lori Miller, and the residuary to his three children. Because he and his girlfriend never married, transferring the house to her incurred higher inheritance taxes. The children wanted her to pay these taxes, whereas she argued the taxes should come from the estate.

The trust provided that “the Successor Trustee shall pay from this trust all inheritance and estate taxes due by reason of the Settlor’s death irrespective of whether such taxes are in respect of the trust property.” This immediately preceded a section on the payment of expenses and debts.

The county court determined that the residue of the estate should pay all inheritance taxes. The children argued that the beneficiaries should be responsible for the taxes proportionally. This would financially benefit them.

Read more about this ruling.

If you have questions about how taxes will be paid from your estate upon your passing, give our office a call at (605) 275-5665 and schedule a free consultation with one of our attorneys.