The decedent’s will divided the probate estate between two beneficiaries. The probate estate was one-fifth the value of the non-probate assets which also passed to the two will beneficiaries. The Nebraska inheritance tax on the beneficiary who was also named as the personal representative was nine times that on the gift to the other beneficiary. The personal representative’s accounting treated the inheritance taxes as an expense of estate administration based on language in the will directing the personal representative “to pay from my probate estate” all inheritance, legacy, or estate taxes payable by reason of the testator’s death on all property whether passing under the will or otherwise. The accounting was approved and the other beneficiary appealed.
In In re Estate of Shell, the Nebraska Supreme Court affirmed, holding that the will language directing the payment of taxes from the probate estate was sufficient to override the statutory scheme assessing the tax against each beneficiary.
Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.
