In re Howe's Estate
| Decision Date | 02 December 1932 |
| Docket Number | No. 3809.,3809. |
| Citation | 163 A. 234 |
| Parties | In re HOWE'S ESTATE. HOWE v. MARTIN, Tax Commissioner. |
| Court | New Jersey Supreme Court |
Syllabus by the Court.
1. A testamentary beneficiary has the right of election either to accept or reject the testamentary gift.
2. In the absence of acceptance by the testamentary donee, the intended testamentary transfer to that donee does not take place; and no tax can be levied as on such transfer under the Transfer Inheritance Tax Act.
3. There is a presumption of acceptance by a testamentary donee of a beneficial gift; this presumption is conclusive where the donee has had the opportunity to elect and has not rejected within a reasonable (or statutory) time.
4. The presumption of acceptance may be rebutted by proof of rejection within a reasonable time; also by proof that the donee never had opportunity to elect.
5. Rejection must be evidenced by some positive act or statement.
6. Where a testamentary donee dies without having had any opportunity to exercise the right of election to accept or reject the testamentary gift, such right of election passes to the donee's executor, or administrator, coupled with the duty of exercising it in accordance with honest judgment as to what will be for the best interest of his decedent's estate.
7. In such a case if the donee's administrator accepts the gift (whether by positive act or by failure to reject within a reasonable time), such election cannot subsequently be revoked or altered by such administrator in the absence of proper and sufficient reason therefore. Quaere, whether it may be revoked at all except by decree in chancery.
8. Husband and wife made reciprocal wills, each leaving the entire estate to the other, unincumbered and without condition. Both were killed in an accident, leaving a single Infant child. The husband died instantly; the wife after three days of continuous unconsciousness. Four months later the wife's administrator served and filed a refusal to accept under the husband's will, obviously with the sole purpose of accomplishing an intestate transfer of the husband's estate to the child and thus avoiding (for the benefit of the child) the liability of such estate to double transfer inheritance tax, first on the testamentary transfer from husband to wife, and second on the subsequent transfer from the wife to the child.
Held that there had been no acceptance by the wife, since she had had no opportunity to elect; that the wife's administrator had the right to elect on behalf of the wife's estate; that the administrator had failed to reject within a reasonable time, and had thereby accepted; that the subsequent attempted rejection was invalid, being intended not for the best interest of the decedent donee's estate but in the interest of the decedent donee's testamentary beneficiary.
In the matter of the estate of John I. Howe. Jr., deceased, and in the matter of the estate of Marion G. Howe, deceased. From the assessment of a transfer tax in each estate, Florence Hunt Howe, administralrix cum testamento annexo of each estate, appeals.
Tax in each case affirmed.
Paul Koch, of Jersey City, for appellant.
William A. Stevens, Atty. Gen., and William A. Moore, of Trenton, for respondent.
BUCHANAN, Vice Ordinary.
John I. Howe, Jr., died testate, March 2, 1929, a resident of Bergen county in this state. By his will (disregarding a specific devise of real estate not owned by decedent at his death) he gave all his estate to his wife, Flora G. Howe, and named her as executrix. Both husband and wife suffered an automobile accident wherein the husband was instantly killed and the wife died three days later without ever having regained consciousness. By her will (disregarding a specific bequest of property not owned by her at her death) all her estate was given to her husband. They had one child, Marion G. Howe, who survived. Both wills were duly probated, and Florence H. Howe (mother of "John I. Howe, Jr.) was appointed administratrix c. t. a. in each estate.
John I. Howe, Jr., left a net estate of over $50,000, and the comptroller assessed a transfer tax of $483.28 in respect thereof, as on a transfer by his will to his wife. In the matter of the tax in the wife's estate the comptroller appraised the net estate at some $140,000, including therein the $50,000 above mentioned, as the value of her interest in the husband's estate, and levied tax accordingly as on a transfer of the entire estate to the daughter Marion.
On July 15, 1929, some four months after the. death of the testator, but prior to the assessment and levy of the transfer inheritance taxes, the administratrix c. t. a. of the wife's estate executed and acknowledged an instrument in writing, whereby she, as such administratrix c. t. a., purported to renounce all her right, title, and interest as such administratrix c. t. a. in and to the estate of the husband. This instrument was forthwith served upon the comptroller and filed with the surrogate of Bergen county.
The administratrix c. t. a. of John I. Howe, Jr., appeals from the transfer tax in that estate, alleging as error the levying of tax on a transfer to the wife under the will instead of on an intestate transfer to the daughter as sole next of kin. In the wife's estate, her administratrix c. t. a. appeals, alleging as error the inclusion in the wife's estate of the net value of the husband's estate.
The single basic question in both appeals (which were argued together and are herein considered together) is whether or not the husband's estate passed to his wife under his will; and the determination of this question rests upon a determination as to whether or not the "renunciation" by the wife's administratrix was effective to prevent such transfer from taking place.
It is deemed that a beneficiary under a will may refuse to accept the testamentary gift and that in such a case no testamentary transfer to such beneficiary takes place and no transfer inheritance tax can legally be levied as on such a transfer, under our statute (P. L. 1909, c. 228, and subsequent amendments [4 Comp. St. 1910, p. 5301, § 537 et seq.; Comp. St. Supp. § 208—537 et seq.]). If, therefore, in the instant case, the wife had regained consciousness and had herself, within the three days prior to her death, made an effective refusal to accept any interest under her husband's will, the appellant's contention as to each of these tax levies must needs be upheld.
All this is expressly conceded by respondent; the latter's contention is that...
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