This matter involves the interpretation of N.J.S.A. 3B:9-4, dealing with (in this case) a disclaimer of benefits by the personal representative of a deceased beneficiary. The effect of that statute was recently addressed in In the Matter of the Estate of Horowitz, 220 N.J. Super. 300 (Law Div.1987). The conclusion herein differs somewhat from the conclusion in that case.
Henry G. Wickham died testate on May 12, 1987. His will dated November 5, 1976 and Codicil thereto dated May 11, 1982 was duly admitted to probate on June 2, 1987.
Under Article Fourth of his will, Henry G. Wickham established a "marital trust" for his wife, Mary S. Wickham, consisting
of 50% of the value of his adjusted gross estate. A sizeable amount was involved. Mrs. Wickham disclaimed that portion of the marital trust in excess of $150,000 pursuant to N.J.S.A. 3B:9-2*fn1 by writing filed with the Surrogate on January 14, 1988.
That disclaimer implicates the residuary clause of the will as to the balance of the marital trust assets. It provides that the residuary estate be distributed 40% to decedent's daughter, Edna W. Schock; 40% to another daughter, Anne W. Chapman and 20% to his son, Henry P. Wickham. The will further provides in the residuary clause that
If any of my said children shall predecease me, I then direct that the share of my estate so given, devised and bequeathed to such child shall be devised equally among such child's surviving issue.
The Edna W. Schock 40% share of her father's estate and after her mother's disclaimer amounts to almost $197,000. If paid to her the Henry P. Wickham estate is obligated to pay about $2,300 in New Jersey Inheritance Taxes.
Edna Wickham Schock survived her father by 10 days. She died May 22, 1987. Her will dated August 21, 1986 was admitted to probate on June 10, 1987. The United Jersey Bank qualified as Executor thereunder. Her estate is valued in excess of $3,600,000.*fn2 Federal estate taxes will be assessed at a rate of about 53%. If the 40% residuary interest of $197,000 payable under her father's estate is received by her estate, a Federal estate tax of about $90,000 would have to be paid on
that sum together with Inheritance Taxes and estate commissions (in addition to the $2,300 New Jersey Inheritance Tax payable by her father's estate). The executor of the Edna Wickham Schock estate wishes to disclaim the 40% residuary bequest from the Henry G. Wickham estate.
If that disclaimer is effective it will result in the following consequence within the Henry G. Wickham estate. The approximate $197,000 would be treated as if Edna Wickham Schock had predeceased her father and it would be divided equally between Edna's two daughters Linda Laramy and Eileen Lapsa. No state Inheritance Tax ...