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AGO Opinion 83160

December 1, 1983
SUBJECT :
Computation of Inheritance Tax

REQUESTED BY:
John H. Skavdahl, Sioux County Attorney, Harrison, Nebraska

OPINION BY:
Paul L. Douglas, Attorney General
Ralph H. Gillan, Assistant Attorney General

QUESTION:

I. In the computation of the deduction from the value of the property subject to inheritance tax, pursuant to Neb.Rev. Stat. ยง77-2018.04 (Reissue 1981), should the deduction for expenses of the last illness of the decedent incurred within six months of his or her death be reduced by any amount of such expenses paid by insurance?


CONCLUSION:
1. Yes.


QUESTION:

2. Should a deduction be taken for such expenses of last illness paid by the decedent before his or her death?

CONCLUSION: 2. No.

1. Section 77-2018.04 provides in part:

In all proceedings for the determination of inheritance tax, the following deductions from the value of the property subject to Nebraska inheritance taxation shall be allowed to the extent paid from, chargeable to, or paid with respect to property subject to Nebraska inheritance taxation:

Expenses of his last illness actually paid by the decedent himself prior to his death were held not to come within the meaning of an inheritance tax statute allowing a deduction of a "reasonable sum" for expenses of last illness, since the intent of such provision is to allow a deduction for expenses of last illness which, although not strictly debts of the decedent owing at his death, are properly payable out of his estate and reduce the amount of property passing
to residuary beneficiaries or interstate
distributes.

To allow such a deduction would be in violation of the terms of the statute. The deduction is allowed "to the extent paid from, chargeable to, or paid with respect to property subject to Nebraska inheritance taxation." (Emphasis added.) The expenses we are concerned with were paid by the decedent from his assets during his lifetime. Such assets were not then "subject to Nebraska inheritance taxation."

Very truly yours,

PAUL L. DOUGLAS
Attorney General