by John Darer® CLU ChFC MSSC RSP CLTC
A New Jersey Appellate Court has concluded that an heir's loss of a prospective inheritance resulting from the imposition of increased estate taxes- incurred due to the premature death of a decedent —— is recoverable in a wrongful death action. The Appellate Court reasoned in its May 29, 2012 decision, that because such a tangible, readily calculable diminishment in an heir's expectancy is in the nature of "pecuniary injuries resulting from such death," N.J.S.A. 2A:31-5, it concludes that it is an element of damages for the jury to consider in this case, subject to appropriate expert evidence.
The interesting legal question arose out of an automobile accident on January 25, 2008 in which John G. Kellogg, 97, and his wife Barbara Kellogg were passengers in a car owned by Patricia Marks, operated by Russell Marks which collided with another vehicle owned by Defendant Teresa Cupples and operated by Defendant Trevor R.Hulfish. On February 7, 2008 John Kellogg succumbed to his physical injuries, which included a displaced rib fracture, non-displaced rib fracture and a possible pulmonary contusion.
Provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") reduced estate taxes in 2009 and eliminated them entirely for the year 2010. Subsequently the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 went into effect December 17, 2010, extending the the estate tax provisions of EGTRRA through 2012.
Plaintiffs sought to recover the estate tax differential from Defendants alleging it was the fault of the Defendants' tortious conduct that resulted in the premature death and ergo, the higher taxes. At the time of his death Kellogg had a life expectancy of 3.20, according to the decision. Though this figure slightly conflicts with life expectancy tables provided by the Social Security Adminstration, the point is the same. Regardless of whether Kellogg lived 2.44 years or 3.20 years, his heirs would have had a higher inheritance due to lower estate tax liability.
See ROBERT B. BEIM AND FRANKLYN Z. ARONSON, AS CO-EXECUTORS OF THE ESTATE OF JOHN G. KELLOGG AND BARBARA KELLOGG, FRANKLYN Z. ARONSON
AS TRUSTEE OF THE ANNE D. KELLOGG MARITAL TRUST AND JUDITH MEDINA AND PRUDENCE KRAUSE,
TREVOR R. HULFISH AND TERESA CUPPLES,
RUSSELL MARKS, JR., AND PATRICIA H. MARKS,
CHUBB INSURANCE COMPANY OF NEW JERSEY, Defendant/Intervenor-
Superior Court of New Jersey
Docket No. A-5947-10T4