Who can Challenge the amount of NJ Estate Tax Levied?
Let's say that your father created a trust for the benefit of his second wife (not your mother) and his Will provided that his wife would receive all the income from the trust during her lifetime, and whatever was left over upon her death would pass to you. This is the common set up with a Qualified Terminal Interest Property (“QTIP”) Trust. Let's also say a New Jersey estate tax is being generating by your father's estate. Do you have a right to challenge the New Jersey estate tax by virtue of being the beneficiary of the QTIP trust after your step-mother's death?
A recent New Jersey Tax Court case says "Yes". In Joanne LaBarbera v. Director, Division of Taxation Judge DeAlmeida, J.T.C. held on behalf of the Tax Court that the Plaintiff, the residuary beneficiary of a QTIP Trust, has standing to challenge an assessment of estate tax against the estate of the initial beneficiary of the trust.
