Chambers v. State (In re Estate of Chambers)

27 Neb.App. 398

932 N.W.2d 343

IN RE ESTATE OF Deena CHAMBERS, deceased.

Kent A. Chambers, Personal Representative of the Estate of Deena Chambers, deceased, appellant,

v.State of Nebraska, appellee.

No. A-18-876.

Court of Appeals of Nebraska.

Filed July 16, 2019

Jon S. Schroeder, Curtis, and Whitney S. Lindstedt, of Schroeder & Schroeder, P.C., for appellant.

No appearance for appellee.

Moore, Chief Judge, and Pirtle and Bishop, Judges.

Per Curiam.

INTRODUCTION

Kent A. Chambers, personal representative of the estate of Deena Chambers, deceased, appeals from the determination by the county court for Furnas County that Anthony K. Chambers, as an individual beneficiary, did not qualify for preferential inheritance tax treatment under Neb. Rev. Stat. § 77-2004 (Reissue 2018). The court found that Kent failed to prove the decedent stood in the acknowledged relation of a parent to Anthony. Because the county court’s factual determination was not clearly wrong, we affirm.

BACKGROUND

Deena died testate in January 2018. Deena was a resident of Furnas County, Nebraska, and she was survived by Kent, her husband. Kent and Deena were married for a little over 30 years and have no biological children. One of the devisees in Deena’s will was Kent’s nephew, Anthony, who was born in 1975 to Kent’s brother and the brother’s then-wife. A copy of Deena’s signed, January 2009 will was filed in the county court in February 2018. In the 2009 will, Anthony is named as alternate personal representative and alternate trustee for all trusts established by the will and is the residuary beneficiary of the will.

In March 2018, Kent, as personal representative, filed an inventory for Deena’s estate in the county court. On June 12, he filed a petition for determination of inheritance tax, along with an inheritance tax worksheet, voluntary appearance, and waiver of notice. Kent asked the court to "dispense with giving of any further notice as provided by law; and upon hearing, without delay," determine the value of Deena’s assets and the amount of inheritance tax. On the inheritance tax computation portion of the worksheet, Anthony’s designated "Beneficiary Relationship" was "Like a Child." The Furnas County Attorney signed the worksheet on May 25, under the printed paragraph stating:

I, the undersigned ... County Attorney, hereby enter my voluntary appearance ... in the above captioned proceeding and waive the service of notice upon me to show just cause, and furthermore waive all notice required by law of time and place of hearing for the determination of values of property for inheritance tax purposes and for the purpose of assessing inheritance tax .... I have examined the foregoing Worksheet and have no objections thereto for inheritance tax purposes only.

On June 22, 2018, Kent filed with the county court an affidavit from Anthony, detailing Deena and Anthony’s relationship. Attached to the affidavit as an exhibit was a copy of an unsigned draft of a February 2013 last will and testament of Deena, naming Anthony as one of the beneficiaries. Anthony is identified at three points in the draft will as having "been like a child of [Deena’s] for his entire life."

A hearing was held before the county court on July 23, 2018. At the hearing, Kent’s attorney stated that he had presented an inheritance tax worksheet to the county attorney, who had the opportunity to review Anthony’s affidavit about his relationship with Deena and to ask any questions of Kent. According to Kent’s attorney, the county attorney "said he was satisfied and signed off on it." During the hearing, Kent’s attorney asked the court to take judicial notice of Anthony’s affidavit, "the will that is in the file," the inventory, and the inheritance tax worksheet. The court did so, but these papers were not marked and made part of the record. The only exhibits offered by Kent and received by the court were copies of durable power of attorney documents for business and for healthcare, in which Deena named Anthony as her "alternate business attorney in fact" and "alternate ... health care power of attorney." The court also heard testimony from both Kent and Anthony about the relationship between Deena and Anthony.

Anthony’s parents divorced at some point in the mid-1980’s, and Anthony’s father eventually drifted away from the family.

Anthony and his sister lived with his mother after the divorce. Anthony was a frequent visitor to Kent and Deena’s home as a child and into adulthood. Anthony estimated that he spent the following number of days per year with Kent and then with Kent and Deena (after age 10): 3 days per year prior to age 10, "[r]oughly" 10 days per year between ages 10 and 15, "probably" 9 days per year between ages 15 and 20, and "maybe" 3 days during 2017 (after he was married and started having children).

Kent testified that he felt he had treated Anthony like a son during his life and that he loved him like a son. Anthony’s middle name is Kent, and he assumes he was named after his uncle. The record shows that they would do chores together on Kent’s father’s family farm and that Kent taught Anthony about various farm-related duties. Kent provided Anthony spiritual guidance, and the two shared interests including movies, music, and the outdoors. Kent gave Anthony Kent’s father’s gun because of their shared love of hunting and pistols and because Anthony had a good relationship with Kent’s father. Kent and Deena married when Anthony was in approximately the seventh grade, and Anthony was a groomsman in their wedding.

Kent indicated that their limited financial circumstances did not allow him and Deena to provide Anthony with any significant gifts beyond ordinary birthday gifts, but he testified that if they had had the money, they would have shared it with Anthony. Likewise, Anthony did not remember any gifts "beyond the normal gifts."

Kent was asked about whether he disciplined Anthony at any time. He recalled an incident that happened when they were moving irrigation pipe. According to Kent, Anthony was "kicking up the dust in the air," and Kent told him not to. It "wasn't a big deal" to Kent, but it was something that Anthony remembered. Kent indicated that while he exercised parental authority over Anthony at times while performing chores at the farm and mentored him, Anthony was "not a difficult child" and did not require much discipline. Anthony also testified about this incident, indicating that it was a time where he "let Kent down" and realized that his actions "could have been better." He described it as "an embarrassing moment" from which he "learned quickly."

Kent testified that he and Deena shared time and affection with Anthony and had many days of "family time" together, although he wished "there had been more times." He indicated that it seemed like the times they did have together were always good. Anthony spent time with Kent and Deena after their marriage, and he felt that whenever he was there, it "was just like before, it was a welcoming home." They would eat together, talk about things, and watch television "or whatever," and Anthony felt it was "always a fun time." Anthony testified that he learned a great deal about marriage, hard work, character, and faith from them. Anthony is now married and has two children, and they have had "many days of family time" with Kent and Deena in which Deena would cook for all of them, and Kent and Deena would engage in various activities with the children.

Kent testified about the unsigned 2013 draft will designating property to Anthony and including language that acknowledged Anthony was like a child to Deena. In 2013, Kent and Deena asked their attorney to prepare wills for them. Although the attorney prepared wills and sent them to Kent and Deena, they did not sign the drafts of those wills at that time. According to Kent, the wills were not signed in 2013 because "life is complicated sometimes" and they were "embroiled in a lawsuit" involving a tenant of Kent’s mother’s estate. He indicated further that after the litigation was over, he "lost [his] dog" and then Deena began having health issues, which shifted his focus to taking care of her at home. Kent testified that he currently has an up-to-date will that includes "the language ... about how close" he is to Anthony.

On August 7, 2018, the county court entered an order finding that Kent had not met his burden of proof to show that the relationship between Deena and Anthony rose to the level required by § 77-2004. Accordingly, the court instructed him to submit an amended inheritance tax worksheet in conformity with the court’s order. In reaching this determination, the court analyzed case law factors for determining whether a decedent stood in the acknowledged relation of a parent with a devisee in order to qualify for preferential inheritance tax treatment. The court found the following factors did not weigh in favor of a parent-child relationship between Deena and Anthony: the assumption of responsibility for support beyond occasional gifts and financial aid, and the existence of written documentation evincing decedent’s intent to act as parent. The court also found the following factors did not weigh heavily in favor of a parent-child relationship: the reception of the child into the home and treatment as a member of the family, and the exercise of parental authority and discipline. Finally, the court found that the relationship by blood or marriage and the sharing of time and affection factors weighed in favor of a parent-child relationship, and the advice and guidance to the child factor weighed somewhat in favor of a parent-child relationship.

After analyzing the above factors and reviewing various other cases applying the factors, the county court concluded:

In most of the cases cited, the [d]ecedent exercised parental authority over the taxpayer—providing discipline and guidance over major life decisions such as schooling, career choice, dating, and medical

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