Estate of Mildred L. McVey v. Department of Revenue, Finance and Administration Cabinet, Commonwealth of Kentucky

Summary

The Kentucky Supreme Court affirmed the judgment upholding additional inheritance-tax liability, holding that review of the Board of Tax Appeals’ legal conclusions was de novo, inheritance taxes paid by an estate could not be deducted as administration costs, and taxes paid for beneficiaries under a tax-exoneration clause were themselves taxable bequests. The court also held that the Department of Revenue misapplied those rules by treating residue as distributable before paying taxes owed on a beneficiary’s substantial nonprobate transfer, but that the error undercalculated rather than overstated the tax assessed.