The New York State Tax Department has apparently decided not to appeal a Manhattan surrogate court judge’s 2018 QTIP ruling.
On October 9, 2018, Manhattan Surrogate Court Judge Rita M. Mella ruled that a marital trust known as a QTIP (qualified terminable interest property) was not subject to New York estate taxation if the surviving spouse was pre-deceased by a spouse who died in 2010.
State officials had until November 16th, 30 days from the date the estate counsel served them with a copy of the order and notice of settlement, to appeal the ruling, but did not file an action to do so, according to court records.
The upshot is the ruling will have wide-ranging implications for estates as large as that of the late George Steinbrenner, long-time principal owner of the New York Yankees. Although the mogul's estate was 95 percent leveraged to construct the team's new baseball stadium, it was valued at $1.1 billion when Steinbrenner died in 2010.
Steinbrenner’s widow, Joan, the surviving beneficiary of the couple’s QTIP, died earlier this month at age 83.
The Boss’ will stipulated that an undisclosed portion of his estimated $1.1 billion sports, shipping, and racehorse-breeding fortune would go into a trust for his widow.
And it assigned Steinbrenner’s lawyer, Robert Banker, to decide whether the trust would pay federal estate tax for 2010, or not until after Joan Steinbrenner's death.
Based on Mella’s October 2018 ruling, as well as the state's subsequent decision not to appeal by the required deadline, it looks like Joan Steinbrenner's estate won't pay a QTIP tax at all.
That’s good news for the Steinbrenner estate heirs, as well as for beneficiaries of the less-well-known Seiden estate, which paved the way for the legal ruling.
Sabino Biondi, a partner with the Manhattan law firm Wilk Auslander LLP, who represented Jules and Evelyn Seiden for years, said he had received an Assessments Receivable Overpayment Notice from the New York State Department of Taxation and Finance on December 13.