- 390 -

Nebraska Court of Appeals Advance S

27 Nebraska Appellate Repor

IN RE ESTATE OF SEDLACEK

Cite as 27 Neb. App. 390

In re Estate of Leonard

Sedlacek, deceas

James Psota, Personal Representative of the

of Leonard John Sedlacek, deceased, app

v. Valley County, Nebraska, appella

___ N.W.2d ___

Filed July 16, 2019. No. A-18-836.

1. Decedents’ Estates: Taxation: Appeal and Error. On appeal of an 

inheritance tax determination, an appellate court reviews the case for 

error appearing on the record.

2. Judgments: Appeal and Error. When reviewing a judgment for errors 

appearing on the record, the inquiry is whether the decision conforms 

to the law, is supported by competent evidence, and is neither arbitrary, 

capricious, nor unreasonable.

3. Decedents’ Estates: Parent and Child: Taxation: Appeal and Error.

Factual findings necessary in determining whether the requisite acknowledged parent-child relationship of Neb. Rev. Stat. § 77-2004 (Reissue 

2018) exists should be reviewed for sufficient evidence and should not 

be disturbed on appeal unless clearly wrong.

4. Decedents’ Estates: Taxation: Statutes: Proof. Statutes exempting 

property from inheritance tax should be strictly construed, and the burden is on the taxpayer to show that he or she clearly falls within the 

language of the statute.

5. Decedents’ Estates: Parent and Child: Taxation. The following factors serve as appropriate guideposts to the trial court in making a determination of an acknowledged relationship of a parent under Neb. Rev. 

Stat. § 77-2004 (Reissue 2018): (1) reception of the child into the home 

and treatment of the child as a member of the family, (2) assumption 

of the responsibility for support beyond occasional gifts and financial 

aid, (3) exercise of parental authority and discipline, (4) relationship 

by blood or marriage, (5) advice and guidance to the child, (6) sharing of time and affection, and (7) existence of written documentation 

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

07/23/2019 12:07 AM CDT
- 391 -

Nebraska Court of Appeals Advance S

27 Nebraska Appellate Repor

IN RE ESTATE OF SEDLACEK

Cite as 27 Neb. App. 390

evincing the decedent’s intent to act as a parent. This list of guideposts 

is not exhaustive, nor will every factor necessarily be present in each 

case. A trial court should consider all pertinent factors in arriving at 

that determination.

6. ____: ____: ____. The law recognizes that although a natural parentchild relationship may exist elsewhere, if the parties regard each other 

in all of the usual incidents and relationships of family life as parent and 

child, the benefits of the inheritance tax statute flow.

Appeal from the County Court for Valley County: Tami 

Schendt, Judge. Affirm

Brandon B. Hanson for appellant.

Amanda L. Tobey, of Peterson Legal Services, P.C., L.L.O., 

for appellee.

Pirtle and Bishop, Jud

Pirtle, Judg

INTRODUCTION

Valley County (County) appeals from an order entered in 

the county court for Valley County finding that Leonard John 

Sedlacek stood in place of a parent for James Psota and that 

thus, Psota was entitled to a “Class 1” inheritance tax rate for 

property inherited from Sedlacek’s estate. The County argues 

that there was not sufficient evidence of a parent-child relationship between Psota and Sedlacek and that therefore, the county 

court erred in granting Psota a Class 1 inheritance tax rate. For 

the reasons that follow, we affirm.

BACKGROUND

Sedlacek was a longtime farmer in Valley County, Nebraska. 

Psota met him when he was around 10 years old and Sedlacek 

would come to help on the family farm. Psota’s mother died 

in approximately 1991, and it was at this time that he and 

Sedlacek formed a closer relationship, with Psota stating it was 

like he had two fathers. Sedlacek was divorced and had several 

children who were distant and rarely in contact with him.
- 392 -

Nebraska Court of Appeals Advance S

27 Nebraska Appellate Repor

IN RE ESTATE OF SEDLACEK

Cite as 27 Neb. App. 390

During the years that followed, Sedlacek would attend holiday parties, birthdays, and church programs—even attending 

Psota’s wedding. He would regularly be invited to the Psota 

home for dinner with Psota’s family. Psota and his family 

would likewise spend time with Sedlacek at his home for 

meals. Psota and Sedlacek also worked closely with each other 

as they were both farmers, with Psota seeking advice from 

Sedlacek and each helping the other when needed.

As Sedlacek got older and needed additional support, Psota 

provided both financial and emotional support. He assisted in 

paying for Sedlacek’s utilities, telephone, and other bills, as 

well as assisting him in paying off loans to prevent him from 

losing his farm. Psota also rode with Sedlacek in an ambulance for needed surgery when Sedlacek initially refused to 

go. Sedlacek was eventually required to enter a nursing home 

due to his failing health, and Psota acted as a “co-power of 

attorney.” Psota was the primary contact for the nursing home 

if it had any issues with Sedlacek, and Psota would assist them 

regularly. As Sedlacek’s health further declined, Psota contacted Sedlacek’s stepchildren to let them know about his condition—all of whom declined to visit him in his final weeks. 

Sedlacek passed away in August 2017, and Psota handled the 

funeral arrangements. In his will, Sedlacek specifically noted 

that he did not wish his “children and other relatives” to share 

in his estate and left the entirety of his estate to Psota.

On July 24, 2018, Psota filed a petition for determination of 

inheritance tax. Psota asked the court to consider him a child 

of Sedlacek, because Sedlacek had stood in the acknowledged 

relation of a parent pursuant to Neb. Rev. Stat. § 77-2004 

(Reissue 2018). A hearing was held on July 25, with five 

witnesses testifying. The court entered an order on July 31, 

determining that Sedlacek had stood in the acknowledged 

role of a parent pursuant to § 77-2004 and granted the petition for determination of inheritance tax with Psota receiving 

a Class 1 inheritance tax rate. It is from this order that the 

County appeals.
- 393 -

Nebraska Court of Appeals Advance S

27 Nebraska Appellate Repor

IN RE ESTATE OF SEDLACEK

Cite as 27 Neb. App. 390

ASSIGNMENTS OF ERROR

On appeal, the County assigns that the county court erred 

in determining that Psota was entitled to a Class 1 inheritance 

tax rate as dictated by § 77-2004 and in determining there was 

sufficient evidence that Sedlacek stood in place of a parent 

for Psota.

STANDARD OF REVIEW

[1,2] On appeal of an inheritance tax determination, an 

appellate court reviews the case for error appearing on the 

record. In re Estate of Hasterlik, 299 Neb. 630, 909 N.W.2d 

641 (2018). When reviewing a judgment for errors appearing 

on the record, the inquiry is whether the decision conforms to 

the law, is supported by competent evidence, and is neither 

arbitrary, capricious, nor unreasonable. Id.

[3] Factual findings necessary in determining whether the 

requisite acknowledged parent-child relationship of § 77-2004 

exists should be reviewed for sufficient evidence and should 

not be disturbed on appeal unless clearly wrong. In re Estate of 

Hasterlik, supra.

ANALYSIS

[4] The County argues that there was not sufficient evidence 

to find that Sedlacek stood in place of a parent for Psota. 

Statutes exempting property from inheritance tax should be 

strictly construed, and the burden is on the taxpayer to show 

that he or she clearly falls within the language of the statute. In re Estate of Breslow, 266 Neb. 953, 670 N.W.2d 797 

(2003). Section 77-2004 provides that “any person to whom 

the deceased for not less than ten years prior to death stood 

in the acknowledged relation of a parent” shall receive an 

inheritance tax exemption of $40,000 and shall be taxed at 

the rate of 1 percent of the clear market value of the property thereafter.

[5] The Nebraska Supreme Court has identified the following factors as appropriate guideposts to the trial court in 

making a determination of an acknowledged relationship of 
- 394 -

Nebraska Court of Appeals Advance S

27 Nebraska Appellate Repor

IN RE ESTATE OF SEDLACEK

Cite as 27 Neb. App. 390

a parent under § 77-2004: (1) reception of the child into the 

home and treatment of the child as a member of the family, (2) 

assumption of the responsibility for support beyond occasional 

gifts and financial aid, (3) exercise of parental authority and 

discipline, (4) relationship by blood or marriage, (5) advice 

and guidance to the child, (6) sharing of time and affection, 

and (7) existence of written documentation evincing the decedent’s intent to act as a parent. In re Estate of Kite, 260 Neb. 

135, 615 N.W.2d 481 (2000). However, this list is not exhaustive, nor will every factor necessarily be present in each case. 

In re Estate of Ackerman, 250 Neb. 665, 550 N.W.2d 678 

(1996). A trial court should consider all pertinent factors in 

arriving at that determination. Id. The county court specifically identified two additional factors as being important in its 

consideration: the “‘community perception’” factor and the 

support provided by Psota to Sedlacek.

[6] The County’s primary argument is that, even if there 

were a parent-child relationship, such a relationship did not 

exist for 10 or more years as Psota’s biological father passed 

away in 2013. However, “‘The law recognizes that although 

a natural parent-child relationship may exist elsewhere, if 

the parties regard each other in all of the usual incidents and 

relationships of family life as parent and child, the benefits’ 

of the inheritance tax statute flow.” In re Estate of Ackerman, 

250 Neb. at 672, 550 N.W.2d at 683, citing Estate of Larson, 

106 Cal. App. 3d 560, 166 Cal. Rptr. 868 (1980). See, also, In 

re Estate of Kite, supra. As such, so long as the relationship 

between Psota and Sedlacek was of a parent-child nature prior 

to the death of Psota’s biological father, it will be included for 

the purposes of establishing the required 10 years.

The County next argues that there was not sufficient evidence to find that there was a parent-child relationship between 

Psota and Sedlacek. It concedes that the fifth factor set forth in 

In re Estate of Ackerman, providing advice and guidance, and 

the sixth factor, sharing of time and affection, were present in 

this case and that the evidence showed that Psota and Sedlacek 
- 395 -

Nebraska Court of Appeals Advance S

27 Nebraska Appellate Repor

IN RE ESTATE OF SEDLACEK

Cite as 27 Neb. App. 390

had a close relationship. Psota concedes that the fourth factor, 

that the decedent and devisee are related by blood, and the seventh factor, written documentation of decedent’s intent to act 

as a parent, were not present in this case. As such, our analysis 

focuses on the other three factors, as well as the additional factors considered by the county court.

The first factor listed in In re Estate of Ackerman, reception of the child into the home and treatment of the child as 

a member of the family, is claimed by both parties. Initially, 

residency in the home of the decedent was required by the 

statute to demonstrate a relationship. In re Estate of Ackerman, 

supra. However, this requirement was removed and this factor is resolved based on whether the individuals treated each 

other as family such as spending holidays together and sharing 

meals together. See In re Estate of Kite, supra. The County 

argues that because Psota never resided for even a temporary 

amount of time with Sedlacek, this factor weighed in favor 

of no relationship existing. While it is true that Psota did not 

reside in Sedlacek’s home at any point, the testimony showed 

that Sedlacek had invited Psota and Psota’s family into his 

home on many occasions for various meals, visits, and holidays 

and that Sedlacek regularly visited the Psota home for meals 

and holiday visits over a period of more than 10 years prior to 

his death.

The second factor listed in In re Estate of Ackerman, 

assumption of the responsibility of support beyond occasional gifts and financial aid, is also claimed by each party. 

We note that this does not mean that the parent must accept 

a legal obligation for support, because this would rarely exist 

where the child was an adult. See In re Estate of Ackerman, 

250 Neb. 665, 550 N.W.2d 678 (1996). However, courts have 

considered whether the parent provided support in other ways 

such as providing room and board or paying for classes. Id. 

It is undisputed that Psota never accepted financial aid from 

Sedlacek, although he testified that Sedlacek had offered it 

to him.
- 396 -

Nebraska Court of Appeals Advance S

27 Nebraska Appellate Repor

IN RE ESTATE OF SEDLACEK

Cite as 27 Neb. App. 390

The third factor listed in In re Estate of Ackerman, exercise 

of parental authority and discipline, has been similarly questioned when applying it to an adult. It has been recognized that 

after a child has established his or her independence, it is not 

unusual that the level of discipline is slight. Id. The County 

argues that the way Sedlacek treated Psota did not rise to the 

level of discipline for the purpose of this factor. Both Psota 

and the County agree that the testimony showed that Sedlacek 

would criticize Psota and would tell him to quit doing something if he “step[ped] out of line.” Further, Psota testified that 

Sedlacek had disciplined Psota’s children.

The final two additional factors identified by the county 

court, “community perception” and the support provided by 

Psota to Sedlacek, did have specific findings made by the 

court. The court found that testimony from individuals in the 

community familiar with Psota and Sedlacek was weighed 

in favor of treating the relationship between them as familial 

because the members of the community perceived them as 

being father and child. A witness who knew Sedlacek for over 

10 years testified that he initially thought Psota and Sedlacek 

were father and son and that they presented themselves as such 

to the community. Another witness similarly testified that having known them both for over 13 years, she regarded Sedlacek 

as a father figure to Psota. She also testified that Sedlacek’s 

relationship with Psota’s children was one of a grandfather 

with grandchildren. A witness who worked at the nursing home 

Sedlacek was placed at testified that she had known Psota and 

Sedlacek for a year and that she believed they were father 

and son until she was told otherwise just a few months before 

Sedlacek passed away. Lastly, another witness also testified 

that she had known the two for over 15 years and that they 

had a father-son relationship. Of particular note, she testified 

that Sedlacek referred to Psota and Psota’s family when asked 

about his family.

The second factor the county court identified was the support provided by Psota to Sedlacek. The court specifically 
- 397 -

Nebraska Court of Appeals Advance S

27 Nebraska Appellate Repor

IN RE ESTATE OF SEDLACEK

Cite as 27 Neb. App. 390

noted that the fact Psota cared for Sedlacek, supported him 

financially and emotionally, and provided considerable care for 

him during the end of his life weighed in favor of treating the 

relationship as that of a parent and child. Psota testified that he 

helped Sedlacek pay his utilities, telephone, and other bills, as 

well as assisting him in paying off loans to prevent him from 

losing his farm. This financial assistance was also testified to 

by one of the witnesses. As Sedlacek aged, Psota assisted him 

on his farm, rode with him to his medical appointments, and 

regularly visited him every other day when he was in the nursing home.

While it is clear that some of the factors are either less 

relevant in this case or not present, the remaining factors and 

the evidence supporting them are sufficient to find that there 

was a parent-child relationship between Psota and Sedlacek. 

Certainly, we cannot say that the county court’s conclusion was 

clearly wrong in light of the substantial evidence that Sedlacek 

viewed Psota as his family, as did the rest of the community, 

and that both Psota and Sedlacek treated each other as such, 

providing emotional and financial support for one another for a 

period of more than 10 years prior to the passing of Sedlacek. 

Therefore, the order of the county court is supported by sufficient evidence.

CONCLUSION

In conclusion, we find that there was sufficient evidence to 

support the county court’s determination that a parent-child 

relationship existed for the purposes of § 77-2004 and that 

Psota should be entitled to a Class 1 inheritance tax rate. The 

order of the county court is affirmed.

Affirme

Moore, Chief Judge, participating on briefs