Title: Estate of Mary Van Riper v. Director, Division of Taxation
Citation: N/A
Docket Number: 
State: new-jersey
Issuer: new-jersey Supreme Court
Date: February 5, 2020

Estate of Mary Van Riper v. Director, Division of Taxation Annotate this Case Justia Opinion Summary Walter and Mary Van Riper transferred ownership of their marital home to a single irrevocable trust. Walter passed away shortly after transfer of the property to the trust. Six years later, after Mary passed away, the trustee distributed the property to the couple’s niece. In this appeal, the issue presented for the New Jersey Supreme Court was whether the New Jersey Division of Taxation (Division) properly taxed the full value of the home at the time of Mary’s death. Walter and Mary directed that, if sold, all proceeds from the sale of their residence would be held in trust for their benefit and would be utilized to provide housing and shelter during their lives. Walter died nineteen days after the creation of the Trust. Mary died six years later, still living in the marital residence. Mary’s inheritance tax return reported one-half of the date-of-death value of the marital residence as taxable. However, the Division conducted an audit and imposed a transfer inheritance tax assessment based upon the entire value of the residence at the time of Mary’s death. Mary’s estate paid the tax assessed but filed an administrative protest challenging the transfer inheritance tax assessment. The Division issued its final determination that the full fair market value of the marital residence held by the Trust should be included in Mary’s taxable estate for transfer inheritance tax purposes. The Appellate Division affirmed the Tax Court’s conclusion, rejecting the estate’s argument that transfer inheritance tax should only be assessed on Mary’s undivided one-half interest in the residence. The Supreme Court agreed with both the Tax Court and the Appellate Division that the Division properly taxed the entirety of the residence when both life interests were extinguished, and the remainder was transferred to Marita. The property’s transfer, in its entirety, took place “at or after” Mary’s death, and was appropriately taxed at its full value at that time. “In light of the estate-planning mechanism used here, any other holding would introduce an intolerable measure of speculation and uncertainty in an area of law in which clarity, simplicity, and ease of implementation are paramount.” Read more Want to stay in the know about new opinions from the Supreme Court of New Jersey? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Supreme Court of New Jersey. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . SYLLABUSThis syllabus is not part of the Court’s opinion. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Court. In the interest of brevity, portions of an opinion may not have been summarized. Estate of Mary Van Riper v. Director, Division of Taxation (A-51-18) (082000)Argued October 8, 2019 -- Decided February 5, 2020SOLOMON, J., writing for the Court. Unlike the common estate-planning strategy whereby a married couple deeds property into two trusts, which are taxed in two phases upon the death of each spouse, Walter and Mary Van Riper transferred ownership of their marital home to a single irrevocable trust. Walter passed away shortly after transfer of the property to the trust. Six years later, after Mary passed away, the trustee distributed the property to the couple’s niece. In this appeal, the Court considers whether the New Jersey Division of Taxation (Division) properly taxed the full value of the home at the time of Mary’s death. Walter and Mary owned their home as tenants by the entirety, which means that they were each considered to own 100% of their home and that neither could convey an interest in the home without the agreement of the other. The record reveals that Walter and Mary together transferred the deed to their marital residence in 2007 to a single irrevocable trust, the Van Riper Residence Trust (Trust). Walter and Mary each retained a life interest and directed that any remainder in the Trust pass to their niece, Marita, upon the death of the surviving spouse. Walter and Mary directed that, if sold, all proceeds from the sale of their residence would be held in trust for their benefit and would be utilized to provide housing and shelter during their lives. Walter died nineteen days after the creation of the Trust. Mary died six years later, still living in the marital residence. Mary’s inheritance tax return reported one-half of the date-of-death value of the marital residence as taxable. However, the Division conducted an audit and imposed a transfer inheritance tax assessment based upon the entire value of the residence at the time of Mary’s death. Mary’s estate paid the tax assessed but filed an administrative protest challenging the transfer inheritance tax assessment. The Division issued its final determination that the full fair market value of the marital residence held by the Trust should be included in Mary’s taxable estate for transfer inheritance tax purposes. 1 The estate filed a complaint seeking a 50% refund of the tax paid. The Tax Court held that the entire value of the residence was subject to transfer inheritance tax and granted summary judgment for the Division. 30 N.J. Tax 1, 18 (Tax 2017). The Appellate Division affirmed the Tax Court’s conclusion, rejecting the estate’s argument that transfer inheritance tax should only be assessed on Mary’s undivided one- half interest in the residence. 456 N.J. Super. 314, 320-21 (App. Div. 2018). The Court granted the estate’s petition for certification. 236 N.J. 565 (2019).HELD: The Court agrees with both the Tax Court and the Appellate Division that the Division properly taxed the entirety of the residence when both life interests were extinguished, and the remainder was transferred to Marita. The property’s transfer, in its entirety, took place “at or after” Mary’s death, and was appropriately taxed at its full value at that time. In light of the estate-planning mechanism used here, any other holding would introduce an intolerable measure of speculation and uncertainty in an area of law in which clarity, simplicity, and ease of implementation are paramount.1. N.J.S.A. 54:34-1 presumptively imposes a transfer inheritance tax on all completed transfers of property worth $500 or more made within three years of the transferor’s death, where the property “is transferred by deed, grant, bargain, sale or gift made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death.” N.J.S.A. 54:34-1(c) (emphasis added). N.J.S.A. 54:34-1(c)’s “at or after death” provision is a common feature of inheritance tax statutes and is intended to prevent the owner of property from evading liability for transfer inheritance tax. The transfer of property to a trust for the duration of the transferor’s lifetime is treated as a transfer “at or after death” when the person creating the trust retained income or some benefit for his life with remainder over on his death. Accordingly, for a transfer to be taxable under the “at or after death” provision of N.J.S.A. 54:34-1, it is necessary that the settlor retain in himself some realistic interest, power or control or some other “string” during his lifetime, or his death must be the determinative and indispensable event in the shifting of economic benefits and burdens. Under N.J.S.A. 54:34-1.1, if the grantor completely and irrevocably severs ties to the trust more than three years before death, then no transfer inheritance tax will be assessed even if the grantor’s death triggers a change in the beneficiary of the trust. Here, Walter and Mary’s transfer falls squarely within the ambit of N.J.S.A. 54:34-1(c), and they did not satisfy the condition necessary for the exception to the transfer inheritance tax set forth in N.J.S.A. 54:34-1.1 to apply. (pp. 9-13)2. Turning to whether Marita inherited the entirety of the marital residence or only a one- half interest upon Mary’s death, the Court finds no basis for the view that the inheritance occurred in two stages. First, New Jersey has no law specifying that the joint conveyance of real property into a single trust destroys a tenancy by the entirety. Second, New Jersey 2 law permits both real and personal property to be held by spouses and civil union partners as tenants by the entirety when the spouses or partners obtain that property under conditions satisfied by the trust instrument here. Accordingly, even if deeding the property to the Trust did sever the tenancy by the entirety, a new tenancy by the entirety was created through the very specific terms of the Trust. The terms of the Trust, moreover, make it clear that no interest in the property would pass to Marita prior to the deaths of both spouses. The trust documents specify that the trustee’s primary obligation was to ensure that Walter and Mary had a residence and any custodial care required for their entire lives, and authorize the trustee to sell the marital residence and apply the proceeds of the sale toward their living or care expenses. It would be unfair to assess a tax based on one-half of the value of the residence at Walter’s death -- Marita’s remainder interest -- because, under the controlling terms of the Trust, it was not clear that there would be any remainder for Marita to inherit. (pp. 13-16)3. Not only is there no reason or legal basis to value Walter and Mary’s interests in the residence as though they had partitioned the property by transferring it to the Trust, but there are strong practical reasons not to do so. The tax law’s goals of clarity, simplicity, and ease of implementation would be subverted by requiring the Division to engage in such speculation. Here, where there is a single trust that allows for the total depletion of the entrusted property, that property can be taxed with certainty only after both spouses have died and the trust has satisfied its obligations. There is no reason to treat the single trust created here the same as the more common grant creating two separate trusts, and the Court discusses and finds inapposite the cases advanced in support of the argument that the property at issue here should have been valued in two steps. (pp. 16-19)4. The Tax Court correctly found, consistent with the relevant case law, that the retention of life interests by Walter and Mary “postponed [Marita’s] enjoyment of the property until the death of both transferors.” 30 N.J. Tax at 11. Under the terms of the Trust, Mary retained power or control or some other “string” during her lifetime over the entirety of the marital residence, not an undivided one-half interest. Mary’s death allowed the trustee to transfer the remainder of the property -- Mary’s 100% interest in the marital estate -- to Marita. Accordingly, when use and enjoyment of the residence was yielded to Marita, the transfer was subject to the transfer inheritance tax. The property’s transfer, in its entirety, took place “at or after” Mary’s death, and was appropriately taxed at its full value at that time. (pp. 19-20) AFFIRMED.CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, and TIMPONE join in JUSTICE SOLOMON’S opinion. 3 SUPREME COURT OF NEW JERSEY A- 51 September Term 2018 082000 Estate of Mary Van Riper, Plaintiff-Appellant, v. Director, Division of Taxation, Defendant-Respondent. On certification to the Superior Court, Appellate Division, whose opinion is reported at 456 N.J. Super. 314 (App. Div. 2018). Argued Decided October 8, 2019 February 5, 2020James J. Curry, Jr., argued the cause for appellant (Law Office of James J. Curry, Jr., attorneys; James J. Curry, Jr., and Timothy J. Petrin, on the brief).Heather Lynn Anderson, Deputy Attorney General, argued the cause for respondent (Gurbir S. Grewal, Attorney General, attorney; Melissa Dutton Schaffer, Assistant Attorney General, of counsel, and Heather Lynn Anderson, on the brief).Andrew J. DeMaio argued the cause for amicus curiae New Jersey State Bar Association (New Jersey State Bar Association, attorneys; Evelyn Padin, President, of counsel, John E. Keefe, Jr., Andrew J. DeMaio, Glenn A. Henkel, Jill Lebowitz, and Heather G. Suarez, on the brief). 1 Edward C. Eastman, Jr. argued the cause for amicus curiae New Jersey Land Title Association (Davison, ~ Eastman, Munoz, Lederman & Paone, attorneys; Peter A. Chacanias, on the brief). JUSTICE SOLOMON delivered the opinion of the Court. New Jersey is one of a handful of states with an inheritance tax.According to the New Jersey Division of Taxation (Division), a commonestate-planning strategy adopted by married couples in light of that tax is atransfer of property during the lifetime of the couple into two trusts, leavingeach spouse with sole ownership of an undivided one-half interest in theproperty for life. Upon the death of the first spouse, his or her trust takesownership of that deceased spouse’s interest in the property and tax is assessedon that undivided one-half interest -- a “compromise tax” under N.J.S.A.54:36-3 -- based upon the property’s value at that time. Upon the secondspouse’s passing, tax on that spouse’s undivided one-half interest in theproperty is assessed upon that spouse’s trust. The full value of the property isthus taxed in two phases upon the death of each spouse. The estate-planning measures used in this case were different. Here,Walter and Mary Van Riper transferred ownership of their marital home to asingle irrevocable trust. Under the terms of that trust, each spouse retained alife interest, with ownership of the property or what might remain from the 2 proceeds of its sale to pass to the couple’s niece upon the death of the secondspouse. Specific language in the trust provided that the full value of theproperty would be made available to provide shelter for the couple and tofinance any care that might be required during their lifetimes. Walter passedaway shortly after transfer of the property to the trust. Six years later, afterMary passed away, the trustee distributed the property to the couple’s niece. The Estate of Mary Van Riper (the Estate), as petitioner, and supportiveamici argue that, despite the differences between the estate-planning measurestaken by the Van Ripers and the more common two-trust method describedabove, the result should be the same. The Estate contends that transferinheritance tax should now be assessed on only one-half of the value of thehome and, because the Division failed to tax Walter’s undivided one-halfinterest at the time of his death, his interest can no longer be taxed. The Division counters that, under the specific terms of the single trustused in this case, no transfer of property occurred until Mary’s death, at whichtime Mary’s 100% interest in the home passed to her niece and becametaxable. Thus, the Division asserts, the Estate was properly taxed for the fullvalue of the home at the time of Mary’s death. Like the Tax Court and the Appellate Division, we agree with theDivision’s interpretation of the language of the trust used in this case and 3 application of the transfer inheritance tax statute, N.J.S.A. 54:34-1. TheDivision’s view also accords with prior case law and advances the vital policygoals of clarity, simplicity, and ease of implementation. We therefore affirmthe Appellate Division’s judgment. I. Walter and Mary owned their home as tenants by the entirety, whichmeans that they were each considered to own 100% of their home and thatneither could convey an interest in the home without the agreement of theother. See Cap. Fin. Co. of Del. Valley, Inc. v. Asterbadi, 389 N.J. Super. 219,227 (Ch. Div. 2006). Only a married couple can own real property as tenantsby the entirety and, in doing so, each spouse owns the entire property as asingle unit. See ibid. (“A tenancy by the entirety is established when propertyis held by a husband and wife with each becoming seized and possessed of theentire estate; after the death of one, the survivor takes the whole.”). Therecord reveals that Walter and Mary together transferred the deed to theirmarital residence in 2007 to a single irrevocable trust, the Van RiperResidence Trust (Trust). Walter and Mary each retained a life interest anddirected that any remainder in the Trust pass to their niece, Marita Kresge, theTrust’s sole contingent beneficiary, upon the death of the surviving spouse. 4 Although the trust documents allowed for the sale of the Van Riper’sresidence, Walter and Mary directed that, if sold, all proceeds from the sale oftheir residence would be held in trust for their benefit and would be utilized toprovide housing and shelter during their lives. The trust documents alsoprovided that any funds from the sale of the property would go first topurchasing a residence in which Walter and/or Mary could live and receivecare, second for their support, and lastly to the upkeep of the new residence. Walter died nineteen days after the creation of the Trust. Walter’sresident decedent inheritance tax return did not report any interest in themarital residence as taxable, and the Division did not assess any transferinheritance tax against his estate. Mary died six years later, still living in themarital residence. Mary’s inheritance tax return reported one-half of the date-of-death value of the marital residence ($467,000) as taxable. However, theDivision conducted an audit and imposed a transfer inheritance tax assessmentbased upon the entire value of the residence at the time of Mary’s death($935,000). Mary’s estate paid the entire tax assessed but filed an administrativeprotest challenging the transfer inheritance tax assessment. The Divisionissued its final determination that the full fair market value of the maritalresidence held by the Trust should be included in Mary’s taxable estate for 5 transfer inheritance tax purposes. The Estate then filed a complaint with theTax Court seeking a 50% refund of the tax paid. The Tax Court held that the entire value of the residence was subject totransfer inheritance tax and granted summary judgment for the Division.Estate of Riper v. Dir., Div. of Tax’n, 30 N.J. Tax 1, 18 (Tax 2017). The courtfirst noted that under N.J.S.A. 54:34-1, any transfer of real property or anyinterest therein, intended to take effect at or after death, is subject to transferinheritance tax. Id. at 7. The Tax Court observed that when the Trust wascreated, there were three distinct interests: (1) Walter’s life estate, (2) Mary’slife estate, and (3) Marita’s remainder. Id. at 17. The court then rejected theEstate’s argument that only Mary’s undivided one-half interest in the residencewas taxable upon her death. Id. at 17-18. The court held that Walter’s life estate was extinguished upon his deathin 2007, and that Mary’s life estate, consisting of 100% of the maritalresidence, was extinguished upon her death in 2013. Id. at 17. Under theexpress terms of the Trust, the court concluded that Marita did not receive anyinterest in the remainder of the Trust until after the deaths of both Walter andMary. Id. at 17-18. Accordingly, the court affirmed the Division’sdetermination that the full value of the residence was subject to tax under 6 N.J.S.A. 54:34-1(c) upon the death of the surviving spouse. Id. at 18. TheEstate appealed. The Appellate Division affirmed the Tax Court’s conclusion. Estate ofVan Riper v. Dir., Div. of Tax’n, 456 N.J. Super. 314 (App. Div. 2018). Thecourt rejected the Estate’s argument that transfer inheritance tax should onlybe assessed on Mary’s undivided one-half interest in the residence. Id. at 320-21. The court explained that when the Van Ripers transferred their residenceto the Trust, they both -- as tenants by the entirety -- held a 100% interest inthe property, id. at 321, and together they made a transfer intended to takeeffect at or upon the death of the surviving spouse, id. at 327. The court thusrejected the Estate’s argument that Walter’s transfer of his interest in theproperty was taxable to his estate when he died, and concluded that theDivision correctly determined that transfer of the entire residence to thecontingent beneficiary upon Mary’s death was subject to transfer inheritancetax at the time. Id. at 322-23. We granted the Estate’s petition for certification. 236 N.J. 565 (2019).The New Jersey State Bar Association (NJSBA) and the New Jersey Land TitleAssociation (NJLTA), who appeared as amici before the Appellate Division,participated before this Court pursuant to Rule 1:13-9. 7 II. The Estate asserts that the Division missed its opportunity to assess atransfer inheritance tax upon Walter’s one-half interest in the residence andshould now be precluded from taxing the full value of the Trust -- the wholemarital residence -- after Mary’s death. To support this contention, the Estaterelies on Gauger v. Gauger, 73 N.J. 538 (1977); United States v. Heasty, 370 F.2d 525 (10th Cir. 1966); and Glaser v. United States, 306 F.2d 57 (7th Cir.1962), and submits that the moment Walter and Mary transferred their maritalresidence to the Trust as tenants by the entirety, their tenancy was severed andeach spouse retained a one-half interest in the residence. The Estate maintains,therefore, that because Mary held only a one-half interest in the residence, theDivision erroneously taxed its full value upon her death. The NJSBA and theNJLTA join in the Estate’s arguments. The Division, relying upon N.J.S.A. 54:34-1(c), argues that the entireunapportioned date-of-death value of the residence is includable in Mary’staxable estate. The Division asserts that the ultimate transfer of the Trust’sremainder to the contingent beneficiary, Marita, resulted in a taxable transferof the full value of the residence -- Mary’s entirety interest, not a one-halfinterest. 8 III. The question presented here is whether the Division erroneouslyimposed a transfer inheritance tax on the full value of the marital residence atthe time of Mary’s death. We consider this question mindful that applicationof the transfer inheritance tax law must provide predictability and certainty asto when transferred property is subject to taxation under N.J.S.A. 54:34-1(c).Cf. Slater v. Dir., Div. of Tax’n, 26 N.J. Tax 322, 334 (Tax 2012) (“Statutes oflimitations in tax statutes are strictly construed in order to provide finality andpredictability of revenue to state and local government.” (quoting Bonanno v.Dir., Div. of Tax’n, 12 N.J. Tax 552, 556 (Tax 1991))). A. 1. New Jersey’s transfer inheritance tax statute, N.J.S.A. 54:34-1, explainsthat the tax owed by a person’s estate is determined by the value of theproperty at the time of the person’s death. Schroeder v. Zink, 4 N.J. 1, 13(1950); Estate of Schinestuhl v. Dir., Div. of Tax’n, 26 N.J. Tax 289, 298 (Tax2012). The statute presumptively imposes a transfer inheritance tax on allcompleted transfers of property worth $500 or more made within three years ofthe transferor’s death, [w]here real or tangible personal property within this State of a resident of this State . . . or real or tangible 9 personal property within this State of a nonresident, is transferred by deed, grant, bargain, sale or gift made in contemplation of the death of the grantor, vendor or donor, or intended to take effect in possession or enjoyment at or after such death. [ N.J.S.A. 54:34-1(c) (emphasis added).] N.J.S.A. 54:34-1(c)’s “'at or after death’ provision is a common featureof inheritance tax statutes. It first appeared in our law in 1892.” In re Estateof Lingle, 72 N.J. 87, 93 (1976) (citing New Jersey’s first inheritance taxstatute: L. 1892, c. 122). That provision is intended to prevent the owner ofproperty from evading liability for transfer inheritance tax even though he orshe has made “a lifetime transfer which is, in effect, a substitute for or asubstantial equivalent of a . . . distribution” after death. Ibid. Thus, NewJersey has recognized for more than a century that “a transfer [during aperson’s lifetime] by which the donor retains a life estate in the subject matteris a transfer 'intended to take effect in possession or enjoyment at or after . . .death.’” Darr v. Kervick, 31 N.J. 476, 483 (1960) (quoting Carter v. Bugbee, 91 N.J.L. 438, 442 (1918)); accord Berg v. Dir., Div. of Tax’n, 17 N.J. Tax 256, 263 (Tax 1998) (stating same and explaining that “[c]ourts consider suchtransfers to be [upon death] by their very nature, because the donors are notregarded as having divested themselves of the property at the time of thetransfer, since they retain the right to the enjoyment of the income”). 10 The transfer of property to a trust for the duration of the transferor’slifetime is likewise treated as a transfer “at or after death” when the personcreating the trust “retained income or some benefit for his life with remainderover on his death.” In re Estate of Lichtenstein, 52 N.J. 553, 576 (1968).Accordingly, for a transfer to be taxable under the “at or after death” provisionof N.J.S.A. 54:34-1, it is necessary “that the settlor retain in himself somerealistic interest, power or control or some other 'string’ during his lifetime, orhis death must be the determinative and indispensable event in the shifting ofeconomic benefits and burdens.” Id. at 578. Prior to 1955, if a grantor placed property in trust for the benefit of oneperson or entity during the grantor’s life with a change in beneficiaries uponthe grantor’s death, the transfer to the second beneficiary was taxed as atransfer of inheritance even if the grantor created the trust more than threeyears prior to death and retained no beneficial interest in, or power over, theentrusted property. See In re Lambert, 63 N.J. 448, 456-57 (1973). That wastrue because the grantor’s death triggered the transfer -- it was the“determinative and indispensable event in the shifting of economic benefitsand burdens.” See Lichtenstein, 52 N.J. at 576. In 1955, the broad scope of the transfer inheritance tax statute waslimited by legislation relevant in the trust context. Lambert, 63 N.J. at 456-57. 11 L. 1955, c. 135 brought New Jersey law into conformity with federal law andthe law of neighboring states, which did not tax such transfers. Id. at 457.Codified at N.J.S.A. 54:34-1.1, the 1955 enactment provides that [a] transfer of property by deed, grant, bargain, sale or gift wherein the transferor is entitled to some income, right, interest or power, either expressly or by operation of law, shall not be deemed a transfer intended to take effect at or after transferor’s death if the transferor, more than 3 years prior to death, shall have executed an irrevocable and complete disposition of all reserved income, rights, interests and powers in and over the property transferred. [(emphases added).] Under that provision, if the grantor completely and irrevocably severshis or her ties to the trust more than three years before his or her death, then notransfer inheritance tax will be assessed even if the grantor’s death triggers achange in the beneficiary of the trust. 2. Here, the effect of the transfer inheritance tax statute is clear under theplain language of the statute itself, as well as the case law discussed above. Walter and Mary transferred their marital residence to a singleirrevocable trust and lived in that residence until death through the lifeinterests they retained. It is clear from the trust documents that Walter andMary intended to and did “retain[] income or some benefit for . . . life” in the 12 residence that could be sold to provide them with a more suitable residence,should their needs change, “with remainder over on his or her death.”Lichtenstein, 52 N.J. at 576. Walter and Mary’s transfer falls squarely within the ambit of section (c)of the transfer inheritance tax statute, N.J.S.A. 54:34-1. Furthermore, they didnot satisfy the condition necessary for the exception to the transfer inheritancetax set forth in N.J.S.A. 54:34-1.1 to apply -- they never “executed anirrevocable and complete disposition of all reserved income, rights, interestsand powers in and over the property transferred” three years prior to death. It is therefore clear that the transfer inheritance tax is properly applicableto the remainder conveyed through the Trust. We turn next to the question ofwhether the contingent beneficiary inherited the entirety of the maritalresidence or only a one-half interest upon Mary’s death. B. In arguing that only Mary’s one-half interest in the residence was subjectto the transfer inheritance tax, the Estate asserts that Walter and Mary’stenancy by the entirety was severed once the residence was transferred to theTrust in 2007. As a result, the Estate argues, Mary did not simply continue toown the entire interest in the Trust upon Walter’s death the way she wouldhave owned the entire residence had Walter died before the Trust was created. 13 Instead, according to the Estate and amici, Walter’s interest passed to Maritaupon his death, with a life estate going to Mary. We find no basis for such a view. First, New Jersey has no lawspecifying that the joint conveyance of real property into a single trust destroysa tenancy by the entirety, and the Estate points to none. Cf. N.C. Gen. Stat.§ 39-13.7(a) (“Any real property held by a husband and wife as a tenancy bythe entireties and conveyed (i) to a joint trust or (ii) in equal shares to twoseparate trusts shall no longer be held by the husband and wife as tenants bythe entirety and shall be disposed of by the terms of the trust or trusts . . . .”).Second, New Jersey law permits both real and personal property to be held byspouses and civil union partners as tenants by the entirety when the spouses orpartners obtain that property under conditions satisfied by the trust instrumenthere. See N.J.S.A. 46:3-17.2(a) (“A tenancy by entirety shall be created when:. . . A husband and wife together take title to an interest in real property orpersonal property under a written instrument designating both of their namesas husband and wife . . . .”). Accordingly, even if deeding the property to theTrust did sever the tenancy by the entirety, a new tenancy by the entirety wascreated through the very specific terms of the Trust. The terms of the Trust, moreover, make it clear that no interest in theproperty would pass to Marita prior to the deaths of both spouses. If, as the 14 Estate and amici argue, Walter’s ownership interest passed to Marita with alife estate to Mary, Mary would not have been able to sell or encumber theproperty without Marita’s consent. Yet the trust documents specify that thetrustee’s primary obligation was to ensure that Walter and Mary had aresidence and any custodial care required for their entire lives, and authorizethe trustee to sell the marital residence and apply the proceeds of the saletoward their living or care expenses. Had Mary required a new residence, thetrustee would have sold the marital residence; had Mary’s care required thefull value of the Trust, then the Trust would have been fully depleted to fundher care -- and all of this would have happened without any say in the matterby the contingent beneficiary. Indeed, it would be unfair to assess a tax based on one-half of the valueof the residence at Walter’s death -- Marita’s remainder interest -- because,under the controlling terms of the Trust, it was not clear that there would beany remainder for Marita to inherit. In fact, given the Trust’s requirements oflifelong shelter and care for the Van Ripers, Walter’s supposed “half interest”in the Trust could not exceed half of the value of the Trust minus the resourcesthat would need to be allocated to Mary’s care. The Division would thus havehad to attempt to predict, at the point of Walter’s death, Mary’s lifeexpectancy, the likely cost of her care, shifts in real estate values, as well as 15 other unknowable variables, to fairly assess a tax on half of what the Trustwould ultimately prove to be worth. Not only is there no reason or legal basis to value Walter and Mary’sinterests in the residence as though they had partitioned the property bytransferring it to the Trust, but there are strong practical reasons not to do so.Our tax law’s goals of clarity, simplicity, and ease of implementation would besubverted by requiring the Division to engage in such speculation. The morecommon vehicle of creating separate trusts with life estates makes it easy tovalue property in two 50% increments. The assessment of tax on the first 50%of the property is not speculative -- it is made based on the property’s value atthe time. Here, where there is a single trust that allows for the total depletion ofthe entrusted property, that property can be taxed with certainty only after bothspouses have died and the trust has satisfied its obligations. Accuracy can beachieved only by a retrospective calculation, not a prospective estimate. Thedifferent estate-planning mechanisms have different consequences reflectingthe grantors’ differing goals and intentions. In short, there is no reason to treatthe single trust created here the same as the more common grant creating twoseparate trusts. 16 The Estate relies on Gauger, a case involving a divorce proceeding, toargue that the property at issue here should have been valued in two steps . InGauger, the plaintiff wife and the defendant husband were married for twenty-five years. 73 N.J. at 541. Four years before the parties married, thedefendant and his mother took title as joint tenants with a right of survivorshipto a tract of farmland. Id. at 542. Approximately one month “before theparties separated and more than [ten] months before the divorce complaint wasfiled,” the defendant’s mother died and her interest in the farmland passed tothe defendant. Ibid. The trial court held in Gauger that the farmland was not subject toequitable distribution because the defendant had not acquired the propertyduring the marriage, but rather by virtue of the deed executed before hismarriage to the plaintiff. Ibid. The court held that the property was thereforeimmune from equitable distribution. Ibid. The Appellate Division affirmed.Ibid. This Court reversed, recognizing that before the mother’s death, thedefendant owned only an undivided one-half interest in the property, id. at 543(quoting Goc v. Goc, 134 N.J. Eq. 61, 63 (E. & A. 1943)), but, after his motherdied, the defendant’s “right to possession became exclusive,” id. at 544. Inother words, the mother’s death changed the nature of the defendant’s 17 ownership interest in the property. Ultimately, this Court found in Gauger thatthe property was subject to equitable distribution because the defendantacquired sole ownership of the property during his marriage to the plaintiff.Ibid. It was therefore necessary to value the property for equitable distributionpurposes, and to accomplish this the Court “evaluate[d] that interest at one -half the net value of the property, as if partition by sale had occurred at thetime of the [mother’s] death.” Ibid. We agree with the Appellate Division that the Estate’s reliance uponGauger is misplaced. See Van Riper, 456 N.J. Super. at 322-23. Gauger dealtwith the equitable distribution of property held as joint tenants with a right ofsurvivorship, not the very different application of the transfer inheritance taxstatute to property held as tenants by the entirety. Furthermore, unlike thedeath of the defendant’s mother in Gauger, here Walter’s death did not alterthe nature of Mary’s interest in the property, which she and Walter held astenants by the entirety. For support, the Estate also relies on Heasty and Glaser. In Heasty, theTenth Circuit applied the Federal Tax Code to the transfer of property heldunder Kansas and Oklahoma law by a husband and wife as joint tenants with aright of survivorship and retained life interests. 370 F.2d at 526, 529. Thisappeal concerns application of New Jersey’s inheritance tax law to property 18 held as tenants by the entirety. The Appellate Division concluded correctlyHeasty is likewise inapplicable. Van Riper, 456 N.J. Super. at 325. In Glaser, the Seventh Circuit interpreted and applied the Federal TaxCode to five separate properties in Indiana held by a husband and wife astenants by the entirety and conveyed by deed to their children while retainingthe properties for life. 306 F.2d at 58. There was no trust created; the tenancywas destroyed upon the properties deeding to the children. A one-half interestin the properties passed to the children at the time of either spouse’s death, andeither spouse’s ties to the properties were completely and irrevocably severedupon the death of that spouse. Therefore, Glaser is likewise inapposite. C. In sum, we agree with both the Tax Court and the Appellate Divisionthat the Division properly taxed the entirety of the residence when both lifeinterests were extinguished, and the remainder was transferred to Marita. The Tax Court correctly found, consistent with the relevant case law,that the retention of life interests by Walter and Mary “postponed [Marita’s]enjoyment of the property until the death of both transferors.” Riper, 30 N.J.Tax at 11. Under the terms of the Trust, Mary retained “power or control orsome other 'string’ during [her] lifetime” over the entirety of the maritalresidence, see Lichtenstein, 52 N.J. at 578, not an undivided one-half interest. 19 Mary’s death allowed the trustee to transfer the remainder of the property --Mary’s 100% interest in the marital estate -- to Marita as the contingentbeneficiary. Accordingly, when use and enjoyment of the residence wasyielded to Marita, the transfer was subject to the transfer inheritance tax. Therefore, the property’s transfer, in its entirety, took place “at or after”Mary’s death, and was appropriately taxed at its full value at that time. Inlight of the estate-planning mechanism used here, any other holding wouldintroduce an intolerable measure of speculation and uncertainty in an area oflaw in which clarity, simplicity, and ease of implementation are paramount. IV. For the reasons set forth above, the judgment of the Appellate Divisionis affirmed. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, and TIMPONE join in JUSTICE SOLOMON’S opinion. 20