I am a little confused about your question. It is my understanding that New York does not impose an inheritance tax on the recipient.  So your wife should receive the money free and clear.  I am hoping that your wife is not the executor of the estate and distributing the money prior to paying all debts and taxes on the estate.  That would really be a problem and she would be held personally liable for the consequences of those actions.  If the latter is the case I would strongly suggest that someone - anyone, even you - make a motion to have her relieved as the executor of the estate and to appoint another to properly probate the assets, etc.  Good luck.