Court Opinion

ID: 8903469
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:28:57.209999+00
Date Added: 2024-06-11T17:08:00.839546
License: Public Domain

ARNOLD, Judge.
The issue on this appeal is whether the life insurance proceeds are a “debt of the decedent,” making them deductible for inheritance tax purposes under G.S. 105-9(4). Our courts have not previously interpreted the word “debt” as it is used in this section. Petitioner argues that G.S. 105-9(4) must be interpreted to include the types of deductions provided for federal estate tax computation by IRC § 2053(a)(3) and (4), but we are unpersuaded that this is what the legislature intended. The language of G.S. 105-9(4) does not parallel that used in the federal statute, and we find no indications otherwise that the legislature intended our state statute to reach the same results as the federal one. Accordingly, federal law is not helpful in interpreting G.S. 105-9(4).
The generally accepted meaning of “debt” is “something owed” from one person to another. See Webster’s Third New International Dictionary 583 (1968). Petitioner argues that the life insurance proceeds here are a debt because decedent owed them to Ruth Kapoor under the terms of their separation agreement. Specifically, however, what decedent owed under the pertinent provision of the separation agreement was “a life insurance trust in the amount of at least $150,000.00” maintained in full force and effect, and this obligation was fulfilled by the payment of the necessary life insurance premiums. At the time of decedent’s death no debt existed with respect to this obligation.
We hold that since decedent had totally satisfied his contractual obligation, no debt existed and no deduction under G.S. 105-9(4) is proper. The order of the trial court is
Reversed.
Judges Erwin and Hill concur.