Zimmer, Duncan & Cole

An Estate Tax Rate of 100%

When a rancher died with an estate worth millions, his long-lost relatives emerged from far and wide to claim a share.
To complicate matters, the intent behind the rancher's written will was unclear, making it possible that the State of South Dakota could be entitled to everything.
Our state Supreme Court took up the case twice in order to carve up the Estate of Robert G. Jetter.
Robert Jetter and his brother Martin were lifelong bachelors who farmed and ranched in Haakon County, northeast of Wall. Neither had children nor ever married.
In 1981, both Robert and Martin went to visit a lawyer and drafted identical wills. Both were written so that the estate of whichever brother died first would go only to the surviving brother.
In addition, each will contained a clause that said, "I have intentionally omitted all of my heirs and all other persons whomsoever, who are not specifically mentioned herein." In other words, the brothers were disinheriting everyone else.
Martin died first, and Robert inherited his land. By this time, however, Robert was in a nursing home and mentally incompetent. He was not aware that his brother had died, and he didn't attend the funeral.
A few years later, Martin died. By then, his land holdings were worth $3.2 million.
A probate file was started at the courthouse so that his estate could be distributed. And that's when the fighting began.
Initially, the State of South Dakota argued that it was entitled to all of Robert's estate under the doctrine of "escheat" (ess-SHEET). This word comes from the Latin phrase "to fall out". In law, it means that land is falling out from a family's possession, and into the hands of the state.
Escheat is very rare, in part because of the rules that govern estate proceedings. If someone dies without a will, their property passes to their closest relative.
There are several rules that define who that is. For example, if you're married, your closest relative is your spouse (unless you have children from a previous relationship, in which case the current spouse and those children would share your estate).
Without a spouse or children, the law treats your parents as next in line, followed by your siblings and half-siblings, then your grandparents, and then eventually your nephews, nieces, cousins, etc.
If no living relatives can be found, no matter how remote, the entire estate escheats to the State. This does not happen very often since almost everyone has at least a distant cousin out there somewhere.
The problem with Robert Jetter's will was that it didn't make it clear what should happen if he lived longer than his brother. Did he really want to disinherit all of his relatives and let the State take it all?
The State argued that this was exactly what he intended. On the other side of the courtroom, there were three groups of relatives vying for a share.
First, Robert had an alleged half-brother whose descendants might be entitled to everything.
Or, if the half-brother story was disproved, then Robert's estate would be split equally between the group related to his mother and the group related to his father. (Robert had never met his father's relatives, all of whom were from Germany.)
As you can already see, the moral of the story is that it's always better to have a will that is carefully drafted to explain your intent in every situation.
The Supreme Court determined, initially, that Robert did not intend for the State to get everything if he outlived his own brother. Instead, the Court pointed out that it couldn't find any case in the last 300 years where the state got the money instead of living, distant relatives.
Next, the Court had to sort out the claim that Robert had an alleged half-brother. As proof, the family introduced an eighty-year old steamship passenger document, in which Robert's father acknowledged in front of a notary public that Johnnie Jetter was his son. In addition, Robert had acknowledged to his lawyer that Johnnie was his half-brother. This was enough to satisfy the Court.
Robert's estate was then divided among the descendants of his half-brother. Everyone else, including the state, got nothing.