The Iowa Supreme Court issued a ruling today on the rules regarding stepchildren and inheritance taxes.
The case involved Paula Tyler and Mark Alcorn who were raised in Rockwell after their mother Constance married Donald Hithusen in 1966. Constance and Donald divorced in 2001, but he remained close to Paula and Mark and left them 77 percent of his estate when he died in 2012.
The two sought a refund of the $203,000 that was taken out of the estate for inheritance tax, saying it was unconstitutional. The Iowa Supreme Court ruled the changes in the tax law in 2003 clearly defined that once a parent died, their stepchildren would no longer be given an exemption from inheritance taxes.
The ruling says different tax treatment of stepchildren is “rationally related to the legislature’s legitimate state interest in promoting and preserving family relationships through the tax laws.” The ruling also noted the two children did not raise any concern about their mother being taxed for her inheritance even though she still had a good relationship with her ex-husband
Here’s the ruling: Stepchildren-tax-opinion-PDF