Stoddard v. Department of Revenue

A provision of the inheritance tax statutes (RCW 83.16.080) exempts' life insurance proceeds up to $40,000 from taxation. Another section (RCW 83.04.013), authorizes the deduction of debts owed by the decedent. When the two are read together, is it proper to treat a loan against a life insurance policy as a debt of the decedent, or should it be regarded for inheritance tax purposes as no more than a reduction of the life insurance proceeds?

The facts of this case were stipulated to by the parties, and agreed upon as set forth in appellant’s brief as follows:

The decedent, George Wellington…