Estate of Emilia W. Olivo
In a recent estate case, the US Tax Court held that an unrecorded caretaker expense was not deductable from the estate. Mr. Olivia had taken care of Emilia Olivo, his elderly mother, who had numerous health issues and required assistance in the performance of daily tasks for about ten years until her death in April, 2003. Mr. Oliver subsequently became the estate administrator and claimed a deduction of $1,240,000 as a debt that the estate owed him for the care he provided. According to his testimony, his mother agreed to pay him $400 per day with payment deferred until after her death. Mr. Oliver failed, however, to record the agreement in writing, and the deduction was therefore disallowed by the Court.
The estate contended that Mr. Olivo was entitled to some recovery under the New Jersey quantum meruit law, a quasi-contractual recovery that allows a plaintiff to recover the reasonable value of services rendered, but the Court concluded that there is a presumption under New Jersey law that services rendered to a family member living in the same house are rendered gratuitously.
To view the entire case, see entire case Estate of Emilia W. Olivo