The property of William Barron Hilton, who was the son and successor of hotelier Conrad Hilton, filed a Tax Court docket petition final month disputing a $1.16 billion property tax deficiency, plus curiosity, stemming from a will contest over bequests Hilton made to the Conrad N. Hilton Basis and Geese Limitless.

Barron made a $2.9 billion bequest to the household basis and a $1 million to Geese Limitless. His property argues that the IRS incorrectly rejected charitable contribution deductions for these bequests.

The IRS, nonetheless, states that the deficiency discover is important as a result of if Barron’s heirs are profitable of their claims in opposition to the property, it could void almost $3 billion in deductions.

Case Historical past

Again in 2007, Barron advised his household that he was making a major change to his will (citing the general public shenanigans of his granddaughter Paris Hilton as one of many causes for his choice and his considerations about “what unearned wealth can do to warp an individual’s values”) and that as a substitute of leaving his multi-billion fortune to his household, he as a substitute determined to go away the majority of his property to the household basis.

In July 2010, Barron publicly reconfirmed his intention to go away most of his wealth to the inspiration “to go away the world a greater place than he discovered it.”

Barron died in 2019, leaving 97% of his fortune to the household basis (the opposite 3% was reportedly break up between relations).

Measure to Keep away from Disputes

Barron took precautionary steps to keep away from disputes relating to his property plan. A few of these steps included acquiring approval from the California Probate Court docket and a personal letter ruling from the Inner Income Service relating to his disclaimer of his curiosity in a marital belief together with his ex-wife (to permit his kids to acquire earlier entry to the residue of the belief), acquiring written waivers from every of his eight kids confirming that his disclaimer of his curiosity within the marital belief wouldn’t be challenged or put aside, advising every of his kids in writing relating to his intention to go away the majority of his wealth to the household basis and publicly asserting his intention to donate the overwhelming majority of his wealth to the inspiration and incorporating no contest clauses into each his will and belief.

Dispute Arises

Regardless of the numerous precautions and the no-contest clauses, a few of his kids, who weren’t too thrilled with their father’s choice relating to the destiny of their inheritance (or lack thereof), subsequently filed claims in opposition to the inspiration.

After the youngsters’s claims have been all rejected by the trustee of their father’s belief, the William Barron Hilton Belief (the remaining belongings of which have been to be distributed to the household basis on Barron’s loss of life, per the phrases of the belief), the youngsters sued the trustee. The Superior Court docket of Los Angeles dismissed their claims, besides for 2 of the claims by Barron’s kids in opposition to the trustee.

The property posits that the remaining challenges are relating to the marital belief or alleged conduct that preceded the marital belief within the Eighties and Nineties. As a result of not one of the remaining claims concern Barron’s will, the property asks that the court docket decide that there’s no deficiency in federal property tax.