CHAPTER 218*

FEDERAL AND STATE ESTATE TAXES

*Estate taxes are payable pro rata by the recipients of the taxable property in essentially the same manner as are succession taxes. 142 C. 692.

Situs of bonds for taxation is domicile of owner. 14 CS 415. Cited. 17 CS 401.

Table of Contents

Sec. 12-400. “Persons interested in the estate”, defined.

Sec. 12-401. Proration of estate taxes. Procedure.

Sec. 12-402. Tax to be paid by executor or administrator.

Sec. 12-403. Distribution by fiduciary.

Sec. 12-404. Order directing payment of prorated amounts.

Sec. 12-405. Appeal.


Sec. 12-400. “Persons interested in the estate”, defined. For the purpose of this chapter, “persons interested in the estate” includes all persons who may be entitled to receive or who have received any property or interest which is required to be included in the gross estate of a decedent or any benefit with respect to any such property or interest whether under a will or intestacy or by reason of any of the transfers, trusts, estates, rights, powers and relinquishment of powers, as severally enumerated in the United States Internal Revenue Code.

(1949 Rev., S. 2075.)

Cannot apply retroactively to impair vested rights. 136 C. 126. Cited. 139 C. 285.

Sec. 12-401. Proration of estate taxes. Procedure. (a) When it appears from any administration account or in any appropriate proceeding in the Probate Court that an executor, administrator, temporary administrator, trustee or other person acting in a fiduciary capacity has paid a death tax levied or assessed under the provisions of chapter 217, hereinafter called the Connecticut estate tax, or under the provisions of the United States Internal Revenue Code or under any death tax law of the United States hereafter enacted, hereinafter called the federal estate tax, upon or with respect to any property required to be included in the gross estate of a decedent under the provisions of any such law, the amount of the tax so paid, except when a testator otherwise directs in his will or when, by written instrument executed inter vivos, direction is given for apportionment within the fund of taxes assessed upon the specific fund dealt with in such inter vivos instrument, shall, except as hereinafter provided in subsection (b), be equitably prorated among the persons interested in the estate to whom such property is or may be transferred or to whom any benefit accrues. Such proration shall be made in the proportion, as near as may be, that the value of the property, interest or benefit of each such person bears to the total value of the property, interests and benefits received by all such persons interested in the estate, except that, in making such proration, allowances shall be made for any exemptions granted by the act imposing the tax and for any deductions allowed by such act for the purpose of arriving at the value of the net estate and except that, in cases where a trust is created or other provision made whereby any person is given an interest in income or an estate for years or for life or other temporary interest in any property or fund, the tax on both such temporary interest and the remainder thereafter shall be charged against and paid out of the corpus of such property or fund without apportionment between remainders and temporary estates. In all cases to which this chapter applies, except as hereinafter provided in subsection (b), the executor, administrator or other person acting in a fiduciary capacity shall include as a part of the administration account or other proceeding in the Probate Court a computation of the proposed proration. Before determining such proration, the probate judge shall, except as hereinafter provided in subsection (c), appoint a time and place for a hearing thereon and shall cause such notice of such hearing to be given to the parties in interest as he directs. In making the proration herein provided for, the credit allowed by the law imposing the federal estate tax for gift taxes paid, or for any estate, inheritance, legacy or succession taxes actually paid with respect to the estate to any state or territory or the District of Columbia, shall be assumed to apply pro rata to all parts of the gross taxable estate subject to such federal estate tax.

(b) If the judge of probate finds with or without a hearing thereon, from the administration account or other evidence available to and satisfactory to him, including written consents by those to whom the tax has been charged, that the federal estate tax and Connecticut estate tax, if any, as finally determined, have been paid and that the ultimate burden of such tax or taxes has been borne by a party or parties in interest in a manner satisfactory to them, or to their legal representatives, as evidenced by the written consent of such persons or of their legal representatives, no proration of the federal estate tax or Connecticut estate tax shall be made unless specially requested by any party in interest.

(c) Upon receipt of the computation provided for in subsection (a), the probate judge shall make a determination of the proration of the federal estate tax, if any, in the manner provided by subsection (a), except that, if all parties affected by such proration or their legal representatives endorse upon such computation their approval thereof, no hearing need be held thereon, but such determination may be made ex parte.

(1949 Rev., S. 2076; 1949, S. 1159d.)

Prior to proration act, burden of federal and state estate taxes was on estate as a whole and, in absence of direction otherwise in will, was payable out of residuary estate without reimbursement from beneficiaries of inter vivos transfers included in taxable estate. 124 C. 66. Cannot apply retroactively to impair vested rights. 136 C. 126. Cited. Id., 141. In the absence of a clear directive to the contrary, the proration statute governs the manner in which the burden of the federal and state estate taxes must be borne. 139 C. 285. Undertakes to determine upon whom the ultimate burden of estate taxes shall be placed; it is not a taxing statute. Were it not for the statute, that burden would, unless the will otherwise directed, fall upon the residuary estate. A directive in a will that all estate taxes be paid from the residue is not a directive against the prorating of estate taxes among residuary gifts. 144 C. 134. Testator must clearly indicate there is to be no proration. 145 C. 542. Marital deduction allowed against portion of residuum given to widow. Id. In absence of clear direction that proration statutes should not apply to death taxes attributable to nontestamentary property, statutes are applicable and burden of taxes fell on recipients of that property and not on the estate. 149 C. 335. In case of doubt as to meaning, the tax burden will be left where the law places it. 165 C. 376.

Provision directing that all taxes be paid “without apportionment or contribution” is sufficient to overcome statutory presumption of proration; however, such language will only be applied to property clearly contemplated by decedent to be within the estate. 60 CA 665.

Statute is constitutional. 16 CS 149. As a necessary result of the proration act, a widow, in the absence of clear language in the will to the contrary, should take her share free of taxes. 17 CS 401. Testamentary directive against proration must be clear and unambiguous. 20 CS 471. Directive to pay taxes in same manner as other administration expenses held effective against proration of taxes attributable to beneficiaries of residue. Id.

Sec. 12-402. Tax to be paid by executor or administrator. So far as is practicable, the tax shall be paid by the executor or administrator as such out of the estate before its distribution, unless the decedent’s will, if any, otherwise directs. When any property required to be included in the gross estate does not come into the possession of the executor or administrator as such, he shall recover from whoever is in possession or from the persons interested in the estate the proportionate amount of such tax payable by the persons interested in the estate with which such persons are chargeable under the provisions of this chapter, and the probate judge may by order direct the payment of such amount by such person to the executor or administrator.

(1949 Rev., S. 2077.)

Secs. 12-402 to 12-405 cannot apply retroactively to impair vested rights. 136 C. 126. Cited. Id., 141.

Sec. 12-403. Distribution by fiduciary. No executor, administrator or other person acting in a fiduciary capacity shall be required to transfer, pay over or distribute any property or fund with respect to which a federal or state estate tax is imposed until the amount of such tax or taxes due from the devisee, legatee, heir-at-law, distributee or other person to whom such property is transferred is paid or, if the apportionment of tax has not been determined, until adequate security is furnished by the transferee for such payment.

(1949 Rev., S. 2078.)

Sec. 12-404. Order directing payment of prorated amounts. The probate judge, upon making a determination as provided in section 12-401, shall make an order directing the executor, administrator or other fiduciary to charge the prorated amounts against the persons against whom the tax has been so prorated so far as he is in possession of property or interests of such persons, and directing all other persons against whom the tax has been so prorated or who are in possession of property or interests of such persons to make payment of such prorated amounts to such executor, administrator or other fiduciary.

(1949 Rev., S. 2079.)

Sec. 12-405. Appeal. Any person aggrieved by any determination or order made by the probate judge pursuant to this chapter may appeal therefrom to the Superior Court in the same manner and with the same effect as from other orders or decrees of the Probate Court.

(1949 Rev., S. 2080.)