Minnesota Legislature
SF 881
as introduced - 89th Legislature (2015 - 2016) Posted on 08/26/2015 02:26pm
1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 2.34 2.35 2.36 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 3.36 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 4.34 4.35 4.36 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19
A bill for an act
relating to estates; providing apportionment of taxes occasioned by a decedent's
death; amending Minnesota Statutes 2014, section 524.3-916.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2014, section 524.3-916, is amended to read:
524.3-916 APPORTIONMENT OF ESTATE TAXES AND
GENERATION-SKIPPING TAX.
(a) For purposes of this section:
(1) "estate" means the gross estate of a decedent as determined for the purpose of
federal estate tax or the estate tax payable to this state;
(2) "decedent's generation-skipping transfers" means all generation-skipping transfers
as determined for purposes of the federal generation-skipping tax which occur by reason
of the decedent's death which relate to property which is included in the decedent's estate;
(3) "person" means any individual, partnership, association, joint stock company,
corporation, limited liability company, government, political subdivision, governmental
agency, or local governmental agency;
(4) "person interested in the estate" means any person entitled to receive, or who has
received, from a decedent or by reason of the death of a decedent any property or interest
therein included in the decedent's estate. It includes a personal representative, guardian,
conservator, trustee, and custodian;
(5) "state" means any state, territory, or possession of the United States, the District
of Columbia, and the Commonwealth of Puerto Rico;
(6) "estate tax" means the federal estate tax and the state estate tax determined by the
commissioner of revenue pursuant to chapter 291 and interest and penalties imposed in
addition to the tax;
(7) "decedent's generation-skipping tax" means the federal generation-skipping
tax imposed on the decedent's generation-skipping transfers and interest and penalties
imposed in addition to the tax;
(8) "fiduciary" means personal representative or trustee.
(b) deleted text begin Unless the will or other governing instrument otherwise provides:deleted text end new text begin Any tax
occasioned by a decedent's death shall be apportioned as set forth in clauses (1) to (4).
new text end
(1) deleted text begin thedeleted text end Estate deleted text begin taxdeleted text end new text begin taxesnew text end shall be apportioned among all persons interested in the
estatedeleted text begin . The apportionment is to be madedeleted text end in the proportion that the value of the interest of
each person interested in the estate bears to the total value of the interests of all persons
interested in the estate. The values used in determining the tax deleted text begin are todeleted text end new text begin shallnew text end be used deleted text begin for
that purpose; anddeleted text end new text begin in apportioning the tax.
new text end
(2) new text begin Notwithstanding the general rule set forth in clause (1), if property is included in
the decedent's gross estate pursuant to section 2044 of the Internal Revenue Code of 1986,
as amended, or any similar provision of any state estate tax law, the difference between the
total estate tax payable by the decedent's estate and the amount of estate tax that would
have been payable by the decedent's estate if the property had not been included in the
decedent's gross estate shall be apportioned ratably among the holders of interests in the
property. The values used in determining the tax shall be used in apportioning the tax. The
balance of the tax, if any, shall be apportioned as provided in clause (1).
new text end
new text begin (3) new text end The decedent's generation-skipping tax shall be apportioned as provided by
federal law. To the extent not provided by federal law, the decedent's generation-skipping
tax shall be apportioned among all persons receiving the decedent's generation-skipping
transfers whose tax apportionment is not provided by federal law in the proportion that the
value of the transfer to each person bears to the total value of all such transfers.
new text begin (4) new text end If the decedent's will or other written instrument directs a method of
apportionment of estate tax or of the decedent's generation-skipping tax different from
the deleted text begin methoddeleted text end new text begin methodsnew text end described in this section, the method described in the will or other
written instrument deleted text begin controlsdeleted text end new text begin shall control;new text end provided, however, that:
(i) unless the decedent's will or other written instrument specifically indicates an
intent to waive any right of recovery under section 2207A of the Internal Revenue Code of
1986, as amended, estate taxes new text begin on property described in clause (2) new text end must be apportioned
under the method described in deleted text begin this section to property included in the decedent's estate
under section 2044 of the Internal Revenue Code of 1986, as amendeddeleted text end new text begin clause (2)new text end ; and
(ii) unless the decedent's will or other written instrument specifically indicates an
intent to waive any right of recovery under section 2207B of the Internal Revenue Code of
1986, as amended, estate taxes deleted text begin must be apportioned under the method described in this
section todeleted text end new text begin onnew text end property included in the decedent's estate under section 2036 of the Internal
Revenue Code of 1986, as amendednew text begin , must be apportioned under the method described
in clause (1)new text end .
(c)(1) The court in which venue lies for the administration of the estate of a decedent,
on petition for the purpose may determine the apportionment of the estate tax or of the
decedent's generation-skipping tax.
(2) If the court finds that it is inequitable to apportion interest and penalties in
the manner provided in subsection (b), because of special circumstances, it may direct
apportionment thereof in the manner it finds equitable.
(3) If the court finds that the assessment of penalties and interest assessed in relation
to the estate tax or the decedent's generation-skipping tax is due to delay caused by the
negligence of the fiduciary, the court may charge the fiduciary with the amount of the
assessed penalties and interest.
(4) In any action to recover from any person interested in the estate the amount of
the estate tax or of the decedent's generation-skipping tax apportioned to the person in
accordance with this section the determination of the court in respect thereto shall be
prima facie correct.
(d)(1) The personal representative or other person in possession of the property
of the decedent required to pay the estate tax or the decedent's generation-skipping tax
may withhold from any property distributable to any person interested in the estate,
upon its distribution, the amount of any taxes attributable to the person's interest. If the
property in possession of the personal representative or other person required to pay any
taxes and distributable to any person interested in the estate is insufficient to satisfy the
proportionate amount of the taxes determined to be due from the person, the personal
representative or other person required to pay any taxes may recover the deficiency from
the person interested in the estate. If the property is not in the possession of the personal
representative or the other person required to pay any taxes, the personal representative or
the other person required to pay any taxes may recover from any person interested in the
estate the amount of any taxes apportioned to the person in accordance with this section.
(2) If property held by the personal representative or other person in possession
of the property of the decedent required to pay the estate tax or the decedent's
generation-skipping tax is distributed prior to final apportionment of the estate tax or
the decedent's generation-skipping tax, the distributee shall provide a bond or other
security for the apportionment liability in the form and amount prescribed by the personal
representative or other person, as the case may be.
(e)(1) In making an apportionment, allowances shall be made for any exemptions
granted, any classification made of persons interested in the estate and for any deductions
and credits allowed by the law imposing the tax.
(2) Any exemption or deduction allowed by reason of the relationship of any person
to the decedent, by reason of the purposes of the gift, or by allocation to the gift (either
by election by the fiduciary or by operation of federal law), inures to the benefit of the
person bearing such relationship or receiving the gift; but if an interest is subject to a prior
present interest which is not allowable as a deduction, the tax apportionable against the
present interest shall be paid from principal.
(3) Any deduction for property previously taxed and any credit for gift taxes or
death taxes of a foreign country paid by the decedent or the decedent's estate inures to the
proportionate benefit of all persons liable to apportionment.
(4) Any credit for inheritance, succession or estate taxes or taxes in the nature
thereof applicable to property or interests includable in the estate, inures to the benefit of
the persons or interests chargeable with the payment thereof to the extent proportionately
that the credit reduces the tax.
(5) To the extent that property passing to or in trust for a surviving spouse or any
charitable, public or similar gift or devise is not an allowable deduction for purposes of
the estate tax solely by reason of an estate tax imposed upon and deductible from the
property, the property is not included in the computation provided for in subsection (b)(1)
hereof, and to that extent no apportionment is made against the property. The sentence
immediately preceding does not apply to any case if the result would be to deprive the
estate of a deduction otherwise allowable under section 2053(d) of the Internal Revenue
Code of 1986, as amended, of the United States, relating to deduction for state death taxes
on transfers for public, charitable, or religious uses.
(f) No interest in income and no estate for years or for life or other temporary interest
in any property or fund is subject to apportionment as between the temporary interest
and the remainder. The estate tax on the temporary interest and the estate tax, if any, on
the remainder is chargeable against the corpus of the property or funds subject to the
temporary interest and remainder. The decedent's generation-skipping tax is chargeable
against the property which constitutes the decedent's generation-skipping transfer.
(g) Neither the personal representative nor other person required to pay the tax is
under any duty to institute any action to recover from any person interested in the estate
the amount of the estate tax or of the decedent's generation-skipping tax apportioned to the
person until the final determination of the tax. A personal representative or other person
required to pay the estate tax or decedent's generation-skipping tax who institutes the
action within a reasonable time after final determination of the tax is not subject to any
liability or surcharge because any portion of the tax apportioned to any person interested
in the estate was collectible at a time following the death of the decedent but thereafter
became uncollectible. If the personal representative or other person required to pay the
estate tax or decedent's generation-skipping tax cannot collect from any person interested
in the estate the amount of the tax apportioned to the person, the amount not recoverable
shall be equitably apportioned among the other persons interested in the estate who are
subject to apportionment of the tax involved.
(h) A personal representative acting in another state or a person required to pay the
estate tax or decedent's generation-skipping tax domiciled in another state may institute an
action in the courts of this state and may recover a proportionate amount of the federal
estate tax, of an estate tax payable to another state or of a death duty due by a decedent's
estate to another state, or of the decedent's generation-skipping tax, from a person
interested in the estate who is either domiciled in this state or who owns property in this
state subject to attachment or execution. For the purposes of the action the determination
of apportionment by the court having jurisdiction of the administration of the decedent's
estate in the other state is prima facie correct.