N.Y. EPT Law § 2-1.8 — New York Code / Act EPT / Article 2 / Part 1 / Section 2-1.8
Apportionment of federal and state estate or other death taxes;
Status: in_force

§ 2-1.8 Apportionment of federal and state estate or other death taxes;\n          fiduciary to collect taxes from property taxed and transferees\n          thereof\n  (a) Whenever it appears in any appropriate action or proceeding that a\nfiduciary has paid or may be required to pay an estate or other death\ntax, under the law of this state or of any other jurisdiction, with\nrespect to any property required to be included in the gross tax estate\nof a decedent under the provisions of any such law (hereinafter called\n"the tax"), the amount of the tax, except in a case where a testator\notherwise directs in his will, and except where by any instrument other\nthan a will (hereinafter called a "non-testamentary instrument")\ndirection is given for apportionment within the fund of taxes assessed\nupon the specific fund dealt with in such non-testamentary instrument,\nshall be equitably apportioned among the persons interested in the gross\ntax estate, whether residents or non-residents of this state, to whom\nsuch property is disposed of or to whom any benefit therein accrues\n(hereinafter called "the persons benefited") in accordance with the\nrules of apportionment herein set forth, and the persons benefited shall\ncontribute the amounts apportioned against them.\n  (b) Unless otherwise provided, when a disposition is made by which any\nperson is given an interest in income or an estate for years or for life\nor other temporary interest in any property or fund, the tax\napportionable against such temporary interest and the remainder limited\nthereon is chargeable against and payable out of the principal of such\nproperty or fund without apportionment between such temporary interest\nand remainder. The provisions of this paragraph apply although the\nholder of the temporary interest has rights in the principal, but do not\napply to a common law annuity.\n  (c) Unless otherwise provided in the will or non-testamentary\ninstrument, and subject to paragraph (d-1) of this section:\n  (1) The tax shall be apportioned among the persons benefited in the\nproportion that the value of the property or interest received by each\nsuch person benefited bears to the total value of the property and\ninterest received by all persons benefited, the values as finally\ndetermined in the respective tax proceedings being the values to be used\nas the basis for apportionment of the respective taxes.\n  (2) Any exemption or deduction allowed under the law imposing the tax\nby reason of the relationship of any person to the decedent, the fact\nthat the property consists of life insurance proceeds or the charitable\npurposes of the gift shall inure to the benefit of the person bearing\nsuch relationship or receiving such insurance proceeds or charitable\ngift, as the case may be.\n  (3) Any deduction for property previously taxed and any credit for\ngift taxes paid by the decedent shall inure to the benefit of all\npersons benefited and the tax to be apportioned shall be the tax after\nallowance of such deduction or credit.\n  (4) Any interest resulting from the late payment of the tax shall be\napportioned in the same manner as the tax and shall be charged wholly to\nprincipal.\n  (5) Any discount allowed for prepayment of the tax shall be credited\nwholly to the principal of the funds contributing the moneys used for\nprepayment in proportion to the contribution made.\n  (d) Subject to subparagraphs (1), (2) and (3) of this paragraph, any\ndirection as to apportionment or non-apportionment of the tax, whether\ncontained in a will or a non-testamentary instrument, relates only to\nthe property passing thereunder, unless such will or instrument provides\notherwise.\n  (1) Any such direction in a will which is later in date than a prior\nnon-testamentary instrument and which contains a contrary direction\nshall govern provided that the later will specifically refers to the\ndirection in such prior instrument.\n  (2) Any such direction in a non-testamentary instrument which is later\nin date than a prior will or non-testamentary instrument and which\ncontains a contrary direction shall govern provided that the later\ninstrument specifically refers to the direction in such prior will or\ninstrument.\n  (3) Any such direction provided in a non-testamentary instrument only\nrelates to the payment of the tax from the property passing thereunder\nand such direction shall not serve to exonerate such non-testamentary\nproperty from the payment of its proportionate share of the tax, even if\notherwise directed in that non-testamentary instrument.\n  (d-1)(1)(A) If any part of the gross tax estate consists of property\nthe value of which is includible in the gross tax estate by reason of\n§2044 of the Internal Revenue Code of 1986 as from time to time amended,\nthe decedent's estate shall be entitled to recover from the person\nreceiving the property the amount by which the total tax under article\ntwenty-six of the tax law which has been paid exceeds the total tax\nunder such article which would have been payable if the value of such\nproperty had not been included in the gross tax estate.\n  (B) Clause (A) of this subparagraph shall not apply if the decedent\nspecifically directs otherwise by will.\n  (2) For the purposes of this paragraph, if there is more than one\nperson receiving the property, the right of recovery shall be against\neach such person.\n  (3) In the case of penalties and interest attributable to additional\ntaxes described in subparagraph (1) of this paragraph, rules similar to\nsubparagraphs (1) and (2) of this paragraph shall apply.\n  (e) In all cases in which any property required to be included in the\ngross tax estate does not come into the possession of the fiduciary, he\nis authorized to, and shall recover from the persons benefited or from\nany person in possession of such property the ratable amounts of the tax\nand any interest payable by the persons benefited. The surrogate may\ndirect the payment thereof to the fiduciary and may charge such payments\nagainst the interests of the persons benefited in any assets in the\npossession of the fiduciary or any other person. If the fiduciary cannot\nrecover the amount of the tax and interest apportioned against a person\nbenefited, such amount may be charged in such manner as the surrogate\ndetermines.\n  (f) No fiduciary is required to pay over or distribute to any person\nother than the fiduciary charged with the duty to collect and pay the\ntax any fund or property with respect to which the tax is or may be\nimposed until the amount of the tax apportioned or which may be\napportioned against such fund or property and any interest due from the\npersons entitled thereto is paid or, where the tax has not been\ndetermined or apportionment made, unless and until adequate security for\nsuch payment is furnished to the fiduciary making such payment or\ndistribution.\n  (g) The surrogate shall make such preliminary, intermediate or final\ndecrees or orders in the proceeding, as he shall deem advisable,\ntentatively or finally apportioning the tax and any interest, directing\nthe fiduciary to collect the apportioned amounts from the property or\ninterests in his possession of any persons against whom such\napportionment has been made and directing all other persons against whom\nthe tax and any interest are apportioned or from whom any part of the\ntax and any interest may be recovered to make payment of such\napportioned amounts to such fiduciary; and if it is ascertained in such\nproceeding that the property in the possession of the fiduciary,\notherwise payable to a person liable for any part of the tax and\ninterest, is insufficient to discharge the liability of such person, the\nsurrogate may direct that the balance of the apportioned amount due\nshall be paid to the fiduciary by such other person. If, in the course\nof the proceeding, it is ascertained that more than the ratable amount\nof the tax and interest due from any person has been paid by him or in\nhis behalf the surrogate may direct an appropriate reimbursement of the\noverpayment.\n  (h) If the surrogate apportions any part of the tax against any person\ninterested in non-testamentary property or apportions the tax among the\nrespective interests created by any non-testamentary instrument, he may,\nin his discretion, assess against such property or interests, an\nequitable share of the expense in connection with the determination of\nthe tax and the apportionment thereof. Whenever an attorney renders\nservices to the estate or to its personal representative resulting in\nthe exclusion from the gross taxable estate of any non-testamentary\nproperty or interests created by any non-testamentary instrument, the\nsurrogate may, in his discretion, assess against such property or\ninterests an equitable share of the compensation for such legal services\nrendered to the estate or to its personal representative in proportion\nto the benefit received by such property or interests from such\nservices, unless the decedent's will or the non-testamentary instrument\ncontains a direction that no portion of the tax shall be apportioned\nagainst such non-testamentary property or against interests created by\nany non-testamentary instrument. The surrogate may retain jurisdiction\nof any proceeding until the purposes of this section have been\naccomplished.\n