2023 Tennessee Code › Title 30 - ADMINISTRATION OF ESTATES (§§ 30-1-101 — 30-5-105) › Chapter 2 - MANAGEMENT, SETTLEMENT AND DISTRIBUTION (§§ 30-2-101 — 30-2-714) › Part 6 - ACCOUNTS AND SETTLEMENTS (§§ 30-2-601 — 30-2-615) › Section 30-2-614 - Proration of federal estate taxes and Tennessee inheritance or estate taxes

(a)
For the purposes of this section, "persons interested in the estate" means all persons who may be entitled to receive, or who have received, any property or interest that is required to be included in the gross estate of a decedent, or any benefit whatsoever with respect to any such property or interest, whether under a will, or intestacy, or by reason of any transfers, trust, estate, interest, right, power, relinquishment of power, gift in contemplation of death, gift taking effect in possession or enjoyment at or after death, or any other transfer inter vivos that is subject to federal death taxes, or the proceeds of any insurance policies that are subject to federal death taxes.
(b)
Whenever the personal representative of an estate has paid an estate or death tax to the government of the United States under any federal tax law now in effect or hereafter enacted by congress, upon, or with respect to, any property required to be included in the gross estate of a decedent under any federal tax law, the amount of the tax so paid, except in a case where a testator otherwise directs in the testator's will, shall 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. This proration shall be made by the personal representative in the proportion, as near as may be, that the value of the property, interest or benefit of each interested person bears to the total value of the property, interests and benefits received by all persons interested in the estate, except that in making the proration allowances shall be made for any exemptions granted by the law imposing the tax and for any deductions allowed by that law 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 by which any person is given an interest in income, or an estate for years, or for life, or only temporary interest in any property or fund, the tax on both the temporary interest and on the remainder thereafter shall be charged against and paid out of the corpus of the property or fund without apportionment between remainders and temporary estate.
(c)
So far as is practicable, and unless otherwise directed by the will of the decedent, the tax shall be paid by the personal representative, as such, out of the estate before its distribution. In all cases in which any property required to be included in the gross estate does not come into the possession of the personal representative, as such, the personal representative shall have the power and the duty, to recover from whomever is in possession, or from the persons interested in the estate, the proportionate amount of the tax, including interest, attorney fees and other costs of collection, payable by the persons interested in the estate with which the persons interested in the estate are chargeable under this section.
(d)
No personal representative, or other person acting in a fiduciary capacity, shall be required to transfer, pay over or distribute any fund or property with respect to which a federal estate or death tax is imposed until the amount of the tax or taxes due from the devisee, legatee, distributee or other person to whom that property is transferred is paid, or, if the apportionment of the tax has not been determined, adequate security is furnished by the transferee for this payment.
(e)
For a decedent dying before January 1, 2016, Tennessee estate or inheritance taxes, as the case may be, shall be prorated equitably among the beneficiaries and persons interested in the estate, except in a case where a testator otherwise directs in the testator's will, by the same method as described in subsections (a)-(d), except that the proration of the Tennessee tax shall be made in the proportion that the value of the property, interest or benefit of each beneficiary or interested person bears to the total value of the property, interests and benefits taxable in Tennessee and received by all persons interested in the estate. In making the proration, allowances shall be made for any exemptions granted by the Tennessee law imposing the tax and for any deductions allowed by that Tennessee law for the purpose of arriving at the value of the net estate. All definitions and rights or responsibilities of the personal representative applicable to the federal tax, as stated in subsections (a)-(d), shall be applicable to the determination of the prorated Tennessee tax payable by each beneficiary or person interested in the estate.
(f)
In the event the personal representative is unable to arrive at a satisfactory allocation of the tax, including interest, attorney fees and other costs of collection, among the beneficiaries and other persons interested in the estate as provided in subsections (b)-(e), the personal representative shall be authorized to file a petition in the probate court of the county in which the estate is being administered for the purpose of securing an adjudication with reference to the allocation. The probate court in such a case shall make a decree or order directing the personal representative to charge the prorated amounts against the persons against whom the tax, including interest, attorney fees and other costs of collection, has been so prorated, insofar as the personal representative is in possession of property or interests of such persons against whom the charge may be made, and summarily directing all other persons, against whom the tax, including interest, attorney fees and other costs of collection, has been prorated or who are in possession of property or interests of those persons, to make payment of the prorated amounts to the personal representative. The probate court of the county in which the estate is being administered shall have jurisdiction to entertain any proceeding or dispute under this section and to make disposition thereof. All such proceedings shall be maintained according to the forms of chancery.
Amended by 2017 Tenn. Acts, ch. 290,s 3, eff. 5/4/2017.
Acts 1943, ch. 109, §§ 1, 2; C. Supp. 1950, §§ 8350.7, 8350.8; T.C.A. (orig. ed.), §§ 30-1117, 30-1118; Acts 1984, ch. 609, §§ 1, 3; 2005, ch. 99, §§ 4, 5.