California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 1 - Inheritance Tax › Article 9.1 - Withholding of Tax by Third Persons › Section 14345 - Delivery of Property-Insurance Companies

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Insurance on Life of Decedent. Except as
				  provided in subdivisions (1), (2) and (3) below, unless the Controller issues a
				  written consent, delivery of payment by reason of the death of an insured to
				  the beneficiary or beneficiaries under a policy of life or accident insurance
				  may not be made by the insuring company without retaining a sufficient amount
				  to pay any inheritance tax and interest which may thereafter be assessed and
				  without first giving notice to the Controller of the time and place of payment
				  at least ten days prior thereto. (See Revenue and Taxation Code Section
				  14345.)
These provisions are modified by the following exceptions
					 whereby, pursuant to the authority granted by Revenue and Taxation Code Section
					 14348,
					 the State Controller has dispensed with the written consent or withholding and
					 prior notice requirements of Revenue and Taxation Code Section
					 14345
					 in the following cases except as otherwise specified:
(1) When proceeds are payable to a named
				  beneficiary if the aggregate paid by the company is not in excess of
				  $5,000.
(2) Subject to the notice
				  under subdivision (9), and in situations other than those indicated in
				  subdivisions (3), (4), (5) and (6), when payable to a named beneficiary if the
				  aggregate paid by the company to the beneficiary is over $5,000 but not in
				  excess of $25,000, and if the company can affirm that to its knowledge the
				  total amount of insurance written by all companies on the life of the decedent
				  does not exceed $50,000.
(3) When
				  payable to the surviving spouse of the decedent with a date of death on or
				  after January 1, 1981 in any amount, provided that notice under subdivision (9)
				  be given of payment in excess of $100,000.
(4) Subject to the notice under subdivision
				  (9) when payable to the surviving spouse of a decedent with a date of death
				  prior to January 1, 1981, if the aggregate paid by the company does not exceed
				  $25,000 plus 50 percent of any proceeds in excess of $25,000.
(5) Subject to the notice under subdivision
				  (9) when payable to a child of the decedent if the aggregate paid by the
				  company does not exceed $25,000 plus 50 percent of any proceeds in excess of
				  $25,000.
(6) Subject to the notice
				  under subdivision (9) of amounts over $2,000, when payable to the estate of a
				  decedent or the executor or administrator of decedent's estate in any amount,
				  if the company has obtained a certified copy of letters testamentary or letters
				  of administration issued in a probate proceeding by a California court to a
				  California resident executor or administrator.
(7) When payable in any amount and the
				  company has obtained a certified copy of the decedent's death certificate which
				  contains entries showing the death to have occurred outside the State of
				  California and that the last usual residence of the decedent was in a state of
				  the United States other than California and the length of stay therein was not
				  less than two years.
(8) When
				  payable in any amount and the company has either not obtained a death
				  certificate, or having obtained one, it shows that the decedent died outside
				  the State of California but is indeterminate as to his last usual residence or
				  length of stay therein, and the company has obtained an affidavit of residence
				  stating that the decedent died outside the State of California, that he or she
				  was a legal resident of a state of the United States other than California and
				  that he or she was not present in California for a period longer than six
				  months during the last two years of his life.
(9) Payments authorized in the situations
				  described in subdivisions (a)(2), (3), (4), (5) and (6), are subject to the
				  condition that notice of such payment is sent to the District Office of the
				  Division of Tax Administration-Inheritance Tax serving the county of which the
				  decedent was a resident, within 35 days after the date of such payment. (See
				  Section 14732 for counties comprising each
				  district.) The notice must indicate the number of the insurance policy, name of
				  the insuring company, nature and type of the policy, name of the insured
				  decedent and residence at time of death, name and residence of beneficiary and
				  beneficiary's relationship to the decedent, the face value of the policy, the
				  amount payable, the amount paid to the beneficiary and the amount retained for
				  future payment, if any.
(10) When
				  the policy is not owned by the insured decedent at death, payment may be made
				  to a named beneficiary if the aggregate is not in excess of $5,000, or pursuant
				  to the circumstances described in subdivisions (a)(3), (4) and (5) and subject
				  to notice under subdivision (a)(9). Payment of all other amounts are subject to
				  the provisions of Revenue and Taxation Code Section
				  14345.
				  The request for consent to transfer will be processed in the District Office of
				  the Division of Tax Administration-Inheritance Tax serving the county of
				  decedent's residence. See Section
				  14732 for counties comprising each
				  district. To facilitate processing the request should include the policy
				  number, name and last residence of the insured decedent, name of the
				  beneficiary, relationship of the beneficiary to the decedent, the amount
				  payable, name of the policy owner, relationship of the owner to the insured,
				  effective date of the current ownership, whether the owner was the original
				  applicant, how ownership was acquired, the extent to which consideration may
				  have been given by the owner to the insured, whether the insured retained any
				  incidents of ownership or policy rights, and the extent to which the insured
				  may have paid the premiums on the policy.