California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 1 - Inheritance Tax › Article 6 - Valuation › Section 13952.2 - Estates, Income and Annuities for Joint Lives of Several Persons

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Joint Lives of
				  Two Persons.
If income, an annuity, or an estate is transferred to two
					 persons for their use or enjoyment during their joint lives, the present values
					 of the respective interests of the transferees are computed as follows:
(1) Determine in accordance with Section
				  13952.1
				  what the present value of the older transferee's life interest would be if he
				  were the only transferee.
(2)
				  Divide by two the value ascertained pursuant to step (1). The quotient will be
				  the present value of the older transferee's interest in the joint
				  estate.
(3) Determine in accordance
				  with Section
				  13952.1 what the present value of
				  the younger transferee's life interest would be if he were the only
				  transferee.
(4) Subtract the
				  present value of the elder transferee's single life interest, as determined
				  pursuant to step (1), from the present value of the younger transferee's single
				  life interest, as determined pursuant to step (3).
(5) Add the remainder determined pursuant to
				  step (4) to one-half of the present value of the elder transferee's single life
				  interest determined pursuant to step (1). The sum is the present value of the
				  younger transferee's interest in the joint estate.
The provisions of subdivision (a) may be illustrated by the
					 following example:
EXAMPLE.
A bequeaths to B and C the annual income from a sum of
					 $10,000 for their joint lives, the survivor to enjoy the entire income until
					 his death, with a remainder over to D. At the time of A's death, B, a male, is
					 40 years of age and C, a female, is 25 years of age. Table A(1) of Section
					 13953 indicates the life estate
					 factor for a male aged 40 is .78923. The product of this factor multiplied by
					 $10,000 is $7,892, the present value of B's single life estate. One-half of
					 $7,892, or $3,946, is the present value of B's interest in the joint life
					 estate. Table A(2) indicates the life estate factor for the life of a female
					 aged 25 is .92375. The product of this factor multiplied by $10,000 is $9,238,
					 the present value of C's single life estate. The difference between B's and C's
					 single life estate, $1,345, is added to one-half of the present value of B's
					 single life estate ($3,946), resulting in the sum of $5,291, the present value
					 of C's interest in the joint and successive life estate. The value of D's
					 remainder is $762 ($10,000 less the sum of B's and C's joint and successive
					 life interest).
The above computation may be simplified by combining the
					 last two steps, i.e., (4) and (5) of subdivision (a) into one computation in
					 the following manner. After determining the value of B's interest in a joint
					 life estate and the present value of C's single life estate as set forth above
					 (pursuant to steps (1), (2) and (3)), subtract the value of B's interest in the
					 joint life estate ($3,946) from the value of C's single life estate ($9,238).
					 The difference represents C's interest in the joint and successive life estate
					 ($9,238 - $3,946 = $5,292).