30.1-20-16. (3-916) Apportionment of estate taxes
1. For purposes of this section:
a. "Estate" means the gross estate of a decedent as determined for the purpose of
federal estate tax and the estate tax payable to this state.
b. "Fiduciary" means personal representative or trustee.
c. "Person" means any individual, partnership, association, joint stock company,
corporation, limited liability company, government, political subdivision,
governmental agency, or local governmental agency.
d. "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, conservator, and trustee.
e. "State" means any state, territory, or possession of the United States, the District
of Columbia, and the Commonwealth of Puerto Rico.
f. "Tax" means the federal estate tax and the additional estate tax imposed by
chapter 57-37.1 and interest and penalties imposed in addition to the tax.
2. Unless the will otherwise provides, the tax shall be apportioned among all persons
interested in the estate. The apportionment is to be made 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 are to be used for that purpose. If the decedent's will directs a method of
apportionment of tax different from the method described in this title, the method
described in the will controls.
3. a. 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 tax.
b. If the court finds that it is inequitable to apportion interest and penalties in the
manner provided in subsection 2 because of special circumstances, it may direct
apportionment thereof in the manner it finds equitable.
c. If the court finds that the assessment of penalties and interest assessed in
relation to the 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.
d. In any action to recover, from any person interested in the estate, the amount of
the tax apportioned to the person in accordance with this title, the determination
of the court in respect thereto shall be prima facie correct.
4. a. The personal representative or other person in possession of the property of the
decedent required to pay the tax may withhold from any property distributable to
any person interested in the estate, upon its distribution to the person, the
amount of tax attributable to the person's interest. If the property in possession of
the personal representative or other person required to pay the tax and
distributable to any person interested in the estate is insufficient to satisfy the
proportionate amount of the tax determined to be due from the person, the
personal representative or other person required to pay the tax 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 the
tax, the personal representative or the other person required to pay the tax may
recover from any person interested in the estate the amount of the tax
apportioned to the person in accordance with this title.
b. If property held by the personal representative is distributed prior to final
apportionment of the tax, the distributee shall provide a bond or other security for
the apportionment liability in the form and amount prescribed by the personal
representative.
5. a. 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.
b. Any exemption or deduction allowed by reason of the relationship of any person
to the decedent or by reason of the purposes of the gift 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.
c. 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.
d. 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.
e. To the extent that property passing to or in trust for a surviving spouse or any
charitable, public, or similar gift or devisee is not an allowable deduction for
purposes of the tax solely by reason of an inheritance tax or other death tax
imposed upon and deductible from the property, the property is not included in
the computation provided for in subsection 2, 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 United States Internal Revenue
Code of 1954, as amended, relating to deduction for state death taxes on
transfers for public, charitable, or religious uses.
6. 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 tax on the temporary interest and the tax, if any, on the
remainder is chargeable against the corpus of the property or funds subject to the
temporary interest and remainder.
7. 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 tax apportioned to the person until the expiration of the three months
next following final determination of the tax. A personal representative or other person
required to pay the tax who institutes the action within a reasonable time after the
three months' period 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 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.
8. A personal representative acting in another state or a person required to pay the 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 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.
