7

[G. L. c. 65, § 8 for the purpose of fixing the tax on the remainder, the life estate was required to be valued on the basis of its probable duration at the death of the testator. When the remainder consisted of future and contingent interests, and it could not be determined until long after the testator's death whether they would fall to direct or to collateral heirs, a case arose for the probate court to defer payment of the tax, and the liability of the remainder to the tax depended upon the outcome of the contingency. There was nothing in the statute which limited the time within which suit might be brought to recover the tax.o

In 1902 a radical change was made and a statute enacted in that year1o provided that when there was a devise, descent or bequest to strangers or collaterals to take effect in possession or enjoyment after a life estate or term for years (1) the tax thereon should not be payable until the persons entitled came into possession of the property; (2) the tax should be based on the actual value of the property when the right of possession accrued; (3) the liability for payment should rest upon the beneficiary instead of upon the executor or administrator. It was held that the statute was retrospective and applied to all estates upon which the tax had not been paid," and was constitutional as so construed, although it might increase the amount of the tax on the remainderman, by reason of the appreciation in value of the property during the preceding term for life or years, as it was aimed to do more exact justice to both the commonwealth and to the taxable beneficiaries by substituting a real for an estimated valuation which might be incorrect by reason of the variation between the actual and the estimated duration of the preceding life estate or by reason of the appreciation or depreciation of the property between the death of the testator and the acquisition of possession by the remainderman.1 12 There was nothing in the statute which limited its application to remainders after such previous estates as were not subject to the tax.13 The statute permitted the payment

Howe v. Howe, 179 Mass. 546 (1901).

8 Howe v. Howe, 179 Mass. 546 (1901). 'Howe v. Howe, 179 Mass. 546 (1901).

10 St. 1902, c. 473.

11 Stevens v. Bradford, 185 Mass. 439 (1904).

12 Attorney General v. Stone, 209 Mass. 186 (1911).

131 Opinions of Attorney General, 76.

G. L. c. 65, § 8] of the tax at any period previous to the acquisition of possession, the value being fixed as of the time of payment after deducting the value of the preceding term.

In 1903, it apparently being felt that the interests of the commonwealth were not sufficiently protected, it was provided that a tax on the remainder or reversion in personal property of the estates of persons dying thereafter should be assessed and collected under the provisions of the original statutes unless the persons beneficially interested gave bond within one year from the death of the decedent for the payment of the tax when they should enter into possession. For the tax on remainders and reversions in real estate the commonwealth was sufficiently protected by its lien.

14

The provisions of the last mentioned statutes relating to the deferment of the payment of taxes upon estates in remainder or reversion received considerable modification when the direct inheritance tax of 1907 was enacted. Such taxes were made payable by the executor, administrator or trustee in office when the right of possession accrued and if there was no executor, administrator or trustee, by the person entitled to the property; and a sum of money might be deposited instead of a bond. The date of payment was however definitely fixed as the date when right of possession accrued if there was an executor, administrator or trustee in office; otherwise one year later, so that the filing of the bond was no longer a condition precedent to the deferment of the tax. The only advantages in filing the bond or making the deposit are that it extinguishes the lien upon the real estate and makes possible the allowance of the final probate accounts of the executor, administrator or trustee. In 1909 a change was made by striking out a provision that the tax should be payable before the expiration of two years if the legacies were paid earlier. 15 The statute which made this last amendment and re-enacted the remainder of the section was given general application to taxes which remained unpaid, and accordingly it has been held that although the statute of 1907 was in terms wholly prospective in operation, the re-enactment of the section now under consideration in 1909 made it applicable to taxes

"St. 1903, c. 276. See the following case decided under that statute. Dow v. Abbott, 197 Mass. 283 (1908).

15 St. 1909, c. 527, §2.

[G. L. c. 65, § 8 assessed under the statutes in force prior to 1907 as well as to those under the act of that year.1

16

In 1915 the time of payment was reduced to one year from the date of giving bond by the executors, administrators or trustees first appointed," and in the following year the tax was made payable in the case of the passing of property by gift or survivorship within one year after the right of possession accrued.18

The provisions of section eight were first enacted in 1900,19 but were repealed in 1912 with respect to the estates of persons dying thereafter,20 as they ceased to be applicable after the state renounced the taxation of the estates of deceased non-residents. In 1920, when the state resumed the taxation of the estates of deceased non-residents within its jurisdiction, the statute was reenacted.21

SUMMARY

The tax is payable and interest begins to run one year from the date of giving bond by the executor or administrator except (1) When the probate court has ordered the retention of funds to satisfy a claim of a creditor it may order payment of the tax suspended.2

(2) When there is an estate to take effect in possession after a term for life or years, the tax is not payable until the right to possession accrues, if there is an executor, administrator or trustee in office; and if there is no such person in office at that time the tax is not payable until a year later;23 but the tax

16

10 St. 1909, c. 527, §10; Attorney General v. Stone, 209 Mass. 186, 192 (1911). 17 St. 1915, c. 162.

18 St. 1916, c. 268, §2.

19 St. 1900, c. 371, §1. This statute first appeared in 1900 as a means of more readily enforcing payment of the inheritance tax on stock in national banks situated in this commonwealth and in Massachusetts corporations, which it had been held in the previous year were subject to the tax, although the foreign executor had succeeded in getting them transferred without taking out ancillary administration here. Greves v. Shaw, 173 Mass. 205 (1899). The statute in its original form and in the Revised Laws applied to the obligations of such corporations as well as to their stock, but as enacted in the statute of 1907 and in its present form the provision as to obligations is omitted.

20 St. 1912, c. 678, §2.

St. 1920, c. 396, §4. 22 G. L. c. 65, §7, par. 2. 23 G. L. c. 65, §7, par. 1.

G. L. c. 65, §§ 8, 9] may at the option of the persons entitled to a future interest be paid earlier.24

(3) When a foreign executor, administrator or trustee of a non-resident decedent causes stock in a Massachusetts corporation or in a national bank situated in this commonwealth to be transferred, the tax becomes payable forthwith.25

(4) The probate court may extend the time of payment of the tax whenever the circumstances of the case require such extension.26

(5) In the case of a gift taking effect in possession or enjoyment after the death of the donor, or upon the accrual of an interest in joint property by survivorship, the tax becomes payable at the expiration of one year from the date when the right of possession or enjoyment accrues."

(6) In the case of a gift made in contemplation of death, the tax becomes payable at the expiration of one year from the death of the donor.28

(7) In case of any gift of a future interest, the tax on the future interest becomes payable when the right of possession or enjoyment thereof accrues.29

Lien for Tax

SECTION 9. Property of which a decedent dies seized or possessed, subject to taxes as aforesaid, in whatever form of investment it may happen to be, and all property acquired in substitution therefor, shall be charged with a lien for all taxes and interest thereon which are or may become due on such property; but said lien shall not attach to any personal property after the same has been sold or disposed of for value by the executors, administrators or trustees, or to real estate after it has been conveyed by the executors, administrators or trustees under license or decree of the probate court, or to real estate which, during the life of the grantor, is conveyed by recorded or registered deed and transferred in possession and enjoyment by him to the grantee, in contemplation of death. The lien charged by this. chapter upon any real estate or separate parcel thereof may be dis

[G. L. c. 65, §§ 9, 10 charged by the payment of all taxes due and to become due upon said real estate or separate parcel, or by an order or decree of the probate court discharging said lien and securing the payment to the commonwealth of the tax due or to become due by bond or deposit as hereinafter provided, or by transferring such lien to other real estate owned by the owner or owners of said real estate or separate parcel thereof.

The provisions for the enforcement of the lien on real estate are found in section thirty-one.

Delivery of Assets to Foreign Executor

SECTION 10. Securities or assets belonging to the estate of a deceased non-resident shall not be delivered or transferred to a foreign executor, administrator or legal representative of such decedent, unless such executor, administrator or legal representative has been licensed to receive said securities or assets under section three of chapter two hundred and four. License to receive, sell, transfer or convey securities or assets under said section shall not be granted unless it appears to the judge of the probate court that all taxes imposed by this chapter have been paid or secured according to law. Any person or corporation that delivers or transfers any securities or assets belonging to the estate of a non-resident decedent before all taxes imposed thereon by this chapter have been so paid or secured shall be liable for such tax in an action of contract brought by the state treasurer.

This section was first enacted in 19001 and was re-enacted in the Revised Laws, but it received considerable modification in the statute of 1907, the express prohibition of the granting of the license and the liability for delivering assets before all taxes have been paid having been added at that time. The statute was repealed as inapplicable in 1912,3 so far as it related to the estates of persons dying thereafter, when the state ceased to tax the estates of deceased non-residents; but when the taxation of such estates was resumed in 1920, the statute was reenacted. The section of the General Laws referred to in the

'St. 1900, c. 371, §2.

2 St. 1907, c. 563, §16. See also St. 1909, c. 527, §7. St. 1912, c. 678, §2.

St. 1920, c. 396, §5.