In re the Estate of Leavitt — 22 N.Y. St. Rep. 81

Majority

p. 81

Estate of Edward Leavitt.

(Surrogate's Court, New York County,

Filed January 31, 1889.)

Headnote

1. Collateral inheritance tax—Laws 1885, chap. 488—Duty of ap-

praiser.

The appraiser of a decedent’s estate subject to the collateral inheritance-tax is only required to find the fair market value of the property at the-death of the decedent; and the question of the possible appreciation or depreciation of the estate within a few months or a few years is not material.

2. Same—Non-resident—Property of—Subject to tax.

Property in this state, real and personal, belonging to a non-resident, testatrix is subject to the tax imposed by chapter 488, Laws of 1885.

George C. Coffin, for executors; Nathaniel Cox, special guardian; Lester G. Read and Augustus C. Brown, for legatees; G. McAdam, for comptroller.

—In this matter the appraiser reports that the-two annuities which are subject to tax amount to $47,581, and. that the whole taxable estate amounts to $58,510,02, which, even if judiciously invested, would not produce a sufficient, amount of income to pay the said annuities, and adds: “ 1 cannot ascertain that the rents, issues, profits and income-from the estate of testator will be more than sufficient to-pay the above legacies and annuities, and am, therefore, unable to compute the value of other contingent payments

p. 82

of surplus income to nephews and nieces provided for in the will. _The_ right of and direction to the executors to impair and diminish the corpus of the estate, if necessary, from time to timé, for the purpose of making good the annuities, •and the apparent necessity' for so doing for want of adequate income, renders any appraisement of the value of the ■contingent interests provided for in the will premature during the life-time of the annuities.”

_ Counsel for certain of the beneficiaries appear in opposition to the report, and claim that the appraiser errs in reporting any of the property subject to the tax, upon the ground that the whole estate in this state is personal property, and that, as the testator was a resident of and domiciled in the state of Connecticut, the surrogate has no juris•diction, and it is a well settled rule of law, that personal property follows the domicile, and, therefore, there is nothing in this state subject to the tax.

Counsel for the executors claim that it is impossible for ■the appraiser to fix a hard cash value on these annuities, as the executors are required to pay to each of the two annuitants $500 quarterly, and, as there is not enough income, there will be, every three monts, some diminution of principal, which sum will then cease to bear interest. This is a case, say counsel, where the value becomes mere guess work, and is not within the contemplation of the Collateral Inheritance Tax Act, and they ask that, at any rate, in view of ■all the considerations here urged, the tax should not be more ■than half.

Counsel for the comptroller contends that the report should •be confirmed, upon the ground that the' sacrifices of stock which counsel for the executors claim have to be made to meet these payments, have nothing to do with the question ■of the tax, unless it can be shown that such sacrifices will - absolutely exhaust and wipe out the estate, so that the life interests will be cut off, and that as the appraiser reports that the value of the estate is $58,510.02, and the valuation -of the life interests, $47,581, the absolute exhaustion of the ■estate is a contingency which it would be impracticable to ■consider.

The question of jurisdiction would appear to be settled by the Matter of Enston (Second Department, 10 N. Y. State Rep., 380), in which the court held that property in this state belonging to a non-resident testatrix, was subject to the tax imposed by chapter 483 of the Laws of 1885.

As regards the claim of the executors, that it is impossible to fix the hard cash value of the annuities on account of the probable and even actual diminution of the property, I hold that the appraiser has nothing to do with such matters. He is only required to find the fair market value of the property at the death of the decedent, and the question of the possible appreciation or depreciation of such property three months or three years after that event, is not material.

p. 83

An order should, therefore, be entered, confirming the report of the appraiser, and assessing _ and fixing the tax upon the estates he has reported as subject.