Sec. 12-341. Taxable transfers by persons dying on and after July 1, 1959, and prior to July 1, 1963.
Sec. 12-341. Taxable transfers by persons dying on and after July 1, 1959, and
prior to July 1, 1963. The transfers enumerated in section 12-340 shall be taxable if
made: (a) By will; (b) by statutes relating to descent and distribution of property upon
the death of the owner; (c) in contemplation of the death of the transferor, and any
transfer of property, either by a direct conveyance or by conveyances through a third
party, made and completed within one year next prior to the date of death of the transferor, shall, unless shown to the contrary, be construed prima facie to have been made
in contemplation of death; (d) by gift or grant intended to take effect in possession or
enjoyment at or after the death of the transferor. Such a transfer as last mentioned shall
include, among other things, a transfer under which the decedent retained for his life,
or for any period not ascertainable without reference to his death, or for a period of such
duration as to evidence an intention that he should retain for his life (1) the possession
or enjoyment of, or the right to the income from, the property, or (2) the right, either
alone or in conjunction with any person or persons, to designate the person or persons
who shall possess or enjoy the property or the income therefrom, but shall not include
property transferred by the decedent in which he retained, whether by operation of law
or otherwise, the possibility, hereinafter referred to as a "reversionary interest", that the
property would return to the decedent or his estate or would be subject to a power of
disposition by him, unless the value of such reversionary interest immediately before
the death of the decedent exceeded five per cent of the value of the property transferred.
The value of a taxable reversionary interest immediately before the death of the decedent
shall be determined, without regard to the fact of the decedent's death, by usual methods
of valuation, including the use of tables of mortality and actuarial principles, allowing
credit for the value of all intervening estates, under regulations prescribed by the Commissioner of Revenue Services; (e) in payment of a claim against the estate of a deceased
person arising from a contract made by him and payable by its terms at or after his death,
but a claim created by an antenuptial agreement made payable by will shall be considered
as creating a debt against the estate and shall not constitute a taxable transfer. If any
transfer specified in subdivisions (c), (d) and (e) of this section is made for a valuable
consideration, so much thereof as is the equivalent in money value of the money value
of the consideration received by the transferor shall not be taxable, but the remaining
portion shall be taxable. If it becomes necessary or appropriate in ascertaining such
value to use mortality tables, the American Men's Ultimate Mortality tables at four per
cent compound interest shall be used, so far as applicable.
(1949 Rev., S. 2021; 1959, P.A. 250, S. 1; P.A. 77-614, S. 139, 610.)
History: 1959 act excluded certain reversionary interests; P.A. 77-614 substituted commissioner of revenue services
for tax commissioner, effective January 1, 1979.
See Sec. 12-341a re effective date of this section.
Annotations to former statute:
Gift which did not create joint tenancy, nevertheless taxable as gift to take effect in possession and enjoyment at death
of donor. 111 C. 165. Cited. Id., 176. Irrevocable transfer to trustee to pay income to transferor during life, with directions
that on his death corpus be paid to designated beneficiaries, taxable within subdivision (d); tax to be computed on value
at death. 114 C. 207, 213, 225; aff'd 287 U.S. 509. See also 122 C. 115. Gift by warranty deed to children, reserving life
use in grantor, taxable within subdivision (d). 114 C. 207. Cited. 115 C. 147. Revocable transfer in trust to pay income to
settlor's spouse for life and upon spouse's death to settlor, and upon death of survivor to transfer principal to settlor's
executors, held within subdivision (d); same where remainder is to spouse's appointees by will or in default of appointment
to designated persons; life estates not taxable. 118 C. 233, 245, 247. See also 122 C. 116. Tax applies to transfers wherein
death of transferor is a factor in devolution of use and enjoyment of property. 122 C. 107, 117. Taxability of transfer
providing for possibility of reverter. Id., 117-122. Transfer in trust to pay income to settlor's wife for life, with remainders
to named beneficiaries, wherein settlor retained power of revocation exercisable to revest corpus in him if wife died or
became incompetent during his lifetime, held taxable under subdivision (d). 125 C. 456. Whether a transfer is in contemplation of death is question of fact in individual case; thought of death must be impelling cause of transfer. Id., 680, 683, 685.
Only consideration having monetary value and actually received by transferor may be deducted; mere promise not sufficient.
127 C. 48. Cited. 128 C. 558. Cases relating to transfers to take effect in possession or enjoyment at death reviewed; inter
vivos trust taxable where settlor reserved power to amend otherwise than to revest in him. 129 C. 176. Joint bank accounts
taxable under subdivision (d) when decedent contributed all funds, retained books and withdrew interest. 131 C. 345. If
donees came into possession and enjoyment at creation of accounts, this section applies; if they were to succeed to possession
and enjoyment at donor's death, accounts taxable under subdivision (d). Id., 347. Life insurance purchased in combination
with annuity held taxable. 132 C. 5. Cited. 282 U.S. 607. Transfer held subject to succession tax as one intended to take
effect in possession or enjoyment at or after the death of the settlor. 134 C. 456. United States defense savings bonds held
taxable even though survivor had no knowledge of treasury regulations. 136 C. 33. Some act of decedent as transferor,
with intent to retain property, is essential to render transfer taxable. Id., 503. Subdivision (d) cited. 140 C. 491; 141 C.
257. Intent is to reach the shifting of the economic benefits that may occur by reason of the death of the settlor even though
the shifting follows necessarily from a prior transfer of title. 142 C. 144. Benefits coming to decedent's spouse from
noncontributory, unfunded retirement plan subject to change by employer, held transfer to take effect at or after death.
145 C. 497.
Element of "interest to take effect in possession or enjoyment after death." 9 CS 196. Cited. 10 CS 541. "Grant" includes
transfer for valuable consideration. 15 CS 24. Trust to take effect at death of survivor or transferor is an "interest to take
effect in possession ... on death ..." Id., 135. Joint and survivor savings account created five years before death of B, when
about to undergo surgery, and who did not thereafter retain possession and control of passbooks, held to have been created
in contemplation of death. 16 CS 241. Cited. 17 CS 70.
Annotations to present section:
Cited. 38 CS 54.
Subdiv. (b):
Cited. 32 CS 227.
Subdiv. (c):
Cited. 175 C. 8.
The question whether a transfer is made in contemplation of death is one of fact and each such transfer must be
individually examined. Hence the state tax commissioner's appeal from the decree of the probate court holding two transfers
nontaxable did not involve all the transfers. 28 CS 210.
Subdiv. (d):
Nine years before his death settlor assigned to charity all interests he might have in properties of trusts, held that on
death of settlor such interests not within this subdivision. 146 C. 184. Taxability determined by state of affairs at time of
death of decedent. Id. Cited. 149 C. 334. Statute is intended to reach the shifting of economic benefits which may occur
by reason of death of transferor, though the shifting follows necessarily from a prior transfer of title inter vivos. 151 C.
39. Consideration for contractual restriction of competition payable annually to decedent held a testamentary transfer and
taxable as such. 152 C. 282. See section 12-354. Succession tax on transfers made according to this subdivision is imposed
on privilege of succeeding to right of possession or enjoyment of property from a former owner at his death, even though
the shifting of enjoyment follows from a prior transfer of title inter vivos, or as a result of a contractual obligation. Id.,
336. Where a trust is involved, intangibles are treated as being owned by a settlor at death and as having their situs, for
purposes of the succession tax, in the state of the settlor's domicile. Id., 336, 337. In order for a transfer to be subject to
the succession tax under this subdivision, there must be a causal relationship between the settlor's intent and the taking
effect in possession or enjoyment. The taking effect must be caused by an intentional act of the transferor, not by an
independent act of someone else. Id., 667.