5. Where is corporate stock taxed? Where is money in bank taxed? Where are bonds, notes, and mortgages taxed?

6. What is the law as to life insurance? What is the federal law on this subject? What if the insurance is payable to the estate?

7. In what states is dower subject to the inheritance tax? When is the right of curtesy taxable? Is a bequest to husband or wife taxable?

8. What is joint tenancy? What distinguishes it from tenancy in common? Is the estate of the survivor of a joint tenancy taxable in your state? What is tenancy by the entirety? the estate of the survivor taxable?

Is

9. Can property be transferred in life, the transfer to take effect at death, so as to evade the tax? Would an absolute transfer made without consideration, before death, be taxable by the state? What circumstances would affect the probability of tax?

10. What is a power of appointment? When is the exercise of such a power taxable in your state? Would the execution of the will creating the power before the transfer tax law was passed affect the result in your state?

§ 253. Domicile

CHAPTER XXXI

MATTERS OF PROCEDURE

Anyone living in a state is subject to its laws and after his death his personal property is subject to its inheritance laws. His real estate is subject to the laws of the state where it is situated. The probate court of the county in which the decedent lived will have original jurisdiction. If he left a will it must be probated there, and if he died intestate the probate court of his county will appoint an administrator.

In these days, when people move so readily from place to place, and when wealthy men may have several residences, sometimes adopting a domicile purposely to evade inheritance and other taxes, it is not always easy to ascertain the real residence of a decedent. The rules by which domicile is determined are as follows:

1. Every person must have a domicile somewhere.

2. A person can have but one domicile.

3. A married woman's domicile is that of her husband unless she lives apart from him and thereby acquires a separate residence.

4. The original domicile of a person is presumed to continue until a new one is acquired.

5. The burden of proof rests upon the party alleging a change of domicile.

6. To sustain this burden, both a change of residence and intent to change the domicile must be shown.1

1 Gleason and Otis, Inheritance Taxation (2nd ed.), 1919, p. 213.

A person acquires a domicile in a place by living there, for even a brief period of time, with no definite present intention of later removing therefrom.'

The existing domicile, whether of origin or selection, continues until a new one is so acquired and the burden of proof rests upon the party who alleges a change. The question is one of fact rather than law and it frequently depends upon a variety of circumstances which differ as widely as the peculiarities of individuals."

Mrs. Hetty Green during a long life of accumulation managed to avoid the payment of most of her share of the burden of taxation. The tax authorities of New York tried hard to hold her whole estate for the large inheritance taxes, which they affirmed should go to the state of New York, but the attempt was entirely futile; the court holding that her residence was in Bellows Falls, a small place in Vermont where she had a residence and in which she lived for six weeks in the summer time.1

Then the New York authorities tried to hold that part of the estate which she was using in the business of money-lending and investing in the state of New York. The surrogate's court held that this could not be done, but on appeal the higher court on May 14, 1920, held that she was in business and that all of the capital engaged in that business was liable to taxation. Owing to the amount involved, the case will probably be carried up to the court of appeals.

In New York a statute was passed declaring that anyone who passed the greater part of the last twenty-four months of his life in New York should "be deemed" a citizen of New York. An attempt was made to apply this to a citizen of New Jersey, who had voted in New Jersey, paid taxes in New Jersey, run for Congress in New Jersey, and in his will and deed had described himself as a native of New Jersey. He had a

2 Article 5 of Regulations 37.

Matter of Newcomb, 192 N. Y. 238.

Matter of Hetty Green, 99 Misc. (N. Y.) 582 (affirmed 179 App. Div. 890).

house in New York and a summer camp in the Adirondacks. The surrogate's court held that under the statutes he was a citizen of New York. This was reversed by the higher court. The court held that "be deemed" was not intended to be conclusive, but merely created a presumption that the party was a citizen, which could be disproved by contrary evidence."

In Wisconsin and Illinois beneficiaries are taxed if they receive property from a decedent in another state. This is another case of double taxation. (See § 241.)

§ 254. Jurisdiction

The court having probate jurisdiction usually has jurisdiction over all matters relating to the ascertainment and payment of state transfer and inheritance taxes. Jurisdiction to grant letters gives jurisdiction as to all inheritance proceedings.

Generally, it is the duty of the executor or the administrator within some specified time after his appointment to initiate proceedings to secure appraisal and ascertainment of the amount of taxes due. If no will is filed and no one in interest applies for letters of administration, an officer of the state, the comptroller, the state auditor, the state treasurer, or the attorney-general may apply for the appointment of an administrator and the settlement of the estate.

In New Jersey, if no administration is applied for within three months after the death, and there is property unadministered, the comptroller may agree to give up to 10 per cent of the amount received by the state as a reward to any informer who notifies him of such property. The same rule holds as to property of a non-resident not administered in the state.

§ 255. Inventory and Appraisal

Within whatever period is allowed by the state law, usually two to three months, the personal representatives are required "Matter of Barbour, 185 App. Div. (N. Y.) 445.

to file with the probate court an inventory and valuation of all the assets of the estate. This inventory is filed on forms prescribed by the tax officials. Usually an official appraiser fixes the values. Where no official is provided, it is usually possible to have the probate judge appoint appraisers. In some states the valuations are placed by the personal representatives and if no objection is made these are accepted. This procedure is important and has been treated in Chapter XIII, "Making an Inventory," and as related to inheritance taxation is considered more fully in Chapter XXXIII, “Inventories,” and Chapter XXXIV, “Appraisement."

§ 256. Ascertaining Values for Taxation

The transfer tax is computed on the value of the property at the time of death. The property of the estate is not appraised at its tax value at a forced sale, but is to be the value which would be agreed upon by a willing buyer and a willing seller.

In appraising inactive stocks and stocks of close corporations, dividends paid, private sales, opinions of experts, and the value of property held, may all be considered.

In many cases it is necessary to ascertain the present value of life estates, annuities, remainders, dower, curtesy, and the like. In most cases this would be referred to expert accountants to work out by the mortality tables and the prevailing rate of interest. The principles underlying the valuation of different assets are more fully discussed in Chapter XXXIV, "Appraisement."

§ 257. Assessment of Tax

In most states, the judge of probate assesses the tax. In New York, the surrogate does this as a matter of routine, merely signing an order as prepared by the appraiser or the attorneys for the state. This is a matter of record and before