Richard's Estate, In re, 3-980A276
Decision Date | 30 April 1981 |
Docket Number | No. 3-980A276,3-980A276 |
Parties | In re ESTATE OF Clara V. RICHARD, Deceased. INDIANA DEPARTMENT OF STATE REVENUE, INHERITANCE TAX DIVISION, Appellant(Petitioner Below), v. FARMERS STATE BANK, LAPAZ, INDIANA and Mary Alice Zieger, Personal Representative of the Estate of Clara V. Richard, Deceased, Appellee(Respondent Below). |
Court | Indiana Appellate Court |
Linley E. Pearson, Atty. Gen., Herbert L. Allison, Deputy Atty. Gen., Indianapolis, for appellant.
George F. Stevens, William L. Fortin, Stevens, Wampler, Travis & Fortin, Plymouth, for appellee.
This is an appeal by the Indiana Department of State Revenue (Department) from a judgment entered against it on its petition for reappraisement and redetermination of inheritance and transfer tax. The issue presented for review is whether Ind.Code 29-1-13-6 applies to contractual sales of a decedent's real property, entered into by the decedent's guardian prior to the decedent's death, thereby causing the balance due under the contract to be distributed as a personal asset.
We affirm.
On October 7, 1974, Clara Richard executed her will in which she gave all of her personal property to her husband, Alonzo Richard, and all of her real property to her husband and the Farmers State Bank (Bank) in trust to distribute a life estate to her husband with the remainder being divided among two of her children and four of her grandchildren. Clara was found to be incompetent on July 30, 1976, and her husband and the Bank were appointed as her co-guardians. They petitioned the court to allow them to sell a farm owned by Clara and on December 14, 1976, the farm was sold on contract pursuant to the court's order. Clara died, still incompetent, on July 20, 1978. At that time the unpaid balance on the contract was $176,949.92.
This amount was reported on "SCHEDULE A-1 REAL ESTATE" on her Schedule of All Property and was carried forward on the inheritance tax return to "SCHEDULE E PERSONS BENEFICIALLY INTERESTED IN THIS ESTATE" where it was distributed by the co-executors as real property pursuant to Clara's will and placed in the trust benefitting her husband, children, and grandchildren. This distribution resulted in Clara's estate paying less inheritance tax than it would have if the unpaid contract balance was scheduled as a personal asset which would have been distributed solely to her husband.
The Department petitioned for a redetermination of inheritance taxes arguing the balance due should have been distributed as a personal asset but the trial court found that Clara did not enter into the real estate contract and that no equitable conversion occurred.
Relying on IC 29-1-13-6, the Department argues the sale of the real estate by contract converted the unpaid balance into personal property.
The Estate's response to this argument is that the statute only covers "real property sold by the decedent on written contract," not real property sold on contract by a decedent's guardian. We agree with the Estate.
Section 29-1-1-3 of Probate Code states, "(D)efinitions appearing in this article shall apply to words used in the Code, unless otherwise apparent from the context." Under that same section a...
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