Waltz' Estate, Matter of

• Citation: 408 N.E.2d 558
• Decision Date: 28 July 1980
• Docket Number: No. 3-1278A326,3-1278A326
• Parties: In the Matter of the ESTATE of Frederick Melvin WALTZ, Deceased.
• Court: Court of Appeals of Indiana

Page 558

408 N.E.2d 558

In the Matter of the ESTATE of Frederick Melvin WALTZ, Deceased.

No. 3-1278A326.

Court of Appeals of Indiana, Third District.

July 28, 1980.

Theodore L. Sendak, Atty. Gen., Wallace T. Gray, Deputy Atty. Gen., Indianapolis, for appellant.

Maxwell P. Smith and Daniel M. Graly, Parry, Krueckelberg & Smith, Professional Corp., Fort Wayne, for appellee.

GARRARD, Presiding Judge.

Frederick Waltz died testate on June 3, 1975. Under his will his brother Robert was a life beneficiary of a charitable remainder trust. In due course Indiana inheritance taxes were determined utilizing actuarial tables to value Robert's interest. However, Robert was terminally ill at the time of Frederick's death and, in fact, died eight days later on June 11, 1975.

In accord with a technical advice memorandum issued by the Internal Revenue Service, the estate subsequently petitioned for a reappraisal of Robert's interest for inheritance tax purposes. The estate contended that due to the circumstances present, Robert's life estate should be valued upon his actual life expectancy rather than the standard mortality tables. ¹ The trial court granted this petition and entered appropriate orders.

The Inheritance Tax Division (the state) appeals solely upon the ground that the petition for reappraisal was barred because it was not filed within ninety (90) days after the original determination. At issue is the proper construction to be placed upon IC 6-4.1-7-1 and 2. These sections of the statute, added by the Acts of 1976, replaced those construed by this court in In re Estate of Hogg (1971), 150 Ind.App. 650, 276 N.E.2d 898.

The 90 day statute, IC 6-4.1-7-1, provides:

"A person who is dissatisfied with an inheritance tax determination made by a probate court with respect to a resident decedent's estate, may obtain a rehearing on the determination. To obtain the rehearing, the person must file a petition for rehearing with the probate court within ninety (90) days after the determination is made. In the petition, the person must state the grounds for the rehearing. The probate court shall base the rehearing on evidence presented at the original hearing plus any additional evidence which the court elects to hear."

There is also, however, a one year statute, IC 6-4.1-7-2, which states:

"A person who is dissatisfied with an appraisal approved by a probate court with respect to a resident decedent's estate may obtain a reappraisal of the property interest involved. To obtain the reappraisal, the person must file a petition for reappraisal with the probate court within one (1) year after the court enters an order determining the inheritance tax due as a result of the decedent's death. However, if the original appraisal is fraudulently or erroneously made, the person may file the reappraisal petition within two (2) years after the court enters the order."

The predecessor statutes ² contained terminology permitting an interested party one year to petition for a redetermination where it was felt that "the valuation of the property and assets . . . does not reflect a fair market value," but only ninety (90) days to petition if they were "dissatisfied with the appraisement or determination of such tax."

In construing these former provisions Judge Buchanan noted that the word "determination" was all-inclusive and that accordingly the 90 day statute which employed it included within its purview consideration by the court of "any factor relating to the manner in which the amount of the tax is ultimately computed . . . ." (original emphasis).

Thus, the court determined that when the two provisions were construed together, the longer one year statute applied only to its more restrictive subject matter: whether the valuation of the property and asserts reflect fair market value. 276 N.E.2d 903.

In 1976 the General Assembly replaced the provisions construed in Hogg with those before this court. It is a rubric of the law that in so doing they are presumed to have responded to prior appellate decisions construing the act.

Aside from the simplified language identifying an aggrieved party, the most notable change in the new language was that which makes the 90 day statute apply to "an inheritance tax determination" while the longer one year statute applies only to "an appraisal approved by a probate court."

We agree with the court in Hogg that the language of the 90 day statute encompassing any "determination" is all inclusive and applies to any basis for seeking a redetermination of the tax.

However, when construed in pari materia with the one year provision appearing in the next section, as it must be, it is, we think, clearly the legislative purpose that despite the broad language of IC 6-4.1-7-1, petitions to challenge an appraisal of a property interest may be brought within one year. Estate of Hogg, supra.

An appraisal is a valuation or estimation of value placed upon an item of property or interest therein. The Indiana Inheritance Tax statute imposes its burden upon "taxable transfers," IC 6-4.1-1-14, which are defined as certain property interest transfers made by a decedent. IC 6-4.1-2-1. A separate section, IC 6-4.1-6-1(a) specifies the manner for appraising each...