N.Y. Comp. Codes R. & Regs. tit. 20 § 360.6

Current through Register Vol. 46, No. 15, April 10, 2024

Section 360.6 - Payment of life insurance proceeds

(a)

(1) Section 249-cc of the Tax Law imposes upon insurance companies, as to proceeds of certain life insurance policies paid by them upon the life of a resident decedent, the same liability for the estate taxes imposed by article 10-C and article 26 of the Tax Law as is imposed on all other persons or corporations having assets of a decedent in their possession. Under said section, where the amount of life insurance proceeds payable by a life insurance company to any beneficiary on the life of a resident decedent is more than $50,000 in the case of a decedent dying after August 31, 1977 (or $20,000 in the case of a decedent dying before September 1, 1977), such company must give written notice to the State Tax Commission at least 10 days prior to the payment of such proceeds, and must retain a sufficient portion of such proceeds to pay estate taxes, unless the State Tax Commission consents in writing to such payment. However, where the amount of such proceeds payable in the case of a decedent dying after August 31, 1977 is $50,000 or less, but more than $30,000 in the case of a decedent dying after June 30, 1978 $2,000 in the case of a decedent dying after August 31, 1977 but before July 1, 1978), such company may make payment to the beneficiary as soon as it shall have mailed to the State Tax Commission a notice thereof. In the case of a decedent dying before September 1, 1977 where the amount of such proceeds payable is $20,000 or less, but more than $2,000, such company may make payment to the beneficiary as soon as it shall have mailed to the State Tax Commission a notice thereof. Where the amount of such proceeds is $30,000 or less, in the case of a decedent dying after June 30, 1978 ($2,000 or less in the case of a decedent dying before July 1, 1978), no notice need be given to the State Tax Commission.

(2) Notwithstanding the provisions of paragraph (1) of this subdivision, an insurance company may pay the proceeds of life insurance policies upon the life of a decedent dying after September 30, 1983 to such decedent's surviving spouse, as beneficiary, without the written consent or waiver of the State Tax Commission and without giving written notice to the State Tax Commission or retaining any portion of the proceeds for the payment of estate tax or interest.

(b) The statute applies to the proceeds of all life insurance policies issued by any one company on the life of a decedent whether paid to a named beneficiary or to an executor or administrator. In determining the amount of such proceeds, the net amount payable under the policy shall be used; that is, the amount payable under the policy, inclusive of dividends, additional insurance, or refunds of premiums, less any outstanding indebtedness. Where a policy is payable in installments the commuted value of the installments, that is, the amount payable if the policy had been issued on a lump sum basis, shall be used. Where a company has issued more than one policy aggregating more than $50,000, in the case of a decedent dying after June 30, 1978 ($20,000 in the case of a decedent dying before July 1, 1978), waivers must be obtained.

(c) Waivers of the State Tax Commission may be secured by insurance companies, representatives of estates or beneficiaries.

(1) Applications for waivers shall, wherever possible, set forth the following information: name and address of the decedent-insured; name and address of the beneficiary; policy number; the amount of proceeds payable under each policy; name and address of the legal representative of the insured's estate; and the county in which the estate is being administered. A copy of the decedent's death certificate must be submitted with the first request for waivers. Upon issuance of a waiver by the State Tax Commission, the proceeds may be paid forthwith to the beneficiary without the giving of notice or the withholding of tax.

(2) Waivers may be secured from the New York State Department of Taxation and Finance, Audit Division-Estate Tax Section, State Campus, Albany, N.Y. 12227.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 360.6