Opinion
No. 79CA0351
Decided August 2, 1979.
Colorado Department of Revenue appealed orders of the probate court that the department could not include in each decedent's estate one-half of the value of certain bearer type securities found in the safe deposit box decedent co-leased with his spouse who was the owner of the securities.
Affirmed
1. TAXATION — Surviving Spouse's Assets — Bearer Type Securities — Not Includable — Decedent Spouse's Estate — Location — Joint Safe Deposit Box. Where the assets of a surviving spouse consist solely of cash or bearer type securities, these assets are not includable, for inheritance tax purposes, in the decedent spouse's estate solely because of their being located in a safe deposit box jointly leased by the two spouses.
Appeal from the District Court of the City and County of Denver, Honorable James R. Wade, Judge.
William J. Baum, Kutak, Rock Huie, John R. Moran, Jr., Mary L. Groves, for plaintiffs-appellees.
J. D. MacFarlane, Attorney General, Richard F. Hennessey, Deputy Attorney General, Edward G. Donovan, Special Assistant Attorney General, Lynne M. Ford, Assistant Attorney General, for defendant-appellant.
These cases were consolidated in the probate court. As of the date of death, Carl J. Luplow, decedent, was the co-lessee with his surviving spouse of a safe deposit box in which the spouse had deposited cash derived "from her own independent source of income." As of the date of death, George A. Mozealous, decedent, was the co-lessee with his surviving spouse of a safe deposit box in which the spouse had deposited bearer type securities owned by her. The issue in each case is whether appellant, Department of Revenue, may include in each decedent's estate for purposes of inheritance taxation one-half the value of these assets. The probate court concluded that no portion of the assets were includable in the decedent's estates, and we affirm.
In seeking reversal of the probate court's orders, the department relies upon § 39-23-139, C.R.S. 1973 (1978 Cum. Supp.) which governs the transfer and release of "securities or assets" and specifically the following language thereof:
"The term 'securities or assets' includes . . . the contents or control of safe deposit boxes . . . ." Section 39-23-139(2)(b), C.R.S. 1973.
"Assets or securities, including safe deposit boxes, shall be considered the property of the decedent if held by him jointly with one or more persons . . . ." Section 39-23-139(3)(a), C.R.S. 1973.
The department construes these provisions as establishing that assets of the type involved here must be deemed the joint property of the decedent and a spouse, with the result that one-half the value thereof must be included in each decedent's estate and taxed to that extent pursuant to § 39-23-106(1)(a) and (d), C.R.S. 1973 (1978 Cum. Supp.). Thus, the department seeks to impose a tax based solely upon the fact that the surviving spouse deposited her assets in a safe deposit box to which the decedent had access. We do not agree with the department's interpretation of the quoted statutes.
[1] Contrary to the department's contention, a review of § 39-23-139 in its entirety reflects a statutory scheme to insure only that "assets" or "securities" are neither transferred nor released by the custodian thereof (or one having control of the transfer) absent compliance with the requirements of that statute. Thus, the purpose of the statute is to provide the department with an effective means of collecting the tax due; and, to effectuate that purpose, the statutory definition includes both assets in the decedent's name as well as assets in the joint names of the decedent and other persons. However, in Colorado the inheritance tax imposed is not a tax upon property as such; rather, it is a tax upon heirs or devisees for the right of succeeding to property in which the decedent holds some type of ownership interest. See People v. Fester, 144 Colo. 316, 356 P.2d 130 (1960). Therefore, the extent to which jointly owned assets are includable in the decedent's estate for purposes of taxation is governed by § 39-23-106(1)(a) and (d). As a result, where, as here, the assets consist of cash or bearer type securities owned solely by a surviving spouse, those assets are not includable in the decedents' estate merely by their being located in a jointly leased safe deposit box.
Orders affirmed.
JUDGE PIERCE and JUDGE BERMAN concur.