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STATE OF MICHIGAN
COURT OF APPEALS


In re Estate of RICHARD J. LACKS, SR., Deceased.

MARY PATRICIA TEETS, RICHARD J. LACKS, JR., and KURT E. LACKS, Petitioners-Appellees, v DEPARTMENT OF TREASURY, Respondent-Appellant.

FOR PUBLICATION March 4, 2003 9:05 a.m.

No. 225414 Kent Probate Court LC No. 99-167543-IE Updated Copy May 9, 2003

Before: Wilder, P.J., and Griffin and Smolenski, JJ. GRIFFIN, J. In regard to the estate of Richard J. Lacks, Sr., deceased, respondent Michigan Department of Treasury appeals as of right an order of the probate court holding that the "the state is not entitled to any state estate tax if no estate tax is due the federal government as a result of the federal TPT [tax on prior transfers] credit." We affirm. I The decedent died on May 13, 1999, and was survived by his wife. His father, John P. Lacks, had died one month earlier on April 14, 1999. On January 14, 2000, the estate of John P. Lacks (JPL estate) filed federal, state of Michigan, and state of Florida estate tax returns, reflecting a sizeable taxable estate with resulting tax liability payable to the federal government, Florida, and Michigan. After payment of certain specific gifts by the JPL estate, the Richard J. Lacks estate (RJL estate) inherited fifty percent of the remaining assets of the JPL estate. By virtue of the inheritance, the RJL estate was charged with a fifty percent share of the taxes payable in the JPL estate.

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The federal, Michigan, and Florida estate tax returns for the RJL estate were due on February 13, 2000. Because of the assets received in the RJL estate from the JPL estate, and because Richard Lacks' widow filed a disclaimer of a portion of the assets of the RJL estate, the RJL estate became subject to federal estate tax.1 Because John Lacks and Richard Lacks died within two years of each other (indeed only a month apart), and because the federal estate tax liability to the RJL estate was attributable to the assets received from the JPL estate, the RJL estate qualified for a one hundred percent "tax on prior transfers" (TPT) federal tax credit under 26 USC 2013. The TPT credit calculated under

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Michigan Law