N.Y. Tax Law § 975: Liability for tax

§ 975. Liability for tax. (a) Duty of executor to pay tax. (1) The tax

imposed by this article shall be paid by the executor, who shall

thereupon charge the same against and collect it from the persons

interested in the estate in accordance with the rules of apportionment

of section 2-1.8 and other relevant provisions of the estates, powers

and trusts law.

(2) If the tax imposed by this article, or any part thereof, is paid

by, or collected out of, that part of the estate passing to or in the

possession of any person other than the executor in his capacity as

such, such person shall be entitled to reimbursement out of any part of

the estate still undistributed or by a just and equitable contribution

by the persons whose interest in the estate of the decedent would have

been reduced if the tax had been paid before the distribution of the

estate or whose interest is subject to equal or prior liability for the

payment of taxes, debts or other charges against the estate, it being

the purpose and intent of this section that so far as is practicable and

unless otherwise directed by the will or non-testamentary instrument of

the decedent, the tax shall be paid out of the estate before its

distribution.

(b) Liability of executor. An executor who pays, in whole or in part,

any debt due by the estate for which he or she acts, except for a debt

owed to the United States or to New York state, or who distributes any

asset of the estate, prior to the payment in full of the tax imposed by

this article, shall be answerable in his or her own person and estate

for the payment of such tax to the extent that the assets of the estate

have been so paid out or distributed. The liability of the executor

under this subsection shall continue until his or her discharge as

provided in section nine hundred eighty-one of this article.

(c) Liability of life insurance beneficiaries. Unless the decedent

directs otherwise in his or her will, if any part of the New York gross

estate on which tax has been paid consists of proceeds of policies of

insurance on the life of the decedent receivable by a beneficiary other

than the executor, the executor shall be entitled to recover from such

beneficiary such portion of the total tax paid as the proceeds of such

policies bear to the federal taxable estate, reduced by the value of any

real or tangible personal property located outside New York state, and

increased by any federal estate tax deductions attributable to such

property. If there is more than one such beneficiary, the executor shall

be entitled to recover from such beneficiaries in the same ratio. In the

case of such proceeds receivable by the surviving spouse of the decedent

for which a deduction is allowed under section two thousand fifty-six of

the internal revenue code (relating to marital deduction), this section

shall not apply to such proceeds.

(d) Liability of recipients of property over which decedent had power

of appointment. Unless the decedent directs otherwise in his or her

will, if any part of the New York gross estate on which the tax has been

paid consists of the value of property included in the gross estate

under section two thousand forty-one of the internal revenue code, the

executor shall be entitled to recover from the person receiving such

property by reason of the exercise, nonexercise, or release of a power

of appointment such portion of the total tax paid as the value of such

property bears to the federal taxable estate, reduced by the value of

any real or tangible personal property located outside New York state,

and increased by any federal estate tax deductions attributable to such

property. If there is more than one such person, the executor shall be

entitled to recover from such persons in the same ratio. In the case of

such property received by the surviving spouse of the decedent for which

a deduction is allowed under section two thousand fifty-six of the

internal revenue code (relating to marital deduction), this section

shall not apply to such property.

(e) Liability of transferees and others. If the tax imposed by this

article is not paid when due, then the spouse, transferee, trustee,

surviving tenant, person in possession of the property by reason of the

exercise, nonexercise, or release of a power of appointment, or

beneficiary, who receives, or has on the date of the decedent's death,

property included in the New York gross estate to the extent of the

value, at the time of the decedent's death, of such property, shall be

personally liable for such tax. Any part of such property transferred by

(or transferred by a transferee of) such spouse, transferee, trustee,

surviving tenant, person in possession of property by reason of the

exercise, nonexercise, or release of a power of appointment, or

beneficiary, to a bona fide purchaser, mortgagee, or pledgee, for an

adequate and full consideration in money or money's worth shall be

divested of the lien provided in section nine hundred eighty-two of this

article and a like lien shall then attach to all the property of such

spouse, transferee, trustee, surviving tenant, person in possession,

beneficiary, or transferee of any such person, except any part

transferred to a bona fide purchaser, mortgagee, or pledgee for an

adequate and full consideration in money or money's worth. Provided,

however, where any interest in such property was held by the decedent

and the decedent's surviving spouse as tenants by the entirety, such

interest in such property shall be divested of the lien provided in

section nine hundred eighty-two of this article.