Title: Pfeufer v. Cyphers

State: maryland

Issuer: Maryland Supreme Court

Document:

Pfeufer v. Cyphers, No. 141, September Term 2004.  Opinion by Bell, C.J.
WILLS - INHERITANCE TAXES
A testator may direct inheritance taxes to be paid from the entire residuary estate prior to
apportionment among residuary legatees even when a statute exempts some of the
residuary legatees from the payment of inheritance taxes.  
IN THE COURT OF APPEALS
OF MARYLAND
No. 141
September Term, 2004
  
______________________________________
BRUCE PFEUFER
v. 
PAMELA J. CYPHERS, PERSONAL
REPRESENTATIVE OF THE ESTATE OF
JAMES RUSSELL HOFFMAN
 ______________________________________
Bell, C.J.
          
Raker
         *Wilner
Cathell
Harrell
Battaglia
Greene,
JJ.
______________________________________
Opinion by Bell, C.J.
______________________________________
Filed:    March 19, 2007
*Wilner, J., now retired, participated in the
hearing and conference of this case while an
active member of this Court; after being
recalled pursuant to the Constitution, Article
IV, Section 3A, he also participated in the
decision and adoption of this opinion. 
1Section § 7-203 provides, in relevant part:
*     *     *     *
“(b) Family allowance. - (1)(i) In this subsection the following words have
the meanings indicated. 
“(ii) ‘Child’ includes a stepchild or former
stepchild.
“(iii) ‘Parent’ includes a stepparent or former
stepparent.
“(2) The inheritance tax does not apply to the receipt of 
property that passes from a decedent to or for the use of:
*     *     *     *
“(iv) a child of the decedent . . .
*     *     *     *
“(vi) a brother or sister of the decedent . . . .” 
The instant case involves the interpretation of language in the Last Will and Testament
of James Russell Hoffman, the testator, and the effect of that language in light of Maryland
Code (1988, 2004 Repl. Vol.), § 7-203(b)(2) of the Tax-General Article.1 The testator left
his residuary estate to four people, three of whom are relatives of the testator and, therefore,
pursuant to the above statute, each of whom is exempt from paying inheritance taxes on his
or her share of the residuary estate.  That is not the case with Bruce Pfeufer, the fourth
residuary legatee, the appellant.  He is not a relative of the testator and, thus, he does not
enjoy any such exemption.  Nevertheless, the appellant contended in the Orphans’ Court for
Montgomery County that, even though the statute does not contain an exemption from paying
inheritance tax for him, Article III of the testator’s will, because it requires that any
inheritance tax be paid prior to apportionment or, “off-the-top,” in effect, does.  The
Orphans’ Court did not agree and, rather than apportion the tax, ordered the tax to be paid
solely by the appellant.  The appellant noted an appeal to the Court of Special Appeals.  He
2As phrased by the appellant, the issue presented was: 
“Did the Trial Court err in holding [that] all the inheritance tax should
be borne solely by appellant instead of being paid out of the residuary
estate prior to division into shares?” 
3Ms. Cyphers is also the testator’s personal representative.
2
asked that court to decide whether a testator may provide in his will that inheritance taxes be
paid from the entire residuary estate prior to apportionment among the residuary legatees
when a statute provides that some of the residuary legatees are not required to pay inheritance
taxes.2   
On our own motion and prior to proceedings in the Court of Special Appeals, we
issued a writ of certiorari, Pfeufer v. Cyphers, 385 Md. 161, 867 A.2d 1062 (2005).  We shall
hold that a testator may direct inheritance taxes to be paid from the entire residuary estate
prior to apportionment among residuary legatees even when a statute exempts some of the
residuary legatees from the payment of inheritance taxes.  Thus, we shall reverse the
judgement of the Orphans’ Court.                             
I.  
The testator’s will provided that his residuary estate be distributed equally to Pamela
J. Cyphers, his daughter, the appellee,3 to James Russell Hoffman, Jr., his son, to Janice
Carol Hoffman, his sister, and to the appellant.   Section 7-203(b) exempts from payment of
inheritance taxes enumerated relatives of the testator, including children and siblings.   As
4The amount of the inheritance tax due on appellant’s share of the residuary estate was
$14,500.
3
the appellant is not one of such enumerated relatives, the statute does not exempt him from
the payment of such taxes.
In an amended First and Final Administration Account for the estate, the appellee
deducted the inheritance tax due on the appellant’s residuary bequest4 from the entire
residuary estate before allocating the balance of the residuary estate in equal shares to each
of  the four residuary legatees.  She did so on the authority of Article III of the testator’s will,
which provides:
“I direct that all estate, inheritance, transfer, legacy or succession taxes, or
death duties (including interest and penalties thereon) which may be assessed
or imposed with respect to my estate, or any part thereof, of whatever nature
and description and wheresoever situated, . . . shall be paid out of the principal
of my residuary estate; and such payment shall be made as an expense of the
administration of my estate without apportionment.” (Emphasis added.)
Over a month later, apparently prior to distribution of the residuary estate, the
appellee filed an Amended Schedule G to the Account, which reallocated the payment of the
inheritance tax.  Rather than from the residuary estate, the inheritance tax now was to be paid
entirely from the appellant’s share of the residuary estate.  Excepting to the reallocation, the
appellant argued that the appellee’s initial allocation of the inheritance tax burden was
correct, Article III of the will required that such taxes be paid out of the entire residuary
estate and not solely from  his portion of the residuary estate.  The Orphans’ Court for
Montgomery County overruled the exception, holding that the allocation of the tax burden
4
reflected in Amended Schedule G was appropriate.  It reasoned:
“All right. Well, this may be one of those battle-of-the-forms kind of
situations, where   you have boilerplate language that is, in most cases, not a
problem, but in a rare case such as this, a problem is created when sort of stock
boilerplate language is used and that may be what happened here.  I think the
legislative intent, as indicated by Section 7-203(b) of the Tax-General Article,
is very, very clear that lineal legatees are exempt from inheritance tax pursuant
to that section. That is the clear intent of the legislature. And, for those
reasons, the exceptions are overruled.”
This appeal ensued.  For the reasons that follow, we shall reverse the judgment of the
Orphans’ Court.
II. 
It is well settled that the “findings of fact of an Orphans’ Court are entitled to a
presumption of correctness.”   New York State Library Ass’n v. Atwater, 227 Md. 155, 157,
175 A.2d 592, 593 (1961); Shapiro v. Marcus, 211 Md. 83, 88, 124 A.2d 846, 849 (1956).
It is equally well settled, however, that interpretations of law by such courts are not entitled
to the same “‘presumption of correctness on review: the appellate court must apply the law
as it understands it to be.’”  Comptroller of Treasury v. Gannett Co. Inc., 356 Md. 699, 707,
741 A.2d 1130, 1141 (1999) (quoting Rohrburg v. Estate of Stem, 305 Md. 443, 447 n.2, 505
A.2d 113, 115 n.2 (1986).  Thus, an appellate court, including this Court, must determine
whether the conclusions of law made by a trial court in the first instance are “legally correct
under a de novo standard of review.”  Banks v. Pusey, 393 Md. 688, 697, 904 A.2d 448, 454
5The parties have not directed us to, and we have not found, any cases of this Court
expressly stating the standard of review for appeals from the Orphans’ Court.  Cf. Hall v.
Morris, 213 Md. 396, 402, 132 A.2d 113, 116 (1957) (noting that in prior decisions, the
Court has held that the judgment of the Orphans' Court on a disputed question of fact,
litigated by adversary proceedings, should not be reversed unless clearly erroneous); Shapiro
v. Marcus, 211 Md. 83, 88, 124 A.2d 846, 849 (1956) (noting that there is a presumption
when an appeal is taken from an Orphans' Court of the correctness of that court's decision
on a disputed question of fact where such a question has been litigated by adversary
proceedings).
Nevertheless, under the circumstances of this case, we see no need to deviate from the
standard of review that we have applied to interpretations and conclusions of law by courts
of general jurisdiction.
5
(2006) (quotations omitted)); see Bern-Shaw Ltd. Partnership v. Mayor and City Council of
Baltimore, 377 Md. 277, 291, 833 A.2d 502, 510 (2003); J.L. Matthews, Inc. v. Maryland-
National Capital Park and Planning Comm’n, 368 Md. 71, 93, 792 A.2d 288, 301 (2002).5
III.
 
When construing a will, the “paramount concern of the court is to ascertain and
effectuate the testator’s expressed intent.”  Emmert v. Hearn, 309 Md. 19, 23, 522 A.2d  377,
379 (1987) (citing Leroy v. Kirk, 262 Md. 276,279,277 A.2d 611,613 (1971));  Shellady, Inc.
v. Herlihy, Ex’r, 236 Md. 461, 471, 204 A.2d 504, 509 (1964); Marty v. First Nat’l Bank of
Baltimore, 209 Md. 210, 216-17, 120 A.2d 841, 844 (1956)).  In other words, the search is
not for the testator’s “presumed [intention] but for his expressed intention.”  Leroy, 262 Md.
at 279, 277 A.2d at 613 (citing Marty, 209 Md. at 216-17, 120 A.2d at 844) (emphasis
added).  Generally, that intent is “gathered from the four corners of the will, Reedy v. Barber,
6Maryland Code (1974) § 11-109 of the Estates and Trusts Article (the current version
of this statute is found in Maryland Code (1988, 2004 Repl.Vol.), § 7-308 of the Tax-General
Article), as relevant, provided:
“(b) Persons among whom tax to be apportioned. The (federal and Maryland
estate taxes) shall be apportioned among all persons interested in the estate.
The apportionment shall be made in the proportion that the value of the interest
of each person interested in the estate bears to the total value of the interests
of all persons interested in the estate.
*     *     *     *
“(k) Applicability. Except as otherwise provided in the will, or other
controlling instrument, the various provisions of this section shall apply to the
apportionment of, and contribution to, the federal and Maryland estate taxes.”
6
253 Md. 141, 148, 251 A.2d 882[, 887] (1969), with the words of the will given their ‘plain
meaning and import.’”  Emmert, 309 Md. at 23, 522 A.2d at 380 (quoting Leroy, 262 Md.
at 280, 277 A.2d at 613).  Words having legal significance, however, “will be construed in
that sense unless the will clearly indicates otherwise.”  Emmert, 309 Md. at 23, 522 A.2d at
380 (citing Patchell v. Groom, 185 Md. 10,15, 43 A.2d  32, 35 (1945)).                              
In Johnson v. Hall, 283 Md. 644, 392 A.2d 1103 (1978), this Court was asked to
resolve who, as between the residuary legatee and the beneficiaries named in the last will and
testament at issue, has the obligation for the payment of the federal estate taxes “assessed on
the worldly goods owned by the testatrix at the time of her death.”  Id. at 645-46, 392 A.2d
at 1105.    Maryland Code (1974), § 11-109 of the Estates and Trusts Article required federal
and Maryland estate taxes to be apportioned “among all persons interested in the estate,”
unless “otherwise provided in the will.”6   The personal representative, apparently in reliance
on this provision, sought the permission of the Orphans’ Court to apportion the estate taxes
7This rule has been “firmly established” for over 170 years.  In Creswell’s Lessee v.
Lawson, this Court stated:
“[I]t is also settled, that where the intent of the testator is apparent, no word
(continued...)
7
due in respect to the testatrix’s death among all of the beneficiaries named in the will.  Id. at
646-47, 392 A. 2d at 1105-06.   Two of the beneficiaries opposed such an order.   They relied
on that provision of the testatrix’s will that declared:                
“I direct that all lawful debts I owe at the time of my death, including funeral
and administration expenses and the expense of my last illness (but not
including debts secured by mortgages on real property, except matured
obligations as they fall due), and all estate and inheritance taxes, be paid as
soon after my death as can lawfully and conveniently be done.”
They argued that this provision expressed the intention of the testatrix that the burden of the
taxes be borne by the residuary estate.  Id. at 647, 392 A.2d at 1105.  The Orphans’ Court
rejected the beneficiaries’ argument and entered an order apportioning the taxes, pro rata,
among all of the beneficiaries, a ruling that was reversed by the Court of Special Appeals.
Hall v. Johnson, 38 Md. App. 589, 382 A.2d 332 (1978).                  
Agreeing with the Orphans’ Court, we reversed the judgment of the intermediate
appellate court.  At the outset, we pointed out that § 11-109 envisioned the supremacy  of the
intention of the testator or testatrix, as reflected in the language of the will, stating that its
“application of the rule of apportionment set out in subsection (b) is mandatory, ‘unless the
will evinces an expression of intent to the contrary,’” Johnson v. Hall, 283 Md. at 648, 392
A.2d at 1106 (emphasis in original), and noted its consistency with, thus reiterating and
emphasizing, “the firmly established rule 
[7] that, unless prohibited by statute or public policy,
7(...continued)
shall be added or dropped, to defeat such intention; which must prevail, if it
can be carried into effect without violating some settled principle of law.”
7 G. & J 227, 248 (1835) (emphasis added).
8
the intent of the testator as ascertained from the four corners of the will controls the
disposition of a decedent’s estate.”  Id. at 648-49, 392 A.2d at 1106.   We also observed:
“under tax apportionment statutes an intention not to apportion must be plainly
stated in the will or other controlling instrument before the legislative scheme
can be ignored. . . .  In examining a will for the purpose of fixing estate tax
responsibility, the court should not try to discern what the testator meant to
say, but what he meant by what he did say, for a few simple words, which need
not be couched in terms of a negative direction against apportionment, will be
sufficient if they demonstratively express the testator’s intent.”
Id. at 649, 392 A.2d at 1106-07 (citations omitted).                         
We held that the language of the will, on which the beneficiaries relied, did not
sufficiently express the intention of the testatrix that the estate taxes be paid in a manner
different from, or otherwise than, that required by § 11-109.  We explained:
“Accepting the premise, as all courts on both sides of this controversy do, that
a statute directing apportionment will only be ignored if the testator clearly and
unambiguously indicates that to be his intention, we fail to see how the first
clause, whether read in isolation or examined in the context of the entire will,
in any way expresses Dr. Johnson’s desire that all the beneficiaries should not
share proportionately the bite of the federal estate tax.”                
Id. at 652, 392 A.2d at 1108 (footnote omitted).  Further elucidating, the Court stated:
“We recognize, of course, that our failure to give the language of the
first clause the import respondents assert it deserves relegates it to little more
than a restatement of the statutory duties of the executor. . . .  Yet, we do not
think this interpretation in any way vitiates the rule of construction that ‘words
in a will are never to be rejected as meaningless or repugnant if by any
reasonable construction they may be given effect and made consistent and
8The  current  version of  that  statute  is   Maryland  Code  (1988, 2004 Repl. Vol.),
§ 7-216 of the Tax-General Article.   It reads, in relevant part:
“§ 7-216. Person required to pay tax; source.
“(a) In general. - (1) Except as otherwise provided in this section, the
inheritance tax on property that passes from a decedent shall be paid, before
it is distributed, by the person who distributes the property.
“(2) The person who distributes property that passes from a decedent
(continued...)
9
significant.’ . . .  Simply because the words of the will restate the law or add
nothing of substance to what would have occurred without them does not
deprive those words of their effect for they are indicative of the testator’s
intent and must be respected and carried out  independently of any parallel,
consistent provisions of the law. . . .  Further, the logic of respondent’s
argument that by mentioning taxes the testatrix must have intended something
other than what the law provides requires that they likewise be able to assign
some special role, other than one parroting the law, to the remainder of the
words of the first clause directing payment of expenses and debts.  This they
make no effort to do.                
“No magic or mystical word or phrase is required to shift the burden of
estate taxes from the legatees and devisees to the residue; however, for us to
recognize that the testatrix’s ritualistic, ‘boiler plate’ reference to the payment
of debts, expenses, and taxes in the first clause of her will states an intent not
to apportion would require that we be clairvoyant.  In short, we detect no
direction by the decedent in the first paragraph of her will not to apportion
taxes as section 11-109 provides.”                   
Id. at 654-55, 392 A.2d at 1109-10 (citations omitted) (footnote omitted).
Bouse v. Hutzler, 180 Md. 682, 26 A.2d 767 (1942) is to like effect.  In that case,
involving calculation of inheritance tax when a testator directs that it be paid from the
residuary estate, we commented:
“The Maryland inheritance tax is imposed on the privilege of becoming a beneficiary
under a will or of succeeding to an inheritance.  Under the Maryland statute, the
executor, administrator, or other person making distribution is charged with the
payment of inheritance taxes to the Register of Wills for the use of the State. Code
1939, Art. 81, Sec. 112.[8] 
8(...continued)
is liable for the inheritance tax on the property distributed until the tax
is paid.
“(3) Unless a decedent specified a source for paying the
inheritance tax and there is sufficient money from that source, the 
court may order sale of property to pay the inheritance tax on the
property.”
The statute now in effect inferentially acknowledges the importance of the testator’s
intent with respect to the source of funds to be used to pay various taxes relating to estates.
In § 7-216(a)(1), there is a requirement that inheritance taxes be paid before distribution.
When this requirement is read in conjunction with § 7-216(a)(3), which authorizes a court
to  order the sale of property in order to satisfy the tax if it is not paid by a source specified
by the decedent, the importance of the testator’s intent is clear.  Accordingly, not only do our
precedents support the power of testators to direct the source of funds for the payment of
inheritance taxes, but the statutory scheme recognizes the same power by limiting the
authority of courts to order the sale of other property (even when the taxes are not timely
paid) so long as the source designated by the testator is sufficient to pay the taxes.
10
“However, since the tax is a charge against each distributive share according
to its value, the executor, administrator or other person must pay the tax out of
the legacy, devise, or distributive share of the estate or with money collected
from the legatee, devisee, or heir.  Of course, a testator has the right to direct
that the tax be paid out of the residuary estate.  In case he so directs, he thereby
increases his gift to the legatee to the extent of the tax, for he is providing for
the payment of an obligation which the legatee would have been obliged to pay
if the testator had not directed otherwise. . . .”
                                                               
Bouse, 180 Md. at 685, 26 A.2d at 768-69 (citations omitted) (emphasis added).   Once
again, we recognized the testator’s intent as paramount.                                     
So, too, is Smith v. State, 134 Md. 473, 107 A. 255 (1919).  That case involved the
exercise by the testatrix of a power of testamentary appointment reserved to her when she
executed a deed of trust, declaring certain trusts.  In the will executed in the exercise of the
reserved power, and a codicil executed subsequently, the testatrix directed her executor to:
11
“[P]ay all collateral or other inheritance taxes out of my estate, to the end that
each legatee above named may receive, free of any such tax the full amount of
his or her legacy hereinbefore given.”                  
“[P]ay out of the residue of my estate any and all collateral, inheritance,
succession, or other like tax or taxes, federal, state or municipal, upon each of
the legacies given and bequeathed both in this codicil and in my said will, to
the end that each legatee named may receive free of any tax the full amount of
his or her respective legacy.”                                         
134 Md. at 477, 107 A. at 256.  The court below having passed a decree requiring the
payment of taxes on “estates, real, personal and mixed, money, public and private securities
for money of every kind . . . transferred by . . . will,” out of the residuary estate, rejecting the
argument made by the testatrix’s executor that no taxes were payable or they were the
responsibility of the legacies, 134 Md. at 478, 107 A. at 257, the executor appealed.  This
Court affirmed the decree.  On the issue of where the burden of the taxes fell, we said:     
“The remaining question which was suggested by the argument was the fund
from which the money was to be paid, if the tax was valid.  It is entirely clear
what the intent of the testatrix was from the quotation made already from her
will and codicil.  It is true  that the decree appealed from might have been a
little clearer in its phraseology, but that is a verbal matter only, and will
occasion no practical difficulty in the conduct of the executors and trustees.”
Id. at 480, 107 A. at 257-58.                                                                             
It is clear that the testamentary language used by the testator in the case at bar clearly
expresses the testator’s intent that any, and all, inheritance taxes were to be paid from the
residuary estate and were not to be apportioned among, or deducted from, the shares of the
individual residuary legatees.  Necessarily, therefore, the testator must have intended that the
amount of the residuary shares to be distributed would be determined based on the value of
12
the residuary estate after the taxes had been paid, off the top, out of the estate; it was the clear
intention of the testator that each individual share of the residuary estate be determined  after
the taxes were paid on the entire estate, albeit from the residuary estate.  Thus, it is
immaterial that under the Tax Code, some of the legatees would not have been obligated, in
any event, to pay taxes on their share; they are, in reality, not being taxed on their residuary
share, nor is any residuary legacy being reduced.  As we have said, the intent of the testator,
as ascertained from the language of the will, controls the source of the funds to be used to
pay inheritance taxes so long as there is no conflict with the applicable statute, other law or
public policy.   See Johnson, 238 Md. 648-49, 392 A.2d 1106-07.   There is no conflict in the
case at bar.  The testamentary language at issue clearly designates the fund from which the
inheritance taxes due in this case were to be paid - from the residuary estate - and also when
the payment is to be made - prior to apportionment among the residuary legatees.
To be sure, the  will provision at issue sub judice is similar to the will provision at
issue in Johnson v. Hall; they both reference  various death taxes and duties, although the
provision in the latter is broader, including, in addition to taxes, debts and expenses, and the
intention of the testator that they be paid, and, thus, the obligation of the personal
representative with regard thereto.   But they differ significantly, as well.   The provision sub
judice not only directs the payment of the taxes, it states how the payments are to be treated,
“as an expense of the administration of my estate without apportionment.”  While the
provision in Johnson also directs payment, it does so only with regard to the timing of the
13
payment of the taxes.  In  Johnson, we characterized as “ritualistic” and “boiler plate,” id. at
655, 392 A.2d at 1110, the will’s reference to debts, expenses and taxes.  The Orphans’
Court’s analysis gives that characterization a significance it does not have and that certainly
was never intended.  In so characterizing the reference, we simply stated that it was
insufficient to express the intention attributed to the testatrix by the beneficiaries.   The Court
did not say, nor did it mean to suggest, that “boiler plate” language can never be sufficiently
clear to express an intention of the testator contrary to the apportionment statute. 
Cases from our sister  jurisdictions generally are in accord.  In Matter of Estate of
Cline,  258 Kan. 196, 898 P.2d 643 (1995), the testator’s will provided that:
“‘All estate, inheritance, legacy, succession, excise or transfer taxes . . . with
respect to all property taxable . . . by reason of my death . . . and whether such
taxes be payable by my estate or by any recipient of any such property, shall
be paid by my Executor out of my general estate as part of the expense of the
administration thereof with no right of reimbursement from any recipient of
any such property.’”                             
258 Kan. at 198, 898 P.2d at 645.  The residuary legatees, claiming that the will under review
was ambiguous, argued that the taxes on the residuary estate should be apportioned  among
the residuary legatees.  The trial court declined to require apportionment.  The Supreme
Court of Kansas affirmed.  Having framed the competing positions of the parties, it expressed
the relevant principles of law, as follows:                                
“The residuary beneficiaries contend that Cline’s will is ambiguous because
it does not clearly state an intention that the entire estate and inheritance taxes
be paid out of her residuary estate. . . .  The Bank asserts that Article I  of
Cline’ s will directing the payment . . . from ‘my general estate’ was a clear
9R.S.A. 86:6 was New Hampshire’s apportionment statute, its version of § 11-109,
then in effect.  It was repealed in 2002.
14
and  unambiguous expression of Cline’s intent that the taxes be paid out of her
residuary estate.      
          
“Where the language of a will is clear, definite, and unambiguous, the court
should not consider rules of judicial construction to determine the intent of the
testator.  In the interpretation of wills, the primary function of the court is to
ascertain the testator’s intent from the four corners of the will and to carry out
that intent if possible and not contrary to law or public policy.
*     *     *     *
“The language in Cline’s will states an intention to exonerate all property passing
as a result of Cline’s death and that the taxes be paid out of her estate.”        
          
Id. at 199-207, 898 P.2d at 646-650 (citations omitted).                                 
In re Robbins Estate, 116 N. H. 248, 356 A.2d 679 (1976), addressed the question
whether “the tax due the State of New Hampshire under RSA 86:6 [9][is] to be paid as directed
in Article Sixth of the will, or is it to be paid by receiving from each legatee and devisee an
amount equal to the tax assessed upon each legacy and devise, pursuant to RSA 86:60.”  Id.
at 248-49, 356 A.2d at 680.  Article Sixth of the testator’s will  directed the testator’s
executor to “pay any and all inheritance taxes . . . from the  residue of my estate insofar as
the same may be sufficient to pay the same.”  Id. at 249, 356 A.2d at 681.  The court held
“[t]he answer to the second question is that the taxes due the State of New Hampshire
pursuant to RSA 86:6 are to be paid as directed in Article Sixth of the will.”  In re Robbins
Estate, 116 N.H. at 250, 356 A.2d at 682. 
15
In Matter of Estate of Morris, 838 P.2d 402 (Mont. 1992), “[t]he question before the
Court [was] whether the will provide[d] a method of apportioning state inheritance taxes
different from that set out in the statute.”  Id. at 404.  To answer this question, it was
necessary that the court determine if the trial court erred in holding that the testatrix’s
“testamentary intent, as expressed in [her] will was sufficiently clear so as to overcome the
statutory directive as to apportionment of state inheritance taxes.”  Id. at 369-370.  The
applicable statute was § 72-16-603, MCA, which, as relevant, provided:
“(1) Except as provided in subsection (3) and unless the will otherwise
provides, the tax shall be apportioned among all persons interested in the
estate.  The apportionment is to be made in the proportion that the value of the
interest of each person interested in the estate bears to the total value of the
interests of all persons interested in the estate.  The values used in determining
the tax are to be used for that purpose.
“(2) If the decedent’s will directs a method of apportionment of  tax different
from the method described in this part, the method described in the will
controls.”
One paragraph of the testatrix’s will stated:
“I direct my Personal Representative . . . to pay all of my just debts, my
funeral expenses, the expenses of administering my estate, and all taxes both
State and Federal which become payable by reason of my death, out of my
estate.”
The Montana Supreme concluded that this language, this direction, “is clearly sufficient,”
id., to control the method of apportionment.  See also Matter of Estate of Keenan, 519
N.W.2d 373, 378 (Iowa 1994) (holding that similar language was also sufficient to enforce
the testator’s intention to have inheritance taxes paid out of the general estate).
16
 In re Estate of Ross, 815 A.2d 30 (Pa. Commw. Ct. 2002), addressed whether there
remained any estate after taxes to be passed on to the residuary legatees named in the will
(the court noted that “[t]his case involves a dispute regarding the proper rate of Pennsylvania
Inheritance Tax to be applied to a residuary estate.”).  Id. at 32.  Addressing that  issue, the
court, after setting out the relevant portion of the will, i.e., “‘Provision of Taxes: I direct that
all . . . inheritance . . . taxes . . . on the property passing under this my Will . . . shall be paid
out of the principal of my general estate to the same extent as if such taxes were expenses
of administration and all . . . devises and other gifts . . . shall be free and clear thereof,’”
observed, “[i]t is clear that Decedent made the decision that any taxes due were to be paid
out of the residuary estate.”  Id. at 33. 
A different Pennsylvania court reached a similar conclusion in a case where the
relevant provision in the will provided that:  “All . . . taxes . . . shall be paid out of the
principal of my residuary Estate just as if they were my debts[.]”  In re Estate of Jones, 796
A.2d 1003, 1004 (Pa. Super. Ct. 2002) (bolding removed).  Agreeing with the  Orphans’
Court that “the tax clause of [the testator’s] Last Will and Testament controlled and required
that all . . . inheritance taxes be paid by the residuary estate,” id. at 1005, the court held “that
the tax clause in the Will was sufficiently clear and specific [enough] to overcome the
statutory scheme for apportionment of estate and inheritance taxes.”  Id. at 1006.  See also
Matter of  Will of  Herz, 206 A.D.2d 283, 287, 614 N.Y.S.2d 514 (1994) (Kupferman, J.
dissenting) (“That inheritance taxes may be paid, as directed in the Will, out of the residuary
17
estate, ‘even where under the statute imposing the tax such tax would ordinarily be payable
by the legatee out of the legacy received’ is well established [.]”  (quotations omitted).
The United States Tax Court has also construed similar testamentary language with
respect to estate taxes in like fashion.  In Estate of Fine v. Commissioner of Internal
Revenue, 90 T. C. 1068 (1988), that court said:
“Absent a controlling Federal statute, State law determines what property
will bear the burden of the Federal estate tax. . . Virginia, like most other
states, has enacted an apportionment statute, providing for the proration of
estate tax liability among the beneficiaries of an estate in proportion to the
relative values of the interests received.
*     *     *     *
“Decedent’s will expressly provides that estate and inheritance taxes are to
be paid out of his residuary estate without apportionment.  Consequently,
the Virginia apportionment statute does not apply.                                   
“The underlying principal in the construction of wills is that the intent of the
testator, if it is legal and can be determined, must control.” 
Id. at 1072-73 (citations omitted).
IV.  
The clearly expressed intent of the testator, in the case sub judice, is that an
inheritance taxes are to be paid by the residuary estate “without apportionment.”  Even if
the language were “boiler-plate,” it sufficiently expressed the testator’s intention to require
that inheritance taxes were to be paid from the residuary estate prior to apportionment.  The
fact that a statute imposes no tax burden on certain classes of residuary legatees is
immaterial.  Under the circumstances here present, the payment of inheritance taxes relating
to appellant’s residuary share is an additional gift to him from the testator, not an additional
18
burden on the “exempt” legatees.  On remand, the Orphans’ Court shall direct that the
inheritance taxes due are to be paid from the residuary estate prior to distribution to the
residuary legatees.
JUDGMENT OF THE ORPHANS’
C O U R T  
F O R  
M O N T G OM ER Y
COUNTY IS REVERSED.  CASE
REMANDED TO THAT COURT FOR
F U R T H E R  
P R O C E E D I N G S
CONSISTENT WITH THIS OPINION.
COSTS 
TO 
BE 
PAID 
BY 
THE
APPELLEE.