Opinion ID: 900890
Heading Depth: 1
Heading Rank: 3

Heading: the inferential approach

Text: [ś 8.] The purpose of a specific bequest is to give specific property to a specific person because the testator wants that person to have that property. The testator wants the devisee to have the specific thing, not something else and not something less. Therefore, specific bequests are the last to be abated to satisfy debts. SDCL 29A-3-902. [ś 9.] Henry Siebrasse wanted Donald, Delbert and Leola to have the specific land he bequeathed them. He described each parcel in the will. He did not give Donald 1120 acres and Delbert and Leola each 800 acres. He did not give Donald an undivided 40% in all the land and Delbert and Leola each an undivided 30%. Instead, Henry gave Donald the following 1120 acres: SW-ź and SE-ź, Section 29; NE-ź and NW-ź, Section 32; N-˝ of the S-˝, Section 32; NE-ź and NW-ź, Section 30; he gave Leola the following 800 acres: All of Section 31; SW-ź, Section 30; and he gave Delbert the following 800 acres: NW-ź, Section 3, Township 117, Range 78; All of Section 36, Township 117, Range 79. Henry wanted certain land to go to certain people. No two pieces of land are alike. Individual parcels of real property are considered to be so unique that when an action is brought for breach of a contract for the sale of land, specific performance may be ordered. SDCL 21-9-1 and 21-9-9; Renner v. Crisman, 80 S.D. 532, 127 N.W.2d 717 (1964). [ś 10.] Henry also directed his executor to pay just debts and funeral expenses first. This was a clear statement of his intention that just debts and funeral expenses come out of the residuary estate to preserve the specific bequests for the people for whom they are intended. King, 278 N.W.2d at 174. Otherwise, the named devisees would get considerably less than the specific property devised. [ś 11.] The common laws provided that estate taxes were to be paid from the residuary. 85 CJS Taxation § 1889 at 875. South Dakota first abrogated the common law and adopted equitable apportionment in 1961. SDCL ch. 29-7 (repealed by 1995 SD Sess. L. ch. 167 § 96). In 1995, South Dakota adopted the Uniform Probate Code, including SDCL 29A-3-916(b), which continues to provide for equitable apportionment of federal estate taxes so that each specific share, interest or legacy bears its proportionate part of the federal estate taxes. [ś 12.] The issue is whether 29A-3-916(b) requires apportionment of federal estate taxes equally over all bequests in this case. SDCL 29A-3-916(b) includes an exception to the general rule of proportional apportionment if a will otherwise provides. According to Matter of Estate of King, 278 N.W.2d at 174, a direction to pay debts and taxes first shifted the burden of federal estate taxes to the residual estate. However, unlike the will in King, Henry's will did not mention taxes, it only directed payment of just debts. [ś 13.] If federal estate taxes are equitably apportioned and deducted from Delbert's share, Delbert receives only three-fourths of the specific bequest. Delbert's land was valued at $328,600.00 and his apportioned share of federal estate taxes was $79,359.00 on the land. Therefore, Delbert only receives $249,241.00 worth of land after taxes or 75% of the specific devise. [ś 14.] We inferred from Article II of the will that Henry intended to give Delbert the entire specific parcels of land, not three-fourths of them. Otherwise Delbert would receive the equivalent of only 600 of the 800 acres which Henry specifically devised to him. The specific direction to give described parcels of land to named devisees, when read in conjunction with the shifting clause in Article I of the will, inferred that the will provided otherwise than for equitable apportionment. Equitable apportionment would defeat Henry's desire that the specific devisees receive the undiminished specific parcels of land. [ś 15.] However, after careful consideration, we now conclude that the uncertainty of the inferential approach will foster confusion and litigation over apportionment of federal estate taxes in numerous estates. Instead, we overrule Siebrasse I and adopt a bright line approach that equitable apportionment under 29A-3-916 applies unless a tax clause clearly shifts the burden of federal estate taxes from equitable apportionment and clearly identifies the property to which the burden is shifted.