Opinion ID: 1614203
Heading Depth: 1
Heading Rank: 2

Heading: Apportionment of Estate Tax Liability.

Text: The Iowa Probate Code provides that all federal and state estate taxes shall be payable from the property of the decedent's estate without apportionment. Section 633.449 reads: Payment of federal estate taxes. All federal and state estate taxes (as distinguished from state inheritance taxes) owing by the estate of a decedent shall be paid from the property of the estate, unless the will of the decedent or other trust instrument provides expressly to the contrary. Accordingly, this court has held that federal estate taxes attributable to nonprobate property are payable out of the probate estate. Bergren v. Estate of Mason, 163 N.W.2d 374 (Iowa 1968). In Bergren, this court discussed the state of the law prior to the adoption of 633.449, stating [t]his court for a long period recognized and followed the common law rule that such tax was to be paid from the residue of an estate unless it was insufficient. In September 1962, we recognized the doctrine of equitable contribution as applicable in certain situations to provide for proration of this tax. Kintzinger v. Millin, 254 Iowa 173, 190, 117 N.W.2d 68, 78. Also see In re Estate of Artz, 254 Iowa 1064, 1075, 120 N.W.2d 418, 425. Id. at 376. The court concluded, however, that passage of section 633.449 removed any doubt as to whether the federal estate tax, in absence of the direction of the will to the contrary, must be paid from the residue as the first source available. It is not to be apportioned. Id. at 378. (Emphasis added). The problem in this case is that, while the decedent's will directed the estate tax to be paid from the nonmarital assets of his estate, there were in fact no nonmarital assets. The devise to his daughter of all farm real estate was of no effect; he had previously conveyed it to her by deed. The only assets actually passing under the will went to Florence and were therefore marital assets. Because the will's express direction for payment of the estate tax from nonmarital assets was ineffective, Caroline argues that section 633.449 requires the tax to be paid from the probate estate, even though it will come from marital assets. The executor argues that the probate assets nevertheless cannot be subjected to payment of the tax, because the testator's direction that his widow's share not be subjected to payment provides expressly to the contrary under section 633.449. Caroline responds that nonprobate assets, such as the land transfer, could not be subjected to payment of the tax, because the will provision relieving the widow's payment of tax does not amount to an express provision for it as required by the statute. Such intent turns on implication, she argues, and that is not sufficient. Express is defined as: Clear; definite; explicit; plain; direct; unmistakable; not dubious or ambiguous. Declared in terms; set forth in words. Directly and distinctly stated. Made known distinctly and explicitly, and not left to influence.... Manifested by direct and appropriate language, as distinguished from that which is inferred from conduct. The word is usually contrasted with implied. Black's Law Dictionary 521 (rev. 5th ed. 1979). While the testator's prescribed manner of payment was ineffective, we believe the end he sought was clear and unmistakeable: His widow's share was not to be reduced by payment of the federal estate tax. This is an express testimentary provision for apportionment of the tax under section 633.449.