Court Opinion

ID: 9709090
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:39:56.194846+00
Date Added: 2024-06-11T18:22:46.018049
License: Public Domain

Murphy, C. J.,

dissenting.

The majority today holds that Dr. Johnson’s will does not explicitly direct the payment of all estate and inheritance taxes out of the residuary estate, and as a consequence the federal estate tax must be apportioned among all the legatees. Because I think that Articles FIRST and TENTH, when read together, sufficiently express Dr. Johnson’s intention to direct against apportionment under Maryland Code (1974), § 11-109 (k) of the Estates and Trusts Article, I respectfully dissent.
To determine the effect of a tax clause in a will, the Court must first ascertain the testatrix’s intent. As Chief Judge Gilbert said in his opinion for the Court of Special Appeals, “We look to the four corners of the will to ascertain that intent. Once we have determined that intention, it prevails.” Hall v. Johnson, 38 Md. App. 589, 595, 382 A. 2d 332, 335 (1978). Each paragraph of the will must be read in light of the other paragraphs, and in light of the general testamentary plan of the whole will. In re Armstrong’s Estate, 56 Cal. 2d 796, 17 Cal. Rptr. 138, 366 P. 2d 490 (1961); McLaughlin v. Green, 136 Conn. 138, 69 A. 2d 289 (1949); In re Artz’ Estate, *658254 Iowa 1064, 120 N.W.2d 418 (1963); In re Ogburn's Estate, 406 P. 2d 655 (Wyo. 1965).
Dr. Johnson left a taxable estate in excess of $299,000, of which more than $246,000 was placed in the residuary trust for her son. Under the majority’s decision, each of the thirteen specific legatees, seven of whom receive $500 or less, will have to contribute 20 percent of the value of the legacy to pay the federal estate tax. After considering the will as an entirety, the size of the gross estate (over a half million dollars), and the amounts of the several legacies, the Court of Special Appeals properly concluded that the testatrix intended that the federal estate taxes were to be deducted from the residuary estate, and that all other testamentary gifts were to pass free of the tax. 38 Md. App. at 597, 382 A. 2d at 337. See also In re Estate of Tedford, 258 Iowa 890, 140 N.W.2d 908 (1966); Old National Bank of Washington v. Damon, 3 Wash. App. 721, 477 P. 2d 29 (1970) (testator’s intention as to distribution of death tax burden is determined from tax clause in connection with every other paragraph of the will).
In analyzing the will to determine the testatrix’s intent, the Court should, if at all possible, avoid any construction which would render the tax exoneration clause meaningless. National State Bank of Newark v. Nadeau, 57 N.J. Super. 53, 153 A. 2d 854 (1959); Oviatt v. Oviatt, 24 Ohio Misc. 98, 52 Ohio Op. 2d 235, 260 N.E.2d 136 (1970). There is a presumption that the testatrix did not use superfluous language in the will, and that she intended each part of the will to have some effect. Beals v. Magenis, 307 Mass. 547, 31 N.E.2d 20 (1941); Nadeau, id. These fundamental principles, which were properly applied by the Court of Special Appeals, have been overlooked by the majority of this Court.
When Dr. Johnson directed her executor to pay “all estate and inheritance taxes,” along with debts, funeral and administration expenses, and authorized payment of those expenses “either from the real or personal property of my estate,” she was not merely reiterating a series óf preexisting legal obligations. Although the executor has a duty to pay lawful debts, administration expenses, all estate taxes, and *659inheritance taxes on probate assets, Code (1975), § 152 of Art. 81, he need not pay these expenses “as soon after [testatrix’s] death as can lawfully and conveniently be done.” Code (1974), §§ 7-305, 7-307 of the Estates and Trusts Article. The inheritance tax owed on the appellees’ legacies is payable out of each beneficiary’s individual legacy, unless the testatrix directs payment out of the residuary estate. Bouse v. Hutzler, 180 Md. 682, 26 A. 2d 767 (1942). Likewise, the federal estate tax must be apportioned among all persons interested in the estate, except as otherwise provided in the will. Code (1974), § 11-109 (b), (k) of the Estates and Trusts Article. Under Dr. Johnson’s will, only the residuary estate receives any real property, and, according to Article TENTH, this real property can be the source of funds for payment of the inheritance and estate taxes.
If Articles FIRST and TENTH are read together, and if Article FIRST is not dismissed as meaningless “boiler plate,” the conclusion reached by the Court of Special Appeals is inescapable. As Chief Judge Gilbert observed for that court: “Dr. Johnson possessed a reasonable command of the English language and knew what she had written in ‘Article FIRST’ of her will.” 38 Md. App. at 597,382 A. 2d at 337. It is unlikely that she was “uttering mere platitudes” about the payment of her taxes, since she is presumed to have known what the law would require in the absence of any contrary direction in her will.
Those courts which have considered whether words similar to those used by Dr. Johnson are sufficient to show the testatrix’s intention to render a tax apportionment statute inapplicable agree that the expression of intent must be “clear and unambiguous.” See 38 Md. App. at 597 & n. 7, 382 A. 2d at 336 & n. 7. The Court of Special Appeals, adopting this standard, considered the cases from other Uniform Act states as more pertinent than opinions from the courts of states which have not adopted the Act. See § 11-109 (i) of the Estates and Trusts Article. The majority pays lip service to the legislature’s expressed direction for uniformity of construction in states adopting provisions of § 11-109, and then rejects the only two decisions from Uniform Act *660jurisdictions which address the issue before the Court. Both In re Ogburn’s Estate, 406 P. 2d 655 (Wyo. 1965) and In re Crozier’s Estate, 105 N. H. 440, 201 A. 2d 895 (1964), analyzed will clauses similar to Article FIRST of Dr. Johnson’s will. The Supreme Court of Wyoming, while noting that a direction to pay “all my just debts, taxes, funeral expenses ... of my estate” was not a “model directive against apportionment,” 406 P. 2d at 658, nevertheless concluded that
“by inclusion of the tax clause in the usual ritualistic and introductory portion of the will directing payment of debts, expenses, et cetera, which when possible are ordinarily satisfied from the residuary estate, it seems clear that testatrix also intended that the death taxes embraced within the language were to be paid from the same source.” 406 P. 2d at 659.
Similarly, the New Hampshire Supreme Court interpreted a clause directing “payment of all my just debts, ... and inheritance taxes out of my estate,” and decided that it was “an artless and ambiguous but in the last analysis an .effective provision against apportionment of death taxes.” 105 N. H. at 442, 201 A. 2d at 897.
In other states which have not adopted the Uniform Act, but which allow a testatrix to shift the death tax burden by so providing in her will, courts have construed clauses like Article FIRST of Dr. Johnson’s will as effective to vary the otherwise applicable statute. See, e.g., In re Estate of Tedford, 258 Iowa 890, 140 N.W.2d 908 (1966) (“pay all death and inheritance taxes”); University of Louisville v. Liberty Nat. Bank & T. Co., 499 S.W.2d 288 (Ky. 1973) (pay all “taxes assessed against my estate and all beneficiaries therein named”); Thomas v. Fox, 348 Mass. 152, 202 N.E.2d 912 (1964) (“all my debts, ... and all inheritance taxes be paid”); In re Bauer’s Will, 54 Misc. 2d 1060, 284 N.Y.S.2d 98 (Sur. Ct. 1967), adhered to, 55 Misc. 2d 808, 286 N.Y.S.2d 323 (1968) (“administration expenses and any estate taxes be paid”); In re Lander’s Estate, 416 Pa. 605, 207 A. 2d 753 (1965) (“my just debts, ... Estate taxes and Pennsylvania Inheritance taxes *661be fully paid”). While recognizing that today’s decision is against the great weight of authority, the majority nevertheless aligns itself with those few courts which hold that language similar to that in Dr. Johnson’s will does not direct against apportionment. I cannot accept the majority’s conclusion that “this very substantial authority” consists of decisions which are “not soundly reasoned” and which should not be followed.
The fact that inheritance and estate taxes are grouped in Article FIRST with the other expenses usually paid out of the residuary estate further buttresses the holding of the Court of Special Appeals. See Starr v. Watrous, 116 Conn. 448, 165 A. 459 (1933), where the first clause of the will directed the executors to pay all “just debts, funeral expenses, succession and other taxes.” A statute required the payment of succession taxes from each legacy, unless otherwise provided by the will. In holding that the succession tax burden was effectively shifted from the specific legatees to the residuary estate the court stated,
“in general, all that is required is that the will sufficiently express an intent that the tax shall be paid out of the estate of the testator other than the property passing to the recipient as donee, beneficiary, or distributee. A natural and appropriate method of accomplishing this purpose is to provide for payment of the tax in like manner as debts of the estate and funeral expenses, the result of this course being that the tax ultimately comes out of the residuary estate.”
“... The testatrix must be presumed to have known that, unless she directed otherwise, the succession taxes paid would be deducted from the several legacies. The presence of the provision for them in the will evinces a desire and intention that they should be satisfied in some other way, and inclusion of them in the same classification as debts, funeral expenses, and ordinary taxes can hardly be *662regarded otherwise than as expressing an intention that they should be paid out of the estate in the same way and from the same funds as these other charges.” 116 Conn, at 451-53, 165 A. at 460.
See also In re Cudahy’s Will, 251 Wis. 116, 28 N.W.2d 340 (1947), which held that the testator’s inclusion of taxes with debts and funeral expenses in Article First of the will was sufficient indication of an intention to require payment of inheritance taxes, ordinarily paid by specific legatees, out of the residuary estate.
Finally, it must be noted that .§ 11-109 (k) of the Estates and Trusts Article, which allows a testatrix to avoid apportionment, does not mandate the use of any particular word or form of words. Under the statute, apportionment is the rule “[ejxcept as otherwise provided in the will, or other controlling instrument.” I might agree with the majority’s analysis if § 11-109 (k) required the testatrix’s intention to be “expressly indicated” or “specifically provided” in the will (see §§ 3-208 (b), 4-405, 4-406 of the Estates and Trusts Article), but I am unwilling to engraft these additional words onto § 11-109 (k). Cf. Caruthers v. Buscher, 38 Md. App. 661, 382 A. 2d 608 (1978) (clause does not expressly indicate testator’s intent to exonerate realty, as required by § 4-406, Estates and Trusts Article).
I would affirm the judgment of the Court of Special Appeals.