Matter of Wesey

[*1] Matter of Wesey 2007 NY Slip Op 51195(U) [15 Misc 3d 1147(A)] Decided on June 8, 2007 Sur Ct, Nassau County Riordan, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 8, 2007
Sur Ct, Nassau County

In the Matter of the Estate of Alexander Wesey, Deceased.



342395



The appearance of counsel is as follows:

Robert E. Greenberg, Esq.

3000 Marcus Avenue

Lake Success, NY 11042

John B. Riordan, J.

Before the court is a petition commenced by the executors for a construction of Article FIRST of the will which provides:

"I direct my Executor, hereinafter named, to pay all my just debts, funeral expenses, and expenses of administering my estate as soon after my death as may be practicable, and to pay from my residuary estate all estate, transfer, inheritance, succession or other death taxes which may be payable under any law of the United States or of any state thereof, or of any other governmental entity (other than generation skipping taxes or taxes attributable to property included in my estate by reason of Internal Revenue Code ("IRC") Section 2044), upon or in respect of all property, whether passing under or outside this Will, includable as part of my gross estate for the purpose of the computation of any such taxes."

As can be seen from reading Article FIRST, there appears to be no ambiguity in the language used and, in such a circumstance, the court's sole function is to enforce the will according to its terms (11 Warren's Heaton on Surrogates' Courts, § 187.01[2][a]). It appears from the instant petition and from the petition and other papers filed in the probate proceeding, that the probate estate consists of assets valued at less than $25,000 while the assets contained in the decedent's revocable lifetime trust are valued at approximately $1,750,000. The will pours over into the lifetime trust which contains no dispositions which would qualify for either the marital or charitable deductions from estate tax. There are thus substantial estate taxes due and insufficient assets in the decedent's residuary estate to pay the tax. While the will contains the subject tax apportionment clause, the revocable lifetime trust is silent with regard to payment of estate tax.

The lifetime trust provides that upon the death of the decedent, $50,000 is to be paid to each of two named individuals, one of whom is one of the coexecutors. The trust also provides that the decedent's residence is to go to those same two individuals, and that the remainder of the trust assets be divided equally among thirteen other persons. What the petition seeks then is not a construction of Article FIRST, but rather a determination of whether the estate tax is payable by the beneficiaries of the trust on a pro rata basis, or solely from the interest of the thirteen individuals who share in the residue of the lifetime trust.

EPTL 2-1.8(a) mandates, in the absence of a contrary direction in the will or trust instrument, that estate taxes be apportioned equitably among all beneficiaries in proportion to [*2]their interests in the estate. Here, the will contains a direction against apportionment and for payment of estate taxes from the residuary estate. However, the residuary estate is insufficient to pay the tax and "where the residuary estate is insufficient to pay all estate taxes, the balance of such taxes, after payment of such portion of taxes as the residue will permit, is required to be equitably allocated against all beneficiaries" (Matter of Hamilton, 69 Misc 2d 246 [Sur Ct, Orange County 1972]). While it appears to this court that an equitable allocation of the tax against all the beneficiaries would require all beneficiaries of the trust to contribute ratably in proportion to their interest in the trust, there is controlling authority in the Second Department that the tax apportionment clause in the will controls the payment of money from the trust, so that the tax is payable from the residuary beneficiaries of the trust only, exonerating the preresiduary beneficiaries (Matter of Collia, 123 Misc 2d 1014 [Sur Ct, Suffolk County 1984], affd 118 AD2d 778 [2d Dept 1986]). While this court might respectfully disagree with that decision, it is binding and it does not produce an unjust result in this case. That is because the decedent's will contains identical dispositive provisions to those contained in the trust, if the trust is found to be invalid. It therefore appears to be the testator's clear intention that the two named individuals receive their $50,000 bequests and the specific devise of the realty, without having to contribute to payment of estate tax.

This decision constitutes the order of the court and no additional order need be submitted.

Dated: June 8, 2007

John B. Riordan

Judge of the

Surrogate's Court

The appearance of counsel is as follows:

Robert E. Greenberg, Esq.

3000 Marcus Avenue

Lake Success, NY 11042