Bovaird's Estate, Matter of, 55427

• Decision Date: 06 April 1982
• Docket Number: No. 55427,55427
• Citation: 645 P.2d 500,1982 OK 48
• Parties: In the Matter of the ESTATE OF Davis D. BOVAIRD, Deceased. William J. BOVAIRD, Ruthanna Bovaird Snow, and Mary Florence Bovaird Stark, children, heirs, devisees, and residuary legatees of Davis D. Bovaird, Appellants, v. Florence H. BOVAIRD, widow of Davis D. Bovaird, Appellee.
• Court: Oklahoma Supreme Court

Page 500

645 P.2d 500

1982 OK 48

In the Matter of the ESTATE OF Davis D. BOVAIRD, Deceased.

William J. BOVAIRD, Ruthanna Bovaird Snow, and Mary Florence

Bovaird Stark, children, heirs, devisees, and residuary legatees of Davis D. Bovaird, Appellants, v. Florence H. BOVAIRD, widow of Davis D. Bovaird, Appellee.

No. 55427.

Supreme Court of Oklahoma.

April 6, 1982.

Appeal from the District Court of Tulsa County; M. M. McDougal, Judge of the District Court.

Testator died and his widow elected to take her forced share of the will, invoking provisions of 84 O.S.1971, § 44. She sought to be relieved from contributing to the federal estate tax. Trial Court agreed, and her children appeal. We hold widow shall not be required to contribute to the federal estate tax liability on grounds of (1) the tax relief clause in the will and (2) the doctrine of equitable apportionment.

Robert G. White, III of Boesche, McDermott & Eskridge, Tulsa, for appellants.

Philip S. Haney, Tulsa, for appellee.

DOOLIN, Justice:

The issue dispositive of this appeal is: May a surviving spouse who elects to take against the will of her husband, be required to contribute to the federal estate tax? We answer in the negative.

Davis Bovaird died in 1979, leaving his wife and three children. Declaring she had ample means in her own right, the decedent intentionally made no provision in his will for his wife except for certain specific devises and legacies regarding the homestead and personal possessions. Most of the balance of his estate went to the three children.

The widow renounced her testamentary share and filed an election to take against the will. ¹ She then filed a declaratory judgment action asking that her forced share of the estate bear no liability for payment of the federal estate taxes. The Court granted such relief. The children appeal.

As part of his last will and testament, the decedent made the following provisions, which both parties cite as support:

"ARTICLE I

General Provisions

1. I direct that all my debts owing at law, including the expense of my last illness and funeral, the expense of administering my estate, all allowances for the support of dependents and all estate, inheritance and other succession taxes levied or assessed against my estate or the transfer thereof, including taxes levied or assessed on property passing otherwise than under the provisions of this, my Last Will and Testament, such as taxes assessed on property held in joint tenancy, be paid by my Executor out of my estate and my Executor shall neither have nor claim any right of contribution for such taxes against any such surviving joint tenant, legatee, devisee or beneficiary of property passing otherwise than under the provisions of this my Last Will and Testament. " (Emphasis added).

Children argue that provision, coupled with 84 O.S.1971, § 3, ² order for payment of estate debts, mandate that apportionate contribution be ordered with each beneficiary of the estate contributing his/her pro rata share of the federal estate tax.

The widow cites the will as authority for paying the estate taxes out of the estate corpus after the widow's forced share has been deducted; she also urges us to adopt the doctrine of equitable apportionment.

In Oklahoma the cardinal rule for the construction of wills is to ascertain the intent of the testator and give effect thereto, unless such intent attempts to effect that which the law forbids. In Re Fletcher's Estate, 308 P.2d 304 (Okl.1957).

The ultimate placement of the federal estate tax liability is controlled by state law. Congress intended that the federal estate tax should be paid out of the estate as a whole and that the applicable state law as to the devolution of property at death should govern the distribution of the remainder and the ultimate impact of the federal tax. Riggs v. Del Drago, 317 U.S. 95, 63 S.Ct. 109, 87 L.Ed. 106 (1942).

Oklahoma statutes are void of direction in answering the question before us. 84 O.S.1971, § 3 creates the order in which a testator's property shall be taken for payment of debts. First in line is property designated by the will itself as specifically appropriated for payment of debts.

The trial court concluded the will was most explicit in directing that all estate taxes shall be paid out of the estate and no beneficiary of property passing "otherwise than under the provisions of" the will shall be required to contribute to such taxes. The court concluded the widow took her statutory share by action of state law and not from among provisions of the will, adding that the widow's share does not constitute estate residue, as defined by case law which characterize Oklahoma as a "burden-on-the-residue" state, citing Thompson v. Wiseman, infra, as authority. It then ruled the widow's share, to the extent it qualified for the federal estate tax marital deduction, shall not be charged with any payment of federal estate tax.

A federal court concluded that the widow's share has a priority, payable from the estate before specific, general and demonstrative bequests, and not from the residue. Robertson v. United States, 281 F.Supp. 955 (N.D.Ala.1968). Also see Cox v. United States, 421 F.2d 576 (5th Cir. 1970), for the proposition that a widow's forced share has a priority under Alabama law.

Children argue the widow's forced share should come from the residue, and thus be taxed with estate tax liability. However, their citations of authority are not on point. Thompson v. Wiseman, 233 F.2d 734 (10th Cir. 1956), concerned a marital bequest of one-third of the residue. In Re Estate of Rettenmeyer, 345 P.2d 872 (Okl.1959), involved no tax payment clause and followed Thompson's edict that the marital deduction shall not be exempt from estate taxes. Tapp v. Mitchell, 352 P.2d 900 (Okl.1960), relieved a joint tenant taking outside the probate estate from payment of estate taxes, concluding that the estate tax burden falls on the residue. Children argue it is illogical that a one-third bequest of residue to a spouse (as in Thompson ) would be treated any differently than a one-third forced share of an estate, but they cite no authority for that argument in logic.

For reasons cited herein, we prefer to come down on the side of the widow and hold that her forced share shall be treated preferentially and not be considered as part of the residue, and thus shall not be liable for payment of estate taxes.

Kansas found itself in a similar quandry: it had neither an apportionment statute nor case law to settle the question. In resolving the question, it relied heavily on Pitts v. Hamrick, 228 F.2d 486, 490 (4th Cir. 1955), and cited the following as authority:

"... Where the estate is to receive the benefit of the deduction of the widow's share from the gross estate in order that share may be relieved of the burden of the estate tax, as Congress intended, it would be unfair and unjust to require her share to bear any portion of that tax; and we find nothing in the law of South Carolina which requires such a result or which would prevent the court from applying equitable principles of apportionment to relieve the share of the widow of this unfair and unjust burden." See, First National Bank of Topeka, Kansas v. United States, 233 F.Supp. 19 (U.S.D.C., Kansas, 1964).

A Kansas case practically on "all fours" with the case at bar is Spurrier v. First National Bank of Wichita, 207 Kan. 406, 485 P.2d 209 (1971). There, the widow elected to take against the will and the executor attempted to charge her with proportionate payment of the estate tax. A declaratory judgment action was filed to resolve the dispute.

The Kansas Supreme Court found a number of states have specific statutes for the apportionment of the federal estate tax:

"Those statutes, in the main, were intended to prevent the burden of the federal estate taxes from falling on residuary legatees, and to cause each person who took from a decedent to pay that part of the tax which accrued by reason of the value of the property he took. In addition, most of those statutes, either expressly or as construed by the courts, provide that any deduction allowed the surviving spouse should inure to the benefit of each spouse, and thus, the surviving spouse pays no federal estate tax by reason of the fact he or she received a portion of decedent's estate in the form of a marital deduction." 485 P.2d at 212.

The Court also made the following assessments: (1) the burden of federal estate taxes falls on the residuary estate; (2) implicit in the decision is recognition of the principle that the marital deduction neither generates nor contributes anything...