Cord's Estate, Matter of

• Decision Date: 05 May 1983
• Citation: 462 N.Y.S.2d 622,58 N.Y.2d 539,449 N.E.2d 402
• Parties: , 449 N.E.2d 402 In the Matter of the ESTATE OF Charlotte L. CORD, Deceased. Don O. Cord, Appellant, Bank of New York et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 622

462 N.Y.S.2d 622

58 N.Y.2d 539, 449 N.E.2d 402

In the Matter of the ESTATE OF Charlotte L. CORD, Deceased Don O. Cord, Appellant Bank of New York et al., Respondents.

Court of Appeals of New York.

May 5, 1983.

Edgar Hills, Riverhead, for appellant.

John J. O'Grady, III, Michael Ritner Weaver and Kevin W. Goering, New York City, for Bank of New York, respondent.

OPINION OF THE COURT

FUCHSBERG, Judge.

In this will construction proceeding, the essential issue is whether a provision of decedent Charlotte L. Cord's irrevocable inter vivos trust, which directed that the tru assume payment of any estate taxes assessed because of its existence, was superseded, without more, by a provision of her will, executed some 40 years later, and directing, in turn, that all death taxes of any nature be paid out of her general estate as an expense of its administration. A subsidiary question is whether the obligation imposed by the trust indenture could be changed other than in the manner expressly provided by EPTL 7-1.9, under which formal consent of all parties "beneficially interested" in a trust is a prerequisite to its revocation or amendment. ¹

The trust provisions in its article third, states: "The Trustees are hereby directed and empowered to pay to the executor or the administrator of the Grantor's estate any estate taxes which may be assessed against such executor or administrator because of the existence at the time of the Grantor's death of the trusts hereby established."

The clause of the will, in its article 2, states: "I direct that all estate, inheritance, transfer, legacy, succession and other death taxes of any nature payable by reason of my death and imposed upon or with respect to property passing under this Will, or property not passing under this Will, including interest or penalties, if any, shall be paid out of my general estate as an expense of administration, without allocation or proration to any legatee or devisee under this Will or any person owning or receiving property not passing under this Will."

Petitioner, who is decedent's surviving husband and executor, commenced this proceeding in Surrogate's Court, Suffolk County, after rejection of his demand that an allocable portion of the estate taxes be paid from the ultimate corpus of the trust, whose beneficiaries are decedent's children by a prior marriage. After exchanging pleadings, the parties consented that an evidentiary hearing be waived. Substantively, the result of the submissi was to rest the determination of the Surrogate on the will, the trust indenture and, subject to the issue of its admissibility, a stipulation that, had the draftsman of the will been called as a witness, he simply would have testified that he was unaware of the existence of the trust at the time he drew the will and, perforce, "did not in any manner whatever have in mind" the effect of one instrument on the other. ²

In deciding the issue so raised, the Surrogate was persuaded by the fact that the will did not "specifically relieve the inter vivos trust from its mandated obligation". To bolster this holding, he further reasoned, in the alternative, that, even if article 2 of the will, though lacking express and explicit direction for apportionment, should be construed to so intend by implication, nonapportionment was still required because the will, however appropriate as a testamentary document, did not comply with EPTL 7-1.9. As to the stipulation, after ruling it admissible, the court nevertheless found it without "probative value". Accordingly, it decreed that the trust pay its proportionate share of the death taxes.

But, for its part, on review, the Appellate Division reversed, on the law. Emphasizing the breadth of the language of article 2 of the will, it construed it to impose the "unqualified obligation" (89 A.D.2d, p. 909, 454 N.Y.S.2d 17) that death taxes on all property passing by reason of the decedent's death be paid by her estate. It specifically held that the draftsman's unawareness of the trust provision did not vitiate this interpretation. And, in taking these stances, it did not discuss the posture of EPTL 7-1.9.

Petitioner now appeals as of right (CPLR 5601, subd. [a], par. [ii] ). In his quest for reinstatement of the Surrogate's decree, he relies on the rationale of nisi prius, including its reliance on EPTL 7-1.9, as well as the stipulation to whi that court gave no weight. For the reasons which follow, we uphold the result reached at the Appellate Division.

Our analysis may well begin with the obvious, i.e., that, in a will construction proceeding, the search is for the decedent's intent (Matter of Thall, 18 N.Y.2d 186, 192-193, 273 N.Y.S.2d 33, 219 N.E.2d 397; Matter of Fabbri, 2 N.Y.2d 236, 239-240, 159 N.Y.S.2d 184, 140 N.E.2d 269) and not for that of the draftsman (e.g., Matter of Aldrich, 259 App.Div. 162, 164, 18 N.Y.S.2d 420; Matter of Kindermann, 48 Misc.2d 607, 610, 265 N.Y.S.2d 538, affd. 27 A.D.2d 856, 278 N.Y.S.2d 546, revd. on other grounds 21 N.Y.2d 790, 288 N.Y.S.2d 480, 235 N.E.2d 452; Matter of von Echt, 39 Misc.2d 373, 376, 240 N.Y.S.2d 703 [all involving tax apportionment clauses] ). For, put in the phrase employed in the stipulation in the present case, relevant in the end was not what her scrivener, but what the testatrix had "in mind". This is especially true here, where it is agreed that the two never as much as discussed the inter vivos trust. Absent other proof which might lend significance to this silence, it therefore plays no role in this proceeding.

Indeed, since ascertainment and implementation of testamentary intent is, consistent with applicable law, to be gleaned, if possible, from within the four corners of the will itself (Matter of Jones, 38 N.Y.2d 189, 193, 379 N.Y.S.2d 55, 341 N.E.2d 565), as a rule extrinsic evidence will not be admissible to vary or contradict the unambiguous expression of the decedent (Matter of Ragone, 58 N.Y.2d 864, 460 N.Y.S.2d 528, 447 N.E.2d 76, revg. 87 A.D.2d 457, 452 N.Y.S.2d 410, for reasons stated by Surrogate Midonick at 116 Misc.2d 993, 997, 459 N.Y.S.2d 649; Matter of Villalonga, 6 N.Y.2d 477, 482, 190 N.Y.S.2d 372, 160 N.E.2d 850). In this perspective, contrary to the premise espoused by the petitioner and adopted by the Surrogate, the failure to mention the trust in article 2 of the will is of no moment. Its all-encompassing direction is plain in its prescription that death taxes payable by the estate not only expressly include those payable on "property not passing under this Will", but also indicates that it is to do so "without allocation or proration to * * * any person owning or receiving [such] property". It is no surprise then that this testamentary formulation has been the one most commonly recommended to accomplish the exoneration from tax apportionment of all property passing on death, whether under the will or otherwise. ³

This said, it is still necessary to confront the seeming conflict between the unambiguous will provision and the trust's own clear direction that death taxes arising out of its existence be charged to its corpus. Ready resolution, however, is found in EPTL 2-1.8 (formerly Decedent Estate Law, § 124), which, while it has long compelled that estate taxes "be equitably apportioned among the persons interested in the * * * estate", has always carried an exception "where a testator otherwise directs in his will" (see, e.g., Matter of Wise, 20 A.D.2d 55, 244 N.Y.S.2d 960, affd. 15 N.Y.2d 591, 255 N.Y.S.2d 259, 203 N.E.2d 648). In short,...