Estate of Acord v. C.I.R., 90-70006

• Decision Date: 22 October 1991
• Docket Number: No. 90-70006,90-70006
• Citation: 946 F.2d 1473
• Parties: -6071, 60 USLW 2312, 91-2 USTC P 60,090 ESTATE OF Jean ACORD, Deceased, Sterling Ernest Norris, Personal Representative, Petitioner-Appellant, v. COMMISSIONER of INTERNAL REVENUE, Respondent-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1473

946 F.2d 1473

68 A.F.T.R.2d 91-6071, 60 USLW 2312,

91-2 USTC P 60,090

ESTATE OF Jean ACORD, Deceased, Sterling Ernest Norris Personal Representative, Petitioner-Appellant, v. COMMISSIONER of INTERNAL REVENUE, Respondent-Appellee.

No. 90-70006.

United States Court of Appeals Ninth Circuit.

Argued and Submitted April 5, 1991.

Decided Oct. 22, 1991.

James L. Norris, Bismark, N.D., for petitioner-appellant.

William A. Whitledge, Washington, D.C., for respondent-appellee.

Before SCHROEDER and REINHARDT, Circuit Judges, and KING, ^* District Judge.

SCHROEDER, Circuit Judge:

We are in an unusual position for a federal appeals court. We must decide an issue of first impression under Arizona probate law. We are called upon to interpret Arizona's statutory provision that a devisee who does not survive a testator by more than 120 hours is deemed to have predeceased the testator unless the will includes "some language dealing explicitly with simultaneous deaths or deaths in a common disaster, or requiring that the devisee survive the testator or survive the testator for a stated period in order to take under the will." A.R.S. § 14-2601(A).

Claud and Jean Acord, husband and wife, were involved in a car accident in which Claud was killed immediately. Jean died approximately 38 hours later. Claud's will bequeathed all of his property to Jean, but also contained a clause stating: "In the event my beloved wife, Jean Acord, dies before I do, at the same time that I do, or under such circumstances as to make it doubtful who died first, I hereby give, devise and bequeath all of my property" to alternate devisees. The Internal Revenue Service claimed that this clause was sufficient to override the statutory requirement of survival by at least 120 hours, and that therefore, since Jean survived Claud by 38 hours, his assets passed to her estate. Under this construction, Jean's estate now owes $151,544.96 in additional taxes. The Estate argues that the language of the will is not sufficient to override the statutory provision, and that since Jean did not survive Claud by 120 hours she should be deemed to have predeceased him. Under the Estate's construction, Claud's assets did not pass to Jean and the Estate therefore owes no additional tax. The Tax Court adopted the IRS's position. We affirm.

Arizona Revised Statutes section 14-2601 was adopted verbatim from section 2-601 of the Uniform Probate Code. The commentary to the Uniform Probate Code indicates that the 120-hour survival requirement "avoids multiple administrations and in some instances prevents the property from passing to persons not desired by the decedent." Unif.Prob.Code § 2-104, 8 U.L.A. 64 cmt. (1983) (discussing provision requiring heir to survive decedent by 120 hours in order to take by intestate succession, referencing section 2-601 as its parallel for situations where there is a will). Because there is no other expression of the intent of the Arizona legislature, we assume, as the parties do, that the statute here at issue was meant to serve these purposes. Since the alternative devisees in the wills of Claud and Jean Acord are identical, there is no possibility that allowing Claud's property to pass to Jean will result in the inheritance of Claud's property by persons Claud did not wish to benefit. Thus, the only purpose of the statute which would be served in this case is avoidance of multiple administrations of the property in Claud's estate.

Such multiple administrations are not always detrimental to the beneficiaries, however. A leading expert on the Arizona Probate Code has noted that where the bequest is to a spouse, if the bequest fails because of the 120-hour survival requirement, then any resulting gift to alternative beneficiaries will not have the benefit of the marital tax deduction that would apply if the spouse took under the will. See Effland, Estate Planning Under the New Arizona Probate Code, 1974 Ariz.St.L.J. 1, 20 (1974). This authoritative commentary on the subject appears to assume that individuals wishing to preserve this deduction will seek to draft a will that includes language that will circumvent the statute. See id. at 21 (suggesting language that will avoid application of the statute); id. at 30 (same). See also J. Geiser, D. Estes, L. Comus, Jr., and E. ter Horst, Arizona Probate Code Practice Manual 25-26 (3d ed. 1989) (suggesting the inclusion of language concerning survivorship in a will "in order to assure a marital deduction"). For example, noting that the language of the statute makes it inapplicable if the will merely "contains some language" about survival or simultaneous deaths, Effland suggests that the statute is easily circumvented by the following types of provisions: (1) a devise to a given beneficiary "if he survive me"; (2) a clause such...