Estate of Atkinson, Matter of

• Decision Date: 23 March 1989
• Parties: In the Matter of the ESTATE of Ethel B. ATKINSON, Deceased. First National Bank of Cortland et al., as Coexecutors of the Estate of Ethel B. Atkinson, Deceased, Respondents-Appellants; Young Women's Christian Association of Cortland, New York, Inc., Appellant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 112

539 N.Y.S.2d 112

148 A.D.2d 839

In the Matter of the ESTATE of Ethel B. ATKINSON, Deceased.

First National Bank of Cortland et al., as Coexecutors of

the Estate of Ethel B. Atkinson, Deceased,

Respondents-Appellants;

Young Women's Christian Association of Cortland, New York,

Inc., Appellant-Respondent.

Supreme Court, Appellate Division,

Third Department.

March 23, 1989.

Theodore Fenstermacher, Cortland, for appellant-respondent.

Scolaro, Shulman, Cohen, Lawler & Burstein, P.C. (Walter D. Kogut, of counsel), Syracuse, for respondents-appellants.

Before KANE, J.P., and CASEY, LEVINE, MERCURE and HARVEY, JJ.

HARVEY, Justice.

Cross appeals from a decree of the Surrogate's Court of Cortland County (Kepner, Jr., S.), entered January 5, 1988, which, inter alia, settled the accounts of petitioners as coexecutors of the estate of Ethel B. Atkinson.

This is a proceeding for judicial settlement of the accounts of the coexecutors of the estate of Ethel B. Atkinson, who died testate in April 1979 leaving an estate of approximately $500,000 in bank accounts, marketable securities and jewelry. Decedent's will provided for a single bequest of her personal effects and household furnishings to her niece, and the residue was to be distributed as follows: 75% to 27 different individual legatees and 25% to 10 separate charitable organizations including respondent, the Young Women's Christian Association of Cortland, New York, Inc. The will was admitted to probate in May 1979 and letters testamentary were issued at that time to petitioners, Morris C. Fitts and the First National Bank of Cortland, as the named coexecutors.

In January 1981, petitioners filed an accounting of the estate with Surrogate's Court. As a result of objections filed by some of the residuary beneficiaries including respondent, petitioners filed an amended accounting in February 1982 and a second amended accounting reflecting the period through February 1987 was also subsequently filed. Respondent filed objections to both amended accounts. Ultimately, in a January 1988 decree, the court, inter alia, denied all of respondent's objections to petitioners' amended accounts except one and settled and approved those accounts. These cross appeals followed.

Initially, respondent asserts that Surrogate's Court erred in determining that decedent's will contained a clear and unambiguous direction to pay estate taxes prior to the distribution of the residuary estate. Respondent argues that the will is ambiguous and therefore the taxes should have been apportioned against the noncharitable residuary beneficiaries pursuant to EPTL 2-1.8. The pertinent paragraphs of the will read, in part, as follows:

THIRD. All the rest, residue and remainder of my estate, both real and personal, wheresoever situate, which I may own, die seized of or be entitled to at the time of my death, which remains after all debts, administration expenses and taxes, of every nature, are paid in full, I give, devise and bequeath in the following manner * * * (emphasis supplied).

FOURTH. I direct that all estate, transfer, inheritance and like taxes, including interest and penalties, imposed or assessed by the federal or state governments or any other duly constituted authority upon or with respect to property passing under this, my Will, and any property passing outside of my Will, which is required to be included in my taxable estate, be paid out of my testamentary residuary estate and that no portion thereof shall be apportioned to or collected from any legatee, devisee or other recipient of property constituting part of my taxable estate (emphasis supplied).

In our view, there is no ambiguity in these provisions. EPTL 2-1.8(c) provides that the tax shall be apportioned "[u]nless otherwise provided in the will". Although there is a strong policy favoring apportionment (see, Matter of Shubert, 10 N.Y.2d 461, 471, 225 N.Y.S.2d 13, 180 N.E.2d 410), that policy gives way where the clear and unambiguous wishes of the testator direct otherwise (Matter of Cord, 58 N.Y.2d 539, 545, 462 N.Y.S.2d 622, 449 N.E.2d 402; Matter of Dewar, 62 A.D.2d 352, 354, 404 N.Y.S.2d 750; see Matter of Collia, 118 A.D.2d 778, 779, 500 N.Y.S.2d 286). It is axiomatic that a decedent's intent should be determined, where possible, from the four corners of the will (Matter of Cord, supra, 58 N.Y.2d at 544, 462 N.Y.S.2d 622, 449 N.E.2d 402). Here, the third paragraph expressly provides that the residuary estate means the estate "after all debts, administration expenses and taxes, of every nature, are paid in full". The fourth paragraph then further directs that all taxes are not to be apportioned to or collected from any beneficiary under the will. Taken together, these provisions unambiguously direct against apportionment and Surrogate's Court correctly rejected this objection.

Next, respondent argues that petitioners diminished the estate and violated their obligation as fiduciaries under EPTL 11-2.2(a)(1) by prematurely selling decedent's securities shortly after the will's admission to probate and imprudently reinvesting the proceeds in several...