Gaskill v. U.S.

• Decision Date: 25 October 1985
• Docket Number: No. 58202,58202
• Citation: Gaskill v. U.S., 708 P.2d 552, 238 Kan. 238 (Kan. 1985)
• Parties: Glenn C. GASKILL, Executor of the Estate of Sophie B. Gaskill, Deceased, Appellee, v. UNITED STATES of America, Appellant.
• Court: Kansas Supreme Court

Page 552

708 P.2d 552

238 Kan. 238

Glenn C. GASKILL, Executor of the Estate of Sophie B Gaskill, Deceased, Appellee, v. UNITED STATES of America, Appellant.

No. 58202.

Supreme Court of Kansas.

Oct. 25, 1985.

Syllabus by the Court

If the power of sale or disposal by a life tenant under the will is merely the ordinary one bestowed on a custodian of property, and no words suggesting that the remaindermen may be compelled to take less than the entire corpus are employed, the will is construed to permit the life tenant to have only the income derived from the life estate.

William P. Wang, U.S. Dept. of Justice, Washington, D.C., argued the cause, and Michael L. Paup, Robert A. Bernstein, and Glenn L. Archer, Jr., Washington, D.C., and Benjamin L. Burgess, Jr., Wichita, were with him on brief for appellant.

Jack E. Dalton of Mangan, Dalton, Trenkle & Rebein Chartered, Dodge City, argued the cause, and Michael A. Doll, of the same firm, was with him on brief for appellee.

LOCKETT, Justice:

This case is here on certification from the Tenth Circuit Court of Appeals. The United States appealed from a judgment of the United States District Court for the District of Kansas in which the district court had determined that under Kansas law the life tenant under a will did not have the right to consume the corpus of the life estate, and, therefore, the value of the life estate was not taxable as a part of the life tenant's estate upon her death. Gaskill v. United States, 561 F.Supp. 73 (D.Kan.1983). After oral argument, the Tenth Circuit Court of Appeals, pursuant to the certification procedures set forth in K.S.A. 60-3201 et seq., certified the following question to the Kansas Supreme Court: "Does a life tenant of property given to her in a will which authorizes her to dispose of the property as provided in Article III [of the Gaskill will] have a right under Kansas law to consume the corpus where Article IV of the [Gaskill] will gives the remainder 'subject to the life estate'?"

E.L. Gaskill died testate in 1952. His wife, Sophie B. Gaskill, died in 1979. Under the terms of her husband's will, she received certain property interests. Paragraph III of the will provided:

"If my said wife survive me I give, devise and bequeath her a life estate in and to all of the rest, residue and remainder of my estate, real, personal and mixed, wheresoever situated or located, with full rights, powers and authorities to sell, convey, exchange, lease for oil and gas and otherwise, assign, transfer, deliver and otherwise dispose of any part or all of said estate during her lifetime, all without authority of or order from any Court."

Paragraph IV of the will stated in part:

"Subject to said life estate I give, devise and bequeath all of the remainder of my estate, or if my wife not survive me then all of the rest, residue and remainder of my estate after payment of all items in Paragraph II hereof unto my children ... equally, share and share alike, in fee simple...."

Although the executor/taxpayer originally included the value of the life estate in the gross estate, the executor subsequently filed an amended return claiming a refund of $90,306.62 in estate taxes. Upon the denial of the claim for refund, the executor filed suit in the federal district court for refund.

Pursuant to cross-motions for summary judgment, the district court held that, although the will granted the decedent far-reaching powers to dispose of the life estate, under Kansas law the decedent had a "correlative duty on her to make any such dispositions for full consideration and to hold the proceeds as a quasi-trustee for the remaindermen." According to the court, the decedent did not possess under state law the power to appoint any of the life estate either to herself or to her creditors, and, therefore, did not have a general power of appointment under Section 2041 of the Internal Revenue Code of 1954 such that the value of the life estate should be included in her gross estate.

The United States argues that the language of the Gaskill will gave Sophie Gaskill the right to consume the entire corpus of the life estate, subject to the sole limitation that she could not give the property away. It contends that the phrase "all of the remainder" should be interpreted to mean "whatever is left," suggesting that the testator gave Sophie the right to consume any part of the property in the life estate, with whatever was left going to the remaindermen.

The executor argues, however, that the power to dispose of the property did not include the power to consume, and that Sophie Gaskill held the property in a quasi-trust for the remaindermen, subject to any powers of consumption she had in the life estate.

When construing the provisions of a will this court is required to place itself in the shoes of the testator at the time he made the will and determine as best it can the purpose and intentions he endeavored to convey by the language used. The tools in aid of the search for the testator's intention are the language contained within the four corners of the document, plus any extraneous circumstances surrounding its execution which assist in understanding his true intent and purpose. In re Estate of Lehner, 219 Kan. 100, 547 P.2d 365 (1976).

The United States District Court, in reaching its decision, reviewed three prior Kansas cases:

In re Estate of Lehner, 219 Kan. 100, 547 P.2d 365, in which the will granted a life estate with power of disposition in "all of the rest, residue and remainder" of the testator's property, and provided that "the remainder of such residue remaining" at the death of the life tenant should go to the remaindermen.

Pearson v. Orcutt, 106 Kan. 610, 189 P. 160 (1920), in which the testator granted a life estate with power of disposition in "all property, real, personal, and mixed," with an additional provision directing that, in the event the life tenant "shall not have sold or disposed of all of my property prior to her death ... then out of such of my estate as shall remain," a sum certain was to be paid to an identified recipient and the remainder was to go to the remaindermen.

Condon Nat. Bank of Coffeyville, Kan. v. United States, 349 F.Supp. 755, 756 (D.Kan.1972), in which the will provided:

" ...