Taggart v. United States, Civ. No. 5304.
| Decision Date | 03 December 1969 |
| Docket Number | Civ. No. 5304. |
| Citation | 306 F. Supp. 430 |
| Parties | Addie B. TAGGART, Administratrix of the Last Will and Testament and the Estate of Mary Isabella Rennie, deceased, Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — District of Wyoming |
Harry L. Harris and Charles D. Phillips, Evanston, Wyo., and Carl L. Lathrop, Cheyenne, Wyo., for plaintiff.
James P. Parker, Dept. of Justice, Washington, D. C., and Richard V. Thomas, U. S. Atty. for the District of Wyoming, for defendant.
Judge's Memorandum
This is a civil action for the refund of $29,373.40 in federal estate taxes and interest paid by the estate of Mary Isabella Rennie, who died October 16, 1964.
A single question is involved, viz: whether, under the Will of Mary Isabella Rennie and the laws of the State of Wyoming, one-half of the amount of the federal estate taxes levied on Mrs. Rennie's estate is to be apportioned to and paid out of the bequest of one-half of her residuary estate in favor of the Memorial Hospital of Uinta County in Evanston, Wyoming.
A claim for refund was filed with the District Director, Internal Revenue Service, for the District of Wyoming, on July 11, 1966. The claim was rejected on January 27, 1967.
By the terms of the Will, the testatrix devised and bequeathed one-half of her estate after payment of all costs and expenses of administration to a nephew and two nieces of her late husband and devised and bequeathed the remaining one-half of her estate to the Board of Trustees of the Memorial Hospital of Uinta County, in Evanston, Wyoming. The Will provides in part as follows:
"I direct that each of my beneficiaries shall pay his, her, their or its individual portion of all state and federal inheritance or income taxes or levies."
Plaintiff contends the Will does not direct that the hospital should pay its portion of federal estate taxes, and thus the hospital is exempt from payment of such taxes as provided for by Section 2055(a) (2) of the Internal Revenue Code of 1954 and by Section 2-341 of the Uniform Estate Tax Apportionment Act in the State of Wyoming.
On the other hand, the United States contends that the Will does direct the hospital to pay its portion of federal estate taxes.
Section 2055(a) (2) of the Internal Revenue Code of 1954 provides that:
"* * * the value of the taxable estate shall be determined by deducting from the value of the gross estate the amount of all bequests, legacies, devises, or transfers * * * to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes * * *."
Sub-section (c) of Section 2055 provides in substance that if the tax imposed is, either by the terms of the Will or by the law of the jurisdiction under which the estate is administered, payable in whole or in part out of the bequests, legacies, or devises otherwise deductible under this section, then the amount deductible under this section shall be the amount of such bequests, legacies, or devises reduced by the amount of such taxes. In other words, the Internal Revenue Code of 1954 provides for a charitable deduction and also provides for no deduction if the terms of the Will or the law of the jurisdiction where the Will is administered directs otherwise.
The State of Wyoming has adopted the Uniform Estate Tax Apportionment Act. § 2-336 et seq. Wyoming Statutes, 1957. Section 2-338 of the Act provides that if the Will fails to direct that estate taxes shall not be apportioned, or unless the Will provides that estate taxes shall be apportioned in a particular manner, then the tax shall be apportioned under the statute among all persons interested in the estate. Section 2-341 provides as follows:
Thus, the Internal Revenue Code of 1954 provides the exemption for the hospital unless the terms of the Will or the law of Wyoming deprive the hospital of the exemption. It is clear that under the Uniform Estate Tax Apportionment Act, the State of Wyoming has preserved the charitable deduction provided for by the Internal Revenue Code of 1954. This leaves the terms of the Will as the only means by which the deduction may be determined. If the Will does not provide for apportionment of the Federal Estate Tax, and does not clearly direct against apportionment, then the tax will be apportioned under the Uniform Act in effect in Wyoming.
In this case it is clear that the Will does not direct against apportionment. This leaves the only remaining question of whether the terms of the Will direct apportionment in such a manner as to deprive the hospital of the charitable deduction to which it would otherwise be entitled, both under the federal statute and as preserved by the Wyoming law.
In order to determine this question, it is necessary to look to the language of the Will in order to determine the intent of the testatrix. The intention of the testatrix is to be ascertained if at all possible from the meaning of all the words used in the context of the entire Will. In Re Ogburn's Estate, 406 P.2d 655 (Wyo.1965). Another principal rule of construction is that each word in an instrument is to be given meaning if at all possible. Ramsey v. Nordloh, 143 Colo. 526, 354 P.2d 513 (1960). The majority rule is that if the Will is ambiguous or uncertain, then the Court may not resort to extrinsic evidence in order to ascertain the intent of the testatrix. On the other hand, if the Will is...
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