Wahlin's Estate, In re

• Decision Date: 31 December 1973
• Docket Number: No. KCD,KCD
• Citation: 505 S.W.2d 99
• Parties: In re ESTATE of Carl Albin WAHLIN, Deceased. Edith M. BELL and Blanche M. McAuliffe, Executrix of the Estate of Doris Hamilton, Deceased, Appellants, v. Edith M. BELL, Executrix of the Estate of Carl Albin Wablin, Deceased, et al., Respondents. 26219.
• Court: Missouri Court of Appeals

Page 99

505 S.W.2d 99

In re ESTATE of Carl Albin WAHLIN, Deceased.

Edith M. BELL and Blanche M. McAuliffe, Executrix of the Estate of Doris Hamilton, Deceased, Appellants, v. Edith M. BELL, Executrix of the Estate of Carl Albin Wablin, Deceased, et al., Respondents.

No. KCD 26219.

Missouri Court of Appeals, Kansas City District.

Dec. 31, 1973.

Thomas A. Hartley, Kansas City, for appellants.

Roy P. Swanson, Milton C. Clarke, Kansas City, for respondent, Shriners Hospitals for Crippled Children; Swanson, Midgley, Eager, Gangwere & Thurlo, Kansas City, of counsel.

William B. Bundschu, Kansas City, for Edith M. Bell, executrix-respondent.

Francis L. Roach, Kansas City, for Kansas City Association for the Blind.

W. Hugh McLaughlin, Kansas City, for The Masonic Home of Missouri.

Allan W. Stopperan, Kansas City, for First Lutheran Church of Kansas City.

Carl A. Hummell, Kansas City, for The Children's Mercy Hospital

Howard A. Crawford, Kansas City, for Gillis Home for Children.

Bernard Craig, Kansas City, for St. Joseph's Orphan Home for Girls.

Before DIXON, C.J., and PRITCHARD and SOMERVILLE, JJ.

SOMERVILLE, Judge.

This litigation arises from polemical positions taken by individual residuary legatees (who were also recipients of non-probate property) and charitable residuary legatees as to where the final burden of the federal estate tax generated by decedent's estate (probate and non-probate) should rest.

There are two issues involved on appeal: FIRST, should the charitable residuary legatees be completely exonerated from the impact of the federal estate tax; and SECOND, should the individual residuary legatees, who were also joint owners with decedent of certain non-probate property and one thereof was the beneficiary of certain insurance, be liable for contribution respecting the federal estate tax to the extent such jointly owned property and insurance generated the tax. The individual residuary legatees (sometimes hereinafter referred to as appellants) assert the negative as to both issues and the charitable residuary legatees (sometimes hereinafter referred to as respondents) assert the affirmative.

A verbal montage of the facts, proceedings and lower court rulings best explains the posture of this case on appeal.

Carl Albin Wahlin (hereinafter referred to as testator) died testate on May 9, 1970, and his last will and testament was duly admitted to probate by the Probate Court of Jackson County, Missouri, and letters testamentary were issued to his sister Edith M. Bell.

Those portions of testator's last will and testament pertinent to the issues on appeal are:

(1) Article I directed 'expenses of my last illness and funeral, and all my just debts, be paid as soon after my death as legally and conveniently possible' (2) Article III was a specific bequest (and the only specific bequest contained in the will) of two items of personal property having a combined value at the time of testator's death of $644.00 'to my good friend, Miss Doris Hamilton';

(3) Article IV bequeathed 'All of the rest, residue and remainder' of testator's estate as follows:

(a) Twenty-five percent (25%) to testator's 'beloved sister, Mrs. Edith M. Bell';

(b) Twenty-five percent (25%) to testator's 'good friend, Miss Doris Hamilton';

(c) Twenty-five percent (25%) to the Masonic Shrine Crippled Children's Hospital at St. Louis, Missouri;

(d) Five percent (5%) to the First Lutheran Church; 30th and Benton Blvd., Kansas City, Missouri;

(e) Four percent (4%) to The Missouri Masonic Home for the Aged;

(f) Four percent (4%) to the Kansas City, Missouri, Home for the Blind;

(g) Four percent (4%) to the St. Joseph Orphan Home for Girls, Kansas City, Missouri;

(h) Four percent (4%) to the Gillis Home for Children, Kansas City, Missouri;

(i) Four percent (4%) to Children's Mercy Hospital, Kansas City, Missouri;

(4) Article V provided that in the event testator's sister, Edith M. Bell, Predeceased testator, 'I then give that part of my estate (25%) which she would have received under this will, to my good friend, Miss Doris Hamilton';

(5) Article VI provided that in the event Doris Hamilton predeceased testator, 'I then give that portion of my estate which she would have received under this will, as an additional amount to the Masonic Shrine Crippled Children's Hospital at St. Louis, Missouri.'

Testator's total gross estate for federal estate tax purposes amounted to $281,227.39, consisting of probate property valued at $155,663.86 and jointly owned property and insurance valued at $125,563.53.

Edith M. Bell, sister of testator, and one of the individual residuary legatees, was surviving joint tenant of non-probate property valued at $57,383.49 and beneficiary of insurance valued at $5,147.58. Doris Hamilton, the other individual residuary legatee, was surviving joint tenant of non-probate property valued at $63,032.46. Funeral expense, expenses of administration, debts of testator and specific bequests totaled $22,549.97. Subtraction of $22,549.97 from $155,663.86 left a residuary estate of $133,113.89. The shares of the charitable residuary legatees, for the purpose of determining the total 'charitable deduction' to be claimed in determining testator's net taxable estate for federal estate tax purposes, were computed on the basis of what each percentage charitable bequest bore to $133,113.89, resulting in a total 'charitable deduction' of $66,556.96. The net federal estate tax determined to be owed with respect to testator's net taxable estate, on the basis of claiming $66,556.96 as the total 'charitable deduction', amounted to $29,445.11. Parenthetically, appellants claim that the net federal estate tax (generated by both probate and non-probate property) due with respect to testator's net taxable estate should be charged to and payable out of the residuary estate of $133,113.89 before calculating the distributive shares of the charitable residuary legatees.

The executrix of testator's estate filed a petition to construe the will of decedent in the Probate Court of Jackson County, the gist of which was to determine the intent of testator as to where the ultimate burden of the federal estate tax should lie. The individual residuary legatees, in response thereto, asserted, essentially, that the intent of testator as disclosed by his will, as well as certain federal and state statutes, compelled payment of the net federal estate tax, whether generated by probate or non-probate property, from probate assets before the net residuary estate for distribution purposes was computed. The charitable residuary legatees, in response thereto, asserted, essentially, that the judicial doctrine of equitable apportionment controlled since testator's will failed to reveal any intent, express or implied, as to who should bear the ultimate burden of the federal estate tax, and, accordingly, additionally asserted that the charitable bequests should not be burdened or diminished by any part of the net federal estate tax, and that such tax should be charged solely to and prorated between the individual residuary legatees, surviving joint owners of non-probate property and individual beneficiaries of insurance.

Certain peripheral facts touching the issues are: deceased was never married, both parents predeceased him, and he had no brothers or sisters, except Edith M. Bell, who survived him and was his only heir at law; testator was seventy-six years old at the time of his death and Edith M. Bell was eighty years old at the time of testator's death; Doris Hamilton, 'good friend' of testator was fifty-seven years old at the time of testator's death and had been acquainted with him for more than twenty-five years; testator had been interested generally in charities, had been a member of the Ararat Shrine since 1917, and had been active in the affairs of the Shriners Hospital for Crippled Children; Doris Hamilton died while the instant case was pending on appeal and the executrix of her estate has been substituted as a party in her stead.

The probate Court of Jackson County, in its order construing testator's will, ruled '. . . the decedent's will fails to reveal any intent, expressed or implied, as to which legatee should bear the burden of the federal estate tax assessed against the decedent's estate' and further ruled that the entire federal estate tax should be charged to Edith M. Bell and Doris Hamilton (the two individual residuary legatees and recipients of all the non-probate property) 'in proportion as property and insurance proceeds received by them, . . ., comprises the decedent's taxable estate for federal estate tax purposes.' The individual residuary legatees appealed the order of the probate court to the Circuit Court of Jackson County. The judgment entered by the Circuit Court of Jackson County construing testator's will, among other things, held, 'That the decedent's will fails to reveal any intent, expressed or implied, as to which legatees should bear the burden of the Federal Estate tax assessed against decedent's estate' and, 'That no part of the Federal Estate tax payable by the executrix should be charged to or reduce any of the legacies payable to any of the aforesaid charitable legatees, but the entire Federal Estate tax on decedent's estate should be charged to and recovered from the legacies of Edith M. Bell and Doris Hamilton in proportion to the property that each receives from the proceeds of life insurance, from property which was jointly owned with decedent and from the net probate estate' and that the executrix was authorized and directed to seek contribution from Edith M. Bell and Doris Hamilton to effect the judgment.

The individual residuary legatees postulate reversal of the circuit court judgment on numerous grounds as to both issues. As to the FIRST issue, their brief contains two points, Point I consisting of eight sub-points and Point II consisting of three sub-points. It is patently obvious that as to...