Estate of Nesbitt

158 Cal.App.2d 630 (1958) Estate of EDNA J. NESBITT, Deceased. GOOD SHEPHERD FOUNDATION (a Corporation), Appellant,

v.

FIRST WESTERN BANK AND TRUST COMPANY, Respondent.

Civ. No. 22654. California Court of Appeals. Second Dist., Div. Two.

Mar. 24, 1958. Robert Einstein for Appellant.

Mabel Clausen for Respondent. [631]

FOX, P. J.

This is an appeal by the contestant from the judgment approving the final accounting and order of distribution in the estate of Edna J. Nesbitt.

It is appellant's position that the executor erred in paying a portion of the inheritance tax out of the decedent's general estate. It contends that such tax should have been paid by the beneficiary.

The testatrix left a will and four codicils. In her will she provided: "I hereby direct my executor ... to pay, out of my general estate, all my just debts and funeral expenses, and all Federal and State estate and inheritance taxes." By the second codicil testatrix devised to Marguerite Belle Johnson certain real property; by the third codicil she bequeathed $1,000 to the Good Shepherd Foundation, the contestant and appellant herein; by the fourth codicil she bequeathed her household furniture and furnishings to Miss Johnson. The gifts to Miss Johnson were conditioned upon her being continuously in the employ of the testatrix from the date of the two codicils to the death of testatrix. Miss Johnson fulfilled the condition.

The inheritance tax against Miss Johnson's share was $1,397.23. There was only $220.72 left in the estate after the specific devises and bequests and the payment of the expenses of administration. If the estate was to pay the inheritance tax on Miss Johnson's inheritance it needed $1,176.51 additional funds. To meet this need Miss Johnson advanced the estate $1,500. This was $323.49 ($1,500--$1,176.51) more than the amount required to fully pay the inheritance tax. The court found that the sum of $323.49 cash advanced to the estate by Miss Johnson did not constitute an asset of the estate and ordered it returned to her. It is thus apparent that the executor used the balance of the funds on hand in the estate to apply on the inheritance tax on Miss Johnson's inheritance. As a result there was no money left in the estate, hence the Good Shepherd Foundation received nothing. It contends that Miss Johnson should have been required to pay the inheritance tax on her inheritance. On that basis the foundation would have been entitled to receive the $220.72 remaining in the estate.