Estate of Dark

California Court of Appeal Apr 30, 1974 No. 42958Published

Before: Fleming

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Holding. The court held that the testator's will sufficiently expressed an intent to charge federal estate taxes against the residuary estate, thereby overriding the statutory presumption of proration. It further held that a preliminary distribution of assets does not preclude a later determination regarding the proration of federal estate taxes.

Issues

Whether a preliminary distribution of estate assets precludes a subsequent determination regarding the proration of federal estate taxes.
Whether the testator's will sufficiently expressed an intent to charge federal estate taxes against the residuary estate rather than prorating them among beneficiaries.

Disposition. affirmed

Quotations verified verbatim against the opinion

“the preliminary distribution undertaken here neither necessarily nor actually determined the proration of federal estate taxes.”

“Dark intended the words, any and all costs, expenses and inheritance taxes, to encompass federal estate taxes.”

“We conclude the federal estate taxes were properly charged against the residuary estate.”

38 Cal.App.3d 890 (1974) 113 Cal. Rptr. 727 Estate of WATSON DARK, Deceased.

SANTA BARBARA NATIONAL BANK, as Executor, etc., et al., Petitioners and Respondents,

SHRINERS HOSPITALS FOR CRIPPLED CHILDREN, Objector and Appellant.

Docket No. 42958. Court of Appeals of California, Second District, Division Two.

April 30, 1974. [891] COUNSEL

Price, Postel & Parma, H. Clarke Gaines, Timothy A. Whitehouse and C. Michael Cooney for Objector and Appellant.

Griffith & Thornburgh, Peter J. Samuelson, Eric R. Van DeWater, Goux, Romasanta & Anderle, J.F. Goux, Schramm, Raddue & Seed, John W. Warnock and Howard M. Simon for Petitioners and Respondents.

[892] OPINION

FLEMING, J.

Shriners Hospitals for Crippled Children appeals the denial of its motion to set aside preliminary distribution in the estate of Watson Dark and the overruling of its objections to the final account and petition for final distribution. The issue is proration of federal estate taxes.

Dark died testate in January 1972 leaving an estate of nearly $1 million. His brief will made six specific bequests to individuals of corporate stock comprising about half his estate and then provided: "Any and all costs, expenses and inheritance taxes that may arise from the probating of this Will shall be paid from the residue of my estate. The rest and remainder of my estate, I give, devise and bequeath to the Shriner's Hospital for Crippled Children at Los Angeles, California." In July 1972 the court granted the executor's petition for preliminary distribution of the specific bequests of corporate stock. In December 1972 the executor filed its final account and petition for distribution. Thereafter Shriners moved to set aside the earlier preliminary distribution and objected to the executor's final account and prospective distribution, claiming it should prorate the $150,000 federal estate tax among all beneficiaries rather than charge the entire amount against the residuary estate. The court rejected Shriners' contention, concluding (1) the preliminary distribution impliedly ruled against proration, and Shriners' objections were untimely, (2) Dark by his will intended to charge all federal estate taxes against his residuary estate.

Estate of Dark

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FLEMING, J.

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