The Montana Supreme Court rules that estate taxes on property conveyed in a codicil to Charles Kuralt's will are the responsibility of Mr. Kuralt's residual estate. In Re the Estate of Kuralt (Mont., No. 2003 MT 92, April 21, 2003).
Charles Kuralt, the CBS news correspondent, died testate in New York City on July 4, 1997. While the bulk of his estate was in New York, he also owned property on Montana's Big Hole River. In a previous decision, the Montana Supreme Court determined that a letter from Mr. Kuralt to his long-time companion, Patricia Elizabeth Shannon, constituted a codicil to his will conveying the Big Hole River property to Ms. Shannon. Left undetermined in that decision was the question of whether the Estate of Charles Kuralt or Ms. Shannon was responsible for the estate taxes associated with the bequest.
Mr. Kuralt's daughters, Susan Bowers and Lisa Bowers White, successor personal representatives of the estate, opposed Ms. Shannon's demand for payment out of the residuary of the estate, arguing that estate taxes should be apportioned under the New York apportionment statutes, notwithstanding language in Mr. Kuralt's will that all death taxes "shall be paid without apportionment." They contended that the conveyance of the property to Ms. Shannon created adverse tax consequences against the estate, contrary to the dominant purpose of the will to take full advantage of the marital deduction and to protect Mr. Kuralt's widow, Suzanna (their deceased mother), from burdensome taxation.
Ms. Shannon responded that where the language of the will makes it clear that there is to be no apportionment of estate taxes according to state statute, the courts of both New York and Montana will abide by the explicit language in the will. The district court agreed with Ms. Shannon and the daughters appealed.
The Supreme Court of Montana affirms. The court relies heavily on In the Matter of the Estate of Dewar(1978), 404 N.Y.S.2d 750, 62 A.D.2d 352, which held: "Since a will and a codicil must be construed together, where the provisions of the will contain a tax exoneration clause broad enough to encompass all testamentary dispositions, the clause also applies to gifts contained in the codicil in the absence of a manifest intent to the contrary . . . "
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