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residue are ambiguous and, therefore, the North Carolina
apportionment statute applies to the apportionment of the taxes
within the residue, causing the charitable portion to be exempt
from apportionment.
Respondent's position is that decedent clearly instructed in
his will that all taxes payable by reason of his death be paid
from the residuary estate, without apportionment, prior to its
distribution to the trust as residuary beneficiary, and that,
because of that clear instruction, apportionment as provided in
the North Carolina statutes is avoided. Respondent argues that
the provision in the trust regarding apportionment to the
noncharitable trust beneficiaries applies only to those taxes
required to be paid from trust assets; that is, if the residuary
portion of the estate were insufficient to pay all debts,
expenses, and taxes.
We agree with respondent. Decedent's instructions were
clear as to where the burden of the taxes should fall. Paragraph
1.02 of his will provided that all taxes payable by reason of his
death on his property or interest included in his gross estate
were payable from the residuary portion of his estate. He also
expressly provided that there be no apportionment among the
recipients of, or those interested in, such property. Because of
decedent's instructions in his will on this subject, neither
section 2206 nor the method of apportionment found in chapter
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