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various named individuals (secondary beneficiaries) but only if
those beneficiaries each furnished their share of the funds for
payment of Federal estate and State death taxes for which the
trustee might be liable upon Atkinson’s death. One of those
secondary beneficiaries was Mary Birchfield (Birchfield), who had
cared for decedent from 1984 until her death.
As trustee, MacQuarrie informed the secondary beneficiaries
of their right to receive an annuity under the trust and of the
condition that they must pay the related Federal estate and State
death taxes. After notifying the secondary beneficiaries of
their need to elect to receive, MacQuarrie moved to compel their
election. Ultimately, only Birchfield elected to take her share.
Birchfield agreed to take the money, but informed MacQuarrie that
the decedent had indicated that she would not be liable for her
share of the estate taxes and that she possessed a notarized
document from decedent to that effect. She informed MacQuarrie
that she expected to be given the money without paying any estate
tax. After increasingly hostile exchanges, MacQuarrie and a
second attorney (who was also evaluating the administration of
the estate) decided that it would be in the best interest of the
trust to settle Birchfield’s claim for the payment of any related
taxes. MacQuarrie filed a motion seeking the court’s approval of
payment out of the administrative trust for any estate taxes
related to the amount to be paid to Birchfield pursuant to the
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Last modified: May 25, 2011