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is not reduced by the Federal estate tax paid by the notice
trusts. Petitioner also contends that the trust instrument does
not provide that that tax is payable out of property in the
marital trust.
3. Whether the Provision in Decedent’s Trust Instrument
That Federal Estate Tax Is Payable From Property in the
Revocable Trust That Would Otherwise Pass to Decedent’s
Surviving Spouse Is Given Effect
Article 3.2 of decedent’s trust instrument provides that the
amount allocated to the marital trust shall be the smallest
amount which, if allowed as a marital deduction, would result in
the least Federal estate tax being paid. Article 4.11 provides
that, to the extent that there are not enough assets in
decedent’s probate estate to pay the Federal estate tax due to
decedent’s death, that tax is to be paid from the revocable
trust.
Petitioner contends that reading the trust instrument as a
whole shows that decedent intended to maximize the marital
deduction and not reduce it by the amount of the Federal estate
tax. Petitioner contends that Article 3.2 conflicts with Article
4.1, which directs payment of estate taxes from the revocable
trust with property that would otherwise pass to decedent’s
surviving spouse. Petitioner contends that Article 4.1 must be
construed to permit decedent’s estate to claim the maximum
1 Unless otherwise specified, references to Art. 4.1 are to
Art. 4.1 of decedent’s trust instrument.
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