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Third, decedent intended that Federal estate tax be paid
either from the residuary probate estate or the revocable trust,
but not from the notice trusts. This is shown by the fact that
(a) decedent specified in Article 4.1 of the will and Article 4.1
of the trust instrument only two sources for payment of Federal
estate tax: the assets of the residuary probate estate and the
assets of the revocable trust; and (b) the notice trust
instruments do not provide for the payment of Federal estate tax
from trust assets. Article 4.1 of the trust instrument provides
that, where the assets in the residue of the probate estate are
insufficient to pay Federal estate tax, that tax is to be paid
from the revocable trust without reimbursement from decedent’s
executor, any beneficiary of insurance upon decedent’s life, or
any other person. This shows that decedent intended that the
notice trusts not be burdened with payment of the Federal estate
tax because the phrase “without reimbursement * * * from any
other person” applies to the notice trusts.2
Decedent may not have anticipated that the notice trusts
(which the parties have agreed have a value of $40,471,059) would
be included in his gross estate. He may have expected that the
residue of his probate estate would be enough to pay the Federal
estate tax and legal costs, and that there would be no need to
2 The term “person” in the trust instrument includes
individuals and trusts. Art. 12.10 of the trust instrument; Art.
5.9 of the will.
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Last modified: May 25, 2011