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IN RE ESTATE OF PICKRELL

April 20, 1990.

IN THE MATTER OF THE ESTATE OF JOYCE EVANS PICKRELL, Deceased. IN THE MATTER OF THE JOYCE EVANS PICKRELL TRUST.


Thomas Pickrell and Patricia Pickrell, the son and daughter-in-law of Joyce Evans Pickrell, deceased, appeal from the district court's judgment concerning apportionment of death taxes and administration expenses. We affirm.

On June 9, 1982, Joyce Evans Pickrell executed her last will and testament and a trust indenture establishing the Joyce Evans Pickrell Trust. Carl W. Sebits and Bank IV Wichita were named co-trustees and co-executors.

Article IV, Section 12 of the trust indenture gave the trustees the power to pay all taxes imposed on the trust estate. On April 23, 1987, pursuant to the powers retained in the trust indenture, Joyce Evans Pickrell amended Section 12 to provide for apportionment of death taxes and administration expenses. The amendment directed and authorized the trustees to pay and distribute to the executors from the trust assets the trust's proportionate share of federal estate and state inheritance taxes and administration expenses. The amendment further stated that it was the settlor's intent that the trust assets and the trust and estate beneficiaries bear their respective proportionate share of all taxes and expenses.

  The trust provided that, upon Joyce Evans Pickrell's death, the trust estate would be divided into four equal shares with one share each to be given to her son, Thomas Pickrell, her daughter, Patricia Pickrell Smith Bellis, and two nieces.

  In the second article of her will, Joyce Evans Pickrell directed that all estate and inheritance taxes and administration expenses

[14 Kan. App. 2d 377]

      "shall be paid out of the residue of my probate estate." The will further provided that the executors were not to be reimbursed or to collect any part of the taxes and expenses from any person or beneficiary under the will, and there could be no charge or recovery based on proration, apportionment, contribution, or distribution against non-probate estates or persons not deriving benefits under the will.

  Under the fifth article of her will, Joyce Evans Pickrell exercised her power of appointment over the Lloyd R. Pickrell Trust No. 1, a testamentary trust created by her deceased husband. Using the words "appoint, devise and bequeath," Joyce Evans Pickrell appointed the entire trust estate of her husband's testamentary trust to a trust created for the benefit of her grandchildren and known as the Joyce E. Pickrell Testamentary Trust.

  Joyce Evans Pickrell died on October 7, 1987, and her will was admitted to probate on January 11, 1988. Her survivors include her son, her daughter, five grandchildren, and the two nieces named in her inter vivos trust. Her federal estate tax return shows the value of her taxable assets as $4,984,362.45. The total amount of federal and state death taxes paid at the time of this appeal was $2,097,667.90.

  After the will was admitted to probate a dispute arose regarding the trustees' interpretation of article IV, section 12 of the amended trust indenture. The trustees maintained section 12 authorized and directed them to pay to the estate a sum representing the trust's proportionate share of the death taxes and administration expenses based on the ratio of trust assets to the total taxable estate. Thomas Pickrell and his wife Patricia disagreed with this interpretation and instead asserted that section 12 was inconsistent with the second article of the will which directs the executors to pay taxes and expenses out of the residuary and not to collect any part of these taxes and expenses from any beneficiaries. The Pickrells argued that the will controlled the question of appointment of taxes and expenses.

  On August 3, 1988, the trustees filed a petition for construction of the trust indenture. One week later the Pickrells filed a petition for construction of the will. The district court consolidated the petitions and found there was no inconsistency between the will and trust indenture concerning the payment of death taxes and

[14 Kan. App. 2d 378]

      administration expenses. The district court found the language of the trust amendment was clear and concise and contained the latest expression of the settlor's intent regarding apportionment of taxes and expenses. The court then directed the trustees to distribute to the executors an amount representing a proportionate part of the death taxes and administration expenses.

  Additionally, the court ruled that, in exercising her power of appointment over her husband's testamentary trust, Joyce Evans Pickrell appointed the assets of her husband's trust directly to her testamentary trust. The district court further found that the second article of the will precluded the executors from seeking a contribution for any death taxes or administration expenses from Joyce Evans Pickrell's testamentary trust until the residue of the estate was exhausted.

  This appeal involves two written instruments: Joyce Evans Pickrell's will and the amendment to her inter vivos trust indenture. The interpretation or construction of written instruments is a question of law that may be determined by an appellate court. Kennedy & Mitchell, ...


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