Goldmann, Freund and Conford. The opinion of the court was delivered by Conford, J.A.D.
This is a contest between the executors of the estate of Ogden A. Kantner, who are the Trenton Banking Company and Arlene M. Kantner, widow of the decedent, and the guardian ad litem of minor children of the Kantners, who by the will are given certain trust interests in the residue of the estate (as is also the widow), after the creation of a trust estate for the widow alone.
The decedent died October 10, 1954. In December 1957 the executors, who were also trustees under the will, petitioned the Mercer County Court for leave to distribute to the widow in satisfaction of her sole trust legacy certain shares of common stock of the United Clay Mines Corporation, a non-board security held by the executors, but at their value determined for federal estate tax purposes as of the date of testator's death, which was $7.20 per share. The guardian ad litem resisted the application, principally on the ground that the distribution should be made at the much higher market value of the shares as of the date of distribution. Indicative of the increased value was a public sale of 1,200 of the shares by the executors on April 12, 1957, which brought an average price of $33.4266 per share. An acceptance
of that position would obviously decrease the number of shares to be distributed to the widow and increase the value of the trusts in which the minors have an interest. The County Court ruled in favor of the executors. The guardian ad litem appeals.
The decedent's will was executed February 12, 1954. The first two articles provide for the payment of debts and funeral expenses and for the bequest to the wife of household furnishings and personal effects. The Third Article of the will reads, in part, as follows:
"Third: If my wife, ARLENE M. KANTNER, survives me, I direct my Executors and Trustees to set aside a portion of my estate equal in value to (a) one-half of the value of my adjusted gross estate (gross taxable estate less funeral and administration expenses and claims and debts but before the deduction of estate or inheritance taxes) as finally determined for Federal estate tax purposes, less (b) the value of all interests in property, if any, which pass or have passed to my wife under other provisions of this Will or otherwise than under this Will, but only to the extent that such interests are for the purposes of the Federal estate tax included in determining my gross taxable estate and are allowable as a marital deduction. All values shall be those finally determined for Federal Estate tax purposes.
Notwithstanding anything to the contrary contained in this my Will, I direct (a) that in establishing this trust for my wife there shall not be allocated to the trust any property or the proceeds of any property which would not qualify for the marital deduction allowable in determining the Federal estate tax on my estate * * *."
This article also provides that the designated portion of the estate be placed in trust, net income to be payable to the wife for life, and also, in her sole discretion, any portion of the principal designated by her at any time; any balance remaining at her death to go as appointed by her will.
The Fourth Article of the will begins as follows:
"Fourth: All the rest, residue and remainder of my property, both real and personal of whatever nature and wherever situate, I give, devise and bequeath to my Trustees hereinafter named in trust nevertheless to hold, manage, control, sell, invest and reinvest the same and to collect the income therefrom, and after deducting from said income all necessary and reasonably proper expenses and charges, to pay the net income therefrom as follows:"
Then follow provisions for the net income of the thus created trust to go to the wife for life, subject to the stipulation that when any child reaches 21 years of age one half of the net income be divided in as many shares as there are surviving children, each child upon attaining 21 to receive an equal share of the said one half of the net ...