[88 NJSuper Page 279] This matter comes before the court on defendant's motion for judgment on the pleadings.
Edward Roberts died testate on March 21, 1964, a resident of Ridgewood, Bergen County, New Jersey. His last will, dated July 15, 1947, was admitted to probate by the Surrogate of Bergen County and letters testamentary were issued to plaintiffs Jule Roberts Gesner and Edward Roberts, Jr., and to defendant Marie B. Roberts, in accordance with the appointments made under the will. Jule Roberts Gesner and Edward Roberts, Jr., are the daughter and son of decedent by a former marriage.
By article Second of decedent's will he gave his home and the contents thereof and any automobiles he might own at his death to his wife Marie B. Roberts, a small clock to his son Edward Roberts, Jr., and all family portraits to his daughter Jule Roberts Gesner. He then provided by article Third as follows:
"THIRD: I give, devise and bequeath all the rest, residue and remainder of my estate of any nature, whether real, personal or mixed and wherever the same may be located, to my wife, Marie B. Roberts, my son, Edward Roberts, Jr., and my daughter, Jule Roberts Gesner, in equal parts share and share alike. It is my suggestion that in any distribution of the residue my son, Edward Roberts, Jr., if he so wishes, shall be allowed to take as part of his share of the estate sufficient stock of Roberts, Cushman & Company so that he may have control of the same."
Prior to testator's death he had disposed of all his stock of Roberts, Cushman and Company, so that the provision of his will relating to the same had no application.
On the basis of independent legal advice sought by plaintiffs individually on the one hand, and by defendant individually on the other, a dispute has arisen as to whether the federal estate tax imposed by the United States of America falls solely on the residuary shares of the children or whether it falls on the residuary shares of the three residuary beneficiaries. Plaintiffs have taken the position that the surviving spouse's share of the residue must contribute proportionately to the federal estate tax payable. The widow contends that since what passes to her qualifies for the marital deduction
and reduces the taxable estate pro tanto, her share should be free of the federal estate tax burden, notwithstanding that it is a tax upon the estate and not upon the inheritance.
In approaching the problem of construction submitted here, I observe that the paramount obligation of the court is to reach the probable intent of the testator. Morristown Trust Co. v. McCann, 19 N.J. 568 (1955); Fidelity Union Trust Co. v. Robert, 36 N.J. 561 (1962).
Plaintiffs argue that since the court is obligated to determine the most probable intent of the testator, it need go no further than the four corners of the will in question, considered in light of the language used and the circumstances existing at the time of the execution of the will. They point out that the obvious extrinsic circumstance existing at the time the will was executed was that no such thing as the marital deduction, found in section 2056 of the Internal Revenue Code, 26 U.S.C.A. § 2056, existed. Considering this circumstance and the provisions of article Third, which, it is contended, indicate absolute equality of treatment with respect to the distribution of the assets of decedent's estate, the result must be that the testator probably intended that all three residuary beneficiaries should contribute to the payment of the federal estate tax.
Defendant argues that the trend of New Jersey decisions handed down since the enactment of the marital deduction provisions of the federal estate tax law, indicates an inclination on the part of our courts to favor a decedent's widow and thus to exonerate her from the payment of federal estate taxes, at least to the extent that the assets of her deceased husband which passed to her qualified for the marital deduction. Defendant cites in support of her argument, In re Gardner's Estate, 35 N.J. Super. 163 (App. Div. 1955); Case v. Roebling, 42 N.J. Super. 545 (Ch. Div. 1956); In re Burnett, 50 N.J. Super. 482 (Cty. Ct. 1958); Dodd v. United States, 223 F. Supp. 785 (D.N.J. 1963), affirmed 345 F.2d 715 (3 Cir. 1964).
All of the cases so cited involved wills which contained specific directions by the testator as to the payment of death taxes, although in Burnett it was determined, in a prior proceeding, that the tax clause there involved did not cover federal estate taxes. See 43 N.J. Super. 534 (Ch. Div. 1957).
In Morristown Trust Co. v. McCann, supra, our Supreme Court established a set of principles which were stated to serve as a guide to fiduciaries and their counsel in administering wills which provide some method for the shifting of burdens of death duties. McCann involved the question of whether a beneficiary (who stood in the position of a daughter to a testator) should be called upon to contribute a portion of the federal estate taxes generated by the inclusion in decedent's gross estate of certain gifts made by decedent to her in his lifetime. The will in McCann provided that all inheritance and estate taxes imposed upon the decedent's estate were to be paid out of his residuary estate. The court, in reversing the judgment of the trial court which held that the beneficiary was bound to contribute her share of the taxes, stated that courts should not be bound by arbitrary and artificial rules of construction in determining such questions, but rather should attempt to ascertain the intent of the testator from the language of his will taken in context with ...