Construction of the will of G. Leonard Ericson is sought. Two clauses defining the marital share are in conflict. Plaintiff executor instituted this declaratory judgment action. Adversary parties are the widow Helen Ericson and several of testator's nephews and nieces and their children, contingent life beneficiaries and remaindermen of nonmarital and inter vivos trusts. The Ericsons were childless.
Ericson died on December 4, 1969. His will dated March 22, 1967 was admitted to probate. He executed an irrevocable inter vivos trust on March 7, 1967 and an earlier will on March 9, 1967. His widow is the life beneficiary and his nephews and nieces and their children are remaindermen of the inter vivos trust. The corpus of the inter vivos trust was $1,069,250 when created and $1,598,722.86 on the date of his death. His estate passing under his will was valued at $2,020,620.49 on the date of his death.
Internal Revenue Service has included the inter vivos trust within Ericson's adjusted gross estate in accordance with the presumption that a trust within three years of death is in contemplation of death. 76 Stat. 1052; 26 U.S.C.A. § 2035(b). Ericson was 75 and in apparent good health on March 7, 1967. Malcolm Savage, plaintiff's trust officer who dealt with him, testified that in his opinion Ericson expected to survive many years, specifically more than three years.
Article IV 1(a) of the will admitted to probate defines the marital share as follows:
If my wife survives me, I give and bequeath to her "PART A" of my residuary estate which shall be that fraction of my entire residuary estate which shall secure for my estate the maximum marital deduction allowable under the Federal Estate tax law. The numerator of this fraction shall be one-half of my adjusted gross estate (as defined in the Internal Revenue Code, but after excluding the value of all property passing or having passed outside this Will except joint tenancies) less the value of all property finally allowed as a marital deduction for property passing to my wife, other than property passing under this Article, and the denominator shall be the value of my entire residuary estate, all based on values as finally determined for Federal Estate Tax purposes.
The maximum marital deduction based on an adjusted gross estate including the inter vivos trust is $1,809,671.67. If the inter vivos trust is excluded from the numerator of the fraction, as literally provided in the will, the marital deduction would be $1,010,310.25, a diminution of almost $800,000 in the widow's outright share, and the federal estate tax would be increased by about $284,000.
The earlier will, executed two weeks before the will admitted to probate and two days after the inter vivos trust, limited the parenthetic phrase in the marital bequest to "as defined in the Internal Revenue Code." It is otherwise identical to the will admitted to probate, except for a specific bequest of $1,000 in the latter. The language "but after excluding the value of all property passing or having passed outside this Will except joint tenancies" is additional language in the will admitted to probate.
In construing a will testator's intent is the cornerstone. The search for testator's intent may reach out to what he would have done if he had envisioned the present inquiry. Fidelity Union Trust Co. v. Robert , 36 N.J. 561, 565-566 (1962); Bank of New York v. Black , 26 N.J. 276, 287 (1958); Morristown Trust Co. v. McCann , 19 N.J. 568, 572 (1955); In re estate of Hays , 128 N.J. Super. 460, 465 (Cty. Ct. 1974).
According to the witnesses, Ericson lived simply. His wealth was derived from inheritance. He retained stocks which had huge accretions in value. He was not a lawyer
and had no special business or financial training or experience. He sought the assistance of Savage, plaintiff's trust officer, in the preparation of his will. He never saw the scrivener of the will until ...