Bandy v. Clancy, 449 Md. 577

Summary

The Maryland Court of Appeals interpreted Thomas L. Clancy’s will and second codicil concerning the allocation of federal estate taxes among marital, family, and children’s trusts. The court held that the second codicil qualified the family trust for the federal marital deduction and that a savings clause restricted payment of taxes from property allocated to the marital deduction. Consequently, the family trust was exempt from liability for federal estate taxes.

Holdings

1. The Family Trust, as amended by the second codicil, was structured to qualify for the federal estate-tax marital deduction as qualified terminable interest property.
2. The Family Trust could not be burdened by payment of federal estate taxes.
3. The amended savings clause controlled over Item Third’s general direction that estate taxes be paid from the residuary estate.
4. The court’s paramount concern in construing the will and codicils was to ascertain and effectuate the testator’s expressed intent from the instruments’ plain language and their four corners.

Questions Presented

1. Whether the second codicil qualified the Family Trust for the federal estate-tax marital deduction through QTIP treatment.
2. Whether the amended marital-deduction savings clause prohibited the personal representative from charging federal estate taxes to the Family Trust despite the will’s direction that taxes be paid from the residuary estate.
3. Whether the savings clause controlled over the inconsistent or conflicting tax-payment provision in the original will.

Disposition

affirmed