## Facts

- Charles Kuralt died domiciled in New York on July 4, 1997, leaving a New York will with a residuary gift to his wife, Suzanna “Petie” Baird Kuralt.
- Kuralt also owned Montana real property on the Big Hole River in Madison County, where he maintained a cabin associated with Patricia Elizabeth Shannon, his longtime companion.
- Kuralt wrote Shannon a handwritten 1997 letter later adjudicated a valid holographic codicil devising the Montana property to Shannon.
- Kuralt’s New York will contained a no-apportionment tax clause directing estate taxes be paid from the residuary estate “without apportionment.”
- Recognizing the codicil produced federal estate tax attributable to the Montana property.
- After related proceedings and Petie’s death, Kuralt’s daughters, Susan Bowers and Lisa Bowers White, served as co-personal representatives; Shannon petitioned for an order requiring the residuary estate to pay the estate taxes attributable to the Montana devise.
- The Montana Fifth Judicial District Court (Madison County), applying New York law, ruled the will’s no-apportionment clause required the residuary estate to bear the taxes attributable to the Montana property.
- The daughters appealed, arguing the tax burden should fall on Shannon because the codicil frustrated the estate plan’s purpose of minimizing taxes on Petie’s share.

## Issues

1. Under New York law governing construction of Kuralt’s will, does the will’s no-apportionment tax clause require the residuary estate to pay estate taxes attributable to the Montana property devised to Shannon by a holographic codicil?

## Decision

- The Montana Supreme Court affirmed.
- New York law governed construction of the will’s tax clause because Kuralt was domiciled in New York and the will was a New York instrument.
- The will’s clear no-apportionment direction overrode default statutory tax apportionment rules and applied to taxes arising from the codicil’s devise.
- The court rejected the daughters’ “dominant purpose” argument because the tax clause was unambiguous and the later codicil reflected a specific testamentary choice to benefit Shannon despite tax consequences.
- No Montana statute or public policy required a different allocation of tax liability.

## Legal Principles

- Construction of a testamentary tax-allocation clause is governed by the law of the decedent’s domicile when that law applies to the will and no contrary forum public policy or statute controls.
- Under New York law, statutory estate tax apportionment is a default rule that yields to a clear will direction against apportionment.
- A codicil is construed with the will as part of a single testamentary instrument; a will’s broad no-apportionment clause generally reaches taxes attributable to transfers effected by a codicil unless expressly limited.
- Courts enforce an unambiguous tax clause as written and do not rewrite allocation based on generalized estate-plan purposes absent textual support.

## Conclusion

The court enforced the New York will’s no-apportionment tax clause and held that estate taxes attributable to the Montana property devised to Shannon by the holographic codicil must be paid from the residuary estate.


In re Estate of Kuralt, 68 P.3d 662 (Mont. 2003)