Apportionment provisions may have unintended consequences

Heather R. Pruger (Executive Notes and Comments Editor, Maryland Law Review) recently authored an article entitled Pfeufer v. Cyphers: Giving the Testator’s Pen Too Much Might—the Unintended Tax Consequences of Innocent Apportionment Language, 67 Md. L. Rev. 758 (2008).

Here is an excerpt from the introduction:

In Pfeufer v. Cyphers, the Court of Appeals of Maryland addressed whether a testator may direct inheritance taxes to be paid from his entire residuary estate prior to apportionment among residuary legatees, even when a statute exempts some of the residuary legatees from payment of those inheritance taxes. The court held that the legislative intent to exempt relatives from inheritance taxes did not supersede the testator’s express intent that inheritance taxes be paid by the non-apportioned residuary estate. * * *

Instead, the court should have more directly addressed the conflict that resulted between its construction of the testator’s directive that any inheritance taxes for diverse classes of legatees be paid without apportionment, and the legislature’s intent in establishing preferential treatment for exempt legatees.