*2043 Held that no interest in certain parcels of property ever passed to decedent under the terms of his father's will and that the value of such property should be excluded from the gross estate of decedent.
*915 This proceeding was brought for the redetermination of a deficiency in estate tax amounting to $1,104.83.
In its original petition the petitioner alleged that the respondent erred by including in the decedent's gross estate the sum of $52,965.43, which represented sums expended in the administration of the estate and in payment of decedent's debts. This sum was added by respondent to the gross estate on the ground that it had not been shown that no part of the property identified as belonging to the estate of Leonard H. Field, deceased, who was William B. Field's father, and who had died less than five years prior to the death of William B. Field, had been used to pay such expenses and debts.
Respondent's counsel admitted at the hearing that the said sum of $52,965.43 was paid from the assets of the*2044 estate of William B. Field and was a proper deduction from the gross estate, and should be allowed in addition to the sum of $137,344.11 which was the amount determined by respondent to have been received from the prior estate and previously taxed within five years.
At the hearing of this proceeding the petition was amended by allegations to the effect that fifty-four items of property scheduled *916 in the estate tax return filed by petitioner were not the property of the decedent at the time of his death and therefore should not have been included in his gross estate.
As the result of the admissions made on behalf of the respondent there remains for our consideration only the question whether or not there were included in the gross estate items which were not the property of William B. Field at the time of his death.
FINDINGS OF FACT.
William B. Field died on March 16, 1925, leaving three children surviving him. His death occurred less than five years after that of his father, Leonard H. Field, who died November 21, 1920. The last will and testament of William B. Field was duly admitted to probate by the Probate Court of Jackson County, Michigan, and the executors*2045 named in the will duly qualified as such.
The Federal estate tax return filed by the petitioner included certain property which passed under the will of decedent's father, Leonard H. Field, as a part of the latter's estate. This property was scheduled in the Federal estate tax return filed by petitioner as items 1 to 3, inclusive, and 6 to 56, inclusive, of Schedule G-1 and there is no dispute as to its value. The items embraced both personal property and real property. It was stated in the estate tax return that the decedent, William B. Field, had a one-fifth interest in these items. None of the personal property included in these items had been distributed to William B. Field nor had the final residuum of Leonard H. Field's estate been distributed at the time of William B. Field's death.
The last will and testament of Leonard H. Field, decedent's father, was admitted to probate in Jackson County, Michigan. In the first nine paragraphs of his will the testator provided for the payment of his debts and funeral expenses, made several bequests of money totaling $42,000 and of personal property other than money, devised his homestead in Jackson, Mich., to his son, William B. *2046 Field, and directed the payment of an annual income to the testator's wife during her lifetime by the following provisions:
I give, devise and bequeath to my wife, Mary Martel Field, five thousand dollars per year, during her life. This amount to be paid to her in equal monthly payments to be made from a fund herein created and provided for. I direct that my executor shall reserve sufficient of my estate and invest and reinvest the same to pay my wife from the earnings and income (if sufficient; if not, then from the principal so reserved) the annual allowance of five thousand dollars referred to in this paragraph. The sum so retained by my executor to be ample to secure such payment to her beyond any contingencies; and, after the death of my said wife, such sum so retained by my *917 executor, with all earnings and income, shall be distributed by him among my residuary devisees and legatees in accordance with the provisions of paragraph X of this instrument.
By the tenth paragraph of his will Leonard H. Field gave, devised and bequeathed all the rest, residue and remainder of his estate, both real and personal, including the "residuum of the trust" created for his wife, *2047 to his five children, share and share alike. The testator also provided that the share of the residuary estate devised and bequeathed to his son, Martel Field, should be held in trust if the latter should not have reached the age of 35 years at the date of the "distribution" of his estate and that if Martel Field died before the expiration of a period of fifteen years after the date of the "distribution" of testator's estate the property held in trust for Martel Field should be divided equally among testator's other children. The eleventh paragraph of Leonard H. Field's last will and testament is as follows:
In the event of the death of either my daughter, Charlotte Field-Carter, or either of my sons William B. Field, Rayner Field or Leonard H. Field, Jr., prior to my decease, or prior to the distribution of the final residuum of my estate, such deceased child leaving issue, then the share that would otherwise go to such deceased child shall be distributed in equal shares to the issue surviving of such deceased child, and if such deceased child leave no issue but leave either husband or wife surviving, then the share of such deceased child shall go to such surviving husband or*2048 wife, and if such deceased child leave neither issue nor surviving spouse, then the share of such deceased child shall be distributed between the survivors of my said named children.
By the thirteenth paragraph of his will Leonard H. Field provided, in part, as follows:
In view of the condition of my estate and the various properties consisting of real property, which, in my judgment, may require some time to dispose of, I direct none of the bequests herein provided shall become payable until five years after my death, and it is my desire, and I so direct, that my said Executor shall have a full period of five years after my death within which to handle and dispose of such properties as may be necessary to be converted into cash. * * *.
The respondent included the value of a one-fifth interest in the property in question in William B. Field's gross estate.
OPINION.
VAN FOSSAN: The issue is whether or not any interest in the personal and real property listed as items 1 to 3, inclusive, and 6 to 56, inclusive, of Schedule G-1 of the Federal estate tax return passed to the estate of William B. Field upon his death. These items of property had belonged to Leonard H. Field, *2049 decedent's father, and were a part of his residuary estate. The personal property had not *918 been distributed by Leonard H. Field's estate at the time of the death of William B. Field. The question at issue is, therefore, to be determined by construction of the provisions of Leonard H. Field's last will and testament.
It is a cardinal canon in the construction of wills, which has been stated in varying phraseology by courts and text-writers, that the intent of the testator must prevail, provided it is not inconsistent with the rules of law. If such intent is expressed in clear and unambiguous language it is unnecessary to resort to technical rules of construction in order to give effect to the provisions of a testator's will. ; ; .
The terms and provisions of the last will and testament of Leonard H. Field are, in our opinion, clearly indicative of his intent. The will discloses that the testator had a considered and definite plan for the ultimate disposition of his property. He made absolute bequests of money to friends and relatives. He*2050 devised his homestead to his son, William B. Field. He directed his executor to set up a trust sufficient in amount to assure to his wife in every contingency an annual income of $5,000 during her life. He divided the residue of his estate among his children in equal shares, including in such residue the residuum of a trust created for the benefit of his wife, the shares bequeathed and devised to each of four of his children being subject to the provisions of paragraph eleven of the testator's will. For a reason not disclosed either by testator's will or by the evidence in the present proceeding, the testator directed that the share bequeathed and devised to the fifth child, namely Martel Field, should be held in trust in the event that that son had not reached the age of 35 years at the time of the distribution of the testator's estate.
In order to empower his executor to carry out properly the provisions of the will the testator conferred upon him "full power to sell, convey, lease, exchange or, in any manner that he may deem advisable, handle or dispose of any or all," of his estate in the same manner as the testator could so do if living. The will also discloses that the*2051 testator considered that his property, and especially his real property, was in such condition that no part of it should be sold by his executor hastily or inconsiderately. It is, therefore, apparent from the provisions of the will that the testator had in mind when executing his will that a very considerable period of time might elapse after his death before "the final residuum" of his estate would be available for his legatees and devisees.
Under the conditions shown by the will it would be neither unnatural nor unusual for the testator to desire to postpone until some *919 future time the absolute vesting of his residuary estate in the beneficiaries ultimately to be entitled thereto. And that it was the testator's intent so to postpone the absolute vesting of the residue of his estate is clearly shown, we think, by the provisions of paragraph 11 of his will, which is quoted in full in the findings of fact. This intent is expressed in that paragraph in clear and unambiguous language, and we are of the opinion that there can not be deduced reasonably from the terms of paragraph 11 or from the terms of the will as a whole any intent to vest absolutely an interest in the*2052 residuary estate or any part of it, either real or personal, in any of the testator's beneficiaries named in paragraph 11 until distribution of the "final residuum" of the estate. Either survival to such time was a condition precedent to the absolute vesting in the decedent, William B. Field, of any interest in the residue of his father's estate, or else such survival was a condition subsequent so that the interest which had conditionally vested at the date of Leonard H. Field's death was divested by William B. Field's death prior to "distribution of the final residuum." And this would be true whether the residue of Leonard H. Field's estate consisted of personal property or of real property, or of both, at the time of his death. The law of the State of Michigan, which was the State of Leonard H. Field's residence, favors vested estates; but the law does not preclude the creation of interests in personal or real property which are contingent upon the happening of a future event, nor does it forbid the creation of vested interests in such property subject to being divested upon the happening of a future event. On the contrary, the law of the State of Michigan recognizes the right*2053 of a testator to create both defeasible and contingent interests in personal and real property. ; ; ; ;
Moreover, in our opinion it is unnecessary to determine whether William B. Field's interest in the residuum of his father's estate was a vested interest subject to being divested by his death prior to the "distribution of the final residuum" or whether it was an interest contingent upon his survival until such distribution. In either case, since William B. Field did not survive until the distribution of the "final residuum" of his father's estate, no interest in the items of the personal and real property now in question passed to William B. Field's estate. It follows that no part of the value of these items should be included in the gross estate of William B. Field for the purposes of the Federal taxation.
Reviewed by the Board.
Judgment will be entered under Rule 50.