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In re Estate of Eagon

Supreme Court of North Dakota

October 17, 2017

In the Matter of the Estate of Margie Eagon, Deceased
v.
Elda Eagon McKeown, Respondent and Appellant Ronald Eagon, Personal Representative of the Estate of Margie Eagon, Deceased, Petitioner and Appellee and Carole Griggs Miller, Connie Henley, Dale Rae Tollefsrud, Peggy Murphy, Linda Melbye, Rex Eagon, and Gail Olson, Respondents and Jack Eagon, Respondent and Appellee

         Appeal from the District Court of Bowman County, Southwest Judicial District, the Honorable William A. Herauf, Judge.

          Gary D. Ramsey, Dickinson, ND, for petitioner and appellee.

          Jordan L. Selinger (argued) and Bruce A. Selinger (appeared), Dickinson, ND, for respondent and appellee. Aaron W. Roseland, Hettinger, ND, for respondent and appellant.

          OPINION

          VANDEWALLE, CHIEF JUSTICE.

         [¶ 1] Elda McKeown appealed from a judgment ordering the distribution of Margie Eagon's estate to McKeown and her nine siblings. Because the district court did not err in interpreting the will or the probate code, its findings regarding the use of life insurance proceeds are not clearly erroneous, and it did not abuse its discretion in awarding attorney fees, we affirm.

         I

         [¶ 2] Margie Eagon died in 2011 and one of her ten children, Ronald Eagon, was appointed personal representative of her estate, which was valued at more than $6 million. Elda McKeown, a daughter, received $2 million in a joint bank account she held with her mother, and under her mother's will would receive more than one-half of the estate. The other nine siblings would share the remainder of the estate. When the personal representative sought to close the estate, several of Margie Eagon's children objected to the proposed distribution. They argued the proposed distribution would reduce their inheritances but leave the inheritances of McKeown and Ronald Eagon intact.

         [¶ 3] Following a trial, the district court determined that under the terms of the will the federal estate tax liability of $403, 956 should be apportioned among all persons interested in the estate under N.D.C.C. § 30.1-20-16(2) (U.P.C. § 3-916) rather than abated under N.D.C.C. § 30.1-20-02 (U.P.C. § 3-902). The court found the proceeds of two $100, 000 life insurance policies naming McKeown and Ronald Eagon as the beneficiaries should be used to reduce the estate tax liability. The court also awarded the parties who objected to the proposed distribution of the estate their reasonable costs and attorney fees in the amount of $23, 549.26.

         II

         [¶ 4] McKeown argues the district court erred in apportioning the federal estate taxes under N.D.C.C. § 30.1-20-16(2) (U.P.C. § 3-916) rather than abating the estate taxes under N.D.C.C. § 30.1-20-02 (U.P.C. § 3-902), because Margie Eagon's will contained a directive for a method of apportionment different than the method provided by the apportionment statute.

         [¶ 5] "The purpose in construing a will is to ascertain the testator's intent as it appears from a full and complete consideration of the will when read in light of the surrounding circumstances." Estate of Johnson, 501 N.W.2d 342, 345 (N.D. 1993). If a will provision is unambiguous, the construction of a will is a question of law fully reviewable on appeal. See id.; Estate of Klein, 434 N.W.2d 560, 561 (N.D. 1989). "Statutes are interpreted as a whole and are harmonized to give meaning to related provisions." Estate of Johnson, 2015 ND 110, ¶ 12, 863 N.W.2d 215; see also N.D.C.C. § 1-02-07. "Statutory interpretation is a question of law, fully reviewable on appeal." Johnson, at ¶ 12.

         [¶ 6] Section 30.1-20-16(2), N.D.C.C. (U.P.C. § 3-916), generally provides for apportioning federal estate taxes and other estate taxes between beneficiaries of an estate:

Unless the will otherwise provides, the tax shall be apportioned among all persons interested in the estate. The apportionment is to be made in the proportion that the value of the interest of each person interested in the estate bears to the total value of the interests of all persons interested in the estate. The values used in determining the tax are to be used for that purpose. If the decedent's will directs a method of apportionment of tax different from the method described in this title, the method described in the will controls.

         McKeown argues Margie Eagon's will "otherwise provides" for a different method of apportionment because a boilerplate provision of the will states: "I direct my personal representative to pay all just debts and claims against my estate, including but not limited to costs of last illness, funeral expenses, federal and state taxes, and ...


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