192 A.3d 1250
Vt.2018Background
- Testator Allen D. Avery died in 2008 leaving a 1997 will (later codicil) that generally devised his estate to his wife but specifically devised shares of Avery Inns of Vermont, Inc. to his three children.
- Probate court distributed the specifically devised corporate shares to the children and the residue and other personal property to the spouse; disputes arose over allocation of substantial estate administrative expenses.
- The civil division, after multiple filings, orders, and stipulated procedures for written submissions, ruled that administrative expenses should be paid from the personal estate (personalty) rather than realty, and applied common-law abatement rules among classes of gifts.
- Wife (spouse) appealed, arguing the will required a different allocation among personalty, that prior agreements/stipulations bound the parties to pro rata (proportional) allocation, and that the court misstated the default abatement rule.
- The Supreme Court reviewed de novo, found the will expressed only a preference that expenses be paid from personalty but was silent about allocation among personalty, held there was no binding stipulation or prior judicial adoption of proportional allocation, and adopted the common-law abatement order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the will prescribes allocation among personalty for administrative expenses | Avery (spouse): Article First requires expenses be paid from personalty but implies a more specific allocation protecting spouse’s share | Estate/children: Article First only expresses preference for personalty over realty and is silent as to allocation among personalty | Court: Will expresses only a preference to abate personalty before realty; silent as to allocation among personalty; infer default rules where silent |
| Whether parties stipulated or are bound to pro rata (proportional) allocation | Avery: Parties’ Joint Discovery & Scheduling Motion and earlier statements show a stipulation or prior judicial adoption of pro rata allocation | Estate/children: No clear, enforceable stipulation or prior court order adopting pro rata; record shows disagreement | Court: No clear stipulation or prior judicial adoption; pro rata allocation not binding |
| What default rule of abatement applies when will is silent | Avery: Vermont law/statutory preference for spouses suggests an allocation favoring spouse or proportional allocation | Estate/children: Follow common-law abatement order (intestate, residuary, general, then specific) derived from Restatement and longstanding authorities | Court: Adopted common-law rule—shares abate in order: intestate, residuary, general, then specific; specific devises (children) are last to abate |
| Whether applying the common-law rule improperly defeats testator’s intent to favor spouse | Avery: Allocating expenses to spouse’s personalty would effectively exhaust her bequest, contrary to testator’s likely intent | Estate/children: Testator’s explicit intent limited to preferring personalty; absent further expression, apply common law | Court: Must construe will as written; absent intent, apply common-law abatement despite potential harshness to spouse |
Key Cases Cited
- In re Estate of Holbrook, 140 A.3d 788 (Vt. 2016) (principle: determine testator’s intent from will language; extrinsic evidence only if ambiguous)
- In re Estate of Barslow, 260 A.2d 374 (Vt. 1969) (principle: language of will governs and will speaks as of testator’s death)
- In re Callahan’s Estate, 52 A.2d 880 (Vt. 1947) (principle: longstanding distinction that personalty abates before realty)
- Ullmann v. First Nat’l Bank of Mobile, 137 So.2d 765 (Ala. 1961) (principle: common-law abatement order—residuary, general, then specific)
- Louisville Presbyterian Theological Seminary v. Fid. Tr. & Safety Vault Co., 68 S.W. 427 (Ky. 1902) (principle: courts apply general abatement rules where testator did not contemplate insufficiency of estate)