THE FIRST NATIONAL BANK OF MOUNT DORA, EXECUTOR, vs. SHAWMUT BANK OF BOSTON, N.A., & ANOTHER, TRUSTEES. [Note 1]

WILKINS, J. In 1970 Harriett Peters, a resident of Connecticut, created a revocable trust in Massachusetts, of which the defendants are now the trustees. Under Article Third of the trust instrument, Peters directed that the trustees pay all estate and inheritance taxes imposed by reason of her death and all her debts and the expenses of administering her estate. [Note 2] On August 6, 1974, while still a resident of Connecticut, Peters executed a will which may be read to direct her executor to pay all estate and inheritance taxes from the residue of her estate. [Note 3] Peters

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died on May 19, 1975, a resident of Florida, where her will has been admitted to probate, and the plaintiff, a Florida bank, has been appointed executor of her will.

The Florida executor commenced this action in the Probate Court for Suffolk County seeking a judgment that the trustees of the Massachusetts trust must carry out the direction of the trust instrument and pay all Peters' estate and inheritance taxes and all her debts and the expenses of administering her estate. The defendant trustees deny any obligation to pay estate and inheritance taxes and point to the provisions of article one of Peters' will, which they argue are controlling and place the entire burden of estate and inheritance taxes on the residue of Peters' estate. At trial the defendants acknowledged an obligation under the trust to pay Peters' debts and the expenses of administering her estate.

The trial judge ruled that where there was a conflict between "clear" terms of the will and "prior executed trusts," the will was the final expression of the decedent's intent and "the estate must bear the burden of the tax unless the will indicates a contrary intent" where there is no statute in aid of the executor's contention. In the course of the trial, the judge excluded evidence offered by the plaintiff concerning the value of the assets included in Peters' gross estate for Federal estate tax purposes and further excluded evidence from a member of the Connecticut

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bar who had prepared Peters' will. He entered a judgment which imposed liability on the trustees only for Peters' debts and the expenses of her estate. The Florida executor appealed, and we granted its application for direct appellate review. [Note 4] We reverse the judgment and remand this case to the Probate Court for further proceedings. The judge should have received evidence of the nature and value of the assets included in Peters' gross estate for Federal estate tax purposes and should have admitted evidence concerning the circumstances under which Peters executed her will.

We summarize, briefly and generally, the dispositive provisions of the trust that were effective at Peters' death and the dispositive provisions of Peters' will. The trust provides for distributions to a nephew during his life, and, on his death, for distributions to various other relatives in equal shares. At the death of the survivor of the distributees, the trust property is to be distributed to The First Church of Christ, Scientist, in Boston. The trust further provides that the trust indenture and the trusts created "shall be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts." The will provides that the residue of the estate should be held in trust by the plaintiff as trustee, and the income paid equally to the same nephew who is named as the initial beneficiary of the trust and to a friend of the testatrix (both apparently residents of Florida) as long as they both are living. All income is to be paid to the survivor and at his or her death, the trust is to terminate and its assets are to be distributed to the Christian Science Church in Boston. The will authorizes disbursements of principal to either or both income beneficiaries

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for their "comfortable support, maintenance, and welfare" and for their funeral expenses.

Because the judge concluded that the will was unambiguous and that it placed the tax burden on the residue of Peters' estate, and, consistent with that view, excluded all evidence concerning the assets included in Peters' gross estate for Federal estate tax purposes, the record does not show fully the financial consequences of the judge's ruling. Although the plaintiff might better have made detailed offers of proof concerning the excluded evidence, such offers were not necessary because it is clear that the judge would have excluded evidence intended to aid in the construction of Peters' will in any event, and that the exclusion, if erroneous, was prejudicial. See Ratner v. Canadian Universal Ins. Co., 359 Mass. 375, 385 (1971). From the complaint we can discern certain essential facts which, if true, show the consequences of a ruling which places the entire estate and inheritance tax burden on the residue of Peters' estate. Peters' gross estate shown on her Federal estate tax return was approximately $2,285,000, of which only about $385,000 was attributable to the value of Peters' probate estate and of which approximately $1,100,000 was attributable to the assets in the Massachusetts trust. [Note 5] The net Federal estate tax obligation shown on the return was about $437,000, a figure in excess of the value of all the probate assets. The return also indicated debts and expenses chargeable to the estate of about $75,000.

The situation involved here is atypical. Normally, in cases involving tension between an estate and the owner of out-of-State, nonprobate assets, the will or the law of the decedent's domicil, or both, would indicate that nonprobate assets should assume their share of estate and inheritance taxes, and the executor would commence an

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action in the situs State to recover his alleged due. If an inter vivos trust were involved, often it would be silent or neutral on the trustees' obligation to pay those taxes, and the situs State would have to determine the trust's obligations. As a conflict of laws choice, it could apply either the law of the decedent's domicil or its own internal law, which might or might not call for contribution from nonprobate assets. Of course, if the inter vivos trust expressly directed the trustees to pay certain estate and inheritance taxes from the trust, there would be no disagreement to that extent between the estate and the trust. A conflict could exist, however, if the will or the applicable law called for the trust to pay a greater share of such taxes than did the trust instrument. [Note 6] If, on the other hand, the trust instrument directed that the trust pay no estate and inheritance taxes and the will did not constitute an amendment of the trust, the situs State might be inclined to apply its own law, the law governing the administration of the trust, and not the law of the decedent's domicil.

Here, the trust instrument instructs that the trust pay not only its pro rata share of estate and inheritance taxes but also all such taxes imposed by reason of the settlor's death. On the other hand, the will may be read to direct no apportionment of estate and inheritance taxes to nonprobate assets and, if so read, as will be seen (note 9, infra), Florida law would not be likely to override that direction, at least as to nonprobate assets as to which there is no contrary direction. These independent commands, the latter of which could not have been made intelligently with knowledge of the former, present an unusual problem.

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The disposition of this case is not explicitly governed by statute. Federal law generally leaves to State law the extent of an inter vivos trust's obligation to contribute to the payment of estate and inheritance taxes. See Warfield v. Merchants Nat'l Bank, 337 Mass. 14, 18 (1958), discussing Riggs v. Del Drago, 317 U.S. 95 (1942). The Massachusetts apportionment statute (G. L. c. 65A, Section 5) applies only to estates of Massachusetts residents. See Warfield v. Merchants Nat'l Bank, supra at 17. This court is not obliged to apply Florida law, including its apportionment statute. See Warfield v. Merchants Nat'l Bank, supra; Isaacson v. Boston Safe Deposit & Trust Co., 325 Mass. 469, 472 (1950). In each of these cases, an executor of a foreign will, relying on the law of the testator's domicil directing apportionment, undertook to collect the portion of the Federal estate taxes attributable to the assets of a Massachusetts trust whose terms did not direct any contribution toward any death tax obligation of the testator. These cases were considered largely on the question whether a foreign executor could compel reimbursement here. In each instance, the answer was in the negative, and contribution was denied.

In the absence of any statute indicating otherwise, we see no reason why the provisions of a will must be given precedence over those conflicting provisions of an inter vivos trust which are to become operative at the settlor's death, particularly when the administration of nonprobate assets is involved. In today's estate planning, it is not reasonable to conclude that a will is always of greater significance than an instrument creating an inter vivos trust. Here, the will, which does not qualify as an amendment to the trust, [Note 7] may be read to require Peters' executor

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to pay the same taxes which the trust instrument directs be paid out of trust assets. If these conflicting provisions appeared in a single document, such as a will, we would admit extrinsic evidence to assist in resolving the ambiguity. See McKelvy v. Terry, 370 Mass. 328, 334 (1976); Putnam v. Putnam, 366 Mass. 261, 266-267 (1974). Similarly, such evidence would be admissible in Florida. See Adams v. Vidal, 60 So.2d 545, 547 (Fla. 1952); Marshall v. Hewett, 156 Fla. 645, 649 (1945). See also Hackett v. Bankers Trust Co., 122 Conn. 107, 126-127 (1936). On the other hand, where there is no ambiguity in the language of the controlling instrument or instruments, the expressed intention must be carried out, even if the result is the failure of an intended gift. See Whitbeck v. Aldrich, 341 Mass. 326, 329 (1960); Putnam v. Putnam, supra at 266.

Although much can be said in favor of "clear" rules of law to guide estate planning decisions and the administration of estates, when a slip-up has obviously occurred in the estate planning process, evidence of the circumstances known to a testator-settlor may be particularly instructive in achieving the ultimate goal of recognizing and carrying out the testator-settlor's intention. Here, if the allegations of the Florida executor concerning the tax obligations of Peters' estate are proved, the view espoused by the trustees would result in total failure of all testamentary gifts, including the gift of income to Peters' friend, who is not an income beneficiary of the trust. There may be no logic in a result which would fully achieve an expressed testamentary purpose of paying all taxes from the residue while in the process destroying the only gifts expressed in the will. Why would Peters' will implicitly preserve the trustees' obligation to pay debts and expenses of the estate, a relatively small item, and yet relieve the trustees entirely of their obligation to pay

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estate and inheritance taxes? [Note 8] Without evidence of the circumstances relating to the preparation and execution of the will and evidence of what Peters knew or believed at that time, we cannot resolve the conflict, and even with that evidence the problem may remain.

Our analysis of the problem has largely assumed to this point that the internal law of Massachusetts, or the similar law of some other jurisdiction, would apply to this case. There is, however, a significant choice of law question. Although the issue might have been raised more squarely in Warfield v. Merchants Nat'l Bank, 337 Mass. 14 (1958), and in Isaacson v. Boston Safe Deposit & Trust Co., 325 Mass. 469 (1950), in each opinion the court seems to have rejected the view that, as a matter of choice of law, Massachusetts should look to the law of a decedent's domicil to determine apportionment questions. Some other jurisdictions also have applied their own law, the law of the situs of the property, rather than the law of the decedent's domicil. See Knowles v. National Bank, 345 Mich. 671 (1956); First Nat'l Bank v. First Trust Co., 242 Minn. 226 (1954); Estate of Torian v. First Nat'l Bank, 321 So.2d 287 (Miss. 1975); Beatty v. Cake, 236 Or. 498 (1963). We need not decide at this time whether the suggestion of the Isaacson and Warfield opinions on choice of law would be accepted today. Refusal to apply the law of the decedent's domicil has been criticized. See Scoles, Apportionment of Federal Estate Taxes and Conflict of Laws, 55 Colum. L. Rev. 261 (1955). In several jurisdictions the law of the decedent's domicil has been applied. See Mazza v. Mazza, 475 F.2d 385, 389 (D.C. Cir. 1973); Doetsch v. Doetsch, 312 F.2d 323, 328 (7th Cir. 1963); Trust Co. v. Nichols, 62 N.J. Super. 495, 508 (1960); In re Estate of Gato, 276 App. Div. 651, 655, aff'd mem., 301 N.Y. 653

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(1950); First Nat'l Bank v. Wells, 267 N.C. 276, 285 (1966). The application of the law of the decedent's domicil, if followed universally, would tend to ensure uniformity of treatment among nonprobate assets included in the decedent's gross estate. See Scoles, Estate Tax Apportionment in the Multi-State Estate par. 71.704.2, in 5 Inst. on Est. Plan. (1971).

It may be necessary to determine whether Massachusetts law, Florida law, or the law of some other State should be applied in this case. Evidence may assist in such a determination. In construing a will, the law of the decedent's domicil would normally be considered. [Note 9] See

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B.M.C. Durfee Trust Co. v. Franzheim, 349 Mass. 335, 338 (1965). In construing a trust instrument and rights and obligations under it, the law of the situs of the trust would often be given recognition, particularly when, as here, the trust expressly so directs. [Note 10] See New England Merchants Nat'l Bank v. Mahoney, 356 Mass. 654, 656-657 (1970); National Shawmut Bank v. Cumming, 325 Mass. 457, 463-464 (1950); Restatement (Second) of Conflict of Laws Section 268 (1971); 5 A. Scott, Trusts Section 579 (3d ed. 1967). In particular circumstances, there may be reason to look to the law of that jurisdiction with which the testator-settlor had the greatest contact at significant times (such as her domicil at the time of execution of the trust and will), or perhaps one would look to the law of that jurisdiction which the testator-settlor had reason to believe would be applicable. See Restatement (Second) of Conflict of Laws Section 268 (2) (1971); [Note 11] 5 A. Scott, Trusts Section 576 (Supp. 1979). Findings on these points may be instructive in resolving the choice of law issue. Another factor to consider on the choice of law question is the language in the trust that the "indenture of trust and the trusts hereby

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created shall be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts."

The judgment is reversed and the case is remanded for further proceedings consistent with this opinion.

So ordered.