1.1 The Tax Clause as a Bequest

In certain circumstances, the tax clause can be the functional equivalence of a bequest. In Fauntleroy v. Blizzard[1], for example, Ms. Jackson’s Will contained the “standard” tax clause which directed that the taxes be paid from the residuary estate. The Will provided a specific bequest of her husband’s family stock back to his family (to the children of the deceased husband’s brother) and the residue to the Fauntleroy heirs who were her family members. The stock was valued at $1.4 Million with her estate apparently consisting of this stock and her farm. The total estate and inheritance taxes tax that was shifted to the residue was $910,000. Probably at least 75% of this amount was attributable to the specific bequest to the collateral family members.   In Estate of Boyd[2], the “standard” tax clause wiped out the marital bequest because of a large insurance policy going to the decedent’s son, the spouse’s stepson. In that case, the son/stepson disclaimed his interest in the probate estate and to the benefit of the tax clause.