WALDEN, Judge.
We grant the Petition for Rehearing filed by J. Michael Nifong. The initial opinion is withdrawn and the following substituted:
Case Nos. 81-1949 82-1570
This appeal involves the resolution of a conflict between the terms of a trust, a will and a statute, all with reference to the responsibility for the payment of certain of the decedent's obligations.
The settlor, testator and the decedent are the same person, Jane Greer Kelly Brown, who died in 1980.
The 1974 trust provided in essence that following the settlor's death the trustee would pay to the testator's personal representative from the trust principal such sums as might be needed to pay certain enumerated debts of the decedent such as taxes and expenses (the amounts and kinds of which are not in controversy), to the degree that the testator's residuary estate might be insufficient and thereby unable to pay same.
FOURTH: Following the death of the Settlor and upon written request of the Executor or Executors of the Settlor's estate (including any Trustee serving under this agreement also serving as an Executor thereof), the Trustee shall pay to such Executor or Executors from the principal of this trust such amount as shall be certified to be the amount by which the Settlor's residuary estate shall be insufficient for payment of (1) any estate, inheritance or other death tax assessed in the Settlor's estate; (2) the Settlor's debts; (3) the Settlor's funeral expenses; and (4) the expenses of administering the Settlor's estate. The Trustee shall be under no duty to determine the propriety of the payment of any sum or sums so certified to him, or to see to the application thereof by such Executor or Executors, or to withhold any distribution in anticipation of any such request. [Emphasis supplied.]
The 1978 Will provided that the taxes such as here involved shall be paid out of the residuary estate without reimbursement or contribution from any person and that debts and administrative expenses be paid in the due course of the administration of the estate.
MY VALID DEBTS AND ADMINISTRATION EXPENSES shall be paid by my personal representative in the due course of the administration of my estate (except such of my debts, if any, as may be secured by mortgage on real estate). The expenses of my last illness and funeral, the reasonable expenses incurred in administering my estate, including the expenses of ancillary proceedings that may be required in another state or country, the expenses of delivering any bequest or devise under my Will shall be considered administration expenses. I further direct that all estate, transfer, succession, inheritance, legacy and similar taxes, including any interest and penalties thereon, if any, with respect to any property that may be included in my gross estate under the provisions of any tax law, whether or not passing under this Will or any Codicil that I may hereafter execute, shall be paid out of my residuary estate without reimbursement or contribution from any person. [Emphasis supplied.]
The statute, Section 733.805(1), Florida Statutes (1981), provided that such expenses shall be paid out of the fund provided by the will (here the residuary estate) and if the fund so designated is insufficient, the estate property will be used to supply the insufficiency delineating an order of priority as concerns the source.
733.805 Order in which assets are appropriated. —
(1) If a testator makes provision by his will or designates the funds or property to be used, for the payment of debts, estate and inheritance taxes, family allowance, exempt property, elective share charges, expenses of administration, and devises, they shall be paid out of the funds or from the property or proceeds as provided by the will so far as sufficient. If no provision is made or any fund designated, or if it is insufficient, the property of the estate shall be used for such purposes, except as otherwise provided in s. 733.817 with respect to estate, inheritance, and other death taxes, and to raise the shares of a pretermitted spouse and children, in the following order:
(a) Property not disposed of by the will.
(b) Property devised to the residuary devisee or devisees.
(c) Property not specifically or demonstratively devised.
(d) Property specifically or demonstratively devised.
Id.
In due course the personal representative certified to the trustee that the testator's residuary estate was insufficient to pay the testator's debts, expenses and income taxes in the sum of $278,987.25. Payment was requested per the terms of the trust. The trustee refused to pay. The trial court ordered the trustee to make the payment from the trust property. The trustee appeals. We reverse.
For clarity we digress to more specifically identify the parties. The trustee is David Yoakley, plaintiff in the trial court and appellant here. The first successor personal representative was Wilson Smith, defendant in the trial court and appellee here. A second successor personal representative as of July 16, 1982, is named Charles Fernsell and is now the appellee.
The basic question before us is whether the pertinent terms of the trust control so as to avoid the terms of the statute inasmuch as the will did not track or corroborate the terms of the trust but rather provided that such funds be paid out of the residuary estate without reimbursement or contribution, and that expenses and debts be paid in due course of the administration of the estate.
We hold that the terms of the trust do not control. The terms of the statute control. Thus the residuary estate is liable for the payment of the taxes in question and, if it is insufficient, then the shortage shall be provided and paid from the estate property in order outlined in the statute.
Id.
The leading case on this question is Guidry v. Pinellas Central Bank and Trust Co., 310 So.2d 386 (Fla. 2d DCA 1975). In Guidry the issue before the Second District was whether a settlor's direction in a trust instrument for the payment of estate taxes was sufficient to avoid the application of the apportionment statute then in force, Section 734.041, Florida Statutes (1973), [Repealed, Ch. 74-106 § 3] which required that estate taxes be apportioned between probate and nonprobate assets unless the decedent's will provided otherwise. In that particular case the settlor's direction was not included in the will but was unequivocally expressed in the trust instrument. The Second District, in reversing the trial court's summary judgment based on the theory that the trust instrument was controlling, held that the statute controls unless the decedent specifically directs otherwise in the will.
The appellee attempts to distinguish Guidry from the case at bar by contending that the will in the present case is more specific with respect to the question of taxes. However, a review of the will does not reveal that there is the specificity called for in Guidry.
This Court has held that where the provision of a trust and a will conflict, the will prevails. See In Re Estate of Strohm, 241 So.2d 167 (Fla. 4th DCA 1970). In the instant case the will unequivocally directs the personal representative to pay taxes from the residuary estate without contribution from any other source.
We feel that the trust instrument here is not sufficient to avoid or defeat the terms of the statute because the will failed to specifically designate the source for payment of the taxes in the event of an insufficiency in the residuary estate.
We would note that some payment of estate, inheritance or death taxes from the trust corpus may be necessitated if the residuary estate is depleted with taxes still owing, and if so, it is fully authorized under Section 733.817, read in conjunction with Section 733.805.
We reverse and remand Case Nos. 81-1949 and 82-1570 for further proceedings consistent herewith.
Case No. 82-214
Inasmuch as the appealed ruling here is consistent with our opinion above in Case Nos. 81-1949 and 82-1570, we affirm.
Case No. 82-214 is affirmed.
Petition for Rehearing is GRANTED.
BERANEK, J., concurs.
ANSTEAD, C.J., dissents with opinion.