Klein

Kirk D. Hartman and William and Patricia Gillespie appeal from a probate court order prorating estate taxes. They contend the court improperly charged them with a portion of another beneficiary’s estimated future income taxes. We agree, and reverse. The estate tax proration provisions of the Probate Code do not contemplate the consideration of future income tax consequences. Neither does Estate of Bixby (1956) 140 Cal.App.2d 326 [ 295 P.2d 68 ] (Bixby), the authority relied on by respondent to justify the order before us. Bixby did not address estate tax proration and establishes only the probate court’s equitable authority to make adjustments for immediate tax consequences in distributing the estate. A more cautious and predictable approach is suggested by the current state of the law—unless income tax consequences can be ascertained with reasonable certainty for purposes of equitable reallocation at the time of distribution, the beneficiaries of an estate are responsible for paying their own future taxes.

BACKGROUND

Mark R. Hughes, the founder of Herbalife, Inc., left a large estate. The sole beneficiary of the estate is a trust. The primary beneficiary of the trust…