                        T.C. Memo. 2004-19



                      UNITED STATES TAX COURT



              ESTATE OF ROBERT H. LURIE, DECEASED,
                ANN LURIE, EXECUTOR, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 22639-94.                Filed January 28, 2004.


     Carleen L. Schreder, Robert M. Levin, Steven S. Brown, Royal

B. Martin, Jr., Patricia E. Kaplan, William G. Sullivan, Daniel

T. Hartnett, Samuel B. Sterrett, and Sheli Z. Rosenberg, for

petitioner.

     John J. Comeau, James S. Stanis, James M. Cascino, and

Patricia Pierce Davis, for respondent.



              MEMORANDUM FINDINGS OF FACT AND OPINION

     COLVIN, Judge:   Respondent determined a $47,459,641

deficiency in the Federal estate tax of the Estate of Robert H.
                                - 2 -

Lurie (the estate).   Respondent filed an amended answer asserting

that the deficiency in Federal estate tax is $83,677,846.

     Robert H. Lurie (decedent) created the Robert Lurie

Revocable Trust (revocable trust), which, upon decedent’s death,

distributed property to a marital trust.    The estate claimed a

marital deduction.    The trust instrument states that, if, as is

the case here, the assets in the residue of the probate estate

are insufficient to pay Federal estate tax and legal costs, the

revocable trust is to pay the Federal estate tax and legal costs

from property that would otherwise pass to decedent’s surviving

spouse.   Decedent executed his will 3 days later.    The will is

silent as to the source of payment of Federal estate tax and

legal costs if the assets in the residue of the probate estate

are insufficient to pay the estate tax and costs.

     After concessions, the issues for decision are:

     1.    Whether the revocable trust instrument establishes that

decedent intended for Federal estate tax and legal costs to be

paid out of property in the revocable trust that would otherwise

pass to decedent’s surviving spouse.    We hold that it does.

     2.    Whether, under Illinois law, we may consider decedent’s

intent expressed in his revocable trust instrument regarding

whether Federal estate tax and legal costs are payable out of

property in the revocable trust that would otherwise pass to

decedent’s surviving spouse.   We hold that we may.
                                 - 3 -

     3.   Whether the marital deduction is reduced under section

2056(b)(4) by the amount of Federal estate tax paid by the

revocable trust with property that would otherwise pass to

decedent’s surviving spouse.     We hold that it is.

     Section references are to the Internal Revenue Code in

effect as of the date of decedent’s death.     Rule references are

to the Tax Court Rules of Practice and Procedure.

                            FINDINGS OF FACT

A.   Decedent and His Family

     Decedent died on June 20, 1990.     He was domiciled in

Illinois on that date.     Decedent was survived by his wife (Ann

Lurie) and six minor children.     Ann Lurie, the executor of

decedent’s estate, lived in Winnetka, Illinois, when the petition

was filed.

B.   Trusts Created Before Decedent Executed the Will

     1.    Notice Trusts

           a.   LF Trusts

     Decedent’s mother created 10 Robert Lurie Family Trusts (LF

Trusts) in May 1969.   On February 3 and 5, 1990, decedent

exercised his limited powers of appointment over the LF Trusts to

create 6 trusts, 1 for the benefit of each of his six children,

to succeed and receive the assets of the 10 LF trusts.

Decedent’s six children were the sole beneficiaries of the six

successor trusts.   The LF trusts contain no provision for the

payment of Federal estate tax from trust assets.
                               - 4 -

           b.    RD Trusts

     Ten RD Trusts were created in September 1974.    The record

does not indicate who created the RD trusts.   On September 30,

1983, decedent exercised his powers of appointment over the RD

Trusts and created 10 trusts to succeed and receive the assets of

the RD Trusts.   The RD trusts contain no provision for the

payment of Federal estate tax from trust assets.

     We refer to the LF Trusts, the RD Trusts, and their

successors as the “notice trusts” because respondent determined

in the notice of deficiency, and the parties agree, that the

value of those trusts is includable in decedent’s gross estate.

     2.    Revocable Trust

     Decedent created a revocable trust on December 19, 1989,

under which he was the grantor and the trustee.    Decedent

retained until his death the right to revoke, modify, alter, or

amend the trust instrument and to withdraw income and principal

from the revocable trust.

     Articles 3.2 and 4.1 of the trust instrument provide as

follows:

     3.2 Amount of Allocation to Marital Trust. The
     allocation herein to the Marital Trust shall have a
     value equal to the smallest pecuniary amount which, if
     allowed as a federal estate tax marital deduction,
     would result in the least federal estate tax being
     payable by reason of the Grantor’s death, taking into
     account the maximum available unified credit and the
     credit for state death taxes, but only to the extent
     that those state death taxes are not thereby increased
     * * *.
                               - 5 -

     *        *         *        *        *        *       *

          4.1 Debts and Taxes. Upon the death of the
     Grantor, the Trustee shall, to the extent that the
     assets of the Grantor’s estate * * * are insufficient,
     pay * * * reasonable expenses of administration of his
     estate, * * * all income, estate, inheritance, transfer
     and succession taxes, including any interest and
     penalties thereon, which may be assessed by reason of
     the Grantor’s death, without reimbursement from the
     Grantor’s Executor or Administrator, from any
     beneficiary of insurance upon the Grantor’s life, or
     from any other person; provided, however, that even if
     the assets of the Grantor’s estate shall not be
     insufficient, if the Trustee shall be holding as part
     of the trust estate Treasury Bonds which are redeemable
     at par in payment of federal estate taxes, then such
     Bonds shall be used to pay any federal estate tax due
     before any other asset is used. All such payments
     shall be charged first against the principal of the
     trust estate other than a Marital Trust.

C.   Decedent’s Will

     Decedent executed his will on December 22, 1989.   In it, he

provided for all of his personal effects to be distributed to his

wife and the remainder of his estate (referred to in decedent’s

will as the “residuary estate”) to be distributed to the

revocable trust.   In his will, decedent directed payment of his

debts, funeral expenses, costs of administration, legal expenses,

and taxes assessed by reason of his death from his residuary

estate, except to the extent that certain U.S. Treasury bonds

redeemable at par value (Flower Bonds) were held by the revocable

trust.
                               - 6 -

     When decedent died, the revocable trust held assets worth

$88,659,780.   The trustees distributed those assets to the

marital trust.

     The Circuit Court of Cook County, Probate Division, admitted

decedent’s will to probate on July 10, 1990.   The value of the

probate estate was $760,253 on decedent’s date of death.   The

personal effects which decedent bequeathed to Ann Lurie were

worth $12,470 when he died.   The value of the residue of the

probate estate was $747,783 on decedent’s date of death.   The

funeral expenses and miscellaneous administration expenses were

paid from the residue of the probate estate.   The probate estate

distributed the residue to the revocable trust.   During his

lifetime, decedent made taxable gifts which fully absorbed the

unified credit.   As a result, the nonmarital residuary trust was

not formed, and the revocable trust distributed all of its assets

to the marital trust.

     The estate reported on its Federal estate tax return a gross

estate of $91,712,318, deductions totaling $91,712,318 (marital

deduction of $91,682,908 and other deductions of $29,410), and a

taxable estate of zero.   Decedent’s estate did not include the

value of the notice trusts in the gross estate on its Federal

estate tax return.

     Respondent determined that the value of the notice trusts is

included in decedent’s gross estate.   Respondent also determined
                                - 7 -

that the marital deduction is reduced by the amount of Federal

estate tax ($47,459,641) payable out of property passing to the

surviving spouse from the revocable trust, leaving, according to

respondent, a marital deduction of $44,223,267.     The parties

agree that the value of the notice trusts is $40,471,059, and

that the value of the notice trusts is included in the gross

estate.

                               OPINION

A.   Whether Federal Estate Tax Is Payable From Property That
     Would Otherwise Pass to the Surviving Spouse

     1.    Background

     A tax is imposed on the transfer of the taxable estate of

every decedent who is a citizen or resident of the United States.

Sec. 2001(a).   In computing the amount of the taxable estate, an

estate may deduct the value of property which passes from a

decedent to the decedent’s spouse (marital deduction), but only

to the extent that that property is included in determining the

value of the gross estate.    Sec. 2056(a).   The marital deduction

is reduced by the amount of Federal estate tax payable from the

property passing to the surviving spouse.     Sec. 2056(b)(4).

     State law governs how a taxpayer’s estate tax burden is

allocated among its assets.    Riggs v. del Drago, 317 U.S. 95,

101-102 (1942); Estate of Sawyer v. Commissioner, 73 T.C. 1, 3

(1979).   Illinois law applies in this case.    Under Illinois law,

equitable apportionment applies if the decedent provided no
                               - 8 -

direction, such as in a will, about payment of Federal estate tax

and costs.   In re Estate of Gowling, 411 N.E.2d 266, 269 (Ill.

1980); Roe v. Estate of Farrell, 372 N.E.2d 662, 665 (Ill. 1978).

If equitable apportionment applies, the estate tax is apportioned

among the recipients of probate property and nonprobate property

(i.e., property that passes outside the will).    The estate tax

liability is borne only by property includable in the taxable

estate.   See In re Estate of Gowling, supra; Roe v. Estate of

Farrell, supra.

     Decedent’s will directs that Federal estate tax be paid from

the residue of the probate estate.     Decedent’s will is silent on

the source of payment of Federal estate tax under the

circumstances here; i.e., there are not enough assets in the

probate residue to pay that tax.

     2.   Petitioner’s Contentions

     Petitioner contends that, under Illinois law, if a decedent

dies testate, Illinois courts consider only the decedent’s will

to decide his or her intent regarding which property is to be

used to pay estate taxes.   Petitioner contends that equitable

apportionment applies here because decedent’s will does not

specify the source of payment of estate taxes.    Thus, petitioner

contends that the notice trusts must pay the portion of the

Federal estate tax equal to the ratio that their value bears to

the total value of the gross estate, and that the marital trust
                                   - 9 -

is not reduced by the Federal estate tax paid by the notice

trusts.      Petitioner also contends that the trust instrument does

not provide that that tax is payable out of property in the

marital trust.

       3.     Whether the Provision in Decedent’s Trust Instrument
              That Federal Estate Tax Is Payable From Property in the
              Revocable Trust That Would Otherwise Pass to Decedent’s
              Surviving Spouse Is Given Effect

       Article 3.2 of decedent’s trust instrument provides that the

amount allocated to the marital trust shall be the smallest

amount which, if allowed as a marital deduction, would result in

the least Federal estate tax being paid.      Article 4.11 provides

that, to the extent that there are not enough assets in

decedent’s probate estate to pay the Federal estate tax due to

decedent’s death, that tax is to be paid from the revocable

trust.

       Petitioner contends that reading the trust instrument as a

whole shows that decedent intended to maximize the marital

deduction and not reduce it by the amount of the Federal estate

tax.       Petitioner contends that Article 3.2 conflicts with Article

4.1, which directs payment of estate taxes from the revocable

trust with property that would otherwise pass to decedent’s

surviving spouse.      Petitioner contends that Article 4.1 must be

construed to permit decedent’s estate to claim the maximum


       1
       Unless otherwise specified, references to Art. 4.1 are to
Art. 4.1 of decedent’s trust instrument.
                              - 10 -

marital deduction and thereby decrease estate taxes.    To achieve

this result, petitioner contends that Article 4.1 applies only if

decedent’s wife predeceased him because, under those

circumstances, there would be no marital deduction.    Inherent in

petitioner’s position is the contention that the notice trusts

bear the burden of the Federal estate tax.

     We disagree.   First, Article 4.1 does not say that it

applies only if decedent’s wife did not survive him.    We must

give effect to Article 4.1 as written, and we do not read into it

a requirement that decedent’s wife predecease him.    Second,

petitioner’s position that the notice trusts must pay the Federal

estate tax because decedent intended to minimize Federal estate

tax by maximizing the marital deduction overlooks the fact that

Article 4.1 of the trust instrument provides that the estate tax

is payable from the revocable trust.   Under petitioner’s

interpretation, Article 4.1 is given no effect.   This is contrary

to Illinois law, which requires that we give effect to all

provisions of decedent’s trust instrument.   Harris Trust & Sav.

Bank v. Donovan, 582 N.E.2d 120, 123 (Ill. 1991); In re Halas,

470 N.E.2d 960, 964 (Ill. 1984).   We must assume that decedent

intended both Articles 3.2 and 4.1 to be given effect.
                               - 11 -

     Third, decedent intended that Federal estate tax be paid

either from the residuary probate estate or the revocable trust,

but not from the notice trusts.    This is shown by the fact that

(a) decedent specified in Article 4.1 of the will and Article 4.1

of the trust instrument only two sources for payment of Federal

estate tax:   the assets of the residuary probate estate and the

assets of the revocable trust; and (b) the notice trust

instruments do not provide for the payment of Federal estate tax

from trust assets.    Article 4.1 of the trust instrument provides

that, where the assets in the residue of the probate estate are

insufficient to pay Federal estate tax, that tax is to be paid

from the revocable trust without reimbursement from decedent’s

executor, any beneficiary of insurance upon decedent’s life, or

any other person.    This shows that decedent intended that the

notice trusts not be burdened with payment of the Federal estate

tax because the phrase “without reimbursement * * * from any

other person” applies to the notice trusts.2

     Decedent may not have anticipated that the notice trusts

(which the parties have agreed have a value of $40,471,059) would

be included in his gross estate.    He may have expected that the

residue of his probate estate would be enough to pay the Federal

estate tax and legal costs, and that there would be no need to

     2
       The term “person” in the trust instrument includes
individuals and trusts. Art. 12.10 of the trust instrument; Art.
5.9 of the will.
                              - 12 -

use property in the revocable trust to pay these expenses.     If

decedent had anticipated the inclusion of the notice trusts in

the estate, he might or might not have included Article 4.1.     But

the issue is not whether decedent might have done things

differently if he had known what we now know.   We must apply the

terms in the trust instrument as written and not speculate as to

what decedent might have done under different circumstances.     See

Larison v. Record, 512 N.E.2d 1251, 1253 (Ill. 1987); In re

Estate of Cancik, 476 N.E.2d 738, 741 (Ill. 1985); Hampton v.

Dill, 188 N.E. 419, 421 (Ill. 1933).   Decedent was extremely

intelligent, effective in his business activities, and

financially successful.   The very best financial and estate

planning resources were available to him.   This is surely an

appropriate case in which to apply the terms of the trust

instrument as written and to refrain from providing a belated,

court-made, opportunity to make choices differently.

     We conclude that decedent’s trust instrument provides that,

if the residue of his probate estate is insufficient to pay

Federal estate tax, Federal estate tax is payable from property

in the revocable trust that would otherwise pass to decedent’s

surviving spouse.

     4.   Whether Decedent’s Intent Regarding the Source of
          Payment of the Federal Estate Tax, as Stated in the
          Trust Instrument, May Be Considered
                              - 13 -

     Petitioner contends that, under Illinois law, if a decedent

dies testate, courts will consider the decedent’s intent

regarding the source of payment of estate tax if it is stated in

his or her will but not if it is stated in the decedent’s trust

instrument.   Petitioner relies on the following cases:    In re

Estate of Gowling, 411 N.E.2d at 269; Landmark Trust Co. v.

Aitken, 587 N.E.2d 1076, 1083 (Ill. App. Ct. 1992); In re Estate

of Fry, 544 N.E.2d 109 (Ill. App. Ct. 1989); In re Estate of

Rosta, 444 N.E.2d 704, 712 (Ill. App. Ct. 1982); In re Estate of

Lyons, 425 N.E.2d 19, 21 (Ill. App. Ct. 1981); Estate of Fender

v. Fender, 422 N.E.2d 107 (Ill. App. Ct. 1981);3 In re Estate of

Maddux, 417 N.E.2d 266, 268 (Ill. App. Ct. 1981); In re Estate of

Gowling, 396 N.E.2d 82, 85 (Ill. App. Ct. 1979), affd. 411 N.E.2d

266 (Ill. 1980); Estate of Callner v. Am. Natl. Bank & Trust Co.,

320 N.E.2d 384 (Ill. App. Ct. 1974); and In re Estate of Wheeler,

213 N.E.2d 35 (Ill. App. Ct. 1965).    None of these cases support

petitioner’s position that Illinois courts do not enforce the

intent of a decedent stated in his or her trust instrument

regarding the source of payment of estate tax where the will is

silent on that subject.




     3
        In Estate of Fender v. Fender, 422 N.E.2d 107, 110 (Ill.
App. Ct. 1981), the Illinois Appellate Court said: “It is evident
that apportionment is now the rule in Illinois, absent a clearly
manifested contrary intent in the will.”
                              - 14 -

     Petitioner contends that no Illinois case has considered an

instrument other than a will to ascertain the decedent’s intent

regarding the source of payment of Federal estate tax.    We

disagree; Illinois courts have considered a decedent’s trust

instrument executed close in time to the decedent’s will to

decide his or her intent regarding the source of payment of

Federal estate tax.   See, e.g., Harris Trust & Sav. Bank v.

Donovan, supra at 124; Frederick v. Lewis, 517 N.E.2d 742, 744

(Ill. App. Ct. 1987); Harris Trust & Sav. Bank v. Taylor, 364

N.E.2d 349, 354 (Ill. App. Ct. 1977).

     In Frederick v. Lewis, supra, the Illinois Appellate Court

considered whether a trust instrument provided specific

instructions for paying estate tax.     Petitioner contends that

Frederick does not support the proposition that a revocable trust

instrument is considered in deciding what a decedent intended

regarding the source of payment of estate tax.    We disagree with

petitioner’s contentions about Frederick.     The court’s sole

reason for examining the trust instrument in Frederick was to

decide the decedent’s intention regarding the source of payment

of tax.   Frederick is contrary to petitioner’s claim that

Illinois courts do not consider instruments other than a

decedent’s will to discern the decedent’s intent regarding the

source of payment of estate tax.
                              - 15 -

     Similarly, in Harris Trust & Sav. Bank v. Donovan, supra,

the Illinois Supreme Court considered the terms of a decedent’s

trust and will (executed 3 days after the trust) in deciding the

decedent’s intent in disposing of his property.   The Illinois

Supreme Court found that the decedent intended that his will and

trust be read together to effect his intent in disposing of his

property.   In the instant case, decedent made clear that he

intended that his trust and will be read together because each

refers to the other.   Decedent executed his will 3 days after he

executed the trust instrument, and the will refers to the

revocable trust or its trustee in Articles 2.1, 2.3, 3.2, 4.1,

and 4.12, while the trust instrument refers to the will in

Articles 3.1, 3.2, and 4.1.

     Harris Trust & Sav. Bank v. Taylor, supra, is also contrary

to petitioner’s claim that Illinois courts do not consider

instruments other than a decedent’s will to discern the

decedent’s intent regarding the source of payment of estate tax.

In that case, the Illinois Appellate Court found that the

settlor’s inter vivos trusts clearly evidenced his intent that

Federal estate and Illinois inheritance taxes be paid from the

assets of those trusts and enforced tax apportionment provisions

in the trust instrument.4

     4
        See Estate of Reid v. Commissioner, 90 T.C. 304, 309
(1988) (citing In re Estate of Rosta, 444 N.E.2d 704, 712 (Ill.
                                                   (continued...)
                                  - 16 -

       We conclude that, under Illinois law, we may consider the

trust instrument in discerning a decedent’s intent regarding the

source of funds to pay Federal estate tax.       In the instant case,

decedent executed his will 3 days after he created the revocable

trust.       Decedent’s trust instrument and will referred to each

other and were part of his estate plan.       We believe that decedent

intended that we read his will and trust together to give effect

to his intent regarding the source of payment of Federal estate

tax.       Accordingly, we give effect to decedent’s intent.

       5.      Whether Equitable Apportionment Applies Where
               Decedent’s Intent Is Clearly Stated in Decedent’s Trust
               Instrument

       Petitioner contends that equitable apportionment applies in

this case because decedent’s will does not specify otherwise,

and, as a result, the notice trusts must pay the estate tax and

the marital trust is not reduced.




       4
      (...continued)
App. Ct. 1982) (wills), and Harris Trust & Sav. Bank v. Taylor,
364 N.E.2d 349, 354 (Ill. App. Ct. 1977) (trust instruments), for
the proposition that the decedent’s intent as manifested in the
language of his or her will or trust instrument controls under
Illinois law where the interpretation of the tax apportionment
provision in a will or trust instrument is in dispute).
                               - 17 -

            a.   Equitable Apportionment Under Illinois Law

       Illinois has no statute specifying who bears the burden of

Federal estate taxes.    Thus, application of equitable

apportionment of estate tax is governed by caselaw.       Estate of

Maierhofer v. Maierhofer, 767 N.E.2d 850, 852 (Ill. App. Ct.

2002); Landmark Trust Co. v. Aitken, supra at 1082; In re Estate

of Fry, supra at 111.    Under Illinois law, if equitable

apportionment applies, estate tax liability is borne only by

property included in the taxable estate.    See In re Estate of

Gowling, 411 N.E.2d at 269; Roe v. Estate of Farrell, 372 N.E.2d

at 665.    If equitable apportionment applies in this case, the

marital deduction would not be reduced because the Federal estate

tax would be payable from the notice trusts; i.e., property that

would not otherwise pass to the surviving spouse.

            b.   Equitable Apportionment Does Not Apply Because
                 Decedent’s Trust Instrument Clearly Provided That
                 Federal Estate Tax Is Payable From the Marital
                 Trust

       Under Illinois law, equitable apportionment applies if the

decedent provided no direction about payment of Federal estate

tax.    In re Estate of Gowling, 411 N.E.2d at 269; Roe v. Estate

of Farrell, supra at 665.    Decedent’s trust instrument clearly

provides that if there are not enough assets in the residue of

the probate estate to pay the Federal estate tax, that tax is

payable from the revocable trust; i.e., out of assets that would
                               - 18 -

otherwise pass to decedent’s surviving spouse.    Under Illinois

law, equitable apportionment does not apply where the decedent

expressed a clear intention to the contrary.    Equitable

apportionment of Federal estate tax is not recognized under

Illinois law when, as in the instant case, a decedent’s trust

instrument directs that the trust will be responsible for payment

of “all income, estate, inheritance, transfer and succession

taxes,” and that his trustee shall not be entitled to

reimbursement from the decedent’s executor or administrator, from

any beneficiary of insurance upon decedent’s life, or from any

other person.    See Landmark Trust Co. v. Aitken, 587 N.E.2d at

1083, and In re Estate of Fry, 544 N.E.2d at 110-111, in which

Illinois courts construed language similar to the language in

Article 4.1 of decedent’s trust instrument as evidencing the

testators’ clear intentions that equitable apportionment not

apply.

            c.   Whether Equitable Apportionment Applies Here on
                 the Basis of Technical Advice Memorandum 8240014

         In Technical Advice Memorandum 8240014 (June 29, 1982)

(TAM 8240014), the Commissioner considered application of

equitable apportionment to property passing to the spouse (and

eligible for the Federal estate tax marital deduction) under

Illinois law.    Petitioner contends that equitable apportionment

applies in this case on the basis of TAM 8240014.    We disagree.
                                - 19 -

First, technical advice memoranda “may not be used or cited as

precedent” unless regulations so provide.     Sec. 6110(k)(3).

Regulations do not so provide here.5     Second, TAM 8240014 does

not discuss the situation present here; i.e., decedent’s intent

relating to payment of estate tax was stated in a trust, not a

will.     As discussed above, Illinois courts recognize those

expressions of a decedent’s intent.

     6.      Conclusion About the Source of Payment of Federal
             Estate Tax

     We conclude that, as provided in decedent’s trust

instrument, Federal estate tax on his estate is payable out of

property in the revocable trust that would otherwise pass to

decedent’s surviving spouse.

B.   Whether Legal Costs Are Payable From Property in the
     Revocable Trust

     Petitioner contends that equitable apportionment applies to

payment of legal costs and that, as a result, those costs are

payable by the notice trusts and not out of property in the

revocable trust because the notice trusts caused those costs to

be incurred.     Petitioner points out that the estate incurred the

legal costs to contest respondent’s determination of additional

estate tax generated solely by inclusion of the notice trusts in

     5
        In light of our conclusion that Technical Advice
Memorandum 8240014 (June 29, 1982) (TAM 8240014) does not control
here, we need not decide petitioner’s contention, based on TAM
8240014, that a preresiduary marital bequest is exempt from
estate tax.
                              - 20 -

decedent’s gross estate.   Petitioner relies on Roe v. Estate of

Farrell, 372 N.E.2d 662 (Ill. 1978); Estate of Fender v. Fender,

422 N.E.2d 107 (Ill. App. Ct. 1981); and In re Estate of Breault,

211 N.E.2d 424, 436-438 (Ill. App. Ct. 1965), for the proposition

that equitable apportionment principles apply to attorney’s fees

incurred by an estate.

     We disagree that equitable apportionment applies to payment

of legal costs for the same reason that it does not apply to

payment of Federal estate tax.   Article 4.1 of the trust

instrument requires that legal costs be paid by the revocable

trust.   In Roe v. Estate of Farrell, supra; Estate    Fender v.

Fender, supra; and In re Estate of Breault, supra, the courts

apportioned legal costs to the property which generated those

costs because the decedents in those cases had not specified the

source of payment of those costs.   Here, decedent directed in

Article 4.1 of his will and Article 4.1 of the trust instrument

that administration costs incurred because of his death are

payable first from the principal of his residuary probate estate

and then from the revocable trust assets.   Legal costs are

administration costs under Illinois law.    See In re Rolley, 520

N.E.2d 302, 303 (Ill. 1998) (Illinois Supreme Court described

legal fees as costs of administration of an estate); In re

Desisles’ Estate, 208 N.E.2d 122, 123 (Ill. App. Ct. 1965) (costs

of administration include more than legal costs).     We do not
                             - 21 -

apply equitable apportionment to the payment of the estate’s

legal costs.

      We conclude that decedent’s trust instrument requires that

legal costs be paid out of property in the revocable trust.

     To reflect concessions and the foregoing,



                                        An appropriate order will

                                   be issued, and decision will

                                   be entered under Rule 155.
