In re Valma M. Hanson Revocable Trust 779 N.E.2d 1218 (2002) Hanson executed a trust that named her as the trustee. It later named Bergstrom as the trustee. The trust stated that when Hanson died, any real estate in the trust would be given to Bergstrom and the rest of the trust assets would be split up amongst nine people and a church. The trust was governed by the laws of Illinois. Hanson also had a will. The will gave all her personal property to Bergstrom. It gave all her residual assets to the trust. The will was governed by the laws of Indiana. Hanson died. Bergstrom paid all of the taxes out of the residual assets in the trust, and then took the real estate. That left no assets for the nine people and the church. Bergstrom used the money that had been intended to go to the church (and should therefore have been tax free) to pay the taxes on the real estate that he took for himself! The nine people and the church then sued Bergstrom charging that he inappropriately apportioned the taxes. The nine people and the church argued that the taxes should have been evenly distributed among the assets, and therefore some of the tax money should have come out of the value of the real estate. Bergstrom had acted improperly by taking all that tax money out of the residual assets and leaving the real estate intact. Bergstrom made a motion to dismiss. Bergstrom argued that the terms of the trust gave him discretion to pay the taxes as he saw fit. The Trial Court denied the motion to dismiss. Bergstrom appealed. Indiana State law provides that Federal taxes should be apportioned among all of the estate's beneficiaries unless the decedent has otherwise directed in the will. The Appellate Court affirmed. The Appellate Court looked to the plain language of the trust, which said that taxes are to be charged generally against the principle of the trust. Bergstrom failed to assess a proportionate share against each beneficiaries' distribution. Expenses must be born ratably by all heirs. Bergstrom had gotten 3/4 of a million dollars while other beneficiaries got $0. It was probably not the intent of Hanson to make Bergstrom the sole beneficiary. In a dissent, it was argued that Hanson clearly intended Bergstrom to decide how the taxes were allocated. It was further argued that under Illinois law, they follow the "burden on the residue rule," for assessing tax liability, as opposed to the "principle of equitable apportionment," which is what this court used.