Castle, Senior Circuit Judge, Cummings and Sprecher, Circuit Judges.
CASTLE, Senior Circuit Judge:
Frances Greene, the widow of and executrix under the will of Carl W. Greene, has appealed from the denial of her claim for a refund of a portion of the federal tax paid on her husband's estate, 336 F. Supp. 464 (E.D. Wis. 1971). At issue on this appeal is whether the Commissioner of Internal Revenue correctly determined that the estate taxes on the estate of Carl W. Greene should be paid out of the property passing to his widow.
Mr. Greene passed away on February 25, 1967, leaving a gross estate of $748,956.89. His will provided, in part:
FIRST: It is my will and I hereby direct that all my just debts and expenses of last illness and funeral be paid by my executor hereinafter named as soon after my decease as conveniently may be.
SECOND: All of my property, wherever located and of whatever nature, I give, devise and bequeath to by wife, Frances Greene.
On August 23, 1966, Mrs. Greene filed a Declaration of Renunciation by which she disclaimed $368,727.25 worth of common stock which would have passed to her under the will; this stock then passed to her three sons under Wisconsin law as though it had been intestate property. On May 25, 1967, Mrs. Greene filed the estate tax return for the estate which claimed a marital deduction of $360,703.69, for under her computations, she was to get $380,229.14 of the estate and her sons were to pay the estate taxes and expenses out of the stock that passed to them through the renunciation. On March 27, 1969, the Commissioner of Internal Revenue assessed a deficiency of $39,545.75 in taxes and $5,231.95 in interest against the estate. He determined that the provisions of Carl W. Greene's will required that the estate pay federal taxes before it made any distributions to Mrs. Greene, and that accordingly Mrs. Greene's share of the estate was $236,751.09 and her marital deduction was only $223,391.02. Mrs. Greene paid the alleged deficiency and then filed a claim for a refund, which was denied.
The County Court for Brown County, Wisconsin, where the will of Carl W. Greene had been admitted to probate, ruled on December 13, 1969 that the debts, expenses and federal estate taxes of the estate be paid out of the stock which was disclaimed by Frances Greene. On June 26, 1970, Mrs. Greene filed a complaint in the federal district court for a refund of the alleged deficiency that she had paid. The district court denied her claim, finding that neither Wisconsin law nor the decision of the Brown County Court required that the renounced property which passed to the sons should pay the estate taxes owing.
Our consideration of the argument presented on this appeal indicates that two fundamental questions are involved: (1) what interpretation and effect should be given to the direction in Carl Greene's will that the just debts and expenses of his last illness and funeral be paid by his executor, and (2) what effect should be given to the judgment of the Brown County Court that the renounced property bear the payment of the estate taxes and expenses.
In resolving the first issue, and in determining whether the estate shall realize a lower marital deduction under 26 U. S. C. § 2056(b) (4) (A) because the estate tax, debts, and administration expenses are subtracted from the gross estate before the marital deduction is computed, we must look to Wisconsin law. Congress has determined that state law should decide upon whom the burden of the federal estate tax should fall, and, consequently, the amount of the marital deduction allowed to a widow taking property through her husband's will. Riggs v. Del Drago, 317 U.S. 95, 97, 87 L. Ed. 106, 63 S. Ct. 109 (1942), Will of Uihlein, 264 Wis. 362, 371-72, 59 N. W. 2d 641, 646 (1953).
A person executing a will in Wisconsin has two general options in determining which of his heirs shall bear the burden of the taxes levied against his estate. First, he may provide through his will that certain property shall be utilized for the payment of the taxes. See WIS. STAT. § 313.26 (1969) (This statute, in effect prior to April 1, 1971, has subsequently been amended.). Secondly, he can make no provision for payment and let the tax liability be determined through application of certain statutory and common law rules. See, e.g., WIS. STAT. § 863.11 (1971) (amended version of §§ 313.26-313.28), Estate of Joas, 16 Wis. 2d 489, 114 N. W. 2d 831 (1962), Estate of Esch, 4 Wis. 2d 577, 91 N. W. 2d 233 (1958), McGonigal v. Colter, 32 Wis. 614 (1873). Appellant argues that Carl W. Greene in effect made no provisions in his will that any property was to be used to pay the estate taxes. She argues that the property she renounced should therefore be treated as intestate property under WIS. STAT. § 238.135, and that this property should be used first to pay the debts and expenses of the estate under § 313.27 because, in the words of that statute, "the provisions made by will are not sufficient to pay the debt. . . ."
The key to appellant's argument, then, is whether Carl W. Greene did make provisions in his will which were sufficient to pay his debts, including the estate tax.
On its face, the first clause of the will appears to be a provision making all of the estate property available for the payment of the estate tax and other debts. We read the direction that the debts be paid "as soon as conveniently may be" as a command that the executrix use whatever property is necessary to pay the estate tax before disposing of the residue of the estate. Wisconsin law makes no distinction between estate taxes and the other debts of a decedent. Will of Uihlein, 264 Wis. 362, 376, 59 N. W. 2d 641, 648 (1953), cf. Re Doerfler's Estate, 348 Ill. App. 347, 109 N. E. 2d 230 (1952). Nor can we ignore the fact that Mr. Greene provided that his wife was to receive all his property after the payment of debts and expenses unless she predeceased him or failed to survive him by 60 days. It is only logical to assume that Mr. Greene realized that his wife would have to pay the estate taxes out of the property passing to her. Will of Cudahy, 251 Wis. 116, 119, 28 N. W. 2d 340, 341 (1947). Conversely, the will contains no indication that Mr. Greene contemplated a shift in the estate tax burden should his wife renounce a portion of the property given her under the will.
Appellant has attempted to establish that, despite its appearance, the first clause of the will was mere surplusage without legal effect. See, e.g., Estate of Koebel, 225 Wis. 342, 345, 274 N. W. 262, 264 (1937). We read the cases cited by appellant as merely adhering to the common law rule that the personal property in an estate is to be charged with the payment of debts before the real property is charged, and holding that language similar to that contained in the first clause of Carl Greene's will is insufficient to change this rule. These cases do nothing to undermine the efficacy of a general direction that all the property of a testator be liable for the payment of taxes. In fact, the Wisconsin Supreme Court has recently held that such a general direction is legally effective as a means of directing the payment of estate ...