Thursday, November 17, 2011

Summary 2011 WY 157

Summary of Decision November 17, 2011

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Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court

Case Name:  In re Estate of George

Citation:  2011 WY 157

Docket Numbers: S-11-0086, S-11-0087

Appeal from the District Court of Sheridan County, The Honorable John G. Fenn, Judge

Representing Appellant (Petitioner-Plaintiff):  Stuart S. Healy of Healy Law Firm, Sheridan, WY.

Representing Appellee (Respondent-Defendant):  Anthony J. Wendtland of Wendtland & Wendtland, LLP, Sheridan, WY.

Date of Decision: November 17, 2011

Facts and procedural history:  The Decedent and Appellant were married in 1985.  The Decedent died in 2009.  They did not have any children.  In 2003, along with her brother and sister, the Decedent inherited significant real and personal property from her parents.  She held this property in her own name and never conveyed any interest in the property to Appellant in any way during the marriage. In 2004, the Decedent signed a one-page holographic will that, if proven valid, would have entitled Appellant to all of her property including the inherited property that Decedent had received in 2003.  In 2008, the Decedent executed a pour-over will and a revocable inter vivos Trust with the intended result that her inherited property held in the Trust would not pass to Appellant upon her death. The Decedent became the trustee and her sister was named the successor trustee.  The 2008 Trust Agreement did provide for Appellant in that it expressly stated that he would receive the jointly-held property accumulated during the marriage and specifically excluded the jointly owned property from the Trust.

The probate matter was initiated by Appellant’s filing of the 2004 holographic will in District Court in January of 2010. In response, Appellee filed two documents in probate proceedings: A traverse asserting various affirmative defenses including that the Decedent left a valid self-proving pour-over will in 2008 and also challenging the subject matter jurisdiction of the probate court over the Trust; and an alternative petition for probate, stating that none of the property in the Trust was subject to probate proceeding as part of the probate estate.  Thereafter, the probate court entered an order admitting the 2008 will to probate.  The creditors notice was published in late February and early March. An inventory of assets was also filed stating that there were no assets subject to probate.

Appellant filed three responsive documents: a petition to revoke the will; a notice of petition for elective share; and a creditor’s claim. All three were seeking relief by and through the estate.  No creditor’s claim was filed against the Trust by Appellant. The Decedent’s estate filed a response, and subsequently a motion for summary judgment asserting that the only issue before the probate court was the validity of the pour-over will. Appellant filed an untimely response to the Motion for Summary Judgment. Appellee filed an objection and motion to strike the responses asserting the untimely filing, which was granted by the District Court. A motion to consolidate the probate and civil cases was filed by Appellant but denied by the District Court.  The trustee also filed a motion to dismiss and alternatively for summary judgment in the probate court to dismiss her individually from the proceeding in the probate court. As to the creditor’s claim filed by Appellant in the probate proceeding, it was accompanied by a letter from a local contractor estimating the value of building improvements at $125,500.00. A rejection of the creditor’s claim was filed by the estate and mailed to Appellant.

In July of 2010, Appellant filed a separate civil complaint in the amount of $125,000.00 for work done on the real estate.  An answer and alternative defenses and a set-off counterclaim were subsequently filed by Appellee, as well as a motion to dismiss asserting that Appellant’s complaint was time barred under § 4-10-507, as the complaint was not filed within 120 days of the required notice to distribute assets, which had been published at the same time as the notice of probate.   

Ultimately, the district court granted the first motion for summary judgment favoring the Decedent’s estate on all claims set forth in the petition to revoke the 2008 will, and the petition was dismissed with prejudice. The district court specifically rejected Appellant’s public policy arguments.  In the separate civil action, the district court found that the complaint filed by Appellant against the Trust was filed out of time. And with regard to the trustee’s motion to dismiss and for judgment on the pleadings, the district court ruled that the motion had been converted to a motion for summary judgment and granted the summary judgment on the basis that the court lacked jurisdiction over the Trust in the probate matter and dismissed all claims filed against the Trust with prejudice.

Issues: As presented by Appellant, concerning the probate matter: (1) Whether a revocable inter vivos trust with testamentary provisions can be used by one party to a marriage to defeat the elective share of the surviving spouse under the Wyoming Probate Code; and (2) Whether the probate jurisdiction of the District Court, having been invoked by the filing of a will and trust, extended to legal and equitable matters concerning the trust. 

Concerning the civil action: (3) Whether, after the admission of a will with incorporated trust into probate in a district court in Wyoming, the jurisdictional and procedural statutes of the Uniform Probate Code are subordinate to those of the Uniform Trust Code.

Holdings:  The district court was affirmed in both cases. 

The Court observed that the Decedent clearly stated her intention that Appellant would not receive any interest in the solely owned property that she had inherited from her parents and transferred to the Trust, but would receive the jointly owned property accumulated during the marriage upon the Decedent’s death. 

As to the first issue, the Court found that the property transferred to the Trust was never legally the property of the Decedent’s estate. The Court stated simply that the Wyoming Probate Code does not incorporate the augmented estate concept from the Uniform Probate Code.  The Court also stated that the plain language of the elective share statute is limited to disposition by will. The Court could not as a matter of law find any basis for making the property transferred to the Trust a part of the Decedent’s estate for purposes of the elective share.

The Court also found that the issue of whether the probate court can address the validity of the Trust was not presented by this matter because Appellant never claimed that the 2008 Trust was invalid.

As to the civil action issue, the Court found that the legislature has limited creditors’ claims against revocable inter vivos trusts as provided in § 4-10-507.  The failure of Appellant to file the complaint in a timely manner deprived the court of subject matter jurisdiction over his creditor’s claim and the Court was without jurisdiction to address the substance of the underlying issue.

J. Hill delivered the opinion for the court.

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