In thе Matter of Trust Fund A and the Trust Under Item VI, Both Under the WILL OF Alfred E. UCHTORFF, Deceased.
Christa E. Uchtorff, Appellant,
v.
Sally Hanson, Taylor Armstrong-Lucas, and Julie Kurt, Appellees.
Supreme Court of Iowa.
*791 Steven J. Havercamp of Stanley, Lande & Hunter, Davenport, for appellant.
Steven H. Jacobs and Linda K. Neuman, of Betty, Neuman & McMahon, L.L.P., Davenport, for appellees.
STREIT, Justice.
H.L. Mencken once said the capacity of human beings to bore one another seems vastly greater than that of any other animal. The subject-matter of this appeal a medieval interest known as a remainder proves Mencken's point, although we shall do our best to bring matters to resolution as painlessly and interestingly as possible. Much is at stake.
At issue is a trust fund. After the family patriarch who controlled the trust fund died, his only child, a son, followed him to the grave. Years later the patriarch's wife passed away. The district court ruled the son was not entitled to the trust fund unless he survived his mother. The son's widow appeals. She claims her late husband's interest vested upon his father's death, and therefore she should receive the trust fund because the son left everything to her. We agree with the widow and reverse.
*792 I. Facts and Prior Proceedings
The facts are not disputed. Alfred Uchtorff died in 1979. Alfred's will is a hairy beast almost twenty pages in length. Fortunately, the parties only dispute "Item VI" of the will. In Item VI, Alfred exercised his power of appointment over "Trust A," a trust fund his father established before a majority of the members of this court were born. In relevant part, Item VI provided:
B. I appoint [the trust fund] property to [a bank] and to my wife Pearl E. Uchtorff, in trust, nevertheless, and tо hold as a trust fund for the following uses and purposes, to wit:
1. During the lifetime of my wife Pearl E. Uchtorff ... the trustees shall pay to her ... the net income from the trust fund.
....
3. The provisions of this subdivision 3 shall be effective in any of the following stated events: (i) the event of the death of my said wife before my death; (ii) the event of remarriage of my said wife after my death without renunciation by her; (iii) the event of the death of my said wife after my death, without renunciation by her and without remarriage by her; or (iv) the event of incompleteness or insufficiency or failure for any reason of the appointment hereinbefore made for the benefit of my said wife....
In any of the stated events ..., I appoint said [trust fund]..., in the manner in this subdivision 3 ... provided.
(a) In the event that my son, Richard E. Uchtorff shall survive me, I appoint the [trust fund] to the said Richard E. Uchtorff, as an indefeasibly vested interest in fee.
(b) In the event that my son, Richard E. Uchtorff shall not survive me, I appoint the same to [a bank], and to Carolyn Uchtorff, ..., in trust nevertheless and to hold as a trust fund for [a class composed of the representative issue of the marriage of Richard and Carolyn, subject to divestment under certain circumstances.]
(Emphasis added.)
When Alfred died, he was survived by his wife, Pearl Uchtorff, and their son and only child, Richard Uchtorff. Richard was married to Carolyn Uchtorff. Richard and Carolyn had three children, Sally Hanson, Taylor Armstrong-Lucas, and Julie Kurt ("the children"). Richаrd and Carolyn eventually divorced, and Richard later married Christa Uchtorff.
Richard died in 1988. Richard disinherited his three children in his will, writing:
I make no provisions in this will for my children for several reasons which I consider sufficient, and generally because of their longstanding and continuous disrespectful conduct to me.
Richard left everything to Christa instead.
Pearl enjoyed the income from the trust fund until her death in 2003. She never renunciated her beneficiary interest in the trust fund, nor did she ever remarry. Today the trust fund contains hundreds of thousands of dollars.
After Pearl's death, the bank, as surviving co-trustee of the trust fund, petitioned the district court for construction of Alfred's will. Two factions claimed the trust fund as their own. Christa argued Richard's remainder interest in the trust fund vested upon Alfred's death and should now pass, like the rest of Richard's assets, through Richard's will to her. The children rejoined, asserting Christa's claim must fail because Richard did not survive Pearl. The district court ruled Alfred's will was ambiguous and did not specifiсally *793 state what should happen if Richard predeceased Pearl. The court held Iowa's new trust code therefore mandated the children receive the trust fund. Christa appealed.
II. Principles of Review
A declaratory judgment action to construe a will is tried in equity. Iowa Code § 633.33 (2003); see, e.g., In re Estate of Rogers,
III. The Merits
A. Vested or Contingent Remainder
The first question presented in this appeal is whether Richard had a vested or a contingent remainder in the trust fund once he survived Alfred.[1] Contrary to the district court, we think the plain and unambiguous language of Alfred's will indicates Richard's remainder interest in the trust fund vested at Alfred's death.
1. General Principles
This appeal involves a remainder interest, long one of the law professor's favorite instruments of torture. Stated in its most general terms, a remainder
is a future interest created in someone other than the transferor that, according to the terms of its creation, will become a present estatе (if ever) immediately upon, and no sooner than, the expiration of all prior particular estates created simultaneously with it.
Thomas F. Bergin & Paul G. Haskell, Preface to Estates in Land and Future Interests 62 (1984) (footnotes and emphasis omitted) [hereinafter Bergin & Haskell]. Alfred's will clearly gave Richard a remainder interest in the trust fund. Richard's interest was a future interest that could become a present estate immediately upon and no sooner than when Pearl's prior interest expired, i.e., when Pearl died, remarried, or renounced her life interest, but only if Richard survived Alfred.
A remainder is either vested or contingent. Moore v. McKinley,
A vested remainder, whereby the estate passes by the conveyance, but the possession and enjoyment are postponed until the particular estate is determined, is where the estate is invariably fixed to remain to certain determinate persons. Contingent remainders are where the estate in remainder is limited to take effect either to a dubious or uncertain person or upon a dubious or uncertain event, so that the particular estate may be determined and the remainder never take effect.
Id. at 746-47,
To determine whether a remainder is vested or contingent, our well-settled canons of will interpretation apply. We need not repeat all of those familiar maxims here. See Rogers,
whether a testamentary remainder is vested or contingent must be determined by the intent of the testator as expressed by the language of the will, if it is plain and unambiguous, and nothing else, considering the will as a whole, and giving effect to every provision thereof if it is reasonably possible.
Moore,
2. The Terms of the Will: Richard's Remainder Vested Upon Alfred's Death
To decide the nature of Richard's remainder, the parties direct our attention to Item VI, paragraph 3(a) of the will. Thаt provision states:
(a) In the event that my son, Richard E. Uchtorff shall survive me, I appoint the [trust fund] to the said Richard E. Uchtorff, as an indefeasibly vested interest in fee.
This provision of the will initially rendered Richard's remainder interest contingent, because appointment of the trust fund to Richard was expressly conditioned upon one uncertain event, i.e., that Richard survive Alfred. Once Richard survived Alfred, this condition, the only uncertain event upon which appointment of the trust fund to Richard was predicated, was fulfilled. Richard's interest in the trust fund vested when Alfred died and needed only to wait until Pearl's interest ended to become an estate in possession. See 28 Am. Jur. 2d Estates § 255, at 273 (2000) ("[U]pon the happening of the contingency upon which the estate in remainder is limited, the remainder becomes vested in right and awaits only the termination of the precedent particular estate to become an estate in possession.").
Survival to Time of Possession Not Required
It could be argued the express terms of the will state Richard's remainder remained contingent until Pearl's death. The will indicates appointment of the trust fund to Richard in the manner set forth in paragraph 3(a) would occur in "in the event" Pearl renounced the trust fund, remarried, or died. Although it is true this part of Alfred's will places a condition upon Richard's possession of the trust fund, see Points v. Points,
Only when a condition serves to make it dubious or uncertain that the remainder *795 interest will ever pass does the condition make the remainder contingent. Moore,
[a] vested remainder confers a present fixed right to the future enjoyment. .... [T]he fact that the devisee is not to have the enjoyment of possession until the termination of the intermediate estate does not prevent the vesting of the remainder immediately upon the death of the testator.... No uncertainty of enjoyment will render the remainder contingent.
Moore,
To rule otherwise would have absurd results. "[T]here could be no such thing as a vested remаinder" because the very definition of a remainder assumes the existence of a prior estate. Bergin & Haskell at 69. As we stated in Katz,
Of course [a remainderman] may predecease the termination of the trust. But this does not make the remainder ... contingent for it is an uncertainty which may attach to all remainders, vested or contingent. Certainty of possession and enjoyment by the remainderman is not essential to a vested remainder.
At the time of Alfred's death it was clear that whatever happened in the future, it was certain Pearl's interest would terminate, and Richard was next in line. Because the trust fund was certain to pass at some time, "[t]he remainder then vested and only the right of possession and enjoyment await[ed] termination of the trust." Katz,
*796 Other Evidence of a Vested Remainder
The structure of the devise in Article VI bears the telltale signs of a vested remainder. First, the remainder was invariаbly fixed to a determinate person, Richard, whose only impediment to taking possession and enjoyment of the trust corpus was based upon a certain event, at the very latest his mother's death. See Moore,
The devise is not to the son in case he survives his mother, or is living at her remarriage, or at the termination of the trust. The devise of the remainder after the termination of thе particular estate is to the son, to be his "sole and absolute property," subject to the trust. No disposition is made of the estate in case of his death before the termination of the trust.
No Latent Ambiguity
The children nonetheless contend Alfred's will contains a latent ambiguity becausе it does not in so many words indicate who should take under the trust if Richard did not survive his mother. There is no latent ambiguity. Alfred plainly stated what sort of interest Richard had and made clear it was a vested interest once Richard survived Alfred. The children themselves admit there is a "certain *797 lock-tight quality" about the phrase "indefeasibly vested interest in fee"; we agree and furthermore hold there is no room for any other interpretation. To rule otherwise would require us to rewrite the will, judicially superinscribing a new condition of survival. We will not do so. See In re Estate of Fairley,
In re Trust of Cross
The Iowa Court of Appeals arrived at the same conclusion as we do on similar facts. In In re Trust of Cross, the testator bequeathed her property in trust to a trustee, directing that necessary amounts from the income and corpus of the trust be used to care for her daughter.
B. The Iowa Trust Code
1. Iowa Code § 633.4701
The children also maintain a provision of the new Iowa Trust Code supersedes our reasoning and that of the court of appeals in Cross. That provision provides:
Unless otherwise specifically stated by the terms of the trust, the interest of each beneficiary is contingent on the beneficiary surviving until the date on which the beneficiary becomes entitled to possession or enjoyment of the beneficiary's interest in the trust.
Iowa Code § 633.4701(1) (emphasis added). The children cоntend Alfred's will is insufficiently specific concerning the nature of Richard's interest in the trust fund. Christa rejoins that the trust code does not apply in this case, and, to the extent it purports to apply retroactively to this case and divest Roger's estate of a vested property right, it is unconstitutional. See Iowa Const. art. I, § 21 ("No ... law impairing the obligation of contracts shall ever be passed."); see also Iowa R.R. Land Co. v. Soper,
2. Alfred's Will Specifically States Richard's Interest Vested
Alfred's will states with sufficient specificity that Richard's interest vested upon his mother's death. By its terms it states Richard took "an indefeasibly vested interest in fee." It is truе Alfred's will *798 does not mimic the statute and state "the interest of each beneficiary is not contingent on the beneficiary surviving until the date on which the beneficiary becomes entitled to possession or enjoyment of the beneficiary's interest in the trust." This is not surprising, however, since Alfred's will was written decades before the new trust code was a glimmer in the legislature's eye. We do not think the statute requires magic words. "We must think things not words, or at least we must constantly trаnslate our words into the facts for which they stand, if we are to keep to the real and the true." Oliver Wendell Holmes, Jr., Law in Science and Science in Law, 12 Harv. L. Rev. 443, 460 (1899). This is not so much a matter of interpretation than it is of translation. Translating the old-fashioned phrase "indefeasibly vested interest in fee" into post-trust code language, we find a specific statement that Richard need not survive Pearl. See In re Estate of Arends,
3. A Little History Helps
Some history will also illuminate matters. As indicated, Alfred referred to Richard's interest as an "indefeasibly vested interest in fee." Given the history of the law in the area, Alfred's use of this phrase is telling. The question has often arisen in the courts as to whether, in the absence of such a phrase, one should imply a condition of survival of the possessor of the precedent estate. Historically, courts did not do so; for various reasons, remainder interests were usually construed as vested rather than contingent whenever possible. See, e.g., Fulton,
a pervasive constructional preference in the property law for vested future interests over contingent future interests and for early vesting over vesting at a later time; this means, in this context, that there is a constructional preference for there being no condition of survivorship of the life tenant.
Bergin & Haskell at 127 (emphasis added). Thus in 1916 in Lingo we stated:
[A]ll estates will be regarded as vested unless a condition precedent thereto is so clearly expressed that it cannot be regarded as vested without doing violence to the language of the will. To effectuate this rule, words of seeming condition are, if possible, to be construed as postponing the time of enjoyment....
The law presumes that words of postponement relate to the enjoyment of the remainder rather than the vesting thereof, and the intent to postpone the vesting of the estate must be clear and manifest.
Lingo,
4. Constitutional Claim
Because we find the Iowa Trust Code does not apply retroactively to divest Roger's estate of a vested property right, we need not address Christa's constitutional claim in this case.
IV. Disposition
Upon the death of his father, Richard had a vested remainder in the trust fund. He was therefore free to devise it to his wife Christa instead of his children. The district court must be reversed.
REVERSED.
NOTES
Notes
[1] As an aside, we point out Iowa's anti-lapse statute is not involved in this appeal. Lapse only occurs when a beneficiary fails to survive the testator. Iowa Code § 633.273(1); cf. In re Estate of Cole,
[2] Likewise Richard was free to convey his vested remainder during his life or borrow against it, as many do. To hold otherwise would wreak havoc upon the settled expectations of many parties to such transactions.