Bеtty Lou MILLER, April Teresa Miller, and William Steffen Miller, Appellants, v. FIRST NATIONAL BANK & TRUST CO., Executor, Estate of William Miller, Jr., Deceased; Frances L. Miller and Jerry Wilson, Appellees.
No. 51901.
Supreme Court of Oklahoma.
Nov. 10, 1981.
Rehearing Denied Dec. 14, 1981.
637 P.2d 75
SIMMS, J., concurs in result. OPALA, J., dissents.
Fred W. Woodson, Tulsa, for appellee First National Bank & Trust Co.
Floyd L. Walker, Walker, Jackman & Adamson, Inc., Tulsa, for appellees Frances L. Miller and Jerry Wilson.
By statute,1 “If, after making a will the testator is divorced,” all provisions in favor of the testator‘s former spouse are revoked. The question then arises, does this statute also apply to those provisions in favor of the former spouse in a trust instrument which was executed by the testator at the same time? Under the facts of this case, we answer affirmatively.
On October 15, 1971, William J. Miller, Jr., executed two instruments, one entitled “Last Will and Testament,” and the other entitled “Life Insurance Trust.” These instruments were prepared simultaneously as part of his estate plan. Dr. Miller was married to Frances L. Miller, appellee, when he made and executed these instruments. This marriage ended in divorce January 27, 1976, eight months before his death on September 11, 1976. William J. Miller, Jr. had been married three times. His second marriage, to Betty Lou Miller, was terminated by divorce on March 9, 1971. Six months later he married Frances. Dr. Miller was survived by a daughter, April Teresa Miller Mann, and a minor son, William Steffen Miller, appellants. Betty Lou Miller, mother of William, is co-appellant.
The Last Will and Testament was admitted to probate on October 1, 1976. The First National Bank & Trust Company, appellee, was appointed executor. Article III of the will devised the residue of Dr. Miller‘s estate2 to First National Bank in trust to become a part of the corpus of the Life Insurance Trust.3 The bank, as executor, brought an action under the Declaratory Judgment Act,
The District Court found that: pursuant to
Appellants, Betty Lou Miller, as guardian, and April Teresa Miller Mann and William Steffen Miller, as heirs-at-law of the deceased, have appealed to this Court seeking a reversal of the district court‘s ruling.
Appellants contend that William J. Miller, Jr.‘s will incorporated the Life Insurance Trust and that provisions in the trust in favor of Frances L. Miller, divorced spouse of testator, were revoked by
This is a case of first impression. The issue presented in this case is whether the trust was incorporated by reference into the will, thereby invalidаting those provisions for the decedent‘s divorced spouse pursuant to
The primary purpose in construction of wills is to ascertain and give effect to the intention of the testator.7 Appellants contend that the trust agreement was incorporated by reference into the will and, therefore, is operative as a part thereof. To incorporate an extraneous instrument into a will by reference, the paper must be in existence when the will is executed and must be referred to in such a way as to reasonably identify the document. The reference must show testator‘s intention to incorporate the instrument into his will, “or at least his intention that the instrument should operate with his will in disposing оf property left by him at his death.”8 The doctrine of incorporation by reference is recognized in Oklahoma,9 and by a majority of other jurisdictions.10 Even in jurisdictions which do not recognize incorporation by reference, it has been held that where there was clear reference to an existing trust agreement, the effect of incorporation may be given and the rule against the doctrine will not be carried to a narrowly logical extreme.11
Decedent‘s will clearly identifies the trust. The trust was in existence when the will was executed. The reference exhibits decedent‘s intention that the trust operate with his will to dispose of his property. He signed the will and the trust contemporaneously, indicating one instrument and a scheme of testamentary disposition. Article II of the will gave Frances only those things to which she would have beеn statutorily entitled. The remainder of the will is directed to the trust. The will without the trust has no meaning or value to the decedent‘s estate plan.
It was Frances Miller‘s status as wife of the testator which was the main inducement for making testamentary provisions for her. They were subsequently divorced and a property settlement was executed between the parties. When testator died eight months later without having revоked
REVERSED.
IRWIN, C. J., BARNES, V. C. J., and DOOLIN, and OPALA, JJ., concur.
LAVENDER, SIMMS and HARGRAVE, JJ., dissent.
HARGRAVE, Justice, dissenting:
The District Court, on December 28, 1977, found inter alia that pursuant to
Betty Lou Miller, in her capacity as guardian, and April Teresa Miller Mann and William Steffen Miller, as heirs-at-law of the decedent, have appealed to this Court seeking a reversal of the District Court‘s finding that the provisions in the trust agreement were not invalidated by Section 114. As their inheritance hаs been severely limited, they argue that the two instruments are not separate and distinct as found by the District Court and that any trust benefits relating to Frances L. Miller have been revoked by the decedent‘s divorce.
This contention is based upon a broad interpretation of the language found in
If, after making a Will, the Testator is divorced, all provisions in such Will in favor of the Testator‘s spouse so divorced, arе thereby revoked.
The appellants argue that even though the legislature used the term “will” in the statute without defining it, this Court had previously defined it “as the instrument by which [a man] expresses his intention as to the disposition of his property at his death.” Johnson v. Johnson, 279 P.2d 928, 930 (Okl.1954), (quoting Loveren v. Eaton, 80 N.H. 62, 63, 113 A. 206, 207 (1921)). This argument seems to be based on the “rule in Oklahoma that the primary consideration in construing wills is to ascertain the intention of the testator in making the same....” McAllister v. Long, 206 Okl. 623, 246 P.2d 352, 353 (1952); Accord,
The appellants also contend that the trust agreement has been incorporated by reference into the will. Since the trust agreement was not executed in accordance with the statutory formalities required for testamentary dispositions,
- the extrinsic paper must be in existence at the time the will makes referenсe to it;
- the will must identify the paper by a sufficiently certain description ...; and
- it must appear that the testator intended to incorporate the paper for the purpose of carrying out his testamentary desires.
In re Estate of Foxworth, 240 Cal.App.2d 784, 50 Cal.Rptr. 237, 240 (1966); (emphasis added), e.g., In re Estate of Meskimen, 39 Ill.2d 415, 418, 235 N.E.2d 619, 622 (1968).
Oklahoma recognized the doctrine of incorporation by reference in In re Fullerton‘s Estate, 375 P.2d 933 (Okl.1962), which involved inter alia a contention that assets were being distributed in accordance with inaccurately identified documents, not admitted to probate, and that such distribution was void.
In applying the doctrine to the facts at bar, it is clear that only two of the three requirements are satisfied. The language of Article III gives no indication that Dr. Miller intended to incorporate the terms of the trust into the will. The language of Article III is for identification, not for incorporation. The trust is identified and the residuаry legatee is identified. “Mere reference to a document is not enough. In order to incorporate a document by reference the intention of the testator must be clearly expressed in his will.” Taylor v. Republic National Bank, 452 S.W.2d 560, 563 (Tex.Civ.App.1970). While the language in the Taylor will was much more vague than in the present case, the language in Dr. Miller‘s will still does nothing more than make reference to the trust.
As stated by the California Supreme Court in Wells Fargo Bank & Union Trust Co. v. Superior Court, 32 Cal.2d 1, 7, 193 P.2d 721, 724 (1948):
It is neither necessary nor proper tо apply the doctrine of incorporation by reference to a valid and operative inter vivos trust when the trustor ... [expresses] no intention in the will or in the inter vivos trust instrument that the latter be incorporated into the will.
The California court further stated that the question is not whether such an incorporation would be valid for that question, if pertinent, should have been determined during the probate proceeding. The question is whether the will provided for such incorporation. The doctrine ... cannot be applied without some showing that the testator intended to incorporate the non-testamentary document into his will. In carrying out the general intention of the testator and the policy of the law against intestacy some courts interpret a reference to non-testamentary documents as indicative of an intention to incorporate by reference certain otherwise inoperative non-testamentary instruments into the testator‘s will. Id. (Citations omitted).
But, as in Wells-Fargo, the non-testamentary document--the trust agreement--is neither inoperative nor invalid. There is no reason to incorporate the trust provisions into the will other than to prevent any benefits flowing to Frances L. Miller, and since no indication can be found in the four corners of the will that the testator desired to incorporate, I would determine the trust agreement has not been incorporated by reference into the will.
In In re Meskimen, 39 Ill.2d 415, 235 N.E.2d 619 (1968), the Illinois Supreme Court addressed this same issue. Although the factual situation varied somewhat in that it was the surviving spouse who would not benefit from the trust provisions, the language of the will‘s residuary clause, as did the language оf Dr. Miller‘s residuary clause, directed the trustee bank, under a trust agreement dated the same day as the will, to manage and distribute the property in accordance with the terms of the trust agreement. The Illinois spouse argued that “the ‘will’ of the decedent should be con
The Illinois Court found that
the language of the will does not disclose any intention to incorporate the terms of the document into the will. Instead, the will, like most “pour over” wills, manifested an intent to give [the] decedent‘s property to the trustee to be administered as part of the inter vivos trust and did not purport to create a testamentary trust. It has been said that one of the purposes of an inter vivos trust, into which assets are “poured” by will, is to avoid publicity concerning family and business plans which would occur if these plans were incorporated into a will which became public record on being admitted to probate. To incorporate the trust by reference would defeat this purpose.
Id. at 418, 235 N.E.2d at 622.
Support can be found in
A devisе or bequest ... may be made by a will to the trustee ... of a trust established ... by the testator (including a funded or unfunded life insurance trust, although the testator has reserved any or all rights of ownership of the insurance contracts) if the trust is identified in the testator‘s will and its terms are set forth in a written instrument, other than a will, executed ... concurrently with the execution of the testator‘s will.... The devise or bequest shall not be invalid because thе trust is amendable or revocable.... (Emphasis added).
The Colorado Court of Appeals in In re Estate of Allen, 28 Colo.App. 574, 475 P.2d 629 (1970), in construing a similarly worded statute stated that the purpose of the statute is twofold.
First, it removes certain conceptual difficulties which arise from the application of either of the two doctrines [the doctrine of incorporation by reference and the doctrine of independent significance]; and second, it validates testаmentary dispositions of property to existing trusts....
Id. at 577, 475 P.2d at 630.
Bequests to life insurance trusts, like the one Dr. Miller had prepared, have been sustained under the doctrine of independent significance. The Illinois Supreme Court in In re Meskimen sustained the bequest under the doctrine, stating that
In carrying out the intent of the testator reference may be made to a document having independent significance without the necessity of strict compliance with the formal rules for incorporating this document into the will. Inter vivos trusts ... have such independent significance entirely apart from the will. They establish a fiduciary relationship between the decedent and the trustee and grant powers and impose duties upon the trustee. Without regard to the will, the trust documents and the trust relationship thus created come into existence.
39 Ill.2d at 419, 235 N.E.2d at 622; See I. A. Scott, The Law of Trusts, § 54.3, at 390 (3d Ed. 1967); Id. § 57.3 at 493-94.
When a will has been аdmitted to probate, when the trustee named as a legatee in the will has been properly identified, when the executor stands ready to deliver the property to the trustee and the trustee stands ready to receive it, the act of testation is finished; the property has come to rest in the hands of the legatee named in the will (the trustee), the will has served its full purpose as a testamentary instrument, the executor and the probate court have fully performed their functions in the administration of the estate; the future ownership and management of the property by the trustee is to be controlled by the terms of the living trust agreement, ... and that future ownership is not part of the testamentary process which was set in motion when the will was offered for probate. McClanahan, Bequests to an Existing Trust--Problеms and Suggested Remedies, 47 Cal. L. Rev. 267, 277 n.51 (1959).
Therefore, based upon all thе foregoing authorities, I would hold the District Court did not err in determining that while
I am authorized to state that LAVENDER and SIMMS, JJ., concur with the views expressed in this dissenting opinion.