The recent Supreme Court decision of BROWN v. ALLEY, 2016 OK 112, 384 P.3d 496 the Court applied the doctrine of equitable estoppel to prevent a common law wife from being appointed as the personal representative of the probate estate. The common law wife had for years behaved as if she and the decedent were not in fact married. She had even remarried. Yet her and the decedent had never obtained a divorce. “Given the facts in this case, appellee is estopped from asserting her continual marital status with the decedent. Appellee had the opportunity for thirteen years to assert her relationship with the decedent, but declined to do so until the decedent’s death. She cannot “speak” now after she has been silent for so long.”

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The Court noted that Oklahoma does not recognize a common law divorce. “¶10 The Oklahoma Constitution contains a prohibition against polygamous or plural marriages. Such marriages are void ab initio. Also, we recognize there is no common law divorce.”

The court cited the ¶11 In In re Estate of Allen, 1987 OK 45, 738 P.2d 142 and observed that the common law wife would even be estopped from inheriting from her husband, “The Court described the theory of “estoppel” as, “if you do not speak when you ought to speak, you shall not speak when you want to speak.” Id. This Court held that because of her previous conduct, the appellee wife should have no claim to her former husband’s estate, despite the lack of a divorce.”

If you are interested this case makes good reading.

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IN THE MATTER OF THE ESTATE OF BOBBY JOE BROWN, JR., Deceased.

RHONDA BROWN, Plaintiff/Appellant,
v.
AMI ALLEY, Personal Representative of the Estate of Bobby Joe Brown, Jr., and as Parent and Next Friend of A.B. and K.B., Minors, Defendant/Appellee.

ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION II

¶0 Appellant sought to revoke the letters of administration of appellee, Ami Alley, who was determined to be the surviving spouse of the decedent Bobby Joe Brown, Jr., through a valid common law marriage. Appellant claimed to be the surviving spouse through a valid ceremonial marriage, prior to the common law marriage, with no divorce from decedent. The trial court held in favor of Alley, and the Court of Civil Appeals affirmed. We affirm.

AFFIRMED

Cameron Cherry, Edmond, Oklahoma, and B. Wayne Dabney, Oklahoma City, Oklahoma, for Appellant,
Murry J. Parrish, Forest Lynn Pepper DeVaughn, Oklahoma City, Oklahoma, for Appellee.

OPINION

WATT, J.:

¶1 The issue in this cause is whether the Plaintiff/Appellant Rhonda Brown is estopped from asserting her status as the surviving spouse of the Decedent, Bobby Joe Brown, Jr. The trial court held that estoppel prevented her from claiming such status, thus preventing her appointment as the Personal Representative of Decedent’s estate. On appeal, the Court of Civil Appeals (COCA) affirmed. This Court previously granted certiorari.1 We hold the trial court properly held Appellant is estopped from asserting she should be appointed Personal Representative of Decedent’s estate.

STANDARD OF REVIEW

¶2 Probate proceedings are matters of equitable cognizance, and on review we must accord deference to the trial court’s determination of the facts. The trial judge has the opportunity to observe the conduct and demeanor of the witnesses, and we will not disturb the trial court’s findings of fact unless they are clearly contrary to the weight of the evidence or to some governing principle of law. In re Estate of Carlson, 2016 OK 6, ¶11, 367 P.3d 486, 491; In re Estate of Holcomb, 2002 OK 90, ¶8, 63 P.3d 9, 13.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Appellant Rhonda Brown and Bobby Joe Brown, Jr. were married on December 12, 1995, and three children were born of the marriage. One child is deceased. Rhonda testified that after a few years of marriage, she told Bobby she could no longer stay with him if he did not cease his extra-marital affairs. He did not comply with this condition, and Rhonda moved out of the marital home. They were never divorced through a court proceeding. She moved frequently and, at different times, lived in several Oklahoma cities, as well as in Kansas. Two of her children by a different father were removed by DHS from her home when she lived in Kansas.

¶4 Rhonda testified that after they separated, she and Bobby met numerous times for the purpose of being intimate. She stated Bobby referred to her as his wife to everyone they met. She also stated that they walked arm in arm and were constantly showing affection for each other in public by hugging and kissing.

¶5 After Bobby and Rhonda separated, he began living with Ami Alley on or about July 23, 2004. Two children were born to the couple. Ami testified she and Bobby held themselves out as husband and wife to everyone and established a home together in Perry, Oklahoma. Ami also testified that Bobby came home to her and their children every night and that he told her he loved her.2

¶6 Rhonda testified she was aware of the relationship between Ami and Bobby and that he was living with her and their two children. Rhonda testified that Bobby referred to Ami as his girlfriend.

¶7 On March 6, 2013, Bobby died in a motorcycle accident. Ami was named Personal Representative of his estate upon the court’s finding she was Bobby’s surviving spouse in a common law marriage. Rhonda was not sent notice of the proceeding, and Ami did not advise the court of Rhonda’s relationship with Bobby. Ami explained that the court asked if there was anybody to object, and no one appeared to do so. She said the court did not ask about Rhonda, and she did not raise the issue. She also testified Rhonda knew about the proceeding but would not give Ami her address.3 Ami also testified that she heard the testimony of a friend of Rhonda’s that the friend took Rhonda for a rendevous with Bobby at places where she and Bobby both worked, i.e., “Sooner’s Corner”, and Taco Mayo. Ami took issue with the testimony, saying:

Q. Would those have been times you worked there?

A. Yes.

Q. Did you ever see any evidence of that?

A. No. And if there was evidence of that, my co-workers would have told me.

Q. We also heard evidence of Taco Mayo rendezvous. Have you heard in connection with Taco Mayo?

A. Yes, I do. I’ve worked there twice. My first time was when my youngest daughter Kandyce was three weeks old, March of 2006 until August of 2008 when I started working at Sooner’s.

Q. These alleged rendezvous that happened at Taco Mayo, when you were working there, do you think it’s possible you would have had some sort of knowledge of that?

A. I would have if it was going on, yes.

Q. Somebody would have told you?

A. Yes.

¶8 As noted above, it is undisputed that Rhonda and Bobby were never divorced in a judicial proceeding. Rhonda testified that, a short time before Bobby’s death, she participated in a ceremonial marriage with Jimmy Shawn Treece. She referred to the marriage as a “sham” because she never intended to be married to Treece. Rhonda testified she met Jimmy while they were both living in a state-supported shelter when they were minors. She stated that when she was 15 years old, she and Treece agreed they would marry each other if one or the other was in need of help at some time in the future. Rhonda testified that after Treece was incarcerated, he finished his probation and parole, upon approval by the authorities, at his grandparents’ home. They took care of him and supported him. Although he wanted to move out, the only way his grandparents would help him financially was to “show some stability and get married . . . .”4 Rhonda testified she was willing to help him. On August 31, 2012, they went to his grandparents’ home in Checotah, Oklahoma, to tell them she and Jimmy were getting married. His grandparents immediately contacted a minister who performed the ceremony the same day at a church in Checotah. Rhonda signed the marriage license as “Rhonda Ann Treece.”5 After the ceremony, Jimmy took her home. She testified she removed the wedding ring. She placed it and the papers they received in the glove compartment of Treece’s car. She stated she spoke to him on two occasions, but she never saw him again. She testified she never changed her name and did not “recognize that name as a legal marriage.”6 She testified she never filed divorce papers but was “under the impression” the marriage was annulled.7 She stated she does not intend to be married to Treece; she only did it to help him out. Treece did not testify.

¶9 In the judgment denying Rhonda’s Petition and Motion to Revoke Letters of Administration, the trial court found Bobby and Ami began their relationship in 2004 and that it lasted until Bobby’s death; that their relationship met the requirements of a common law marriage;8 and that Rhonda married Treece in a ceremonial, traditional marriage in 2012. The court based its decision to deny Rhonda’s motion to revoke the letters of administration on the issue of estoppel, rather than the legal classification of her marriage to Bobby. The court concluded:

The Oklahoma Supreme court case of Matter of Estate of Allen, 1987 OK 45 (1987) is nearly on point with the case at bar. While there was [a] great deal of conflicting testimony about the post separation relationship between Rhonda and the Decedent, the real issue is whether Rhonda should be estopped from claiming surviving spouse benefits and not so much the legal classification of her marriage to the Decedent.

Estoppel is a bar raised by the law which precludes one from alleging or from denying a certain fact or state of facts in consequence of the previous allegation, denial, conduct, or admission or in consequence of a final adjudication of the matter by a court of law. Allen quoting from Wisel v. Terhune. 201 Okl. 231, 204 P.2d 286, 290 (1949). The formal ceremonial marriage by Rhonda to Treece is, by itself, a previous denial vis a vis her marriage to the Decedent. Despite her unsubstantiated testimony to the contrary, a later marriage is in fact, a denial of any prior marriage.

DISCUSSION AND AUTHORITY

¶10 The Oklahoma Constitution contains a prohibition against polygamous or plural marriages.9 Such marriages are void ab initio.10 Also, we recognize there is no common law divorce. However, in this case, we are not explicitly determining whether our laws defining and regulating marriage in Oklahoma were violated, but whether the doctrine of estoppel precludes Rhonda from being declared Bobby’s surviving spouse and the Administrator/Personal Representative of his estate. We hold that it does.

¶11 In In re Estate of Allen, 1987 OK 45, 738 P.2d 142, this Court examined the multiple marriages of a couple who were married, divorced, remarried and then permanently separated, with no divorce. Wife cohabited with another man (“second husband”), and four children were born to the couple. Second husband filed for divorce and sought custody of the children. Wife admitted a common law marriage and also sought custody of the children. The court found a common law marriage existed and entered a divorce decree. Meanwhile, first husband married another woman who later died. No children resulted from that marriage. Then, first husband died. He left his estate to his son from an earlier marriage, and Wife petitioned for letters of administration and appointment as personal representative as surviving spouse. She argued she was still married to first husband because there was no divorce. The trial court agreed, but this Court held that she was estopped to claim the status of surviving spouse to her first husband. We reasoned that she had had an opportunity for 13 years to assert a marital relationship with her first husband, but she never did. We stated:

Given the facts in this case, appellee is estopped from asserting her continual marital status with the decedent. Appellee had the opportunity for thirteen years to assert her relationship with the decedent, but declined to do so until the decedent’s death. She cannot “speak” now after she has been silent for so long.

Allen, 1987 OK 45, ¶9, 738 P.2d 142, 144. The Court described the theory of “estoppel” as, “if you do not speak when you ought to speak, you shall not speak when you want to speak.” Id. This Court held that because of her previous conduct, the appellee wife should have no claim to her former husband’s estate, despite the lack of a divorce.

¶12 In the present case, the facts which were alleged by the respective parties were disputed. Rhonda testified that her relationship with Bobby never ended until he died. She related instances of his declarations of love to her, their intimacy, and his visits to her which included numerous overnight stays. This testimony about their relationship was confirmed by her witnesses who alleged they witnessed the affection shown between Bobby and Rhonda. However, the evidence of the continued relationship between them stood in stark contrast to the testimony of Ami Alley who was Bobby’s professed common law wife, beginning in 2004. Ami’s testimony that Bobby was with her at home every night and that he did not travel to see Rhonda, except the times when Ami was present totally contradicts Rhonda’s testimony. The trial court was trier of fact and determined the post-marriage events in favor of Ami. We do not find the court’s factual findings are clearly contrary to the weight of the evidence or contrary to law. See In re Estate of Carlson, and In re Estate of Holcomb, supra. The evidence in support of the court’s determination included witnesses who were told that Ami and Bobby were married and who witnessed their life together for nearly ten years. Moreover, Rhonda’s testimony that she gave Bobby an ultimatum about his extra-marital affairs in 1999 indicates her willingness to separate from him, rather than to endure his alleged infidelity.

¶13 Finally, the subsequent marriage to Jimmy Treece, which is substantiated by a copy of the marriage license and by the testimony of Rhonda herself, is further evidence that she considered her marriage to Bobby was at an end. While this Court is aware of Rhonda’s articulated reason for her marriage to Jimmy Treece, i.e., to help him out, her actions in engaging in a “sham” marriage to defraud Treece’s grandparents offer little to persuade the Court that equitable estoppel should not be applied against her. Moreover, she and Bobby had ceased living as husband and wife for several years, during which he lived with another woman and with whom he had two children. Rhonda’s signature on the marriage license, dated August 31, 2012, as “Rhonda Ann Treece”11 and her admission that she and Treece had been intimate before the marriage are further evidence Rhonda believed her marriage to Bobby had terminated.

¶14 We note that in a previous case, Darrough v. Davis, 1928 OK 730, 135 Okl. 263, 273 P. 309, similar to Allen, supra, the deceased person was the party who was abandoned during the marriage, while in this case, the deceased person (Bobby) is the party who engaged in a common law marriage relationship without officially ending his marriage to Rhonda. However, the evidence which was presented at the hearing, although disputed, supports the court’s finding that Rhonda’s subsequent marriage to Treece, despite her disavowal of it as a valid marriage, is an act which was contrary to Rhonda’s expressed intent to remain married to Bobby at the time.

CONCLUSION

¶15 As the fact finder who observed the testimony, the trial court was in the best position to consider the demeanor and credibility of the witnesses who testified. Ami’s testimony as to the alleged common law marriage and Bobby’s presence at home every night contradicted Rhonda’s testimony that he spent numerous nights with her away from home. The testimony that Rhonda was taken by a friend to meet Bobby at a place where he and Ami both worked appears to be disputed because Ami testified she would have been told by fellow employees that this occurred. Finally, Rhonda’s testimony that she participated in a ceremonial marriage ceremony with Jimmy Treece, as evidenced by a copy of the marriage license entered into evidence, had to be weighed against Rhonda’s testimony that the marriage was meaningless. We find the trial court’s determination of the facts is not against the weight of the evidence.

¶16 AFFIRMED.

 

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The following will was filed for probate. The trial court found that the testator was incompetent. The Supreme Court reversed the trial court and found that the testator was competent.

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Here is an excerpt from the opinion of the court: “An examination of all this testimony convinces us beyond serious doubt that at the time he made this will, Emanuel Kerchner was competent and in possession of his mental faculties to such an extent that he knew well the property which he possessed, the indebtedness due him, his relation to his kindred, his duty toward such kindred. That he knew the diposition which he desired to make of his property and that the will which he executed expressed his intentions. We are particularly impressed with that testimony of George L. Cook, who drew the will; of Dr. W. H. Harris, one of the attesting witnesses, and of L. E. McClure, the executor. It appears that upon the recommendation of a friend, who was in no wise interested, the deceased went to Cook and stated to him that he desired to have his will drawn. Cook had known Emanuel Kerchner for a number of years, but had not been connected with him in any way, and as far as the testimony goes had not attended to any business for him. Emanuel Kerchner came into Cook’s office on the 17th day of April, 1920, by himself. It does not appear that any person came to town with him. He stated plainly and with clearness to Mr. Cook the property which he had and the disposition which he desired to make of it by will. He acted and talked normally, talked with Cook about his relations. Cook took down with pencil the instructions given him as to the provisions of the will, read them over to Kerchner and asked him if they met his approval. He said they were exactly what he wanted; stated that he held a note against Nick Kerchner and desired to give him that note; that Harry Burns had treated him more kindly than his own son. Cook then drew the will on the typewriter, read it over to Kerchner. It was satisfactory. Dr. W. H. Harris, the physician who knew Kerchner well, and had treated him for many years, was called as one witness to the will, and Dr. Tibbets as another witness. Both of those men had offices in the same building where the will was drawn. They were requested by Kerchner to witness the will when he had stated to them that it was his last will and testament. They did so, and Kerchner then took the will and went away.

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¶17 Dr. W. H. Harris, one of the attesting witnesses, had been acquainted with Kerchner for 25 years. Had seen his frequently during that time and had acted as his physician. He testified that his mental condition did not change from the time he first became acquainted with him up to the time he saw him a short time before his death, and Dr. Harris attended him in his last illness. L. E. McClure, the executor and a banker, had known Kerchner since 1912. Kerchner had kept his papers in that bank. Kerchner brought his will to McClure in the bank on the date it was executed, told him that it was his will and he wanted it put away for safekeeping. McClure put the will in Kerchner’s safety box with the rest of his papers and after Kerchner’s death broke the seal on the envelope, brought the will to Alva and turned it over to the county judge. McClure was acquainted with Kerchner in a business way. Deceased Kerchner had kept an account at McClure’s bank for years and always transacted his own business without the assistance of any one. When he brought the will to McClure there was no one with him, He transacted business with the bank just the same afterwards as before the will was deposited there. McClure says that the deceased was entirely capable of carrying on his business, understood the nature of all business transactions, and the value and extent of his property, and that he noticed no difference in the deceased from the time he first became acquainted with him until the last time he saw him, shortly before his death.

¶18 The substance of this testimony as to the normal condition of the mind of Emanuel Kerchner is sustained by the testimony of many witnesses, all of whom had thorough opportunity to judge of his condition during many years and up to the time of the making of his will and up to the time of his death. All this testimony has convinced us that the testator, Kerchner, was at the time of making this will of sound mind, and the testimony introduced by the protestant does not, in our judgment, when considered in its most favorable aspects, reach the point where it raises in our mind any serious doubt as to the competency of the testator. We therefore find that the judgment of the trial court upon this branch of the case was not sustained by sufficient evidence and was against the great weight of the evidence.”

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The will in question is as follows:

“Know All Men by These Presents: That I, Emanuel J. Kerchner of Kiowa, in the county of Barber, in the state of Kansas, being in good health (or ill health) and of sound and disposing mind and memory, do make and publish this, my last will and testament, hereby revoking all former wills by me made; and as to my worldly estate and all the property, real, personal or mixed, of which I shall die seized and possessed, or to which I shall be entitled at the time of my decease, I devise, bequeath and dispose thereof in the manner following, to wit:

“First: That all my funeral expenses, and any expense occurring from sickness, be paid in full out of the proceeds of my estate.

“Second: To my grandson, Harry Burns, I bequeath the school land, being the northeast quarter of section thirty-six (36), township twenty-nine (29), range thirteen (13) in the county of Woods, Oklahoma; Provided that he assume and pay all assessments due the government as it becomes due.

“Third: To my son, Nick K. Kerchner, I bequeath one promissory note, the amount being
$1,470.50, dated April 10, 1917; also one promissory note, being in amount $ 500, dated May 25th, 1918; also any bills I may have paid out for improvement on his school land in Harper county, Okla.

“Fourth: To my daughter, Ninnie Burns, I bequeath the sum of ten dollars ($ 10.00).

“Fifth: To my grandson, Harry Burns, I bequeath the southeast quarter of twenty-five (25), township twenty-nine (29), range thirteen (13) in the county of Woods, Okla., provided, that he pays Nick K. Kerchner the sum of eleven hundred and seventy-three dollars and 50-100 (1,173.50), the same to be paid in two equal payments of five hundred eighty-six and 75-100 dollars ($ 586.75) the first payment one year after my decease, and the second one year thereafter.

“Sixth: All moneys or bonds that I may have are to be equally divided with my son Nick K. Kerchner and my grandson, Harry Burns.

“And lastly, I do nominate and appoint L. E. McClure to be the executor of this, my last will and testament.

“In Witness Whereof. I, the said Emanuel J. Kerchner, have to this, my last will and testament, subscribed my name…”

The Supreme Court reversed the trial court and found that the testator was competent. It is important that the appellant court noted the important badges of competency of an individual to make a will. These are: (1) he knew well the property which he possessed; (2) the indebtedness due him; (3) his relation to his kindred; (4) his duty toward such kindred; (5) he knew the diposition which he desired to make of his property; (6) the will which he executed expressed his intentions.

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The Supreme Court affirmed the following legal principles in reaching its decision:

A testator has a sound mind for testamentary purposes when he can understand and carry in mind, in a general way, the nature and situation of his property and his relations to those who naturally have some claim to his remembrance and to those in whom and the things in which he has been chiefly interested.

The testator must have sufficient memory to comprehend the conditions of his property and his relations to the objects of his bounty, but the fact that the memory of an old person has failed somewhat does not of itself invalidate his will, as occasional lapses of memory, mere decay or feebleness of memory or absent mindedness, ought not to invalidate a will unless amounting under our general rule to a mental incapacity to collect the particulars essential to a just testamentary disposition.

A presumption of sanity goes with everyone, and the burden of proving unsoundness of mind in a will contest rests on the contestant.

From this case certain “Badges of Competency” are evident. First, there is an overall presumption that a will properly executed (you need an attorney to make sure this is done correctly) was competently executed. There is a presumption of sanity, or competency. The burden to prove that someone was not competent is on the objector to the will.

Second, no one has to be perfect mentally to make a valid will. A good enough memory is OK. It does not have to perfect. Forgetfulness is allowed. Did the will maker understand what he or she owned. Who his or her relatives were and who would be his or her natural objects of his love and affection.

It is good enough to know in a general way what is owned, and the relationship with the natural objects of bounty or close family and friends. The Supreme Court stated these five “Badges of Competency” as follows: (1) To know in a general way the property owned; (2) To know in a general way his or her own business affairs; (3) To remember his or her relationship with close family and friends; (4) To understand that he or she has a duty toward close family; (5) To know and understand what he or she wanted to happen with the estate after death.

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In the case of WELCH v. CROW, 2009 OK 20, 206 P.3d 599 Decided: 03/31/2009 THE SUPREME COURT OF THE STATE OF OKLAHOMADYLAN WELCH and HILLARY found that on April 12, 1995, a mother created her revocable trust and executed a pour-over will. Pour over wills are never intended to be probated, since all of the property is supposed to be owned in the revocable trust.

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The only problem is that the mother had a deceased son who left issue that she didn’t leave anything to in her trust or in her will. Neither the will nor the Trust made any provision for her deceased son’s issue. The grandchildren fought the will and trust. They claimed they were entitled to a share of the Trust as pretermitted heirs or that the Trust was illusory.

The Supreme Court held that: 1) Oklahoma’s pretermitted heirs statute, 84 O.S. 2001 §132, is not applicable to revocable inter vivos trusts; and 2) because the Trust provided for contingent beneficiaries, it was not illusory simply because Neighbors was the sole trustee and the only vested present beneficiary.
The mother her revocable trust and she was the sole trustee and only vested beneficiary during her life. Upon its creation, some of her property was conveyed into the Trust. The terms of the Trust provided that at the time of her death, the successor trustees were to be her daughters, and her son-in-law, collectively, the trustees. After the Trust paid the expenses of the estate, the remaining principal and income were to be distributed to the daughters in equal shares.

The will recognized that the mother had four children, including the one deceased. The son deceased was deceased at the time of the will’s execution. The grandchildren were not referred to in the will. The will provided that at the time of her death, the entirety of her estate was to be distributed to the Trust. This is what a pour-over will usually does, it pours-over into the trust. If the Trust were not in existence at the time of her death, the will provided that her daughters take the entirety of her estate in equal shares. And the will also stated that she was omitting anything for her other living son.

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The trial court found that the omitted issue of her deceased son were her heirs and were pretermitted heirs as defined by 84 O.S. 2001 §132.7.

The grandchildren won with the will, so they then filed a suit contesting the trust. Asking the court to determine that either they had a statutory share in the Trust and were entitled to an accounting by the trustees or, in the alternative, that the Trust was illusory. The trial court ruled against the omitted grandchildren.

The first impression question before the Supreme Court was whether naming a contingent beneficiary satisfies the requirement that a trust may not have the same person as sole trustee and sole beneficiary.
Title 84 O.S. 2001 §132 Does Not Apply To Revocable Inter Vivos Trusts.

The grandchildren argued that as pretermitted heirs, they were entitled to a statutory share in the Trust under 84 O.S. 2001 §132.14 The trust responded that §132 applies only to wills, and not to trusts. The Supreme Court noted that the opinion of In re Estate of Jackson, 2008 OK 83, 194 P.3d 1269, held that §132 “unambiguously pertains only to wills. It does not encompass a situation where a child is omitted from a trust, and we decline to extend its reach to revocable inter vivos trusts, and that the grandchildren are not entitled to a statutory share in the Trust.

The other first impression question was whether naming a contingent beneficiary satisfies the requirement that a trust may not have the same person as sole trustee and sole beneficiary. In other words, can you make a self-settled trust when you are the sole beneficiary. The Supreme Court held that the right to dispose of property is an inalienable natural right that persists throughout a person’s lifetime, and the right to control disposition of property after death is subject to statutory limitations. And, that Oklahoma law permits an individual to dispose of property at death by trust.

When it is applied to the law of trusts, the so-called “merger doctrine” is the equitable concept that a valid trust must have a separation of the legal estate from the beneficial enjoyment, and that no trust can exist where the same person possesses both.18 Title 60 O.S. 2001 §175.6, without using the term “merger doctrine,” codifies the principle that if a trustor is a beneficiary and the sole trustee, a valid trust also requires a beneficiary other than the trustor.19 Title 60 O.S. 2001 §175.3(K) defines a trust beneficiary as “any person entitled to receive from a trust any benefit of whatsoever kind or character.”

The majority rule is that a trust is not illusory or invalid simply because the interests of its beneficiaries, other than the trustor, are contingent. The Restatement (Third) of Trusts §25, Comment b provides in pertinent part:

(The) validity (of) an inter vivos trust is not affected by the fact that the interests of all beneficiaries other than the settlor do not take effect in possession or enjoyment before the settlor’s death, or that they are contingent or subject to conditions subsequent, including the exercise of a power of revocation, withdrawal, amendment, or appointment reserved to the settlor, whether exercisable during life or by will.

The reporter’s note to Restatement (Third) of Trusts §25, Comment b provides in pertinent part:

(C)ourts regularly and properly find valid trusts where settlors have retained complete control, and where other beneficiaries usually, if drafting is competent, have only future interests that are not only defeasible (by revocation or amendment) but also “contingent” upon surviving the settlor and maybe other events as well. . . .

Seven states have enacted statutes which explicitly provide that a trust which has the same person as sole trustee and sole present beneficiary is not invalid if it provides for a contingent or successor beneficiary. Nineteen states and the District of Columbia have adopted a version of the Uniform Trust Code, which provides at §402(b) that a beneficiary is definite if the beneficiary can be ascertained at the time of the creation of the trust or at some time in the future, subject to the rule against perpetuities. The Uniform Comment to §402(a)(5) provides that the merger doctrine is not applicable to a trust with the same person as sole trustee and sole life interest beneficiary if another person is designated the remainder beneficiary. Two other states, which do not have a statute directly addressing the issue, have adopted the Restatement view in appellate court opinions. While there are a few state court decisions which take a view contrary to the Restatement, each of these decisions has been subsequently overruled by statute. A few other decisions appear to require a present, vested beneficiary other than the sole trustee, but, by using terms like “vested interest subject to divestment” to rename contingent interests, embrace the Restatement view for all practical purposes. Our research has not disclosed a viable case or statute contrary to the Restatement view on this issue.

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The Supreme Court stated that in Thomas v. Bank of Okla., N.A., 1984 OK 41, ¶21, 684 P.2d 553, this Court determined that a revocable inter vivos trust may not be employed to defeat a surviving spouse’s forced share of an estate as provided by 84 O.S. 2001 §44. The Court held that such a trust was illusory as to the surviving spouse and set forth the method of determining the validity of a trust:

(T)he test of the validity of a trust is whether the transfer is real or illusory; that the test is whether the settlor in good faith divested himself of the property ownership or simply made an illusory transfer as a mask for the effective retention of the property.

Here, it is clear that the Trust was not an artifice for the effective retention of Neighbors’ property. Instead, Neighbors employed the common estate-planning device of creating a revocable inter vivos trust and simultaneously executing a pour-over will to provide for her heirs at the time of her death. The Restatement view is persuasive and consistent with the definition of a trust beneficiary found at 60 O.S. 2001 §175.3(K). A trust is not illusory simply because it has the same person as the sole trustee and only vested present beneficiary if it provides for at least a contingent beneficiary.

The Supreme Court held that the Trust was not illusory simply because the mother was the sole trustee and she was the only vested present beneficiary during her life. Because the Trust provided for her daughters as contingent beneficiaries, it was a valid trust.

Brent D. Coldiron is a NAELA Member

Brent D. Coldiron is a member of National Academy of Elder Law Attorneys

An experienced probate and living trust attorney like Brent D. Coldiron, knows what to do in these situations. His fees are reasonable. The best money ever spent is to get good legal advice before signing your name to something. Contact Brent at (405) 478-5655 or 737-2244. His website is http://coldironlaw.com.

The language used in your trust determines when a beneficial share will vest, or be secure.

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OLD FAITHFUL GEYSER, YELLOWSTONE, 2015. LIKE OLD FAITHFUL SOMEDAY YOUR WILL IS GOING TO BE READ. MAKE SURE IT IS DOES WHAT YOU WANT IT TO WHEN YOU DIE.

This language was used in a recent court case in a mother’s revocable trust intended to benefit her children and grandchildren if a child was deceased:

Division of Trust and to Shares upon My Death, Division Date Defined: Upon my death, the Co-Trustee, shall immediately divide the trust principal into separate shares for the benefit in equal seven (7) shares for [children’s names deleted] …, per stirpes. This date shall be called the “Division Date”. Each share set aside for a child or more remote descendant of mine shall constitute a separate and distinct trust. The person for whose benefit a share is created … is the primary beneficiary of that share.

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Distribution of Income and Principal to My Descendants After the Division Date: After the Division Date, the Co-Trustee shall have the discretionary power to pay all or any portion of the income and principal of each share of each independent trust to or for the benefit of …, per stirpes. If any beneficiary shall be deceased at the time of distribution, their share shall be distributed to their children so long as they have obtained the age of 25 years or older. Any heir not of the age of 25 years shall have their share held in trust until such time as they reach the age of 25 years.

Termination of Trust: The share or proportionate part thereof of the trust principal set aside for each primary beneficiary shall be held and eventually distributed and paid over free and clear of trust [children’s names deleted]… within three years of the death of [mother’s name deleted] ….

One of the children survived his mother but died a year later [before the distribution date], leaving a surviving spouse but no children. His surviving spouse contested the trust seeking to recover her husband’s share of the trust for his estate [and ultimately in her pocket as his sole heir]. The trial probate and trust court entered its judgment against the wife and in favor of mother’s trust. The trial judge found the intent of the trust agreement was that in order for a child to inherit the child had to be alive at his mother’s death and also when the distribution was made. And because this child left no children his bequest had lapsed.

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The appellant court reversed the trial court. The interpretation of an unambiguous trust agreement is a question of law. Corr v. Corr, 2001 OK CIV APP 31, 21 P.3d 642, 644 [The appellant court cited a case handled by my law office :)]. In construing a trust agreement, our primary purpose is to ascertain and give effect to the trustor’s intent. If the language of the agreement is unambiguous, we must ascertain the intent of the trustor from the terms of the agreement as a whole.

The appellant court said there was no ambiguity in the language of the trust agreement in this case. Contingent rights vest when the contingency is removed. Pursuant to the trust agreement, the contingent beneficiaries’ rights in the trust vested upon the trustor’s death. The mother directed the co-trustee to establish separate and distinct trusts for the benefit of each beneficiary upon her death, establishing that date as the Division Date. As of that date, the contingency was removed and the beneficiaries’ interests vested. Personally I think the lawyer who drafted the trust could have made it clear that if a child did not survive to the division date his share would lapse.

The appellant court went on to say that a trust’s terms may postpone vesting of a beneficiary’s interest to the happening of some future event, such as survival to a distribution date. The appellant court observed in another decision the trust language provided that if any beneficiary was not living on the distribution date, then that person’s share would go to her issue per stirpes, or if she had no surviving issue, it would be divided among the other beneficiaries. Trust language may also provide for the interest of the beneficiary to be divested upon the happening of a condition subsequent.

In the case at hand the mother’s trust did not use any language establishing a distribution date. This is something the drafting lawyer missed. Because of this, the son’s share will pass to his surviving spouse under his estate.

The dissent was more sympathetic with the drafting lawyer. It said that the majority’s holding, that a gift in trust vested at the time of the trustor’s death and could not lapse when the beneficiary died before the distribution date, is incorrect pursuant to Oklahoma law and the unambiguous intent shown in the mother’s trust document.

With no authority, the majority declares “the contingent beneficiaries’ rights in the Trust vested upon the trustor’s death.” The majority finds that the death of the trustor was the contingency, then notes authority that a later event may divest the beneficiary’s rights, but that it did not in this case. Oklahoma authority shows that a trust gift vests on the distribution date, absent an express declaration to the contrary.

In construing a trust instrument, the intention of the trustor controls. In re Dimick’s Will, 1975 OK 10, 531 P.2d 1027, 1030. In Dimick, the testamentary trust directed that after the corpus was delivered to the trustee, the trust would continue for ten years, at which time half the assets would be divided between the testator’s two daughters and the other half would remain in the trust for the care of his wife until her death, at which time the remaining funds would be divided between the two daughters. At the end of the ten years, the trust was in debt so the trustees did not distribute any assets. One daughter survived the ten year period but died before the assets were distributed. The trial court held that her quarter share of the trust was a vested right and the court directed the trustee to distribute that share to her estate. The appellate court framed the issue as whether at the end of the ten year period, the then-surviving daughter acquired a vested interest in her share of the trust, which was not divested by her subsequent death before the actual distribution of the trust corpus. The court noted that if an instrument provides a definite time when the right to receive the legacy accrues, then the gift vests at that time, even though actual distribution may occur later. Id. at 1030. The Oklahoma Supreme Court found that the trust showed the testator’s intent that half the trust property should be vested in and distributed to his daughters alive at the end of the ten years, or if either was dead on that date then to her children. Id. at 1031. The court held that the daughter who survived the ten years had a vested interest at that time, even though distribution occurred later. Id.

In Sivia v. Snyder, 1973 OK CIV APP 8, 517 P.2d 813 (cert. denied), the trustor created a living trust which provided that on his death, the trustee should pay various last expenses and after all of the preceding parts of the trust had been complied with, pay the residue to four named persons. The trust provided that if any of those persons were deceased but had living issue at the distribution date, then the trustee should distribute their share to their issue, but if the deceased left no living issue, then that share would be divided between the surviving named residuary beneficiaries. After the trustor died, the trustee paid the expenses as required by the trust, but the IRS proposed additional taxes. The trustee then planned to distribute the trust to the four beneficiaries but retain the amount of the proposed additional taxes. After the partial distribution commenced but before it was complete, one of the beneficiaries died without issue. The trustee asked the court to construe the trust to determine whether the deceased beneficiary survived until the “distribution date” so that her share of the trust would be paid to her estate. The trial court found that the deceased beneficiary’s interest vested at the time of the testator’s death. The appellate court was unable to see how the trustor could have intended “distribution date” to be his date of death because the trust directed certain payments to be paid upon the trustor’s death, but payment of the residuary was not among those. Id. at 815. Indeed, the court noted that the trust provided the residuary beneficiaries were to be paid after all the other trust provisions were complied with, which necessarily indicated some later date. The court noted an estate is never distributed on the date of death and to find otherwise would be to give the phrase “distribution date” an “interpretation contrary to its ordinary meaning.” Id. at 815-816. The appellate court noted there were two remaining possibilities for the “distribution date”-either the date of actual distribution, or the date the trustee could first have made distribution. The court concluded the second option “seems to comport more nearly with what the settlor most likely intended.” The court found that the settlor would not have desired the beneficiaries’ enjoyment of the gift to depend on accident, delay, or inconvenience. The court held it chose to follow the majority view, and the more practical one, that vesting in these circumstances takes place on the first date the legacy could reasonably be paid by the trustee, which was when all the provisions of the trust had been complied with, with the exception of payment of the additional tax, for which a fund was set aside. This date of course was prior to the death of Miss Sivia. To hold otherwise would be to find that the settlor, by using ‘distribution date’ in the trust, provided for such unpredictable occurrences and delays to defeat the gift. Such occurrences and delays would then replace the settlor’s manifest intent to give to certain named beneficiaries. We find such an interpretation would be completely contrary not only to settlor’s intentions, but also contrary to the very purpose for which the trust instrument was prepared in the first place.

In this case, the trustor clearly showed an intent that the distribution date differed from the date of death and she provided for an outside limit to the distribution date, to guard against unforeseen delays as shown in Sivia. The distribution date cannot be more than three years after her date of death. But as in Sivia, the interest of the beneficiaries does not vest on the date of the trustor’s death. Because Donald did not survive until the distribution date and because he did not leave children, his share lapsed under the plain language of the trust instrument.

This outcome is also supported by the Restatement. The trust instrument here shows the trustor’s intent to provide for her seven children. Restatement (Second) of Property, Don. Trans. § 27.3 (1988), provides: If a gift is made in favor of a class described as “children,” “grandchildren,” “brothers,” “sisters,” “nephews,” “nieces,” “cousins,” or by similar class gift terms that describe a one-generation class,

(1) a person within the primary meaning of the class gift term who dies after the dispositive instrument takes effect but before such class member is entitled to distribution of his or her share is not excluded from the class by reason of such death, if such death does not make impossible the fulfillment of a condition, unless additional language or circumstances indicate otherwise, or an applicable statute provides otherwise.

(2) If additional language or circumstances indicate otherwise or an applicable statute provides otherwise, the share in the class gift that such deceased class member would have taken had he or she lived, when the share of each class member is not a specified amount, goes to enlarge the shares of the class members not excluded, except to the extent that substitute takers are provided to take in place of the deceased class member by additional language or circumstances or by a statute.

Here, distribution was conditioned upon the class member or his living issue surviving until the distribution date. Donald’s death without issue prevented fulfillment of that condition.

The trust instrument at issue here shows the trustor’s intent that to receive a share, a beneficiary must survive (or have surviving issue) by the time of distribution, which was to be no more than three years after the death of the trustor.

The trustee has complete discretion when to distribute during that time frame. It also seems clear that the trustor’s intent was to provide for her seven children. If any child died before the distribution date, without children, that child’s share would necessarily go to the remaining living children. That comports with the trust language and the trustor’s intent. Donald died before his interest vested and the trial court correctly found that his interest lapsed.

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BRENT COLDIRON’S OFFICE IS LOCATED AT 1800 EAST MEMORIAL ROAD, OKLAHOMA CITY AND 2801 PARKLAWN DRIVE, MIDWEST CITY. BRENT HAS OVER 39 YEARS EXPERIENCE!

As well as the dissent argued it could not save the mother’s trust from the drafting of the trust attorney. An experienced living trust attorney like Brent D. Coldiron, knows what to do in these situations. His fees are reasonable. The best money ever spent is to get good legal advice before signing your name to something. Contact Brent at (405) 478-5655 or 737-2244. His website is http://coldironlaw.com.

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