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If you check your will or trust you will probably run across the Latin term “per stirpes.”   The Supreme Court in the recent probate and trust case of O’DONOGHUE v. DOOLEY, 2016 OK 110, 383 P.3d 773 defined per stirpes to mean ” ¶17 The Latin term “per stirpes” means “by roots or stocks” and is a method of dividing an estate where the gift is “[p]roportionately divided between beneficiaries according to their deceased ancestor’s share.” Black’s Law Dictionary (10th Ed. 2014). The term comes from the Latin word “stirps” which references a “branch of a family” or “a line of descent.” Black’s Law Dictionary (10th Ed. 2014). The phrase “lineal descendant” is defined to mean “[a] blood relative in the direct line of descent. Children, grandchildren, and great-grandchildren are lineal descendants. Black’s Law Dictionary, (10th Ed. 2014). Spouses are neither blood relatives nor lineal descendants of each other.”

Last Will and Testament

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In everyday speech, it means that the inheritance will follow the blood lines down from the ancestor and stop at the first alive person or persons who can take.  Let’s say that a will leaves a share of an estate to my children per stirpes.  You have only one child.  Unfortunately your child does not survive you.  But he or she leaves a child, your grandchild.  The grandchild steps into the shoes his or her ancestor, your child and inherits your child’s share.  Le’t say that you have two or more children.  If any one or more of your children does not survive you, then his or her children would step into their parent’s place to inherit.

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An experienced probate, will, 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 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.

Last Will and Testament

BRENT IS EXPERIENCED IN PROBATES, WILLS AND TRUSTS

¶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.

Brent has been helping his clients since 1976.  He knows his way around the courtroom, but also how to keep his clients out of court.  He is an expert with wills, trusts, probate, living wills, advance directives, guardianships, powers of attorney and solving many problems that affect us all.  Brent is an expert with nursing home Medicaid qualification.  He has saved thousands of dollars for his clients who need to qualify for Medicaid.  He knows how to legally protect resources and qualify for Medicaid.  He is experienced in dealing with the Department of Human Resources.  Cal Brent’s office at (405) 478-5655 or 737-2244.  Brent has two offices: 1800 East Memorial Road, Suite 106, Oklahoma City and 2801 Parklawn Drive, Suite 503, Midwest City.

 

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

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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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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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