The recent Oklahoma case of In the Matter of the Estate of Stolba, 2019 OK CIV APP 43, involved a will drafted by a mother leaving her estate to her children. Unfortunately she wroter her own will without seeking the help of an experienced will, trust and probate attorney. The will provision at issue states: AThe homestead will remain in trust, Not to be sold or split. All four of you have got to get along. Work it out, you should be able to have fun doing things there. Everyone should behave [email protected]
The appellant court ruled that the above will provision violated Oklahoma law. It amounted to a restrain on the power of alienation. Oklahoma law does not allow a power of alienation (a prohibition of the right to divide in kind or sell) of real and personal property for any time longer than the lives of the will beneficiaries who are then alive plus 21 years. In other words, if the will provision under question had stated that the homestead could not be sold or divided during the lives of her four children, that would not have violated the law.
The point being is that while a will or trust might seem to be simple, it is anything but simple. It is easy to make a misstep and foil your estate plan. You are asking for trouble if you attempt to draft you own will or trust. An experienced will, trust and probate attorney will know when to research the law. Certainly an experienced will, trust and probate attorney would have researched whether a perpetual restrain on alienation of real estate was permissible. The will had another big problem. There was no final residuary disposition.
What Mrs. Stolba wanted could have been done. While it is possible to prohibit her children from selling or dividing the homestead, was that a wise thing to do. Sometimes it is a benefit to have your attorney point out possible problems. I am sure she wanted her four children to have another chance to get along, to build memories with the homestead, and to be nice to each other building relationships. While this is all great, there are some things that are not really possible. Instead of the foregoing benefit, it is more probably there will be disagreements, hurt feelings and continuing hostility. The bequest of the homestead for life with the admonishment to work it out and have fun if not realistic. There are just all kinds of continuing potential problems. How will the insurance and taxes be paid annually? Which child will be in charge of maintenance? How will that child collect? What if a child uses the home and leaves it dirty? What if a child damages the home? What happens when a child dies? Does his wife or husband step into the mix? The list just can go on and on. It is usually not a good idea to leave property tied up jointly among children.
Here is the appellant court ruling:
&1 Daniel W. Lowther, as personal representative of the estate of Margaret J. Stolba, deceased (Decedent), appeals a decision by the district court finding that a restriction on the alienation of property in the Decedent’s will was invalid, and distributing the subject property to decedent’s heirs.
&2 Decedent’s will was admitted for probate in December 2012. It was evidently composed by Decedent without legal assistance. Among its provisions was this:
The home stead will remain in trust, Not to be sold or split. All four of you have got to get along. Work it out, you should be able to have fun doing things there. Everyone should behave themselves. (sic)
In January 2017, probate was still open, and one of Decedent’s sons, Mark S. Stolba, filed an application to distribute the remaining property in the form of the homestead1 because either 1) the “trust” failed for lack of required elements, or 2) the homestead provision created an unenforceable perpetuity or restriction on alienation.
&3 In October 2017, the district court entered a decree of distribution, distributing the homestead to Decedent’s four children, per the rules of intestate succession. Representative Daniel Lowther filed a motion for new trial, which was denied. He now appeals.
STANDARD OF REVIEW
&4 Probate proceedings are of equitable cognizance. In re Estate of Holcomb, 2002 OK 90, & 8, 63 P.3d 9. We will not disturb the trial court’s decision unless it is “found to be clearly contrary to the weight of the evidence or to some governing principle of law.” In re Estate of Maheras, 1995 OK 40, & 7, 897 P.2d 268. This matter involves questions of statutory interpretation. We are required to review questions of law, such as the construction of statutes, under a de novo standard of review. In re Estate of Jackson, 2008 OK 83, & 9, 194 P.3d 1269.
&5 Appellant states the following questions on appeal, which we reproduce below.
&6 The core question before us is whether the “trust” provision of the will represents an unenforceable perpetual ban on the alienation of real property. We will first address Appellant’s jurisdictional arguments, however. These arguments appear to arise from a fundamental misunderstanding of the legal nature of the proceedings. Appellant argues that Appellee attempted to contest the validity of the will, thereby rendering it entirely ineffective, and forcing an intestate probate, and that the district court rejected the will and proceeded with an intestate distribution. This is incorrect. Appellee’s “application for distribution” specifically requested that the court find the will valid, and requested the court to interpret whether a specific clause of the will was legally enforceable.
V. The Question of the “Trust” Provision
now return to the core question. The will contained two significant provisions.
The first was the “homestead” provision, which stated (sic):
The home stead will remain in trust, Not to be sold or split. All four of you have got to get along. Work it out, you should be able to have fun doing things there. Everyone should behave themselves.
&13 The first provision, as written, apparently violates the first part of 60 O.S. ‘ 175.47 ‑ Suspension of absolute power of alienation‑‑Period of suspension.
A. Except as otherwise provided in subsection B of this section, the absolute power of alienation of real and personal property, or either of them, shall not be suspended by any limitations or conditions whatever for a longer period than during the continuance of a life or lives of the beneficiaries in being at the creation of the estate and twenty‑one (21) years thereafter.
&14 The mandate that the homestead is “not to be sold or split” without a time limitation facially violates ‘ 175.47.
&18 The immediate problem, however, is that this case does not truly involve a perpetuity, but involves a restraint on alienation.
&19 The rule against perpetuities is one of property law which precludes the postponement of vesting of contingent interests for a period of time considered to be too long. Denney v. Teel, 1984 OK 63, 688 P.2d 803. A restraint on alienation does not have any contingent interest or future vesting of rights. “Restraints upon alienation where there are no provisions for forfeiture or reversion are ‘disabling restraints’ and void.” Shields v. Moffitt, 1984 OK 42, &26, 683 P.2d 530. Commenting on Kentucky law, Denney noted the same distinction: The common‑law rule against restraint on alienation is designed to prevent owners from losing their power to alienate property while the rule against perpetuities is designed to prevent interests from being created too far in the future. Id., n. 18. See also Producers Oil Co. v. Gore, 1980 OK 62, 610 P.2d 772 (in contrast to rules against restraints on alienation, the rule against perpetuities, although aimed at preventing restrictions on alienation, is directed toward duration of the rights rather than toward absolute restraints); 70 C.J.S. Perpetuities ‘ 12 (“the rule against perpetuities limits the power of an owner to create future interests, whereas the rule against restraints on alienation prohibits the owner from creating provisions blocking his or her grantee from disposing of the property”).
this case, the will as written clearly creates a restraint on alienation rather
than an impermissibly remote future interest ‑ the homestead is “not to be
sold or split.” Title 60 O.S. ”
75 and 77 do not apply at all to void restraints on alienation. In reforming a
perpetuity that vests too late, a court can simply shorten the vesting period
and maintain the grantor’s wishes in all other ways. It is not possible to
reform an absolute restriction on alienation and maintain the grantor’s intent.
&21 Further, although these statutory sections were enacted almost 50 years ago, there are only three Oklahoma cases interpreting them. Producers Oil Co. v. Gore held that that the rule against perpetuities did not apply to interests created by preemptive option provisions of oil and gas lease operating agreements. Am. Nat. Res., LLC v. Eagle Rock Energy Partners, L.P., 2016 OK 67, 374 P.3d 766, discussed the preservation of the issue of reformation for appeal, and found it had not been preserved. Matter of Estate of Crowl, 1987 OK 13, 737 P.2d 911, noted that, where an instrument is fairly susceptible to two or more constructions, the court should choose the one which does not violate the rule against perpetuities.
&22 None of these cases give any indication of how far a court may go in “reforming” an instrument that violates the rule. As noted in In re Prather’s Estate, 1974 OK CIV APP 24, n. 4, 527 P.2d 211, however:
The rule of construction that the intent of the testator must be carried out if possible does not authorize courts to make a new will to conform to what they may think the testator intended. The intent of the testator must be ascertained from the will as it stands.
&23 Even if we could ascertain that the testator intended the restriction on alienation to last only for the life of her children2, we are left with no clue as to the disposition of her property after that period. Simply assuming the property would fall into the estate residual does not solve the problem because the will has no residuary beneficiary. We find that, even if the void restraint on alienation could legally be reformed pursuant to ” 75 & 77, the will is so defective in this area that a court could not reform it without re‑writing the will to include a final disposition that is no more than a guess of the testator’s intent.
&24 As such, when faced with a trust provision that appears to lack any duties for the trustee, and contains an absolute prohibition on alienation, coupled with a will that gives no clue as to what the final disposition of the property should be, we find the trial court did not err in holding the homestead provisions of the will invalid, and distributing the property as a partial intestacy.
&25 We find no error in the district court’s decision.
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