Case Title: Sharee Self, as successor trustee of the revocable trust of Georgia B. Slaughter v. Bruce Slaughter, individually and as personal representative of the estate of Georgia B.Slaughter, deceased, and Barbara Slaughter Jones

Citation: 

Docket Number: 1061041

State: alabama

Court: Alabama Supreme Court

Date: 2008-12-19T00:00:00Z

Document:
REL:12/19/2008
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2008-2009
____________________
1061041
____________________
Sharee Self, as successor trustee of the revocable trust of
Georgia B. Slaughter
v.
Bruce Slaughter, individually and as personal representative
of the estate of Georgia B. Slaughter, deceased, and Barbara
Slaughter Jones
Appeal from Mobile Circuit Court 
(CV-06-2795)
BOLIN, Justice.
Sharee Self, as the successor trustee of the revocable
trust of Georgia B. Slaughter, appeals from the trial court's
1061041
2
summary judgment in favor of Bruce Slaughter and Barbara
Slaughter Jones, which required Self, in her capacity as
trustee, to transfer to Georgia B. Slaughter's estate all
assets held by the revocable trust.
Facts and Procedural History
Wright Slaughter and Georgia B. Slaughter (collectively
referred to as the "Slaughters") were married for 32 years.
There were no children born of their marriage but each had
children born of prior marriages.  Wright's four children
included Bruce Slaughter, Rebecca Slaughter Norwood, Barbara
Slaughter Jones, and Wright Slaughter III ("Buddy"). Georgia's
two children included Mike Self and Don Self. 
In 1998, the Slaughters had assets totaling approximately
$1.2 million.  The assets were apportioned as follows: Wright
had assets totaling $664,464, Georgia had assets totaling
$238,194, and they had joint assets totaling $347,229.
Additionally, Georgia owned a policy of life insurance that
insured Wright's life for $415,986 and that named Georgia as
the beneficiary.
In 1998, the Slaughters sought estate-planning advice
from attorney Harwell E. Coale, Jr.  Coale recommended as part
1061041
No provision was made in these two wills for Buddy
1
Slaughter 
because 
Buddy 
was 
disabled, 
on 
government
assistance, and incapable of handling assets.  
3
of the Slaughters' estate plan the creation of two separate
and equal estates in order to minimize estate taxes by the use
of a credit-bypass trust.  To this end various assets were
transferred between Wright and Georgia so that each individual
estate was approximately equal in value to the other.  On June
1, 1998, Wright and Georgia executed identical wills that
provided for a family-support trust upon the death of the
first to die, with the surviving spouse being the lifetime
beneficiary of the trust.  Upon the death of the surviving
spouse, the remaining assets of the family-support trust would
be distributed  to the Slaughters' children as follows: 22%
each to Wright's children Bruce Slaughter, Rebecca Slaughter
Norwood, and Barbara Slaughter Jones, and 17% each to
Georgia's children Don Self and Mike Self.   The wills
1
provided that each spouse would be the other's personal
representative and that successor co-personal representatives
would be Mike Self and Bruce Slaughter.
On June 1, 1998, Wright also executed an irrevocable
trust into which the life insurance policy with death benefits
1061041
4
totaling $415,986 was transferred.  Georgia was made the life
beneficiary of the trust with the remainder being distributed
to the Slaughters' children in the same proportions as the
remainder of the family-support trust assets was to be
distributed under the wills.
At the time the Slaughters executed their wills, Georgia
also executed the following agreement:
"I swear before God, the Court, and my husband
that I will NOT change my Last Will and Testament
executed on June 1, 1998, after my husband, Wright
B. Slaughter, becomes physically or mentally ill or
dies; and if I do change my said Will for any reason
whatsoever, or if I marry again and change my said
Will, that will be ample reason to break or
disregard any future Will that I make and Harwell
Coale will represent this Will in Court."
Wright executed a substantially identical agreement.  Coale
testified that the Slaughters presented these agreements to
him in handwritten form and that he had the agreements typed
and notarized.  He stated that the Slaughters wanted to
execute the agreements to ensure that the surviving spouse
could not change his or her will after the other died.
In January 2002, the Slaughters executed identical
codocils to their 1998 wills.  The Slaughters reduced Rebecca
Slaughter Norwood's share from 22% to 17% and increased Bruce
1061041
5
Slaughter's and Barbara Slaughter Jones's shares to 24.5%.
Georgia's two children, Mike Self and Don Self, did not
receive an increased share. 
In June 2002, the Slaughters again executed identical
codicils to the 1998 wills.  The purpose of the codicils was
to assure that Georgia would receive monthly income from the
family-support trust and to completely remove from the wills
Wright's daughter, Rebecca Slaughter Norwood.  Pursuant to the
codicils executed in June 2002, Rebecca's 17% share was
reallocated to Bruce Slaughter and Barbara Slaughter Jones so
that their shares under the 1998 wills increased to 33% each.
Georgia's two children, Mike and Don, did not receive an
increased share.  Subsequent to the execution of the 1998
wills and the subsequent codicils, Wright began day-trading on
the stock market and lost approximately $203,000 between 2000
to 2005.
Wright died in November 2005.  Wright's will was admitted
to probate, and his estate passed consistent with the terms of
the will to fund the family-support trust for Georgia.
Shortly after Wright's death, Georgia discussed with Coale the
possibility of changing her will because she felt that the way
1061041
6
the assets were to be distributed under the will was unfair to
her two children and to Wright's son Buddy.  Coale advised
Georgia that it would be inappropriate for him to assist her
in changing her will because of the agreement that she and
Wright had executed in which they each agreed not to change or
revoke their 1998 wills subsequent to the other's death.
Coale referred Georgia to attorney Greg Watts.
In November 2005, Georgia, Mike Self, and Mike's wife
Sharee Self met with Watts to discuss Georgia's will.  Georgia
informed Watts that the disposition of her estate under her
will was not fair to her children and Buddy and that she
wanted to change it.  Watts recommended to Georgia, Mike, and
Sharee that Georgia create a revocable trust that would own
all of her assets and would provide for disposition of those
assets to her children and Buddy upon her death.  Georgia
executed the Georgia B. Slaughter Revocable Trust on March 3,
2006.  Pursuant to the terms of the revocable trust, Georgia's
children Mike and Don were to receive her residence, household
effects, furniture, furnishings, silverware, chinaware, art,
jewelry, automobiles, and other personal property in equal
shares.  The balance of the trust was to be distributed to
1061041
Buddy's share was not to be distributed to him but was
2
to be held in trust by the trustee of the revocable trust for
his benefit during his lifetime.
Mike Self is a co-personal representative of Georgia's
3
estate and agreed that he would not participate in, but would
not oppose the filing of, the declaratory-judgment action by
the personal representative.
Georgia was the trustee of her revocable trust until her
4
death; Sharee was then named as the successor trustee.
7
Don, Mike, and Buddy,  each receiving 33 1/3%.  All Georgia's
2
assets were transferred into the trust during March and April
2006.  The effect of establishing the revocable trust and
transferring Georgia's assets into it was that there would be
no assets to be distributed to the two of Wright's children
who were benificiaries of Georgia's 1998 will –- Bruce and
Barbara.  Georgia died on April 13, 2006, shortly after
executing the revocable trust.  Her will was admitted to
probate in July 2006.       
On August 11, 2006, Bruce Slaughter, individually and as
the personal representative of Georgia's estate, and Barbara
Slaughter Jones, individually (collectively referred to
hereinafter as "the personal representative"),  sued Sharee
3
Self ("the trustee") as the successor trustee  of the Georgia
4
B. Slaughter Revocable Trust, seeking a judgment declaring
1061041
8
that the transfer of assets into the trust was a nullity and
that the assets purportedly transferred into the trust are the
property of Georgia's estate.  The complaint also sought an
attorney fee. 
On October 23, 2006, the trustee answered the complaint
and asserted a counterclaim, seeking a judgment declaring 1)
that the revocable trust is valid and enforceable because, she
argued, the execution of the codocils in 2002 served as a
revocation of any agreement that may have existed between
Wright and Georgia not to change their wills and 2) that the
dissipation by Wright of the assets of his estate constitutes
an anticipatory breach of the agreement or a failure of
consideration for the agreement not to change the wills.
On January 12, 2007, the personal representative moved the
trial court for a summary judgment.  On March 1, 2007, the
trustee amended her answer to add failure of consideration as
an affirmative defense.  The trustee also on that same day
filed 
her 
motion 
in 
opposition 
to 
the 
personal
representative's motion for a summary judgment.
Following a hearing, the trial court, on March 30, 2007,
entered 
a 
summary 
judgment 
in 
favor 
of 
the 
personal
1061041
9
representative, finding that the transfer of Georgia's assets
from her estate to the revocable trust breached the agreement
executed by her and Wright that the latter of them to die
would not change his or her will after the other's death.  The
trial court ordered the trustee to transfer to Georgia's
estate all assets held in the revocable trust; ordered that
all attorney fees and expenses be paid out of Mike Self's and
Don Self's shares of Georgia's estate; and denied the
trustee's counterclaim. 
Standard of Review
This Court has stated the applicable standard of review
as follows:
"'Summary judgment is appropriate only when
"there is no genuine issue as to any material fact
and ... the moving party is entitled to a judgment as
a matter of law." Rule 56(c)(3), Ala. R. Civ. P.,
Young v. La Quinta Inns, Inc., 682 So. 2d 402 (Ala.
1996).  A court considering a motion for summary
judgment will view the record in the light most
favorable to the nonmoving party, Hurst v. Alabama
Power Co., 675 So. 2d 397 (Ala. 1996), Fuqua v.
Ingersoll-Rand Co., 591 So. 2d 486 (Ala. 1991); will
accord the nonmoving party all reasonable favorable
inferences from the evidence, Fuqua, supra, Aldridge
v. Valley Steel Constr., Inc., 603 So. 2d 981 (Ala.
1992); and will resolve all reasonable doubts against
the moving party, Hurst, supra, Ex parte Brislin, 719
So. 2d 185 (Ala. 1998).
1061041
10
"'An appellate court reviewing a ruling on a
motion for summary judgment will, de novo, apply
these same standards applicable in the trial court.
Fuqua, 
supra, 
Brislin, 
supra. 
 
Likewise, 
the
appellate court will consider only that factual
material available of record to the trial court for
its consideration in deciding the motion.  Dynasty
Corp. v. Alpha Resins Corp., 577 So. 2d 1278 (Ala.
1991), Boland v. Fort Rucker Nat'l Bank, 599 So. 2d
595 (Ala. 1992), Rowe v. Isbell, 599 So. 2d 35 (Ala.
1992).'"
Ex parte Turner, 840 So. 2d 132, 135 (Ala. 2002) (quoting Ex
parte Rizk, 791 So. 2d 911, 912-13 (Ala. 2000)).
Discussion
Contracts not to revoke a will or devise are enforceable
under Alabama law.  See § 43-8-250, Ala. Code 1975.  In
Humphries v. Whiteley, 565 So. 2d 96, 97 (Ala. 1990), a
husband and wife made reciprocal wills that contained the
following provisions:
"'THIRD ITEM: At my death I hereby give, devise and
bequeath all the rest and residue of my estate, both
real and personal, wheresoever situate, unto my
spouse in absolute fee simple.
"'....
"'FIFTH ITEM: My spouse and I are executing our wills
at or about the same time and such wills are intended
to be and should be construed [as] contractual and
reciprocal wills.  Neither wills [sic] shall be
subject to revocation by it's [sic] maker without the
consent of the other party.'"
1061041
11
The husband and wife each had children from previous
marriages.  The wife's will also contained the following
provision:
"'[I]n the event my said spouse shall predecease me,
then in such event I give, devise and bequeath all my
estate, both real and personal, wheresoever situate,
of which I may die seized or possessed, or to which
I may be or become entitled to have any interest or
over which I may have any power of appointment, unto
my children, Gwinnette Meads Bates and Travis
Humphries, and my husband's children, Morris W.
Whiteley, Bobby Whiteley, David Whiteley and Lanny
Whiteley, in equal shares, share and share alike, in
absolute fee simple, per stirpes and not per
capita.'"
Humphries, 565 So. 2d at 97.  The husband's will contained a
similar provision to leave all of his property to all of their
children equally in the event that the wife died first.  
The husband predeceased the wife, and, under the terms of
the husband's will,  she took title to all of their property.
Subsequently, the wife began making gifts to her children
only.  By the time the wife died, the estate had been
significantly 
reduced. 
 
The 
wife's 
children 
filed 
a
declaratory-judgment action to determine how the wife's estate
was 
to 
be 
handled. 
 
The 
husband's 
children 
filed 
a
counterclaim, seeking to set aside the gifts the wife had made
1061041
12
to her children.  The trial court entered a judgment in favor
of the husband's children and set aside the gifts.  Id.
In affirming the trial court's decision, this Court quoted
the following from the trial court's findings of fact and
conclusions of law:
"'"'The weight of authority is that a contract
to devise does not prevent the making of gifts during
the lifetime of the promisor; but such gifts must be
reasonable, absolute, bona fide, not testamentary in
effect, and not made for the purpose of defeating the
contract to devise, nor having such effect.'  Skinner
v. Rasche, 165 Ky. 108, [112,] 176 S. W. 942, 944
[(1915)]."'"
Humphries, 565 So. 2d at 100 (quoting in turn Wagar v.
Marshburn, 241 Ala. 73, 78-79, 1 So. 2d 303, 307 (1941)).
In this case, it is clear from the record that the
creation of the revocable trust and the transfer of Georgia's
assets into the trust were for the clear purpose of defeating
the contract Wright and Georgia had entered into whereby each
agreed not to change his or her 1998 will upon the other's
death.  Georgia informed Watts in November 2005 that the
disposition of her estate under her will was not fair to her
children and Buddy and that she wanted to change it.  Watts
testified in his deposition as follows:
1061041
13
"Q. [By Slaughter and Jones's counsel:] All
right.  Looking back now at the November 28 memo, in
the final paragraph on the first page you have the
line: 'Georgia Slaughter now believes that the
disposition under her will does not treat her
children fairly and desires to change her will.'  Did
she explain to you her thought process as to why she
felt it was not fair to her children?
"A. That if -- the first important thing was
that when Rebecca Norwood and Buddy were not provided
for, the share for her children should have been
higher.  She was also concerned at that time that her
house would be included in this estate plan, and we
had a specific discussion about her jewelry, which
she regarded to be hers.
"Q.  The next sentence in that same paragraph
you have the line: 'Unfortunately, Harwell Coale also
prepared a contract signed by each of Georgia and
Wright Slaughter by which each of them agreed not to
change or revoke their 1998 wills.'
"A.  Yes.
"Q.  Why was it unfortunate?
"A.  Because it was a problem to comply with
what she wanted to do.
"Q.  It stood in the way, so to speak --
"A.  Yes.
"Q.  –- of her desire to change her will?
"A.  Yes.
"....
1061041
14
"Q.  ... [C]an you tell me, Greg, what the
subject matter of the paragraph, redacted paragraph,
is?
"A.  Different means of accomplishing what she
wanted to do without violating that contract.
"Q.  That's fair enough.  The next line that we
have in the memo that's not redacted is: 'After an
extended discussion, we determined that the cleanest
approach would be for me to prepare an inter vivos
revocable trust that would own all of [Georgia's]
assets and that would provide for disposition of her
assets at her death.'
"....
"Q.  Why was using the inter vivos trust the
cleanest approach?
"A.  It addressed her concerns across the board
as opposed to other alternatives that would involve
other 
alternatives, 
like 
payable-on-death
designations or life estates in houses.  To provide
for what she wanted to do was to provide for her
property to go to Mike, Don, and set up a trust for
[Buddy]. ..."
Watts also testified that he informed Georgia, Sharee, and
Mike that agreements not to revoke or change a will were valid
and enforceable agreements and that a challenge to the
creation of the revocable trust and the transfer of Georgia's
assets into the trust was likely.
The trustee testified in her deposition as follows:
1061041
15
"Q.  If the Revocable Trust is upheld, there
won't be any assets to pass under [Georgia's] 1998
will, right?
"A.  That's what I understand.
"Q.  And that was the intent, wasn't it, in
drafting a Revocable Trust, to have it, in effect,
replace [Georgia's] will?
"A.  Yes, I would think so."
Here, Georgia and Wright executed a valid and enforceable
agreement by which the surviving spouse would not change or
revoke his or her will following the other's death.  That
agreement cannot be circumvented by the creation of the
revocable trust and the transfer of Georgia's assets into the
trust when it is clear that the sole purpose for creating the
revocable trust was to defeat the  agreement not to change or
revoke the 1998 wills executed by Wright and Georgia.
The trustee argues, however, that the depletion by Wright
of his separate estate by day-trading on the stock market
constitutes 
a 
failure 
of 
consideration 
that 
renders
unenforceable the agreement not to change the wills.  We
disagree.  "Consideration must be present when the contract is
made." Fant v. Champion Aviation, Inc., 689 So. 2d 32, 37
(Ala. 1997).  "The requirement of consideration means that a
1061041
16
gratuitous promise is not enforceable."  Id. The failure of
consideration is "'the neglect, refusal and failure of one of
the contracting parties to do, perform, or furnish, after
making and entering into the contract, the consideration in
substance and in fact agreed on.'"  Lemaster v. Dutton, 694
So. 2d 1360, 1366 (Ala. Civ. App. 1996) (quoting 17 C.J.S.
Contracts § 129 (1963)).  Additionally, a failure of
consideration is "'predicated on the happening of events which
materially change the rights of the parties, which events were
not within their contemplation at the time of the execution of
the contract.'" Lemaster, 694 So. 2d at 1366 (quoting
Contracts § 129).
Wright supplied consideration for Georgia's promise not
to change her will when he transferred to Georgia a
significant amount of assets titled solely in his name in
order to create two separate and equal estates.  Before the
transfer of assets to Georgia, Wright had titled solely in his
name $664,464 of the couple's approximately $1.2 million in
total assets (including jointly held assets and Georgia's
solely owned assets of $238,194).  Thus, a transfer of assets
by Wright to Georgia in order to create two separate and equal
1061041
17
estates resulted in a significant reduction in the value of
Wright's individual estate.  Additionally, Wright supplied
consideration to Georgia in exchange for her promise not to
change or revoke her will when upon his death the balance of
his estate passed into the family-support trust for Georgia's
benefit.  
The trustee contends that the $203,000 diminution in
Wright's estate due to losses from day-trading materially
altered the amount each child would receive under the wills
and that that diminution could not have been contemplated by
Georgia at the time she executed her will, the agreement not
to change the will, and the codicils.  On the contrary, the
diminution of the parties' assets was reasonably expected due
to several considerations.  A diminution of assets would be
reasonably contemplated by  Wright and Georgia because the
couple had been retireed for approximately seven years after
the estate plan was put in place.  Further, because the estate
plan called for the creation of the family-support trust upon
the death of the first spouse, it was easily within Wright's
and Georgia's contemplation that the parties' assets would be
reduced because they would have been used for the support of
1061041
18
the surviving spouse under the terms of the trust until the
death of the surviving spouse.  However, this aspect of
diminution of the assets is ignored by the trustee in arguing
failure of consideration.  Rather, the trustee focuses solely
on the investment losses suffered by Wright.  However, it was
certainly within contemplation that Wright, a retiree of
significant wealth, would seek investment opportunities on the
stock market and that both gains and losses could result from
those investments.  The assets could have easily increased had
Wright been more successful at trading on the stock market.
Accordingly, we conclude that there was no failure of the
consideration given by Wright in exchange for Georgia's
executing the agreement not to change or revoke her will.
The trustee next argues that Georgia agreed only not to
change her will and that the inter vivos transfer of her
assets into the revocable trust does not constitute a breach
of the agreement not to change her will.  Here, the parties
did indeed use the word change  in reaching the agreement at
issue, and by creating the revocable trust and transferring
the balance of her estate into the revocable trust Georgia did
not technically work a change to her will.  However,
1061041
19
transferring the balance of her estate into the revocable
trust had the effect of revoking her will, because upon her
death there was nothing left in her estate to be distributed
in accordance with the terms of her will.  As discussed above,
contracts not to revoke a will or devise are enforceable under
Alabama 
law 
and 
inter 
vivos 
transfers 
–- 
whether 
to
individuals or trusts –- cannot be used to circumvent such
contracts.  Indeed, "'such gifts must be reasonable, absolute,
bona fide, not testamentary in effect, and not made for the
purpose of defeating the contract to devise, nor having such
effect.'   Skinner v. Rasche, 165 Ky. 108, [112,] 176 S.W.
942, 944 [(1915)]."  Humphries, 565 So. 2d at 100 (emphasis
added).   There is a fundamental principle of law that "one
cannot do indirectly what one cannot do directly."  Blue Cross
& Blue Shield of Alabama, Inc. v. Butler, 630 So. 2d 413, 416
(Ala. 1993). See also Baldwin County v. Jenkins, 494 So. 2d
584, 589 (Ala. 1986); Sanders v. Cabaniss, 43 Ala. 173 (1869).
Accordingly, we conclude that the transfer of the assets of
Georgia's estate into the revocable trust, which was created
for the purpose of circumventing the terms of her will,
1061041
20
constitutes a breach of the agreement not to change or revoke
her will.
The trustee next argues that the trial court erred in
ordering that all attorney fees and expenses be paid out of
Mike Self's and Don Self's shares of Georgia's estate.  The
personal representative argued in its motion for a summary
judgment that the transfer of assets from Georgia's estate to
the revocable trust should be set aside and that all attorney
fees should be awarded out of Don Self's and Mike Self's
shares of Georgia's estate.  The trustee argued in response
only that genuine issues of material facts existed relating to
the enforcement of the agreement not to change the wills and
offered nothing in response to the personal representative's
argument 
in 
support 
of 
attorney 
fees 
and 
expenses.
Additionally, following the entry of the summary judgment by
the trial court, the trustee offered no opposition by way of
a postjudgment motion to the trial court's award of attorney
fees and expenses.  This Court has stated:
"'As a general rule, an appellate court will not
reverse a summary judgment on a ground not presented
in the trial court.
"'"[T]he appellate court can consider an
argument against the validity of a summary
1061041
21
judgment only to the extent that the record
on appeal contains material from the trial
court record presenting that argument to
the trial court before or at the time of
submission 
of 
the 
motion 
for 
summary
judgment."
"'Ex parte Ryals, 773 So. 2d 1011, 1013 (Ala. 2000)
(citing Andrews v. Merritt Oil Co., 612 So. 2d 409
(Ala. 1992)).  Put another way, on an appeal from a
summary judgment, this Court cannot hold the trial
court in error on the basis of arguments made for the
first time on appeal.  See Barnett v. Funding Plus of
America, Inc., 740 So. 2d 1069 (Ala. 1999); West Town
Plaza Assocs., Ltd. v. Wal-Mart Stores, Inc., 619 So.
2d 1290 (Ala. 1993).'"
Cain v. Howorth, 877 So. 2d 566, 578 (Ala. 2003) (quoting Ex
parte Elba Gen. Hosp. & Nursing Home, Inc., 828 So. 2d 308,
311-12 (Ala. 2001)).  Accordingly, because the trustee failed
to submit to the trial court her arguments in opposition to
the award of attorney fees and expenses, we will not address
those arguments, which are presented for the first time on
appeal.
AFFIRMED.
Cobb, C.J., and Lyons, Stuart, and Murdock, JJ., concur.