Title: ESTATE OF DUNLAP

State: montana

Issuer: Montana Supreme Court

Document:

NO. 82-46 IN THE S U P R E J I Z E COURT OF THE STATE OF MONTANA 1982 IN THE MATTER OF THE ESTATE OF BESSIE EVA DUNLAP, a/k/a BESS DUNLAP, Deceased. Appeal from: District Court of the Fourth Judicial District, In and for the County of Missoula Honorable John Henson, Judge presiding. Counsel of Record: For Appellant: Tipp, Hoven, Skjelset & Frizzell, Missoula, Montana Richard Buley argued, Missoula, Montana For Respondent : Milodragovich, Bale and Dye, Missoula, Montana Donald C. St. Peter argued, Missoula, Montana Submitted: June 24, 1982 ' I - Decided: August 19, 1982 Filed: AU(; 1 9 1 9 8 2 Mr. Justice Gene B. Daly delivered the Opinion of the Court. The decedent, Bessie Eva Dunlap, died testate on November 27, 1980. J. Wayne Dunlap, the surviving child of Bessie, filed a "Petition For Exempt Property Allowance" on July 1, 1981. A hearing was held in the District Court of the Fourth Judicial District of the State of Montana, in and for the County of Missoula. I 3 y order, on August 5, 1981, the District Court granted J. Wayne Dunlap $3,500 in exempt property. The estate of Bessie Dunlap thereafter moved the District Court to amend its order. The motion was denied, and the estate now appeals. Bess Dunlap died testate on November 27, 1980. In paragraph 7 of her will, she acknowledged her son, J. Wayne Dunlap, and stated: "I hereby declare that I have one child: J. Wayne Dunlap, a/k/a Joseph A . Dunlap. I spe- cifically leave nothing to my said child." Bessie Dunlap's husband predeceased her. In her will, Bessie devised all her property to her husband, and in the event he predeceased her, the entire estate was then devised to the Victor Cemetary Association, Victor, Montana. The personal representative appointed by the will filed an application for informal probate and received her letters of probate. Later, the disinherited son, J. Wayne Uunlap, filed a notice of intent and petition to take exempt property. The sole issue before this Court is whether a child specifically disinherited by will may take under section 72-2-802, MCA, which provides exempt property for certain heirs. Section 72-2-802, MCA, provides: "(1) In addition to the homestead allowance, the surviving spouse of a decedent who was domiciled in this state is entitled from the estate to value not exceeding $3,500 in excess of anv securitv interests therein in * * household furniture, automobiles, furnish- ings, appliances, and personal effects. If there is no surviving spouse, children of t L decedent are entitled jointly to the same --- ------ value. If encumbered chattels are selected and if the value is excess of security in- terests, plus that of other exempt property, is less than $3,500 or if there is not $3,500 worth of exempt property in the estate, the spouse or children are entitled to other assets of the estate, if any, to the extent necessary to make up the $3,500 value. "(2) Rights to exempt property and assets needed to make up a deficiency of exempt property have priority over all claims against the estate, except that the right to any assets to make up a deficiency of exempt property shall abate as necessary to permit prior payment of homestead allowance and family allowance. "(3) These rights are in addition to any benefit or share passing to the surviving --------- spouse or children by the will of the dece- dent unless otherwise provided, by intestate succession, or by way of elective ------ share." Section 72-2-802, MCA. (Emphasis added.) The appellant has rested its case on two arguments: (1) that testator's intent governs the above section, and (2) that the statutory language in subsection (3) above, "unless otherwise provided," includes the will of the testator by disinheriting the son and hence the son cannot be the recipient of exempt property. The appellant cites Matter of Estate of Merkel to demonstrate that the primary purpose of the exempt property provision is to protect the estate from creditors in favor of the family. Matter of Estate of Merkel (1980), Mont. , 618 P.2d 872, 37 We agree with the proposition advanced by appellant that the governing rule in construction or interpretation of a t e s t a m e n t a r y d i s p o s i t i o n is t h e i n t e n t i o n of t h e t e s t a t o r and must p r e v a i l ; however, t h a t is n o t our case h e r e . F u r t h e r , you c a n n o t i s o l a t e t h e p h r a s e as h a s been done here. I t must be c o n s i d e r e d w i t h t h e s e c t i o n as a whole. S e c t i o n 72-2-802, MCA, d o e s n o t , a s a r g u e d by a p p e l l a n t , use t h e term "exemption" o r "exempt" i n its c o l l o q u i a l f o r m . T h i s s e c t i o n r a t h e r t r e a t s " e x e m p t p r o p e r t y " t o g e t h e r w i t h "homestead allowance" i n t h e noun form t o i d e n t i f y a n a b s o l u t e g r a n t . T h i s g r a n t is t o t h e spouse who s u r v i v e s and i f no s u r v i v i n g s p o u s e , t h e n i n p a r t (exempt p r o p e r t y ) t o c h i l d r e n of t h e d e c e d e n t j o i n t l y i n t h e same v a l u e a s would go t o a spouse. These r i g h t s ( o r g r a n t ) are i n a d d i t i o n t o any b e n e f i t o r s h a r e p a s s i n g t o t h e s u r v i v i n g spouse o r c h i l d r e n (1) by w i l l of t h e d e c e d e n t u n l e s s o t h e r w i s e p r o v i d e d , ( 2 ) by i n t e s t a t e s u c c e s s i o n , o r ( 3 ) by way of e l e c t i v e s h a r e . T h i s Court determined i n Merkel, s u p r a , t h a t t h e s u r v i v i n g s p o u s e ' s r i g h t t o exempt p r o p e r t y and homestead allowance w a s a b s o l u t e . The e s t a t e ' s c o n t e n t i o n t h a t a d e c e d e n t ' s c h i l d r e n a r e n o t e n t i t l e d t o t h e same r i g h t s as a s u r v i v i n g spouse is s p u r i o u s . S e c t i o n 72-2-704, MCA, d o e s n o t e n l a r g e t h e s u r v i v i n g s p o u s e ' s r i g h t t o exempt p r o p e r t y p u r s u a n t t o s e c t i o n 72-2-802, MCA. I t m e r e l y d i r e c t s t h a t exempt p r o p e r t y n o t b e c h a r g e d a g a i n s t t h e s u r v i v i n g s p o u s e ' s e l e c t i v e s h a r e . S e c t i o n 72-2-802, which c r e a t e s a r i g h t t o exempt p r o p e r t y , makes no d i s t i n c t i o n between t h e r i g h t s of a s u r v i v i n g spouse and c h i l d r e n of t h e d e c e d e n t t o t a k e exempt p r o p e r t y . The s t a t u t e embodies a p r i o r i t y r i g h t i n t h e s u r v i v i n g spouse a s a g a i n s t t h e s u r v i v i n g c h i l d r e n of t h e d e c e d e n t , b u t d o e s n o t g r a n t a s u r v i v i n g spouse any g r e a t e r r i g h t t o exempt p r o p e r t y t h a n t h e s u r v i v i n g c h i l d r e n . I n Merkel, s u p r a , we s t a t e d t h a t t h e homestead exemption and exempt property of t h e Montana Uniform Probate Code continue t h e t r a d i t i o n of making s t a t u t o r y r i g h t s a v a i l a b l e t o a surviving spouse. I n t h a t case decedent executed a w i l l which l e f t nothing t o h i s s u r v i v i n g spouse. N o one questioned her r i g h t t o s t a t u t o r y g r a n t s because she was l e f t nothing by w i l l . Only t h e q u e s t i o n of l i f e o r f e e i n t e r e s t t o her were argued. Our i n t e r p r e t a t i o n would g r a n t a c h i l d t h e same r i g h t s under s e c t i o n 72-2-802, MCA, which would not r e q u i r e t h a t a c h i l d r e c e i v e any b e n e f i t under t h e w i l l of t h e decedent t o r e c e i v e t h e g r a n t . The a p p e l l a n t argues a g a i n s t t h i s procedure because the purpose of t h e exempt property s t a t u t e is t o p r o t e c t t h e a s s e t s of t h e e s t a t e , e s p e c i a l l y family heirlooms from passing t o c r e d i t o r s . The a p p e l l a n t ignores t h e f a c t t h a t p r o t e c t i n g t h e s e a s s e t s from c r e d i t o r s is not an end i n i t s e l f . These a s s e t s a r e p r o t e c t e d from c r e d i t o r s s o t h a t property and money can be d i s t r i b u t e d t o those people whom Montana's l e g i s l a t u r e has determined t o p r o t e c t . The f a m i l y p r o t e c t i o n p r o v i s i o n s of t h e Uniform Probate Code were intended by t h e d r a f t e r s t o p r o t e c t a surviving spouse and c h i l d r e n from d i s i n h e r i t a n c e by a decedent. The Uniform Probate Code c o n t a i n s t h r e e d i f f e r e n t kinds of p r o v i s i o n s t o p r o t e c t t h e immediate family. P a r t 7 , Chapter 2 of T i t l e 7 2 , MCA, c o n t a i n s p r o v i s i o n s a s s u r i n g the surviving spouse of a s h a r e i n both t h e probate e s t a t e and i n c e r t a i n a s s e t s t r a n s f e r r e d o u t s i d e of t h e probate p r o c e s s t h a t a d e c e d e n t c a n n o t d e f e a t . Such e l e c t i v e s h a r e takes t h e p l a c e of common law dower and c u r t e s y which a r e a b o l i s h e d under t h e Code. P a r t 6 of Chapter 2, T i t l e 72, MCA, p r o t e c t s a g a i n s t u n i n t e n t i o n a l d i s i n h e r i t a n c e by p r o v i d i n g a s h a r e f o r t h e s u r v i v i n g s p o u s e and c h i l d r e n i f t h e t e s t a t o r m a r r i e s a f t e r e x e c u t i n g t h e w i l l o r h a s c h i l d r e n born o r adopted a f t e r t h e w i l l is e x e c u t e d , u n l e s s t h e omission was i n t e n t i o n a l o r t h e t e s t a t o r made o t h e r p r o v i s i o n s f o r t h e d i s i n h e r i t e d s p o u s e o r c h i l d . P a r t 8 of Chapter 2, T i t l e 72, d e a l s w i t h exempt p r o p e r t y and allow- a n c e s , s t a t u t o r y r i g h t s v e s t e a i n t h e s u r v i v i n g s p o u s e and c e r t a i n c h i l d r e n . I n t h e p r e s e n t case, t h e d e c e d e n t ' s w i l l d i d no more t h a n d i s i n h e r i t t h e c h i l d and e x p r e s s e d no i n t e n t as t o s t a t u t o r y r i g h t s . The judgment o f t h e D i s t r i c t C o u r t is a f f i r m e d . We concur: