Opinion ID: 2351923
Heading Depth: 1
Heading Rank: 11

Heading: Issue # 1: Wyoming has Rejected the Augmentation Concept of the UPC

Text: [¶ 44] Under the Revised Uniform Probate Code, the decedent's surviving spouse is entitled to an elective-share amount calculated by applying a specified percentage to the augmented estate[.] 2 Restatement (Third) of Property: Wills & Other Donative Transfers § 9.2(a) (2003). Simply put, the Wyoming Probate Code does not incorporate the augmented estate concept. The Wyoming legislature has not adopted this concept. For purposes of applying the augmented estate concept to the elective share of a surviving spouse, some states utilize an illusory test and some states use a fraud test. Regardless of the many variations used in other states, until the Wyoming legislature adopts a motive-based approach to the elective share, as well as the requirement that non-probate assets be added back to the probate estate for purposes of the elective share, the policy adopted by other states is largely irrelevant. [¶ 45] Wyoming may not be in accord with other states on the issue of whether or not certain non-probate assets should be added back to the probate estate for purposes of the surviving spouse's elective share. See Amundson v. Amundson (In re Estate of Amundson), 621 N.W.2d 882, 886 (S.D.2001). Under any circumstances this is a policy choice for the Wyoming legislature to consider, and either accept or reject. [¶ 46] Wyo. Stat. Ann. § 2-5-101(a) (LexisNexis 2011) provides for the elective share of a surviving spouse and states: § 2-5-101. Elective share of property. (a) If a married person domiciled in this state shall by will deprive the surviving spouse of more than the elective share, as hereafter set forth, of the property which is subject to disposition under the will, reduced by funeral and administration expenses, homestead allowance, family allowances and exemption, and enforceable claims, the surviving spouse has a right of election to take an elective share of that property as follows: (i) One-half(1/2) if there are no surviving issue of the decedent, or if the surviving spouse is also a parent of any of the surviving issue of the decedent; or (ii) One-fourth(1/4), if the surviving spouse is not the parent of any surviving issue of the decedent. [Emphasis added.] The elective share of a surviving spouse under § 2-5-101 of the Wyoming Probate Code only applies to dispositions by will. [¶ 47] In Briggs v. Wyoming Nat'l Bank, 836 P.2d 263 (Wyo.1992), we determined that a waiver of the right to challenge an inter vivos trust did not violate the elective share statute. This Court noted that Wyoming's elective share statute states that it is applicable to testamentary or `will' dispositions of property. Id. at 273. The Briggs court also notes that the laws of the states vary with respect to the right of the survivor to claim a share of assets transferred to a revocable trust before the decedent's death. Id. at 274. For example, other states utilize different statutory criteria to determine the validity of the inter vivos transfers to an inter vivos trust with regard to the elective share. [¶ 48] On the other hand, the plain language of the elective share statute is limited to disposition by will. This so-called bright line rule is not dependent on the decedent's intent or retention of control. Section 2-5-101 begins with the condition, [i]f a married person domiciled in this state shall by will deprive the surviving spouse of more than the elective share, ... Here, the surviving spouse was not deprived by will, but rather by the Decedent's transfer of property to a revocable inter vivos Trust prior to her death. We have found no legal basis, nor has Poland cited any legal basis, for this Court to augment for purposes of the elective share the probate estate of the Decedent with the property transferred to the Trust prior to Decedent's death or with property transferred by will substitutes at the time of Decedent's death. [¶ 49] The Wyoming Probate Code defines Will at Wyo. Stat. Ann. § 2-1-301(a)(xxxiv) (LexisNexis 2011) to include a codicil, a testamentary instrument that merely appoints an executor, or a testamentary instrument that merely revokes or revives another will. In this case the will does more than merely appoint an executor or merely revoke a will; it actually pours-over the assets held at death by the Decedent into the Trust. Albeit that this is a relatively small amount of property; nevertheless, this transfer is made pursuant to Wyo. Stat. Ann. § 2-6-103 (LexisNexis 2011). [1] [¶ 50] In addition, prior to 2007, Wyo. Stat. Ann. § 4-10-505, now § 4-10-506(c), provided: § 4-10-505. Creditor's claim against settlor. (a) Whether or not the terms of a trust contain a spendthrift provision, the following rules apply: . . . . (iii) After the death of a settlor, and subject to the settlor's right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the settlor's death, is subject to claims of the settlor's creditors, costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal of remains and statutory allowances as provided in W.S. 2-5-101 and 2-5-103 to a surviving spouse and children to the extent the settlor's probate estate is inadequate to satisfy those claims, costs of administration, expenses, and allowances as provided in W.S. 2-5-101 and 2-5-103. [Bolded text deleted in 2007 amendment.] 2007 Wyo. Sess. Laws, ch. 155, § 3. [¶ 51] Ordinarily, when a statute is amended by deleting an express provision, the presumption is that a substantial change in the law was intended. Payne v. Laramie, 398 P.2d 557, 561 (Wyo.1965). The legislature's intent is clear that by its 2007 amendment to § 4-10-506, that property transferred to a revocable trust by the decedent prior to death was not subject to the elective share of a disinherited surviving spouse. [¶ 52] In 2007, the legislature specifically removed from § 4-10-506(c) the language that previously provided that property held in a revocable trust was subject to the elective share of a disinherited spouse. The amendments to § 4-10-506(c) removed the specific references to the statutory allowances as provided in §§ 2-5-101 and 2-5-103 to a surviving spouse and children and allowances as provided in §§ 2-5-101 and 2-5-103. 2007 Wyo. Sess. Laws, ch. 155, § 3. [¶ 53] The Wyoming legislature has not adopted or integrated the concept of augmenting the estate for purposes of computation of the elective share with the non-probate assets transferred to an inter vivos trust during the lifetime of the decedent. There is a definite split of authority between the states as to whether or not assets transferred and held in a revocable inter vivos trust are to be added back to the estate for purposes of the elective share. However, the legislature has specifically addressed how this split of authority should be viewed by this Court. [¶ 54] Wyo. Stat. Ann. § 4-10-1101 (LexisNexis 2011) provides: § 4-10-1101. Uniformity of application and construction. In applying and construing this act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it. With respect to article 5 of this act, a court shall not give consideration to cases from jurisdictions that have adopted some version of the Uniform Trust Code, but have not modified article 5 of the Uniform Trust Code in a manner similar to Article 5 of this act. [Emphasis added.] [¶ 55] Article 5 referred to above contains § 4-10-507. The second sentence was adopted in 2007 as part of the same act that removed the elective share from the list of claims now found in § 4-10-506. Given the split of authority found in other states, we agree that the consideration of case law from other jurisdictions would be of limited assistance in this case given the clear and unambiguous language used by the legislature. See 2007 Wyo. Sess. Laws, ch. 155, § 3. [¶ 56] It is reasonable to suggest that the legislature during its consideration of the 2007 amendments was made aware of the different criteria used by other states to implement the augmentation rule, as well as the need to clearly define its intent with regard to these multiple and sometimes confusing methods used to address this issue in other states. For a comprehensive article explaining that most of the confusion stems from the approach to the problem taken by the courts and from their being overly concerned with the statute of wills: See V. Woerner, Annotation, Pour-over Provisions from Will to Inter Vivos Trust, 12 A.L.R.3d 56 (1967 and 2011 Supp.). Also see Bezzini v. Department of Soc. Servs., 49 Conn.App. 432, 715 A.2d 791 (1998); Taliaferro v. Taliaferro, 252 Kan. 192, 843 P.2d 240 (1992); Soltis v. First of Am. Bank-Muskegon, 203 Mich.App. 435, 513 N.W.2d 148 (Mich.1994) and Dumas v. Estate of Dumas, 68 Ohio St.3d 405, 627 N.E.2d 978 (1994) (involve cases holding that assets held in a revocable inter vivos trust are not subject to the surviving spouse's elective share). For cases holding that assets transferred to an inter vivos trust were subject to the elective share of a surviving spouse, see Dunnewind v. Cook, 697 N.E.2d 485, 489 (Ind.Ct.App.1998), and In re Estate of Inter, 444 Pa.Super. 417, 664 A.2d 142, 147 (Pa.1995); Sieh v. Sieh, 713 N.W.2d 194 (Iowa 2006). [¶ 57] Furthermore, the Uniform Trust Code also provides at Wyo. Stat. Ann. § 4-10-106 (LexisNexis 2011), The common law of trusts and principles of equity supplement this act, except to the extent modified by this act or another statute of this state. When interpreting article 5 of this act, the court shall first use the law of this state, then general common law. The law of this state includes the following legislative directive at Wyo. Stat. Ann. § 2-1-102(a)(ii) and (iv) (LexisNexis 2011) that provide that the Wyoming Probate Code shall be liberally construed and applied to promote the following purposes: to [d]iscover and make effective the intent of a decedent in distribution of his property; and to [f]acilitate use and enforcement of certain trusts. We are of the opinion that the district court properly determined that summary judgment was appropriate in this matter in that the Decedent's testamentary intent regarding the property transferred to the Trust was made effective and the 2008 Trust was enforced.