Opinion ID: 895787
Heading Depth: 1
Heading Rank: 5

Heading: Estate Distribution

Text: [¶ 47] Lavilla argues the trial court erred in approving the children's proposed estate distribution because she believes the will is not ambiguous. She objects to the court's conclusion that her specific bequests in Article II and the incomplete disposition in the Article III residuary clause are inconsistent. Lavilla asserts the residuary clause's condition, [i]n the event Lavilla [Lutz] does not survive me, is clear and unambiguous. Since she survived Emanuel, she insists the residuary clause is ineffective and she is accordingly entitled to an intestate share of Emanuel's estate. She contends the court modified the will by concluding there was an ambiguity and then used extrinsic evidence to rewrite the will. [¶ 48] How courts must construe a will was recently summarized in Matter of Estate of Fern L. Brown, 1997 N.D. 11, ¶ 15, 559 N.W.2d 818: Courts must construe a will to find the testator's intent from full consideration of the will in light of surrounding circumstances. Whether an ambiguity exists in a will is a question of law for the court to decide. A will is ambiguous only if it has more than one reasonable interpretation. If a will is ambiguous, extrinsic evidence can be used to aid in clarifying the ambiguity. As we [have] held, resolution of an ambiguity by extrinsic evidence is a finding of fact that will not be set aside unless it is clearly erroneous. (citations omitted). Here, the trial court primarily used the premarital agreements as controlling extrinsic evidence of Emanuel's intent in order to resolve a perceived ambiguity in favor of his children. Because the trial court's analysis was based on agreements that may or may not be enforceable after a trial on remand, we reverse the court's construction of the will and its order approving the children's proposed estate distribution, and we remand for interpretation of the will after the trial on the enforceability of the premarital agreements. [¶ 49] Even if the premarital agreements are enforceable, the trial court should be mindful that the premarital agreements permitted Emanuel to give Lavilla more property under a will than the minimum he agreed to in the premarital agreements. A spouse who has entered into a premarital agreement remains free to give a surviving spouse more than the agreed minimum either by will or agreement later. See 41 Am.Jur.2d Husband and Wife § 123 (1995); Coffman v. Adkins, 338 N.W.2d 540, 543 (Iowa.Ct.App.1983)(It may not be entirely logical for a man to enter into a contract to keep his property separate from his wife's and then transfer it into joint tenancy with her, but that does not constitute a legal basis on which this court could void a transfer freely made.); Estate of Strickland, 181 Neb. 478, 149 N.W.2d 344, 354 (1967)(widow, who had agreed before marriage to receive nothing from husband's estate on his death, was entitled to bequest made in his later will). Here, Lavilla did not waive any gifts made by Emanuel's will because the premarital agreements excepted what was provided in their respective wills. [¶ 50] If the trial court finds the premarital agreements were voluntary, then it must also consider them for the substantive elements of unconscionability under NDCC ch. 14-03.1. If the premarital agreements are either unenforceable or unconscionable, however, the trial court must reconsider the interpretation of Emanuel's will accordingly. Compare Matter of Estate of Ruben J. Peterson, Deceased, 1997 ND 48, ¶¶ 11-14, 561 N.W.2d 618 (Although P.O.D. designation may not be altered by will, testamentary intent should not be thwarted by apparent mistaken assumption). Although the invalid premarital agreements would not be controlling, they nevertheless may be some evidence of Emanuel's testamentary intent. [¶ 51] If the premarital agreements are unenforceable or unconscionable, Lavilla may or may not be entitled by intestacy to inherit half of the intestate estate, see NDCC 30.1-04-02(4)(1994), but she would likely be entitled to an elective share of one-third of the augmented estate. See NDCC 30.1-05-01(1)(1994). [6] She would also likely be entitled to her family allowance, homestead allowance, and exempt property entitlement. See NDCC 30.1-07-01 (1994)(Exempt property); NDCC 30.1-07-02 (1994)(Family allowance); NDCC 47-18-01 (Homestead exemption). On the other hand, if Lavilla's premarital agreements are valid, enforceable, and not unconscionable, her waiver of rights to an intestate share and to elective and exempt shares will prevent Lavilla from receiving more from Emanuel's estate than express gifts to her in his will. [¶ 52] In that event, the interpretation of the resident property gift to Lavilla in Article II may become important. They lived in half of a duplex, and Emanuel rented out the other half. Emanuel gave Lavilla the resident property used and occupied by us as a home ... for the remainder of her natural life, or until she remarries. Lavilla contends in this appeal, since the duplex has one legal description and is therefore one resident property, she should also have the right to use, occupy and take the income from all of the duplex for the remainder of her life or until she remarries. Emanuel's children insist there are two residences and two street addresses located on the property and that Lavilla has only resided at one of them, so she cannot claim the other one. Since the income from the rental half of the duplex is used to pay the mortgage on the whole, and the mortgage payment exceeds the income received from the rental side, Emanuel's children argue there is no basis for Lavilla claiming the entire duplex as a testamentary gift. [¶ 53] Because the trial court did not explain the reason why it approved the children's proposed distribution to Lavilla of only a right of occupancy of residence-main floor unit[], and did so without any provision for the mortgage, taxes, and other common expenses for the property, the trial court may also have to re-visit and resolve ambiguities about this gift in Emanuel's will to finally approve distribution of his estate.