Court Opinion

ID: 6768784
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:40:47.748868+00
Date Added: 2024-06-11T16:02:42.890556
License: Public Domain

Alice Robie Resnick, J.,
dissenting. This case presents an ideal opportunity for this court to reconsider its ill-advised decision in Smyth v. Cleveland Trust Co. (1961), 172 Ohio St. 489, 18 O.O.2d 42, 179 N.E.2d 60. By reaffirming and strengthening Smyth, the majority compounds the error of that case, continuing to ignore the rights of surviving spouses whose interests are “overlooked” in the testamentary provisions of their deceased spouses. I respectfully, but vigorously, dissent.
R.C. 2106.01, formerly R.C. 2107.39, allows a surviving spouse who is not sufficiently provided for in a deceased spouse’s will to elect against the will and instead receive a specified share of the deceased spouse’s estate. A surviving spouse who exercises the statutory right of election does not take under the will, but instead takes up to one half of the net estate. R.C. 2106.01(C). Even though the decedent’s will provides that certain of his or her property is to go to others, the surviving spouse can elect to take a portion of that property. By providing for this right of election, the General Assembly has evinced a clear intent to protect the interests of a surviving spouse. The decedent spouse’s plan for the distribution of his or her estate, as expressed in the will, must yield to these important interests.
When, as in this case, a trust instrument provides that virtually all of a decedent’s property passes to someone other than the surviving spouse, the same interests sought to be protected by the right of election arise. Although the trust at issue is not testamentary in nature (per R.C. 1335.01), from the surviving spouse’s perspective there is no difference between this trust and a will which *413provides an insufficient share of the estate for the surviving spouse. The holding in Smyth (and the holding by today’s majority reaffirming that decision) ignores the importance of a surviving spouse’s interests protected by the statutory right of election, and fails to realize that this court can, and should, act to uphold the property interests of surviving spouses.
Prior to Smyth, decisions of this court on the surviving spouse’s ability to reach trust assets did provide protection for surviving spouses. Bolles v. Toledo Trust Co. (1944), 144 Ohio St. 195, 29 O.O. 376, 58 N.E.2d 381, and Harris v. Harris (1947), 147 Ohio St. 437, 34 O.O. 371, 72 N.E.2d 378, both held that a surviving spouse could reach the assets of a revocable inter vivos trust, established by a spouse who had retained dominion'and control over the trust property until his or her death, by exercising the right of election after the death of the spouse. In Smyth, this court overruled relevant parts of those two cases, and effectively put trust assets beyond the reach of a surviving spouse, even though the surviving spouse might not have been sufficiently provided for in an existing will. Id. at paragraph two of the syllabus. After the decision in Smyth, a spouse can use a trust to disinherit the other spouse, although the statutory right of election prevents the same result from being accomplished through a will.2 The majority, by refusing to question the unfair result in Smyth, perpetuates this most inequitable situation.
The Supreme Judicial Court of Massachusetts, in Sullivan v. Burkin (1984), 390 Mass. 864, 460 N.E.2d 572, overruled its prior decision in Kerwin v. Donaghy (1945), 317 Mass. 559, 59 N.E.2d 299, and effectuated precisely the result this court should have reached in this case. Kerwin held that a surviving spouse could not reach the assets of an inter vivos trust created by the deceased spouse over which the decedent spouse had retained sole dominion and control. In 1961, the Smyth court adopted the Kerwin position, establishing Ohio law identical to that of Massachusetts on this issue. In 1984, however, in Sullivan, Massachusetts abandoned Kerwin, and held “as to any inter vivos trust created or amended after the date of this opinion, we announce that the estate of a decedent * * * shall include the value of assets held in an inter vivos trust created by the deceased spouse as to which the deceased spouse alone retained the power during his or her life to direct the disposition of those trust assets for his or her benefit * * Sullivan, 390 Mass, at 867, 460 N.E.2d at 574.
In deciding whether a surviving spouse can reach the assets of an inter vivos trust created by a decedent spouse, two strong competing interests must be weighed. The right of a decedent to allocate property as he or she sees fit must *414be balanced against the right of a surviving spouse to share in the decedent’s estate. Smyth placed great emphasis on respecting the wishes of a decedent spouse, to the extent that a surviving spouse’s interests were virtually ignored. In upholding the general validity of inter vivos trusts as effective will substitutes even though their creators do not comply with the Statute of Wills, the Smyth court failed to recognize that a surviving spouse’s right to reach trust assets in an appropriate situation should be recognized as an exception to the general rule. By allowing a decedent spouse an untrammeled right to use a trust to distribute assets, the Smyth court was willing to sacrifice the interests of surviving spouses.
If the rights of a surviving spouse were not sufficiently recognizable when Smyth was decided, those rights are readily identifiable today. The majority acknowledges that if Mr. Dumas had not died before the divorce proceedings were completed, Mrs. Dumas could have reached the trust assets as a judgment creditor of Mr. Dumas. However, since Mr. Dumas died while still married to Mrs. Dumas, the trust assets were beyond her reach at the moment of his death, as dictated by the rule of Smyth. The difference in results is curious. Ohio law now requires that in divorce proceedings, property acquired during the marriage belongs to both marriage partners, and should be divided accordingly. See R.C. 3105.171(B). That Mr. Dumas created a trust to distribute property acquired during the marriage at his death would not have prevented Mrs. Dumas in the divorce proceedings from reaching the assets of the trust, inasmuch as the trust was funded with marital property. Thus, Mrs. Dumas’s interests would have been taken into account if the divorce had proceeded, but are ignored since the marriage was not terminated prior to Mr. Dumas’s death. The compelling policy reasons for according a divorcing spouse the opportunity to reach marital property are identical to the reasons for allowing a surviving spouse to exercise the right of election set forth in R.C. 2106.01. Today’s courts should not, as the majority does, condone absolutely any attempt by one spouse to disinherit another through a revocable trust funded with marital property.
In Sullivan, supra, 390 Mass, at 871-872, 460 N.E.2d at 577, the court stated: “ * * * There have been significant changes since 1945 in public policy considerations bearing on the right of one spouse to treat his or her property as he or she wishes during marriage. The interests of one spouse in the property of the other have been substantially increased upon the dissolution of a marriage by divorce. We believe that, when a marriage is terminated by the death of one spouse, the rights of the surviving spouse should not be so restricted as they are by the rule in Kerwin v. Donaghy. It is neither equitable nor logical to extend to a divorced spouse greater rights in the assets of an inter vivos trust created and controlled by the other spouse than are extended to a spouse who remains married until the death of his or her spouse.” (Footnote omitted.)
*415The majority’s abbreviated discussion of the effects of fraud by a decedent spouse in the creation of a trust which disinherits a surviving spouse illustrates the unworkability of the majority’s interpretation of Smyth. The majority acknowledges that theoretically there could be fraud in the creation of a trust, in which case, presumably, the trust assets could be reached by the surviving spouse. However, under the majority’s reasoning, it will be extremely difficult, if not impossible, for a surviving spouse to establish that fraud was perpetrated in the creation of a trust.
The majority’s assertion that “[i]n this case, * * * the facts do not even suggest fraud” is questionable when one considers that this case comes to us by way of summary judgment. The uncontroverted facts of this case, when considered in a light most favorable to Mrs. Dumas, indicate a very real possibility that Mr. Dumas fraudulently created the trust to deprive Mrs. Dumas of her share of marital property.
Moreover, if this court declines to overrule Smyth, we should still recognize that a rigid interpretation of the rule of Smyth is equivalent to this court’s sanctioning the disinheritance of one spouse by another. Under the majority’s interpretation of Smyth, creation of such a trust will virtually never be fraudulent, and the surviving spouse will rarely be able to reach the trust assets unless perhaps the explicit statement “this trust is created to defraud my spouse” appears somewhere in the trust instrument.
It is obvious to me that serious inequities are engendered by this court’s lack of foresight. The court of appeals recognized the clear inadequacies of Smyth and realized that grave injustices could result from application of the broad rule in that case. This court in the second syllabus paragraph of Smyth went well beyond what was needed to resolve the question before it. The widow in Smyth had participated in the decision to establish the trust — clearly there was no fraud against her in the decedent husband’s creation of the trust. Instead of overruling relevant parts of Bolles and Harris, which had held that the surviving spouse could reach the assets of such a trust through exercising the right of election, the Smyth court could have merely modified those cases, by holding that the surviving spouse could not reach trust assets where he or she had approved of the creation of the trust, ie., where inequities arose by allowing the surviving spouse to reach the trust assets. The real problem with Smyth is that, through the overly broad second syllabus paragraph, it seemed to hold that a revocable inter vivos trust is never reachable by a surviving spouse who exercises the right of election. The majority primarily errs in its unsupportable ratification of Smyth’s second syllabus paragraph, without realizing that Smyth should, at the very least, be limited to the facts upon which it was based.
*416It is surprising that the General Assembly itself has not acted to rectify the obviously erroneous holding of Smyth. The General Assembly is in a position to hold hearings and gather information to allow it to draft a bill which will protect the interests of surviving spouses, in the same way those interests were protected before Smyth. The General Assembly can also strike a balance to establish the circumstances under which trust assets would be beyond the reach of a surviving spouse. “The question of the rights of a surviving spouse in the estate of a deceased spouse, using the word ‘estate’ in its broad sense, is one that can best be handled by legislation.” Sullivan, supra, 390 Mass, at 873, 460 N.E.2d at 578. With the increasing popularity of revocable trusts as an estate planning tool, the possibility that married persons will take advantage of the rule of Smyth to effectively disinherit their spouses has increased since Smyth was decided. Because the majority is unwilling to reconsider Smyth, I call on the General Assembly to examine this important question. If the General Assembly perceives these same inequities, that body should correct the error of Smyth through legislation.
Douglas, J., concurs in the foregoing dissenting opinion.

. For a discussion of the development of Ohio law in this area, and a cogent criticism of Smyth, see, generally, Note, The Surviving Spouse’s Sacred Right to Elect Against the Will: Is It a Pyrrhic Victory? (1990), 19 Cap.U.L.Rev. 553.