Court Opinion

ID: 9688441
Source: CourtListenerOpinion
Date Created: 2023-08-24 17:47:26.705594+00
Date Added: 2024-06-11T18:18:38.846092
License: Public Domain

SABERS, Justice
(dissenting).
I have no trouble with the rule that trusts can be revoked by the terms of a will, as long as the intention to revoke is clear and satisfactory. In this case, however, any intention to revoke the trusts was neither clear nor satisfactory.
Tentative trusts may be revoked in the will of the depositor creating such trusts. Annotation, Revocation of Tentative (“Totten”) Trust of Savings Bank Account by Inter Vivos Declaration or Will, 46 A.L.R. 3d 487, 493 (1972); Restatement (Second) of Trusts § 58 comment c (1959). Since there was no decisive act or declaration of revocation of the trusts created by the decedent during her lifetime, a presumption arises that an absolute trust was created as to each trust. Annotation, 46 A.L.R.3d 487. “This presumption may be overcome, however, if the will of the depositor manifests a clear intention to revoke the trust.” (emphasis in original). In re Dougherty’s Estate, 62 Misc.2d 348, 352, 309 N.Y.S.2d 1, 6 (Sur.Ct.1970).
The majority’s holding that the language contained in paragraph 2 of the will impliedly revokes the trusts because the decedent left her estate to be divided equally to Arnold and Margaret has disastrous implications. Under this reasoning, any tentative trust created prior to the execution of a will would nearly always be declared revoked if someone other than the beneficiary of the trust was to share in the decedent’s estate. It is tantamount to holding that trusts are revoked by a subsequently executed will unless the testator specifically states otherwise in the will. This defeats her intention rather than supporting it.
The majority opinion was overly impressed with the will language “share and share alike.” This “share and share alike” language is important as to Henrietta’s intention, but it only applies to her probate estate “over which I have the power to make testamentary disposition.” This does not apply to the trust property. The trust property passed to the beneficiary upon Henrietta’s death and she did not have the power to make testamentary disposition over the trust money.
The majority asserts that this language is “mere ‘boiler plate’ language which, standing alone, is in no manner disposi-tive.” This assertion is not supported by other authority. In Old Colony Trust Co. v. Gardner, 264 Mass. 68, 161 N.E. 801 (1928), the Massachusetts Supreme Court held that
If the words in the residuary clause, “all ... property ... over which I have any power of testamentary disposition,” are given their natural meaning, they do not revoke the trusts declared by the testatrix. She had no power of testamentary *472disposition over any of the property held in trust until the trusts were revoked.
Id. at 802.
The majority presumes Henrietta was an unintelligent person who did not know what she was doing. There is no evidence in the record to indicate that Henrietta was anything other than an intelligent person who knew what she was doing. In my view, this was a well-drawn will by an intelligent person and even the “boiler plate” language has meaning.
Over the years Henrietta established numerous joint and trust checking, savings, and other accounts. On March 3,1976, she established savings account #4194 in the name of Henrietta A. Bol, Trustee for Margaret Tompkins. On October 30, 1980, she established a thirty-month money market certificate # 28121.2 in the original sum of $6,000 at a rate of 12% interest. On October 5, 1981, she established a thirty-month money market certificate # 49994.2 in the original amount of $22,845.05 at 16% interest. On January 5, 1982, she established another thirty-month money market certificate # 55595.2 with an opening balance of $7,000 at 14%. Henrietta must have been pleased with these accounts as she allowed each to grow. Interest was compounded daily on the last three high yielding accounts. All of these last three accounts were in the name of Henrietta A. Bol, Trustee for Margaret Tompkins and contained the following language: “No additions permitted_ This account is Non Transferable.”
Henrietta’s will was signed on August 11,1983. Between that date and her death on May 23, 1985, she earned thousands of dollars in interest on these trust accounts in her name as trustee for Margaret Tompkins. The earnings on the last three money market certificates were distributed quarterly so there would have been numerous distributions. Despite that, Henrietta never took any action to transfer or revoke the trust accounts. In addition, the third money market certificate matured on April 4, 1984, and she allowed it to be automatically renewed in the name of Henrietta A. Bol, Trustee for Margaret Tompkins. The fourth certificate matured on July 4, 1984, and she also allowed it to be automatically renewed in the name of Henrietta A. Bol, Trustee for Margaret Tompkins. In my view, her handling of these accounts demonstrates her intelligence and her intention to maintain, not revoke, these trust accounts. If she did not want her sister, Margaret, to have this money upon her death, all she had to do was to remove Margaret’s name therefrom. Likewise, if she wanted Margaret to receive the money in a representative capacity only, all she had to do was to reflect that by saying Margaret Tompkins “as proposed executrix of my estate.” She did not do either.
The American Law Reports summarizes a case involving similar facts as follows:
[ I]n Nace v. Fulton County Nat. Bank (1951) 79 Pa D & C 325, ... there being no expression in the will of an intention to revoke the tentative trust existing by reason of the trust form of the certificate of deposit, such an intention could not be implied from the terms of the will. The court reasoned that had the purchaser intended the certificate of deposit to be governed by the terms of the testamentary trust created by her will, she could have easily so provided in the will and could have accomplished the same result by having the certificate renewed in her own name without the trust designation; instead, it was noted, the purchaser continued to have the certificate renewed in trust form even after the allegedly revoking will was executed.
Annotation, 46 A.L.R.3d at 532.
If the language of this will is sufficient to revoke these trusts, isn’t it also sufficient to revoke:
1. The savings account held jointly with Margaret,
2. The certificate of deposit held jointly with Margaret,
3. Title to the 1968 Ford LTD held jointly with Arnold,
4. Title to the 1967 Volkswagen held jointly with Arnold.
If the language of this will is so strong that it revokes four trusts without refer*473ring to them or naming them in any way, wouldn’t it be strong enough to revoke or remove a named beneficiary under a life insurance policy? The majority opinion wholly fails to even consider any of these questions.
The law in South Dakota concerning joint accounts has been stable since Wagner v. Wagner, 83 S.D. 565, 163 N.W.2d 339 (1968). Wagner properly placed the burden of challenging a joint account on the challenger to show by clear and satisfactory evidence that there was no intention to create the joint account. I fear that we are reversing Wagner by implication. For the purpose of stability, the Wagner Rule and its progeny should be extended to trust accounts.
Another reason expressed by the majority for revocation of the trusts is that, “the estate’s available liquid assets would be insufficient to pay the debts and costs of administration and expenses of Henrietta’s last illness.” The majority completely overlooks the fact that pursuant to SDCL 30-22-18 an insolvent estate can sell its property to pay such expenses. The record reveals household furnishings valued at $3,000 which could be sold. In addition, there was a balance due the estate on a real estate deed of trust covering Idaho land worth approximately $10,700. Thus, the estate had assets totalling $13,700, while the costs of administration of the estate and expenses of her last illness were $9,300, or $4,400 less. Finally, if the basis of the rule is that a trust may be revoked for the purpose of paying the estate’s bills, the rule should not exceed the reason, and the revocation or withdrawal from the trust should not exceed the amount of the bills. In re Campbell’s Estate, 140 N.Y.S.2d 863 (Sur.Ct.1955).
In his special writing Justice Henderson purports to support the majority opinion by emphasizing SDCL 55-1-14 which provides: “An interest in an existing trust can be transferred only by operation of law or by a written instrument subscribed by the person making the transfer or by his agent.” This statute does not mean that an interest in an existing trust was transferred, only that an interest in an existing trust may be transferred if, and only if, done in accordance with the statute.
I recognize that a will can revoke a trust and that an interest in an existing trust can be transferred by another written instrument. I do not, however, accept the claim that Henrietta A. Bol intended to or revoked the four trusts she established for her sister, since there is no language in the will which clearly and satisfactorily indicates any intention to revoke the trusts she created.