Court Opinion

ID: 7825763
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:06:33.713824+00
Date Added: 2024-06-11T16:30:51.757247
License: Public Domain

David Newbern, Justice, dissenting. Justice Dudley’s dissenting opinion expresses my views, but if we were to get further into the merits of this case, as does the majority opinion, I have another basis for disagreement, hence this separate opinion. As recognized by the majority, in order for a terminable interest to qualify for the marital deduction, the surviving spouse must be entitled to all the income from the property, payable annually or at more frequent intervals. 26 U.S.C. 2056(b)(7). Prior to execution of the second codicil, the will of Granville M. Cook provided for distribution of a share of the estate outright to Mrs. Cook and a share in trust for Mrs. Cook with the income to be distributed to her at least quarterly. The second codicil changed the will to say that all property previously devised to Mrs. Cook would be placed in trust for her benefit but with no provision for an “at least quarterly” distribution to her of the income from the property. Although he said in the second codicil he did not intend to reduce the bequest to his wife, Mr. Cook clearly did so. He converted a bequest to his wife to a bequest to a trust. It is a trust which did not exist prior to the execution of the second codicil. Instead of the trustees being, as in the trust created in the original will, Mrs. Cook and People’s Bank and Trust Company, as co-trustees, the sole trustee of this new trust is the Bank. In addition, Mr. Cook stated that Peoples Bank & Trust Company was to receive in trust for his wife “a// funds” which he previously designated as bequests to his wife. By that language he placed the property given outright to Mrs. Cook in the new trust in addition to the proceeds of the first trust in which Mrs. Cook was a trustee. To say that the second codicil did not reduce or change the bequest to Mrs. Cook because Mr. Cook said it did not is a little specious. If I say in today’s will, “I devise blackacre to A,” and then in tomorrow’s codicil, “I devise blackacre to B, but it is not my intent to reduce the devise I made yesterday to A,” the instruments could be interpreted to result in a devise of black-acre to B. In that event, the devise to A has most certainly been reduced. The creation of the new trust in the second codicil is inconsistent with the provisions of the will and the first codicil creating the first trust. Construction of the provisions in a will and codicil may be different from that which may be given to the same provisions in a will, since the mere making of a codicil raises an inference of a change of intention. Driver v. Driver, 187 Ark. 875, 63 S.W.2d 274 (1933). When a will and a codicil are inconsistent, the codicil, being the last expression of the testator’s desires, is to be given precedence. Ragland v. Commercial National Bank of Arkansas, 276 Ark. 418, 635 S.W.2d 258 (1982); Driver v. Driver, supra. In this case, the effect of Mr. Cook’s second codicil was to create a new trust. As the provision creating this trust is inconsistent with the provisions in the will and first codicil creating the first trust and devising 1/2 of his estate outright to Mrs. Cook, the second codicil takes precedence over the will and first codicil. As the new trust created in the second codicil does not contain a provision requiring the trustee to distribute income to Mrs. Cook annually or at more frequent intervals, it should not qualify for the marital deduction. In Wisely v. United States, 893 F.2d 660 (4th Cir. 1990), the Court held that the marital trust’s silence as to the frequency of income payments, as well as the fact that the trust granted the trustees discretion to accumulate any income they deemed unnecessary for care and support of the testator’s spouse in a manner in which she was accustomed, disqualified the trust for the marital deduction. The majority attempts to distinguish that case by pointing out that Mr. Cook’s will and codicils do not expressly direct the trustees to accumulate and add to the corpus of the trust what is not used for Mrs. Cook’s care and support. In this case, as in Wisely, it is material that, by the terms of the new trust, the trustees have the sole discretion to determine how much income is necessary for Mrs. Cook’s support and when the income should be given. As Mrs. Cook is given no right to compel distribution of the income to her, and the trustees are not to distribute the corpus of the trust to anyone else, that which is not given to Mrs. Cook will automatically accumulate and be added to the corpus. Cf. Friedman v. United States, 364 F.Supp. 484 (1973), which reached the contrary conclusion based on a Georgia statute requiring annual distribution in these circumstances. The lack of any provision for annual or more frequent distribution of the income, and the fact that Mrs. Cook is given no authority to compel distribution of the income to her from the trust created by the second codicil disqualified the trust for the marital deduction. I respectfully dissent. Dudley, J., joins in this dissent.