Bay v. Estate of Bay
| Decision Date | 31 January 2005 |
| Docket Number | No. 52687-1-I.,52687-1-I. |
| Citation | 125 Wash. App. 468,105 P.3d 434 |
| Court | Washington Court of Appeals |
| Parties | Laura BAY, Appellant, Cross-Respondent, v. ESTATE OF John BAY, Kelly Bay and Eric Bay, Respondents, Cross-Appellants. |
Larry C. Leonardson, Bothell, WA, for Appellant.
Deanne Minor, Gail B. Nunn, Oloane Nunn & Guthrie PLLC, Everett, WA, for Respondent.
Laura Bay, who was not named or provided for in her late husband's will, challenges a trial court's decision to deny her a share of his estate. Although she was presumptively entitled to an intestate share as an "omitted spouse", the statute permits this presumption to be rebutted by clear and convincing evidence "that a smaller share, including no share at all, is more in keeping with the decedent's intent." RCW 11.12.095(3). Substantial evidence in this case supports the court's conclusion that it was more in keeping with the decedent's intent that his estate go entirely to his children. We affirm.
John Bay created a will in 1983, 16 years before his death. The will left everything to Cathy, his wife at the time, then in trust to their children. John's will emphasized his desire that his estate provide for his children's post-secondary education.
John and Cathy divorced in 1986 after having two children, Kelly and Eric. By statute, the divorce revoked any provisions in John's will in favor of Cathy. His estate would pass "as if the former spouse failed to survive the testator". RCW 11.12.051. This left Kelly and Eric as the sole beneficiaries of the will.
John Bay married appellant Laura Bay in November 1999. He changed the beneficiary designation of his 401(k) retirement plan so that Laura was an 80 percent beneficiary. He designated his two children as equal beneficiaries of the remaining 20 percent. John did not make any changes to his will.
John Bay committed suicide in October 2000. At the time, Kelly was 18 and Eric was 15.
It was undisputed that John's 401(k) retirement plan, a non-probate asset, should be distributed according to the percentages he designated. Laura received approximately $290,000, and Kelly and Eric each received their 10 percent share.
John's probate estate was administered by his first wife's brother, who was the personal representative designated by the will. John's probate assets consisted almost entirely of separate property, amounting to a net of some $108,000. The personal representative proposed to distribute this sum equally between Kelly and Eric, with nothing for Laura.
Laura Bay protested the proposed distribution. She claimed that as an omitted spouse she was entitled to her intestate share of the probate estate. Her intestate share under the descent and distribution statute would have been "one-half of the net separate estate" because John was "survived by issue". RCW 11.04.015(1)(b). Laura accordingly proposed that she receive $54,000 from the probate estate, with Kelly and Eric to receive $27,000 each.
The dispute came to the superior court where Judge Thorpe rejected Laura's claim and ordered the $108,000 to be distributed equally between Kelly and Eric Bay. Each child's total receipts, including their shares of the retirement account and some other non-probate accounts, amounted to approximately $100,000. Laura appeals the final order confirming the proposed distribution to the Bay children.
In confirming the distribution of John's set separate estate entirely to his children, the trial court applied Washington's 10-year-old omitted spouse statute, which provides as follows:
RCW 11.12.095.
The legislation enacting the current omitted spouse statute repealed the predecessor statute, former RCW 11.12.050. Laws of 1994, ch. 221, §§ 10; 72, effective Jan. 1, 1995. The purpose of the former omitted spouse statute was "to prevent the unintentional disinheritance of the surviving spouse of a testator who marries after making a will and then dies without ever changing it." In re Estate of Deoneseus, 128 Wash.2d 317, 319, 906 P.2d 922 (1995). The new statute has the same purpose, and, like the old statute, it establishes a presumption that the omitted spouse will receive the same amount as if the decedent had died intestate.
The Bay children initially argue that the distribution can be affirmed on the ground that John's "net separate estate" under RCW 11.04.015(1)(b) included not only the $108,000 but also the 401(k) asset worth $290,000. They contend that Laura, as the beneficiary of the $290,000, has already received more than her presumptive half of John's "net separate estate", and therefore it is unnecessary to decide whether there is sufficient evidence to rebut the presumption. But the children have cited no authority for the proposition that a non-probate asset is part of the "net separate estate" discussed in the descent and distribution statute. We conclude the trial court correctly rejected this argument, and found that John's "net separate estate" consisted of the $108,000 in probate.
We are then faced with deciding whether there was sufficient evidence to rebut the presumption that Laura would receive half of the net separate estate of $108,000.
The means of rebutting the presumption provided by the new statute are somewhat more expansive than in the former statute. The new statute is divided into four subsections. The presumption is stated in subsection (3). The first two subsections are concerned with determining whether a spouse, married after the execution of the will, is entitled to the presumption. Subsection (1) states that the spouse "must" receive "a portion" of the decedent's estate as provided in subsection (3), unless the decedent's failure to name or provide for the spouse in the will was intentional. Subsection (2) provides rules for determining whether the will names or provides for the spouse. The first two subsections are not at issue in this case. It is clear that John did not name or provide for Laura in his will, and no one claims that his failure to do so was intentional. Subsection (4) is also not at issue.
Our analysis, therefore, focuses on subsection (3). This part of the statute defines the presumption and states that it can be rebutted by evidence of the decedent's intent. The omitted spouse will receive her intestate share "unless the court determines on the basis of clear and convincing evidence that a smaller share, including no share at all, is more in keeping with the decedent's intent." RCW 11.12.095(3).
The statute provides a non-exclusive list of things the court may consider in relation to this question, including the decedent's dispositive scheme and provisions for the omitted spouse outside of the decedent's will. Here, the trial court considered John's desire to support a college education for his children, an interest he expressed not only in...
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