Bonness' Estate, In re

• Decision Date: 22 April 1975
• Docket Number: No. 1135--II,1135--II
• Citation: 535 P.2d 823,13 Wn.App. 299
• Parties: In the Matter of the ESTATE of George J. BONNESS, Deceased.
• Court: Washington Court of Appeals

Page 299

13 Wn.App. 299

535 P.2d 823

In the Matter of the ESTATE of George J. BONNESS, Deceased.

No. 1135--II.

Court of Appeals of Washington, Division 2.

April 22, 1975.

Review Denied Sept. 5, 1975.

Susan F. French, Seattle, for appellant.

Michael J. Swofford, Graham, McCord, Dunn, Moen, Johnson & Rosenquist, Seattle, for NBC-respondent.

David H. Armstrong, Sanchez, Martin & Armstrong, Bremerton, for cross-appellant.

Frank A. Shiers, Port Orchard, for Estate of Geo. J. & Anona Bonness.

PEARSON, Judge.

This is an appeal from an order in probate directing the administratrix de bonis non with will attached of the estate of George J. Bonness, deceased, to pay to the testamentary trustee the sum of $7,943.72, in accordance with an accounting approved by the court after a contested hearing. The propriety of several items of the accounting is at issue in the appeal.

George J. Bonness died testate on April 21, 1963 in Bremerton, leaving a gross community estate in Kitsap County of $254,237.47. His will named his wife, Anona F. Bonness, as nonintervention executrix, and she subsequently was appointed, qualified, and served as such until her death on June 2, 1970.

The contestants to the accounting rendered by a successor administratrix are three adult children (by a former marriage) of George Bonness (hereafter appellants), who are three of four beneficiaries of the testamentary trust established by decedent's will. Respondent and cross-appellant is the successor administratrix, Ellen Patricia Anderson. She is the daughter of Anona F. Bonness by a prior marriage, a beneficiary of the trust, and executrix and sole heir under the will of Anona F. Bonness, deceased. ¹ The other respondent, National Bank of Commerce of Seattle, is a co-trustee (hereafter Bank) with Anona F. Bonness, as nominated by the will in question.

The will of George J. Bonness left the residue of his estate to Anona F. Bonness and the National Bank of Commerce as co-trustees, to pay the net income to Anona F. Bonness for life. The Bank was given sole discretion to invade the corpus of the trust in its entirety for the 'proper care, maintenance and support' of Anona F. Bonness, if in its opinion the income was insufficient for such purposes.

On the death of Anona F. Bonness, the trust estate was to be distributed in equal shares to the three appellants and to Ellen Patricia Anderson.

The probate of the estate proceeded normally for approximately 2 years. During that period two pertinent orders, among others, were entered: (1) August 2, 1963, Order of Solvency; (2) October 11, 1963, Order for Family Allowance of $600 per month, retroactive to April 21, 1963, and to continue for such period as was necessary to complete the probate. The family allowance amounted to $18,400 to its terminal date on November 9, 1965.

The major asset of the estate was an apartment complex, Town and Country Apartments, in which Mrs. Bonness resided. This apartment became the object of litigation over a rejected creditor's claim that was not resolved until January 23, 1968. It was this litigation that ostensibly delayed closing the estate and funding the trust. It was not until April 29, 1969 that Mrs. Bonness as executrix funded the trust by delivering to the Bank stocks valued at $26,139.57. This was accomplished after the apartment had been sold. The Bank formally accepted the trust on June 16, 1969.

Prior to the time the trust was funded, the Bank's role, aside from occasionally giving Mrs. Bonness and her attorney advice, consisted of the following:

(1) On November 9, 1965 an agreement was made with Mrs. Bonness that the estate would be kept open until the litigation was concluded and perhaps later, until there would be a 'distinct advantage . . . in closing it up.' Mrs. Bonness was to provide accountings to the Bank consisting of income tax returns and a statement of changes in assets.

(2) On August 16, 1967 the Bank, at the request of a title company, cosigned a mortgage against the Town and Country Apartments, permitting Mrs. Bonness to borrow some $12,340, presumably to be used for her living expenses.

It is undisputed that until the time of her death, Mrs. Bonness made no formal accounting of the assets of the estate, nor did she keep any records of any bank accounts or other receipts and disbursements of the estate. Instead, she appears to have made no separation of her own share of the community property from that of her husband's estate, nor was any segregation made between estate assets and those assets which passed to her outside of testator's will.

From the accounting rendered by the successor administratrix it appears, however, that Mrs. Bonness had disposed of assets amounting to some $72,375.52. In addition, it appears that she consumed two savings and loan accounts of $10,000 each, which it is claimed were survivorship accounts, as well as the $12,340 loan proceeds mentioned above.

This action was precipitated by a citation for an accounting issued by the court to the administratrix de bonis non at the request of appellants and the Bank. When the accounting was furnished, appellants filed several objections, which were heard on oral testimony. A majority of the objections were disallowed and furnish the basis for the appeal-in-chief. The administratrix has cross-appealed from the order directing the estate of Anona F. Bonness to pay to the trust the sum of $7,943.72. It is contended that the trial court lacked jurisdiction over her estate. Cross-appellant also objects to a finding that a savings account count was community property, and to a ruling that costs of administration, the family allowance, and attorney's fees should be charged against the entire community estate of George J. and Anona F. Bonness. We first consider the cross-appeal.

The contention that the trial court lacked jurisdiction over the estate of Anona F. Bonness is without substantial merit. The estates of both spouses are pending before the Kitsap County Superior Court. Ellen Patricia Anderson was cited to account both as the administratrix de bonis non of the Estate of George J. Bonness and also as executrix of the Estate of Anona F. Bonness. The show-cause citation was effective as a summons and complaint and vested jurisdiction over both the parties and the subject matter of both estates. See In re Estate of Wheeler, 71 Wash.2d 789, 431 P.2d 608 (1967). The ruling made was well within the broad jurisdiction and power of the superior court in matters of probate granted by RCW 11.02.010 and RCW 11.02.020. The latter statute enables the court to function even where the law is 'inapplicable or insufficient or doubtful, . . .' to the end that 'such estates may be by the court administered upon and settled.' Since the assets of the two estates were commingled, an accounting as to one would not be effective without an accounting of the other. The order was proper.

Cross-appellant also claims that the $26,139.57 in securities delivered to the trustee on April 29, 1969 was intended to be the total funding of the trust. This contention is contrary to a preponderance of the evidence. Even if this were shown to have been the intention of Mrs. Bonness and the Bank, it would not bind the trust beneficiaries. They were entitled to have the trust funded in a manner consistent with the will of George J. Bonness. The amount necessary to carry out his intention could only be determined after a full and final accounting.

Cross-appellant's contention that the costs of administration, attorney's fees and the family allowance should be charged only against George J. Bonness's half of the community property is based upon the general powers given Mrs. Bonness in the will. We have set forth the provision in the margain. ² Admittedly, testator conferred upon his wife broad powers. These powers do not include, however, a specific authority to disregard the statutory direction that the expenses of administration and the family allowance be charged against both halves of the community. RCW 11.02.070. This statute codified the common law. Thatcher v. Capeca, 75 Wash. 249, 134 P. 923 (1913); In re Estate of Guye, 54 Wash. 264, 103 P. 25 (1909).

We do not believe such a general grant of power in the will should be sufficient to nullify the specific statutory provision, and we are cited no authority which so holds. We are persuaded that the provision was inserted to enable the executrix to deal effectively with third persons as in the sale and investment of assets. It was not intended as a means whereby an executrix who is also a trust beneficiary could enhance her personal position to the detriment of other trust beneficiaries. We agree with the trial court, who observed: 'I do not believe that language is intended to destroy the fiduciary obligation.'

Finally, cross-appellant contends that one of two 'Totten Trust' savings accounts, each one for $10,000, should have been treated as Mrs. Bonness's separate property, rather than community property as the court ruled it was.

George and Anona Bonness had created two mutual 'Totten Trusts,' pursuant to RCW 33.20.070. ³ On one such trust the account was in the name of 'George J. Bonness, Trustee for Anona F. Bonness.' There is no dispute that this account was properly determined to be the separate property of Mrs. Bonness, to which she was immediately entitled upon his death, in accordance with RCW 33.20.070. See In re Estate of Madsen, 48 Wash.2d 675, 296 P.2d 518 (1956). The dispute is over the characterization of the other trust, which was in the name of 'Anona F. Bonness, Trustee for George J. Bonness.' The statute makes no reference to the disposition of the proceeds when the beneficiary predeceases the trustee. Cross-appellant contends however, that the effect of establishing the two trusts at the same time evidences an intention by the parties to convert $20,000 of community assets into $10,000 separate property for each.

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