Edgar v. Fitzpatrick
| Decision Date | 13 April 1964 |
| Docket Number | No. 50369,50369 |
| Citation | 377 S.W.2d 314 |
| Parties | William R. EDGAR, Executor of the Estate of Charles Monroe Fitzpatrick, Deceased, (Plaintiff) Respondent, v. Carl FITZPATRICK, Vesta Fitzpatrick and June Hitt, (Defendants), Marvin Fitzpatrick, Opal Williams and Jessica Rice, (Defendants), Appellants, and Faye Varnum, Guardian of the Person and Estate of Jettie Fitzpatrick, Incompetent, (Defendant), Respondent. |
| Court | Missouri Supreme Court |
William H. Wyne, Jr., and Ray T. Dreher, Clayton, for defendants-appellants.
Dearing, Richeson & Weier, Will B. Dearing, Hillsboro, for defendant-respondent Faye Varnum, guardian of the person and estate of Jettie Fitzpatrick.
William R. Edgar, Jr., Ironton, for respondent executor.
John B. Gage, Kenneth V. Butler, of Gage, Hodges, Moore, Park & Kreamer, Kansas City, for amicus curiae.
Action for declaratory judgment by the executor of the estate of Dr. Charles Monroe Fitzpatrick, deceased, to construe his will, to determine whether personal property referred to in a revocable declaration of trust should be considered part of his estate, and to determine the distribution required to be made. The principal issue is whether personal property (shares of Keystone Fund of Canada, Ltd.) referred to in the declaration of trust made by him, before he made his will, should be considered as a part of his estate in determining the amount to be distributed to his widow. The trial court found in favor of the widow, entered judgment that the value of the trust property should be included in determining the amount which was to go to the widow and ordered all legacies and devises abated proportionately to realize the necessary funds. The three children of Dr. Fitzpatrick by a former marriage, who were named in the declaration of trust, have appealed.
The Springfield Court of Appeals reversed the judgment and remanded with directions to enter a decree which would not include the value of the trust property in determining the amount to go to the widow (Edgar v. Fitzpatrick, Mo.App., 369 S.W.2d 592), and on application of the widow's guardian we transferred the case here. The 'Revocable Declaration of Trust' and paragraph 7 of Dr. Fitzpatrick's will (making provision for his widow) are set out in full in the opinion of the Court of Appeals (369 S.W.2d 594-595) and are incorporated herein by reference. We also refer to the opinion of the Court of Appeals for other material facts.
Sec. 474.150, subd. 1 provides: 'Any gift made by a person, whether dying testate or intestate, in fraud of the marital rights of his surviving spouse to share in his estate, shall, at the election of the surviving spouse, be treated as a testamentary disposition and may be recovered from the donee and persons taking from him without adequate consideration and applied to the payment of the spouse's share, as in case of his election to take against the will.' The notes of the 67th General Assembly committee say this 'is similar in effect to the case law in this state.' Thus the issue would still be whether the gift involved was in fraud of the marital rights of the surviving spouse. Certainly the provision that such a gift 'be treated as a testamentary disposition' means that it would become an estate asset when the statute is applicable to the situation. In this case, the Court of Appeals (369 S.W.2d l.c. 602) said 'since we must determine the question upon the test of motive and purpose, we are forced to conclude that the evidence does not show the transfer was in fraud of the widow's marital rights.' The basis of this view of the Court of Appeals was that the amount of the assets involved in the transfer were not so disproportionate (about one-third of property he then owned) as to permit inference of fraudulent intent to deprive his wife of her marital rights, relying on Potter v. Winter, Mo.Sup., 280 S.W.2d 27, and Wahl v. Wahl, 357 Mo. 89, 206 S.W.2d 334. Although the income tax claim against Dr. Fitzpatrick later reduced his estate to such an extent that the final result would be disproportionate, the Court of Appeals noted there was no evidence that he knew of this claim.
Support for the view of the Court of Appeals may be found in the American Law Institute Restatement of Trusts, Second, Sec. 57, stating: 'Where an interest in the trust property is created in a beneficiary other than the settlor, the disposition is not testamentary and invalid for failure to comply with the requirements of the Statute of Wills merely because the settlor reserves a beneficial life interest or because he reserves in addition a power to revoke the trust in whole or in part, and a power to modify the trust, and a power to control the trustee as to the administration of the trust.' Comment c, Sec. 57, states:
There is authority for holding that a trust reserving such board powers as one does is illusory and not real and therefore ineffective to deprive a wife of her marital rights. A leading case on this subject is Newman v. Dore, 275 N.Y. 371, 9 N.E.2d 966, 112 A.L.R. 643, a more extreme case than this because the trust was created much nearer to the time of the testator's death and transferred all his property. (See discussion of this case in 1 Scott on Trusts 472, Sec. 57.5) In that case, the settlor reserved the power to revoke the trust and provided that the trustees should be subject to his control during his lifetime and should exercise their powers only in such manner as he should direct. The Court said: See annotation 49 A.L.R.2d 521. In this case, the settlor was the sole trustee and it would seem that he had every power he would have over his own property not in trust. See Atlantic National Bank of Jacksonville, Florida v. St. Louis Union Trust Co., 357 Mo. 770, 211 S.W.2d 2....
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