Estate of Bol, Matter of, No. 16073

• Court: Supreme Court of South Dakota
• Writing for the Court: MILLER; WUEST, C.J., and MORGAN; HENDERSON; SABERS; HENDERSON; SABERS
• Citation: 429 N.W.2d 467
• Decision Date: 26 May 1988
• Docket Number: No. 16073
• Parties: In the Matter of the ESTATE OF Henrietta A. BOL, Deceased. . Considered on Briefs

Page 467

429 N.W.2d 467 In the Matter of the ESTATE OF Henrietta A. BOL, Deceased. No. 16073. Supreme Court of South Dakota. Considered on Briefs May 26, 1988.
Decided Sept. 21, 1988.

Dennis Maloney and Michael T. Hogan of Maloney, Kolker, Fritz, Hogan & Johnson, Aberdeen, for appellant.

Ronald C. Aho and Scott K. Bradshaw of Aho & Bradshaw, Brookings, for appellee.

MILLER, Justice.

In this case of first impression, we address the issue of whether a subsequent will revokes a prior tentative ("Totten") ¹ trust.

FACTS

Decedent Henrietta A. Bol (Henrietta), established a passbook savings account in 1976 and purchased three 30-month money market certificates in 1980, 1981 and 1982 at the Brookings (South Dakota) Savings & Loan Association. These deposits were all issued in the name of "Henrietta A. Bol, Trustee for Margaret Tompkins" (Henrietta's sister).

On August 11, 1983, Henrietta executed her last will and testament. This will directed that all of her debts and funeral expenses and expenses of last illness and administration of her estate be paid from the estate. It further provided that after payment of said expenses and debts:

... I give, devise and bequeath all of my estate and property, real, personal or mixed, and wheresoever situated, and over which I have the power to make testamentary disposition, to my brother, ARNOLD F. deBLONK, and my sister, MARGARET E. TOMPKINS, share and share alike ... (Emphasis added.)

In the will she also specifically disinherited three other brothers "because I feel the need of my brother ARNOLD and my sister MARGARET [is] greater than those of my said [disinherited] brothers or any members of their respective families."

Henrietta's will made no specific reference to the savings account or money market certificates that she previously had created in her name as trustee for her sister Margaret.

Henrietta died on May 23, 1985. At the time of her death, the trust deposits had a

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total value exceeding $52,000. Her other property included joint tenancy bank accounts with Margaret valued at over $2,400, a joint tenancy checking account with Arnold of approximately $314, two automobiles in joint tenancy with Arnold having a total value of $300, household furnishings valued at $3,000, and a balance due on a real estate deed of trust covering land in Idaho worth approximately $10,700. The costs of administration of the estate and expenses of her last illness exceeded $9,300.

Margaret, as executrix, petitioned for summary administration of the estate on July 1, 1985. The usual proceedings were followed, pursuant to SDCL 30-11-1 et seq., and subsequently the court entered findings of fact, conclusions of law and a decree of distribution.

Arnold later moved to set aside the decree of distribution, arguing that Henrietta's last will had revoked the trust deposits and claiming that the passbook savings account and money market certificates should have been included as estate assets.

The trial court found that the deposits were, in fact, valid, tentative trusts. It further found that Henrietta's will had revoked such trusts.

ISSUE

WHETHER THE PROVISIONS OF DECEDENT'S LAST WILL AND TESTAMENT

REVOKED THE TENTATIVE TRUSTS.

DECISION

We must first observe that the validity of the trust arrangement is not properly before us. The trial court specifically held that a valid tentative, or Totten, trust had been created by Henrietta when she established the bank account and purchased the money market certificates. Although the validity of the trust was addressed in the briefs submitted by counsel, Arnold filed no notice of review which would allow us to consider the court's ruling. SDCL 15-26A-22. Therefore, assuming, as we must, that a valid Totten trust was established, we will proceed to determine whether that trust was revoked by Henrietta's subsequent will.

Courts, in interpreting wills, are required to construe them according to the intention of the testator. SDCL 29-5-1. The words of a will are to receive an interpretation which will give to every expression some effect, rather than an interpretation which renders any of the expressions inoperative. SDCL 29-5-9. Rowett v. McFarland, 394 N.W.2d 298 (S.D.1986); Estate of Bock, 85 S.D. 113, 177 N.W.2d 734 (1970). In examining Henrietta's will in light of the mandates of SDCL 29-5-1 and -9, we affirm the trial court's ruling that the will revoked the tentative trusts created by Henrietta.

Generally, a tentative trust may be revoked by (1) the depositor withdrawing the deposit, (2) the depositor's unequivocal act or declaration of disaffirmance, (3) the beneficiary predeceasing the depositor, (4) the terms of the will of the depositor, and (5) by facts and circumstances resulting in the inadequacy of the estate assets to satisfy the testamentary gifts, funeral and administrative expenses, taxes, and other charges. See generally Annot., Revocation of Tentative ("Totten") Trust of Savings Bank Account by Inter Vivos Declaration or Will, 46 A.L.R.3d 487 (1972), and Scott, The Law of Trusts, Sec. 58.4 (3d ed. 1967).

As stated in Restatement (Second) Trusts Sec. 58 Comment (c) (1959), "[a] tentative trust ... can be revoked by the depositor at any time during his lifetime, by a manifestation of his intention to revoke the trust. No particular formalities are necessary to manifest such an intention." See also Annot., 46 A.L.R.3d at 493, wherein it is stated that

[v]irtually all courts adopting the ... doctrine adhere to this liberal policy and recognize that a Totten trust is effectively revoked where some declaration of depositor, regardless of form, and regardless of whether made inter vivos or in a will, sufficiently expresses or implies the existence of a revocatory intent.

Initially, we agree with the majority of jurisdictions holding that a residuary

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clause in a will, standing alone, is insufficient to impliedly revoke the tentative trust. Brucks v. Home Fed. S & L Assn., 36 Cal.2d 845, 228 P.2d 545 (1951); Re Estate of Basch, 41 Misc.2d 773, 246 N.Y.S.2d 244 (1964); Re Greniewich's Will, 243 App.Div. 811, 278 N.Y.S. 279 (1935); Re Richardson's Estate, 134 Misc. 174, 235 N.Y.S. 747 (1929); Re Pozzuto's Estate, 124 Pa.Super. 93, 188 A. 209 (1936); Annot., 46 A.L.R.3d 509-10 (1972).

Further, we agree with the majority of courts which hold, in cases where the trust was not specifically revoked, that we must resort to a consideration of surrounding circumstances in order to determine whether the true intention of the depositor was to revoke the Totten trust. See, e.g., Conry v. Maloney, 5 N.J. 590, 76 A.2d 899 (1950); Re Estate of Krycun, 24 N.Y.2d 710, 301 N.Y.S.2d 970, 249 N.E.2d 753 (1969); Re Phipps' Will, 125 N.Y.S.2d 606 (1953); Nace v. Fulton Co. Nat. Bank, 79 Pa. D. & C. 325 (1951); Annot., 46 A.L.R.3d 493-97 (1972).

In order to determine whether the depositor intended to revoke the tentative trust, courts have considered the following factors: (1) whether subsequent to the alleged revocation (e.g., through a later will), the depositor continued to treat the deposits consistent with the trust (e.g., by maintaining the account in trust form, by activity or inactivity of the account, etc.); (2) retention of possession of the account passbook or certificates; and (3) whether, absent the Totten trust, sufficient assets exist in the estate to effectuate the specific dispositions provided in the will, including directions for the payment of costs and expenses. See Conry, supra; Krycun, supra; Nace, supra; Re Beck's Estate, 173 Misc. 733, 19 N.Y.S.2d 83, aff'd mem., 260 App.Div. 651, 23 N.Y.S.2d 525 (1940); Re Schiffer's Estate, 142 Misc. 518, 254 N.Y.S. 871 (1931); 46 A.L.R.3d 493-97 (1972).

We observe, as did the trial court in its findings, that the money market certificates were never cashed or altered, but rather were automatically...