Estate of Francis, Matter of

• Decision Date: 26 July 1990
• Docket Number: No. 342PA89,342PA89
• Citation: 394 S.E.2d 150,327 N.C. 101
• Parties: In the Matter of the ESTATE OF Vida P. FRANCIS, Deceased. (appealed by Iva P. Marshall).
• Court: North Carolina Supreme Court

Page 150

394 S.E.2d 150

327 N.C. 101

In the Matter of the ESTATE OF Vida P. FRANCIS, Deceased (appealed by Iva P. Marshall).

No. 342PA89.

Supreme Court of North Carolina.

July 26, 1990.

Johnson, Bell & Francisco by George Francisco, Dobson, for petitioner-appellee.

V. Talmage Hiatt, Mt. Airy, for appellants.

FRYE, Justice.

The issues in this case are (1) whether a deceased spouse's joint bank accounts with right of survivorship with a non-spouse, established pursuant to N.C.G.S. § 41-2.1(a), should be included in the computation of the decedent's net estate for determining a surviving spouse's right to dissent from the deceased spouse's will; and (2) whether property owned as tenants by the entirety should be included in the decedent's net estate and in the computation of the value of property passing outside the will to the surviving spouse as a result of the death of the testator-spouse. A proper resolution of these issues determines the ultimate issue of the right of the surviving husband to dissent from his deceased wife's will.

The Clerk of Superior Court, Surry County, adjudged that the surviving spouse was entitled to dissent and by virtue of the dissent was entitled to one-half the decedent's net estate which, according to the clerk, included: 1) joint bank accounts with right of survivorship to decedent's sister; 2) decedent's personal property; and 3) real property owned by the decedent and her husband as tenants by the entirety. The trial court adopted the clerk's findings of fact, made conclusions of law, and affirmed the clerk's order.

On appeal, the Court of Appeals, in its initial opinion, concluded that for public policy reasons the joint bank accounts with right of survivorship with decedent's sister were correctly included in computing decedent's net estate. The court also concluded that, for purposes of the dissent statute, the value of real property owned by the entireties should not be included in the decedent's net estate or in the value of property passing outside the will as a result of the death of the testatrix. Decedent's sister's petition for discretionary review was allowed by this Court on 7 December 1989.

The Court of Appeals revised its opinion after the petition was allowed in this Court but prior to the case being published in the bound volume of the reporter. As corrected, the published opinion held that the value of real property owned by the entireties is included in the computation of property passing outside the will pursuant to N.C.G.S. § 30-1(b)(4). The Court of Appeals did not alter its conclusion that the unwithdrawn funds in the joint bank accounts with right of survivorship were properly included in the computation of the value of the net estate. Nor did the court alter its initial conclusion that property owned by the entireties should not be included in the net estate for purposes of the dissent statute. The Court of Appeals remanded the case to the superior court for disposition in accordance with the opinion.

We conclude that the surviving spouse was not entitled to dissent from his deceased spouse's will and that neither the joint bank accounts with right of survivorship, nor the real property owned by the entireties, are to be included in the decedent's net estate for purposes of determining the right to dissent. We further conclude that the Court of Appeals correctly held, in its published opinion, that property owned by the entireties should be included in the computation of property passing outside the will to the surviving spouse as a result of the death of the testator-spouse.

Vida P. Francis died testate on 13 September 1987, survived by her spouse, C.A. Francis, leaving no children or other lineal descendants or parents. The will was probated in common form, and letters testamentary were issued to decedent's sister, appellant Iva P. Marshall, on 2 October 1987. The will directed that all the funds in her savings accounts with three Mt. Airy banking institutions be divided equally among certain named relatives, including her sister, Iva P. Marshall. The remainder of the estate was left to decedent's husband, C.A. Francis.

Ms. Marshall, as executrix, filed the 90-day inventory on 6 January 1988 listing the following property: one-half the value of four joint bank accounts--$46,274.48; cash on hand at death--$45.38; household and kitchen furnishings--$1,023.50; medicare check--$5.20; refund of Blue Cross/Blue Shield of North Carolina premium--$29.10; and one-half the value of real property held as tenants by entirety--$14,399.

On 20 January 1988, C.A. Francis, surviving spouse, filed a petition dissenting from the will and claiming "the properties to which he is entitled under Chapter 30 of the General Statutes of North Carolina."

On 18 July 1988, the clerk of superior court made findings of fact and conclusions of law and adjudged that Mr. Francis had a right under the law of North Carolina to dissent from the will. Ms. Marshall excepted to the following findings of fact made by the clerk of superior court:

3. The value of the decedent's net estate is at least $123,281.64 less family allowances, costs of administration and all lawful claims against the estate, and the value of the properties passing to the surviving spouse outside the Will and in accordance with the provisions of the Will does not exceed $14,399.00;

4. The value of the properties passing to the surviving spouse outside the Will and the provisions for his benefit under the Will amount to less than one-half of the deceased spouse's net estate;

....

6. The value of the assets are as follows:

(a) Joint bank accounts with the right of survivorship payable to $92,548.96

Iva P. Marshall

(b) Cash on hand at death 45.38

(c) Medicare check 5.20

(d) Blue Cross Blue Shield of North Carolina refund of premium 29.10

(e) Personal property of Vida P. Francis located in the house as 2,055.00

appraised by Dick Lawson

(f) Value of real property owned as tenants by the entirety 28,798.00 The clerk also adjudged that Mr. Francis was entitled to an additional monetary award equal to one-half the net estate of his deceased spouse, to be calculated upon the filing of the Final Report in the estate. From the clerk's order, Ms. Marshall, individually, and as executrix, appealed to the superior court.

On 2 November 1988, the superior court affirmed the clerk's order, and Ms. Marshall appealed to the Court of Appeals. The Court of Appeals agreed with the conclusion that Mr. Francis was entitled to dissent from the will but remanded the case for the clerk to recompute the value of the property. Under the Court of Appeals' opinion, upon remand, the clerk would: 1) exclude the entireties property from the value of the net estate; 2) include the entireties property in the value of the property passing to Mr. Francis outside the will; and 3) include the value of the joint bank accounts with right of survivorship in the net estate. For the reasons indicated herein, we hold that Mr. Francis is not entitled to dissent from his deceased spouse's will. We agree with the Court of Appeals' conclusions one and two, but disagree as to number three.

The legislature has created a two-step process to be used when a surviving spouse attempts to dissent from his deceased spouse's will. See N.C.G.S. §§ 30-1 and 30-3 (1984); see also Phillips v. Phillips, 296 N.C. 590, 252 S.E.2d 761 (1979). The first step is to determine if the surviving spouse has a right to dissent, and the second step is to determine the consequences of the dissent. Phillips v. Phillips, 296 N.C. 590, 252 S.E.2d 761.

We first consider Mr. Francis' right to dissent. If he has no right to dissent, it is unnecessary to determine the consequences of the dissent. The right of a surviving spouse to dissent from a will is provided in N.C.G.S. § 30-1. Section 30-1(a) provides:

(a) A spouse may dissent from his deceased spouse's will in those cases where the aggregate value of the provisions under the will for the benefit of the surviving spouse, when added to the value of the property or interests in property passing in any manner outside the will to the surviving spouse as a result of the death of the testator:

(1) Is less than the intestate share of such spouse, or

(2) Is less than one half of the deceased spouse's net estate in those cases where the deceased spouse is not survived by a child, children, or any lineal descendent of a deceased child or children, or by a parent, or

(3) Is less than the one half of the amount provided by the Intestate Succession Act in those cases where the surviving spouse is a second or successive spouse and the testator has surviving him lineal descendants by a former marriage and there are no lineal descendants surviving him by the second or successive marriage.

N.C.G.S. § 30-1(a) (1984); see also Phillips v. Phillips, 296 N.C. 590, 252 S.E.2d 761.

Under subsection (1) of N.C.G.S. § 30-1(a), a spouse may dissent from his deceased spouse's will if the aggregate value of the provisions for his benefit under the will, when added to the value of property or interests in property passing in any manner to him outside the will as a result of the death of his spouse, is less than his intestate share. Mr. Francis' intestate share is all the real and personal property of his deceased spouse, since she was not survived by any lineal descendants or a parent. When the intestate is not survived by children or any lineal descendent of deceased children or by a parent, the intestate share of the surviving spouse is "all the real property" and "all of the personal property." N.C.G.S. § 29-14 (1984). The intestate share does not include the value of any property received by the surviving spouse as a tenant by the entirety or from joint accounts with right of survivorship. In re Estate of Connor, 5 N.C.App. 228, 232, 168 S.E.2d 245, 248 (1969). Nor is the year's allowance for the surviving spouse under the provisions of...