Estate of Pejsa, Matter of, 16697
| Decision Date | 18 July 1990 |
| Docket Number | No. 16697,16697 |
| Citation | 459 N.W.2d 243 |
| Parties | In the Matter of the ESTATE OF Frank PEJSA, a/k/a Frank C. Pejsa, Deceased. |
| Court | South Dakota Supreme Court |
J.M. Grossenburg, Day & Grossenburg, Winner, for appellant, the Estate of Frank Pejsa, a/k/a Frank C. Pejsa, Deceased.
Gary E. Davis, Johnson, Eklund & Davis, Gregory, for appellee, Gladys Pejsa.
Frank Pejsa's (Frank) will dated September 10, 1985, was admitted to probate on November 11, 1988. The surviving spouse, Gladys Pejsa (Gladys), filed her election to take an elective share of her husband's augmented estate, having received no legacy under the will except her right of homestead as guaranteed by South Dakota law. After a probate hearing in circuit court, Gladys was awarded fifty percent of Frank's augmented estate.
On appeal, the estate alleges:
(1) That the trial court abused its discretion in awarding an elective share without taking into account all circumstances relative to the second marriage arrangement, surviving spouse's net worth, and income, and;
(2) That the trial court erred by not subtracting the value of spouse's homestead from her elective share.
We affirm on Issue I, and reverse on Issue II.
Gladys, the surviving spouse, was married to Frank for 12 years at the time of his death on December 15, 1987. This had been the second marriage for both parties. Frank and Gladys both had three children from earlier marriages. The children are all adults and living away from home. At the time of their marriage, Frank was just short of reaching his 72nd birthday and Gladys was 52 years of age. Gladys had first met Frank when she rented a basement apartment from him in his home, where she and her youngest son resided when she first came to Gregory, South Dakota as a teacher in 1969.
At the time of their marriage in 1975, Frank was retired from his occupation as a carpenter but did some part-time work. He was receiving Social Security retirement and Gladys was employed full time as a teacher in the Wagner, South Dakota school system. After the completion of her 1975-1976 contract with the Wagner school system, Gladys was rehired by the Gregory school system and taught there as an elementary teacher full time throughout the parties' marriage until Frank's death. It was her intention to retire after the 1988-1989 school year.
During the time of the parties' relationship, Frank had continuing medical problems which required five operations and hospitalization on 55 different occasions. He was never admitted to a nursing home and was cared for by Gladys. Gladys also suffers from some health problems and physical disabilities.
Prior to, and after their marriage, the parties did not discuss or reach any agreement concerning their financial affairs, with each maintaining separate bank accounts that they had established prior to their marriage. Frank's accounts grew considerably over the years during the marriage. They also did not have any formal type of arrangement concerning the payment of household and living expenses. But it is clear that Gladys paid certain living expenses, such as heat, lights, gasoline, grocery bills, telephone, and other household expenses.
In September 1985, Frank, in the company of his daughter Doris Berens the executrix, and her husband Vince Berens, met with Frank's attorney, Dudley Herman. A will was prepared, which was the will admitted to probate in the present case. The will left nothing to Gladys other than her statutory right to a homestead interest in the home which was titled in Frank's name.
Frank held most of his assets in his name and the names of his three children as joint tenants. He also made a gift of his eighty acres to his children before his death. These assets and their values are listed below:
(a) Lots 1 & 2 of Block 15, Gregory (fee simple) $ 22,500.00
(b) Life insurance policy 10,000.00
(c) Personal property in home 2,945.00
(d) 80 acres of farm ground (gifted to children) 14,000.00
(e) Vehicles 1,085.00
(f) Certificates of Deposit (held jointly with his children) 70,489.19
(g) Joint checking account with daughter, Doris Berens 22,082.28
(h) Life insurance policy payable to children 1,000.00
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TOTAL $135,101.47
Frank's will dated September 10, 1985, provided that Gladys should receive a life estate in the house; the balance of his estate he left to his three children to share equally.
Gladys filed her election to take an elective share in Frank's estate, instead of taking under the will. The trial court, by way of judgment dated December 8, 1988, awarded Gladys fifty percent (50%) of the net augmented estate. The net augmented estate was computed as follows:
Gross Augmented Estate $135,101.47
Less: Life estate in house 12,012.19
Less: Joint checking account 22,082.28
Less: Funeral/administration expenses 4,364.84
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Net Augmented estate 96,642.16
x 50
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Elective share awarded 48,321.08
Plus: Life estate in house 12,012.19
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Total to Gladys $60,333.27
DECISION
South Dakota, in 1980, codified into Chapter 30-5A of the South Dakota Code entitled "Elective Share of Surviving Spouse." Under our elective share statutes, if a married person domiciled in this state dies, the circuit court shall have jurisdiction to award an elective share of the augmented estate to the surviving spouse. This usually happens when the surviving spouse is not adequately provided for by the decedent's will.
SDCL 30-5A-5 mandates the elective share awarded to the surviving spouse must be an "equitable" share of the augmented estate:
... the court upon application of the surviving spouse shall award to the surviving spouse such elective share in the remaining augmented estate as is equitable taking into account all of the circumstances of all interested parties and the length and other circumstances of the marriage of the decedent and such surviving spouse.... (emphasis added).
The only restriction on the amount of the award placed on the trial court is that it shall not exceed one-third of the augmented estate or $100,000, whichever is greater.
The equitable determination in an elective share proceeding is within the discretion of the trial court and will not be overturned, absent an abuse of that discretion. Matter of Estate of Clyde, 423 N.W.2d 513 (S.D.1988); In Re Estate of Smith, 401 N.W.2d 736, 738 (S.D.1987). In Smith, we stated:
As in other instances of review of the exercise of a legal discretion by the trial court, our function in this case is to determine whether there has been an abuse of discretion. In other words, we are not to determine whether or not the [justices] of this court would have made an original like ruling, but rather whether we think a judicial mind, in view of the law and the circumstances of the particular case, could reasonably have reached such a conclusion. Citing Davis v. Kressly, 78 S.D. 637, 641-42, 107 N.W.2d 5, 8 (1961).
Therefore, the trial court's determination of certain facts and what is "equitable" shall not be disturbed unless there is clearly no basis in reason or evidence which would support that finding.
In the present case, the trial court determined that Frank and Gladys had a relationship which existed for a period of 17 years (12 years marriage, 5 years living together) terminating upon Frank's death. It was also determined that the increases in some of Frank's investments were the result of his having available to him the bulk of his own income while Gladys' income paid for a substantial portion of the day-to-day living expenses of the couple. She was employed at the time of trial as a teacher,...
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