Estate of Thies, Matter of

• Decision Date: 21 September 1995
• Docket Number: No. 94-363,94-363
• Citation: 903 P.2d 186,273 Mont. 272
• Parties: , 64 USLW 2272 In the Matter of the Estate of Everett Almer THIES, Eleanor THIES, Petitioner/Appellant, v. Barbara LOWE, Patty Coram and John Thies, Respondents/Respondents.
• Court: Montana Supreme Court

Page 186

903 P.2d 186

273 Mont. 272, 64 USLW 2272

In the Matter of the Estate of Everett Almer THIES,

Eleanor THIES, Petitioner/Appellant, v. Barbara LOWE, Patty Coram and John Thies, Respondents/Respondents.

No. 94-363.

Supreme Court of Montana.

Submitted on Brief March 23, 1995.

Decided Sept. 21, 1995.

Virginia A. Bryan, Wright, Tolliver & Guthals, Billings, for appellant.

James P. Healow, Sweeney & Healow, Billings, for respondents.

NELSON, Justice.

This is an appeal from a decision of the Thirteenth Judicial District Court, Yellowstone County, declaring the widow (Petitioner- /Eleanor) cannot collect against the will of the decedent (Everett). We affirm.

We restate the issue on appeal. Did the District Court err in determining the prenuptial agreement between Eleanor and Everett was valid, thus, precluding Eleanor from collecting her elective share of Everett's estate?

Facts

Everett and Eleanor were married June 27, 1981. Both Everett and Eleanor had been married previously. Eleanor had one child by her previous marriage and Everett had three children by his. The parties entered into a prenuptial agreement on June 26, 1981. This agreement was prepared by Everett's attorney (Mr. Gunderson). Eleanor was not represented by counsel in this matter.

The second recital to the prenuptial agreement stated:

WHEREAS, each of the parties owns individual real and personal property, the nature and extent of the holdings of each party having been fully disclosed to the other; ...

Following, the first three substantive paragraphs of the prenuptial agreement stated:

1. After the solemnization of the marriage between the parties, each of them shall separately retain all rights in his or her own property, whether now owned or hereafter acquired, and each of them shall have the absolute and unrestricted right to dispose of such separate property, free from any claim that may be made by the other by reason of their marriage and with the same effect, as if no marriage had been consummated between them.

2. Notwithstanding the provisions of the next preceding and next succeeding paragraphs, any real or personal property acquired as joint tenants during their marriage shall, at the death of one of the parties, vest in the survivor of them.

3. Each of the parties waives and releases all rights as surviving spouse in the property or estate of the other and waives the right to elect to take against the other's will, whether heretofore or hereafter made.

Mr. Gunderson testified that he did not discuss the prenuptial agreement with Eleanor prior to its preparation. Mr. Gunderson inquired in the presence of Everett and Eleanor whether they understood the agreement and were aware of the assets of the other. Eleanor recalls that Mr. Gunderson asked Everett and her whether they divulged their assets to each other and that Everett said they had. Eleanor claims they had not divulged their assets and, although she knew it at the time, she remained silent and did not speak up.

Eleanor admits reading the agreement. She testified it was her understanding, at the time, the gist of the agreement was that she would not have a claim to anything which Everett and his first wife had accumulated. Eleanor claims nobody explained to her the nature of what was meant by waiving her elective share of the estate. Mr. Gunderson testified Eleanor said nothing at the time to indicate she was dissatisfied with the agreement, she did not understand what she was signing, she was pressured or coerced into signing it, or it only applied to property accumulated in Everett's prior marriage.

At the time of his marriage to Eleanor, Everett owned his home, two cars, personal belongings and a Piper, Jaffray & Hopwood retirement account valued at $143,090. Eleanor had approximately $7,000 of assets. Eleanor said she supposed Everett owned the home he had lived in for nearly forty years, but he had never said so. Additionally, Eleanor testified that she knew Everett had worked at Piper, Jaffray & Hopwood since shortly after World War II but claimed she did not know he had any retirement benefits or savings through his employer. During their marriage, Eleanor said she quit her job as a realtor, at Everett's request, and relied on his support.

Eleanor testified, in 1985-86, in response to a comment made by Everett, she consulted an attorney as to the prenuptial agreement and her financial situation. She said her attorney told her she had signed all of her rights away and should ask Everett to provide for her in an irrevocable will. At Eleanor's request, Everett drafted a will devising to Eleanor $10,000 in cash, furniture and household goods, a life estate in the family home and earnings on a bond portfolio that he would maintain in a minimum amount of $100,000 for Eleanor's life. The will provided "[a]s to the bequest to my wife, ELEANOR E. THIES, contained herein, this Will shall be irrevocable so long as we are married and living together."

Eleanor and Everett had marital conflict which resulted in the filing by Eleanor of a petition for dissolution of marriage on June 6, 1991. The couple separated and Eleanor moved to Colorado. On July 9, 1991, Everett prepared a new will disinheriting Eleanor and naming his children as the sole heirs to his estate. Everett died on March 20, 1992. The pending dissolution action was dismissed by reason of Everett's death.

At his death, Everett's Piper Jaffray account was valued at $333,692. Eleanor testified her net worth was under $10,000. Eleanor filed a petition for payment of her elective share on June 19, 1992. A non-jury trial was held on December 21, 1993. The District Court ruled the prenuptial agreement precluded Eleanor from claiming her elective share. Judgment was entered in favor of respondents, Barbara Lowe, Patty Coram and John Thies, on March 30, 1994. From this judgment, Eleanor appeals.

Discussion

Eleanor argues the prenuptial agreement, signed in 1981, contained an invalid waiver under the governing statute--s 72-2-102, MCA (1979). Section 72-2-102, MCA (1979), a codification of UPC § 2-204, provides:

Waiver of rights by spouse. The right of election of a surviving spouse and the rights of the surviving spouse to homestead allowance, exempt property, and family allowance or any of them may be waived, wholly or partially, before or after marriage, by a written contract, agreement, or waiver signed by the party waiving after fair disclosure. Unless it provides to the contrary, a waiver of "all rights" (or equivalent language) in the property or estate of a present or prospective spouse or a complete property settlement entered into after or in anticipation of separation or divorce is a waiver of all rights to elective share, homestead allowance, exempt property, and family allowance by each spouse in the property of the other and a renunciation by each of all benefits which would otherwise pass to him from the other by intestate succession or by virtue of the provisions of any will executed before the waiver or property settlement. [Emphasis added.]

Eleanor contends, prior to signing the prenuptial agreement, Everett did not disclose his assets to her. Therefore, Eleanor claims the agreement is not valid and she did not waive her elective share.

Eleanor refers to our decision in In Matter of Estate of Flasted (1987), 228 Mont. 85, 741 P.2d 750, where we determined a widow waived her right to an elective share of her husband's estate in an agreement with her brother-in-law. In that case, the widow signed an agreement acknowledging she had rights to the property of the estate as the deceased's widow; she was represented by an experienced attorney who drafted the agreement; and, the brother-in-law was not represented by counsel and was unaware of the widow's statutory rights. Eleanor argues the agreement she signed should be held invalid for the same reasons the widow's agreement, in Flasted, was found valid--Eleanor did not know she had rights to an elective share of the property; she was not represented by counsel; and, it was Everett's attorney who drafted the agreement.

In Flasted, however, the widow's argument was based on the ambiguity of the agreement regarding what rights she was waiving. The agreement's ambiguity was interpreted against the widow because it was her counsel who drafted the agreement. In the divorce proceedings Eleanor initiated prior to Everett's death, Eleanor's counsel stated the prenuptial agreement was "straightforward and simple." Therefore, it's ambiguity is not at issue and the Flasted decision does not apply.

Eleanor then refers to Breidenbach v. Wedum (1988), 233 Mont. 478, 760 P.2d 1237, which involves the validity of a family settlement agreement between heirs as a renunciation of the vested rights of a single heir. We held the settlement agreement to be invalid because it did not describe the property or interest, nor did it declare the extent of the renunciation. Eleanor claims her prenuptial agreement lacked the same element--explicit disclosure. Eleanor argues, under Breidenbach, the prenuptial agreement fails.

The heir's rights which were contested in Breidenbach vested at the decedent's death because the heir was the named beneficiary of a life insurance policy and was a joint tenant with the decedent in certain property. The governing statute, § 72-2-101, MCA (1979), specifically required that a writing, in a renunciation of succession, shall "describe the property or part thereof or interest therein renounced." The statute governing the waiver of rights by a spouse, § 72-2-102, MCA (1979), requires only "fair disclosure." Therefore, Breidenbach does not apply as well.

Eleanor asserts we should consider other states' interpretations of fair disclosure under UPC § 2-204. Particularly, the New Jersey Superior Court, in DeLorean v. DeLorean (1986), 211 N.J.Super. 432, 511 A.2d 1257, prescribed that, henceforth, prenuptial agreements must contain a...