Estate of Wagner, Matter of

• Decision Date: 02 September 1993
• Docket Number: No. 92-762,92-762
• Citation: 507 N.W.2d 711
• Parties: In the Matter of the ESTATE OF Frances WAGNER, Deceased. Frank Albert WAGNER and Verna Jaeggi, Appellants, v. Sharon K. WILLIAMS, Executor of the Estate of Frances Wagner, Appellee.
• Court: Iowa Court of Appeals

Page 711

507 N.W.2d 711

In the Matter of the ESTATE OF Frances WAGNER, Deceased.

Frank Albert WAGNER and Verna Jaeggi, Appellants, v. Sharon K. WILLIAMS, Executor of the Estate of Frances Wagner, Appellee.

No. 92-762.

Court of Appeals of Iowa.

Sept. 2, 1993.

Edward N. Wehr and John R. Newman of Wehr, Berger, Lane & Stevens, Davenport, for appellants.

James G. Sothmann and Harold J. DeLange, II, Davenport, for appellee.

Considered en banc.

HAYDEN, Judge.

On December 3, 1986, Frances Wagner died from injuries suffered in an accident. As a result, the estate of Frances Wagner pursued a wrongful death claim, which resulted in a net recovery of $30,307.36. Frances died testate, and her will was admitted into probate on December 15, 1986. The executor's final report was filed on December 31, 1986. The executor concluded the wrongful death proceeds should be distributed to the residuary legatee, Marguerite Williams. Frank Wagner and Verna Jaeggi, heirs at law of Frances's, filed objections to the final report. They objected to being excluded from the distribution of the wrongful death proceeds.

The distribution of the wrongful death proceeds is the issue on appeal. We must determine whether article II, section "g" of Frances's will is a residuary clause. The estate contends section "g" is a residuary clause bequeathing the wrongful death proceeds to Marguerite and Roy Williams. Frank and Verna claim the will did not contain a residuary clause. They argue the wrongful death proceeds should pass by partial intestacy.

In article I of her will Frances provided for her executor to pay all just debts and funeral expenses. The preamble to article II of Frances's will provides: "After the payment of all such debts and funeral expenses, the remainder of my property shall pass as follows." (Emphasis added.) Under article II of her will, Frances then made several specific bequests. Sections "a" through "f" of the will provide for several specific bequests to named individuals, including bequests of $1000 and $500 to objectors, Frank Wagner and Verna Jaeggi respectively. Section "g" provides:

To Marguerite Williams and Roy Williams, I give, devise and bequeath my real property ... with the contents therein, including all personal items, as well as any money left in the bank, to be theirs absolutely and in fee simple, share and share alike....

Roy Williams predeceased Frances.

The district court determined section "g" is a residuary clause. The court stated the wrongful death proceeds pass to the beneficiary named in section "g," which was Marguerite. The objectors have filed this appeal.

The proceeding on objections to an estate's final report was heard and determined in equity. This action involves the interpretation of a will. Our standard of review is de novo. Iowa Code § 633.33 (1993); In re Roehlke's Estate, 231 N.W.2d 26, 27 (Iowa 1975); Houts v. Jameson, 201 N.W.2d 466, 468 (Iowa 1972) (citation omitted).

The Iowa probate laws are codified in chapter 633 of the code. Iowa Code ch. 633 (1993). Iowa Code section 633.336, which addresses wrongful death proceeds, provides:

When a wrongful act produces death, damages recovered therefor shall be disposed of as personal property belonging to the estate of the deceased, however, if the damages include damages for loss of services and support of a deceased spouse and parent, such damages shall be apportioned by the court among the surviving spouse and children of the decedent in such manner as the court may deem equitable consistent with the loss of services and support sustained by the surviving spouse and children respectively. If the decedent leaves a spouse, child or parent, damages for wrongful death shall not be subject to debts and charges of the decedent's estate.

Iowa Code § 633.336 (Iowa 1987), amended by 1989 Iowa Acts ch. 111, § 2 (emphasis added). Frances was not survived by a parent, husband, or child, and the damages were not sought for any loss of services. It appears the intent of the legislature was, if the damages recovered were not for loss of services of a deceased spouse or parent, then the damages would be distributed as personal property of the estate. The legislature could have provided for a specific distribution of such damages and precluded distribution under a residuary clause; however, the legislature did not impose such a limitation. For example, New York statutes provide wrongful death damages are exclusively for the benefit of decedent's distributees, which are defined as persons entitled to take or share in the property of a decedent under statutes governing descent and distribution. N.Y.Est.Powers & Trusts Law §§ 5-4.4, 1-2.5 (McKinney 1981). We determine the wrongful death proceeds involved in the instant case are an asset of Frances's estate.

The next step is to determine whether the wrongful death proceeds should be distributed by a residuary clause or partial intestacy. If section "g" is a residuary clause, the wrongful death proceeds pass to Marguerite. If section "g" is not a residuary clause, the remainder will descend as intestate property to heirs of the testator. Schau v. Cecil, 257 Iowa 1296, 1301, 136 N.W.2d 515, 519 (1965) (citations omitted); In re Estate of Ramthun, 249 Iowa 790, 800-01, 89 N.W.2d 337, 343 (1958).

The focus of our analysis is the intent of the testator. In re Trust of Killian, 459 N.W.2d 497, 499 (Iowa 1990); see In re Estate of Rogers, 473 N.W.2d 36, 39 (Iowa 1991). Frances's intent is to be determined from the language of the will, the scheme of distribution, and the facts and circumstances surrounding the will's execution. Killian, 459 N.W.2d at 499. Our courts have adopted the well-established doctrine of gift by implication:

When a testator's will clearly reveals a general plan or intention as to the disposition of [her] property, and a situation arises that is not within the express language of the will, such general plan may be regarded as existing but incompletely expressed, and the failure to provide for the situation inadvertent rather than intentional, and a gift may be implied for the purpose of the general plan.

In re Estate of Fawcett, 370 N.W.2d 837, 838 (Iowa App.1985) (quoting Davis v. Davis, 24 Ohio Misc. 17, 258 N.E.2d 277, 282 (1970)); Russell v. Johnston, 327 N.W.2d 226, 230 (Iowa 1982); Porter v. Porter, 286 N.W.2d 649, 654 (Iowa 1979). As did the district court, we conclude the doctrine applies in the instant case.

Frances's will reflects a plan of disposition. The will disposed of all of Frances's property at the time it was executed in 1978. All of the bequests made by Frances are contained in article II, sections "a" through "g" of her will. The preamble to article II provided the remainder of Frances's assets were to be distributed under the subsequent sections. Section "g" is the only section of Frances's will that can be interpreted as a residuary clause because sections "a" through "f" contain bequests of a specific item or amount of money.

There is a presumption a testator intends to dispose of her entire estate. Bankers Trust Co. v. Allen, 257 Iowa 938, 947, 135 N.W.2d 607, 612 (1965). Our courts seek to avoid partial intestacy if possible. In re Spencer's Estate, 232 N.W.2d 491, 498 (Iowa 1975) (citations omitted). This presumption against intestacy is particularly strong where the subject of the gift is a residuary estate. Hollenbeck v. Gray, 185 N.W.2d 767, 769 (Iowa 1971); Moore v. McKinley, 246 Iowa 734, 757, 69 N.W.2d 73, 87 (1955) (citation omitted).

The term "remainder" of estate is usually understood to mean part of estate left after all provisions of the will have been satisfied. In re Richter's Will, 212 Iowa 38, 44, 234 N.W. 285, 288 (1931). The purpose of a residuary clause is to make a complete disposition of testator's estate, so no part may be left to pass as intestate property. Bankers Trust Co., 257 Iowa at 946, 135 N.W.2d at 612 (citations omitted). The presumption against partial intestacy may be invoked when intention is not clearly expressed. Baker v. Elder, 223 Iowa 395, 399, 272 N.W. 153, 155 (1937) (citation omitted). The words used by Frances in her will, however, clearly show her intent to dispose of all of her property by will. Frances provided the bequests under article II were to dispose of the remainder of her property. Frances's will provided the remainder of her assets, including "any money left in the bank," were disposed under article II, section "g." This section of the will, in addition to the preamble of article II, make it evident her intent was to dispose of all the remainder of her property by way of the bequests under article II. The will clearly indicates Frances intended a very specific plan of distribution regarding Frank and Verna. She made bequests of one specific amount of money to each beneficiary. These bequests of the will show Frances's intent to limit the bequests to Frank and Verna.

We find section "g" of Frances's will is a residuary clause. As a result the wrongful death proceeds should be distributed to the beneficiaries designated in this section. The proceeds shall not pass intestate. We affirm the decision of...