Gregory v. Estate of Gregory, 93-202

• Decision Date: 22 November 1993
• Docket Number: No. 93-202,93-202
• Citation: 866 S.W.2d 379,315 Ark. 187
• Parties: Genevive GREGORY, Appellant, v. ESTATE OF H.T. GREGORY, Appellee.
• Court: Arkansas Supreme Court

Page 379

866 S.W.2d 379

315 Ark. 187

Genevive GREGORY, Appellant, v. ESTATE OF H.T. GREGORY, Appellee.

No. 93-202.

Supreme Court of Arkansas.

Nov. 22, 1993.

Timothy Steven Parker, Marianna, for appellant.

David Soloman, Helena, for appellee.

BROWN, Justice.

This case involves the right of a widow, appellant Genevive Gregory, to elect to take against the will of her deceased husband, H.T. Gregory. The decedent had previously executed a reciprocal will and a separate contract not to revoke the wills with his first wife, Gladys Gregory. The two wills of the couple created testamentary trusts giving the six children of their marriage the estate of the surviving spouse. The issue before us in this appeal is who prevails between a second wife, in this case Genevive Gregory, electing to take her statutory share in the estate and the rights of the children as trust beneficiaries under the contract and reciprocal wills. The probate court concluded that the rights of the children were paramount, and from that decision Genevive Gregory appeals. We agree with the probate court and affirm its order.

On March 24, 1964, H.T. Gregory and his first wife, Gladys Gregory, executed "An Agreement to Make Reciprocal Wills and Not to Revoke Same." The Agreement stated in part: "upon the death of either party the survivor shall not revoke his or her will without the consent of all the beneficiaries, devisees, and legatees." Pursuant to this Agreement, H.T. Gregory and Gladys Gregory simultaneously executed reciprocal wills, which were attached and incorporated into the Agreement by reference. The Agreement was also referred to in the body of the wills. The wills were the same and stated that the residuary estate of the first to die was to be held in trust with the surviving spouse and their son, H.T. Gregory, Jr., as trustees and the couple's six children as beneficiaries. Under that trust, the surviving spouse was to receive income for life and principal as deemed necessary by the trustees. Upon the death of the surviving spouse, the residuary property of that spouse was also to go into trust for the benefit of the children and the trust was to continue until the youngest surviving child reached the age of 25 and then the balance of the trust estate was to be distributed to the beneficiaries.

Gladys Gregory predeceased H.T. Gregory some time after 1964. Her property went into trust for the benefit of H.T. Gregory pursuant to the Agreement and her will. Thereafter, H.T. Gregory married appellant Genevive Gregory in the early 1970's. On April 26, 1979, H.T. Gregory executed a codicil to his 1964 will, giving Genevive Gregory a life interest in the marital home. The codicil provided that the home would revert to the children at her death in accordance with the wills of H.T. Gregory and Gladys Gregory. H.T. Gregory's children, the beneficiaries under both wills, consented to the 1979 codicil.

H.T. Gregory died on December 9, 1990, and is survived by Genevive Gregory, and by his six children, including his son, H.T. Gregory, Jr. His 1964 will and the 1979 codicil were admitted to probate that same month, and H.T. Gregory Jr. was appointed executor of the estate. On January 15, 1991, Genevive Gregory filed an Election of Surviving Spouse to take her dower and homestead interests and her statutory allowances in the estate against H.T. Gregory's will.

On March 13, 1992, an inventory of H.T. Gregory's estate was filed listing the following assets: 37 acres of real estate around the homestead valued at $70,000, tools and implements valued at $250, two cars valued at $12,000, Certificates of Deposit valued at $35,000, and stock and an insurance policy valued at $7,589.28.

On September 2, 1992, Genevive Gregory filed a Petition for Partial Distribution of the estate. In that petition, she acknowledged possession of the marital home but demanded her dower and homestead rights and her statutory allowances to which she was entitled, according to the petition, by virtue of her election to take against H.T. Gregory's estate. The petition also requested certain rents and profits from the land which comprised the homestead. In response to Genevive Gregory's petition, H.T. Gregory's children, as beneficiaries of the trust under both wills, stated that the rights of Genevive Gregory in relation to both H.T. Gregory's will and the Agreement between H.T. Gregory and Gladys Gregory had to be determined prior to the distribution of any assets of the estate.

A hearing was held where the facts were not in dispute, and the probate court was presented with the single question of who prevails between the surviving spouse, Genevive Gregory, on the one hand and the six children on the other. The court subsequently filed its letter opinion and stated in part:

The language of the reciprocal Will reads--"that if [he or she] should not survive me then I give devise and bequeath said property unto my trustee as hereinafter designated for the use and benefit of my beneficiaries as designated and set out in paragraph # 4." This language implies a present joint intention to make a gift of the collective property to the named beneficiaries effective upon the survivor's death and binding as of the signing of the reciprocal Will. The reciprocal Will represented the sole attempt by the signatories to effect a distribution of their collective property according to their intent. The decedent had no right to revoke or change his Will without the consent of the beneficiaries. To do otherwise would allow the survivor to receive advantages under the contract and then breach it thereby defeating and defrauding the deceased wife and her beneficiaries.

....

Unless the husband has at some time during the marriage relation held a heritable estate of some kind--legal or equitable--in the property in question, no statutory rights could attach in the wife's favor since a stream cannot rise higher than its source.

The probate court also found that it was "probable" that Genevive Gregory knew about the 1964 arrangements between Gladys Gregory and H.T. Gregory. Genevive Gregory then petitioned for clarification of whether the opinion also applied to personal property acquired after her marriage to H.T. Gregory. By letter, the probate court declined to clarify his opinion further.

Based on the reasoning in his letter opinion, the probate court denied the petition of Genevive Gregory to compel distribution of her homestead rights, dower interests, and statutory allowances and concluded that any rights of Genevive Gregory were subject to the prior rights of the six children under the 1964 will. The probate court specifically found that the order applied to property acquired by H.T. Gregory after his marriage to Genevive Gregory.

Arkansas recognizes reciprocal wills, whether joint or mutual, as a legitimate estate planning device to effect the intent of a married couple to dispose of collective property. See Smith v. Estate of Smith, 293 Ark. 32, 732 S.W.2d 154 (1987); George v. Smith, 216 Ark. 896, 227 S.W.2d 952 (1950). Generally, the surviving spouse is required to dispose of the collective property according to the joint will or mutual wills. See Janes v. Rogers, 224 Ark. 116, 271 S.W.2d 930 (1954). Arkansas also has a firmly entrenched public policy that the surviving spouse of a testator has the right to elect to take against her deceased spouse's will:

(a) When a married person dies testate as to all or any part of his or her estate, the surviving spouse shall have the right to take against the will if the surviving spouse has been married to the decedent continuously for a period in excess of one (1) year.

Ark.Code Ann. § 28-39-401 (1987). This right in the surviving spouse to take an elective share is well settled. See, e.g., Lamb v. Ford, 239 Ark. 339, 389 S.W.2d 419 (1965). This court has also recognized that when a spouse elects to take against a will, it may be impossible for the decedent's wishes to be followed. Clements v. Neblett, 237 Ark. 340, 372 S.W.2d 816 (1963).

The public policy set forth in § 28-39-401 is disallowed only in limited circumstances such as in the case when the electing spouse was married to the decedent for less than a year. The surviving spouse's elective interest in the decedent's estate vests immediately upon the spouse's death, but it can vest only in property which the deceased spouse owned at the time of death. Maloney v. McCullough, 215 Ark. 570, 221 S.W.2d 770 (1949).

We are confronted with two competing public policies in this case--the right of a couple to contract to make mutual wills that are irrevocable and that dispose of both estates to third-party beneficiaries, and the right of a surviving spouse to take an elective...