In re Estate of Zimmerman
| Decision Date | 30 August 2001 |
| Docket Number | No. 20000361, No. 20010002. |
| Citation | 2001 ND 155,633 N.W.2d 594 |
| Parties | In the Matter of the ESTATE OF Wallace W. ZIMMERMAN, Deceased. Sarah L. Zimmerman, Surviving Spouse of Wallace W. Zimmerman, and Maureen K. Zimmerman, Daughter and Residuary Devisee of Wallace W. Zimmerman, Petitioners and Appellees, v. Andrew C. Zimmerman, Personal Representative of the Estate of Wallace W. Zimmerman, Deceased, Respondent and Appellant. In the Matter of the Estate of Wallace W. Zimmerman, Deceased. Sarah L. Zimmerman, Surviving Spouse of Wallace W. Zimmerman, and Maureen K. Zimmerman, Daughter and Residuary Devisee of Wallace W. Zimmerman, Petitioners and Appellants, v. Andrew C. Zimmerman, Personal Representative of the Estate of Wallace W. Zimmerman, Deceased, Respondent and Appellee. |
| Court | North Dakota Supreme Court |
Robert G. Hoy (argued) and Steven E. McCullough (on brief), Ohnstad Twichell, P.C., West Fargo, ND, for petitioners, appellees, and appellants.
Edmund G. Vinje II, Vinje Law Office, Fargo, ND, for respondent, appellant, and appellee.
[¶ 1] Andrew Zimmerman, the personal representative of Wallace Zimmerman's estate, appealed a probate court order excluding Sarah Zimmerman's property from Wallace's augmented estate for purposes of calculating her elective share of his augmented estate. Sarah and Maureen Zimmerman appealed a probate court order allowing the personal representative attorneys' fees and refusing to award Sarah interest on her elective share. We reverse the court's decision excluding Sarah's property from Wallace's augmented estate, and we affirm the decision allowing the personal representative attorneys' fees.
[¶ 2] In Matter of Estate of Zimmerman, 1998 ND 116, 579 N.W.2d 591, we outlined the factual background regarding Sarah's claim for an elective share of Wallace's augmented estate. Wallace and Sarah were married in April 1954, and they had three children during their marriage: Maureen, Karen, and Andrew. Wallace and Sarah were divorced in 1982. The divorce court distributed the couple's marital estate, awarding Sarah property valued at about $357,000. However, the divorce court refused to include Wallace's military retirement benefits in the couple's marital estate.
[¶ 3] Sarah subsequently learned she had a claim against Wallace's military retirement benefits, and she moved to reopen the divorce decree so those benefits could be considered in the property division. However, Sarah withdrew her motion when she remarried Wallace in March 1985, Before Wallace and Sarah remarried, they entered into a March 1985 prenuptial agreement, which provided:
1. The parties agree that upon their remarriage the military retirement pay of [Wallace] shall be considered a marital asset to be considered by the Court in the event of any future separation or divorce.
2. Both parties agree that property owned by them separately at this time, with the exception of the military retirement pay described above, shall remain their separate property in the event of their remarriage and shall further remain their separate property in the event of their divorce or separation.
3. Both parties stipulate and agree that any property acquired after their marriage and the question of spousal support, if any, will be settled by the parties or by the court in the event of a future separation or divorce.
[¶ 4] After their remarriage, Wallace and Sarah again experienced marital problems. In May 1986, they informally separated and thereafter lived apart from each other. Although they never lived together again, neither Wallace nor Sarah sought a legal separation or divorce.
[¶ 5] In August 1986, Wallace executed his final will, designating Andrew Zimmerman as personal representative of his estate and devising his property to his three "children, share and share alike, per stirpes," subject to the following provision:
I am presently married and separated, contemplating divorce. I hereby leave my wife the legal minimum required by law. When we are legally divorced, I understand that the legal minimum is zero and it is my intention that if we are not husband and wife at the time of my demise my present wife, Sarah Lily Zimmerman, shall receive nothing from my estate.
[¶ 6] Wallace died on January 1, 1994, and the probate court appointed Andrew personal representative of the estate. Rather than taking under Wallace's will, Sarah petitioned for an elective share of his augmented estate under N.D.C.C. ch. 30.1-05. The probate court initially rejected Sarah's claim for an elective share, ruling the prenuptial agreement waived all of her rights in Wallace's estate.
[¶ 7] In Zimmerman, 1998 ND 116, ¶¶ 24, 28, 579 N.W.2d 591, we concluded the prenuptial agreement was not a waiver of Sarah's right to an elective share of Wallace's augmented estate, and the probate court erred in deciding she was entitled to nothing under Wallace's will. We remanded for determination of Sarah's elective share. Id. at ¶ 29.
[¶ 8] On remand, Sarah argued the property distributed to her in the 1982 divorce should not be included in Wallace's augmented estate. She claimed that, after excluding her property, Wallace's augmented estate was about $400,000 and her one-third elective share was about $133,000. The personal representative argued the property distributed to Sarah in the 1982 divorce should be included in Wallace's augmented estate. The personal representative claimed Sarah was not entitled to any additional property from Wallace's estate to satisfy her elective share because, with the property distributed to her in the divorce, she had already received more than one-third of Wallace's augmented estate. The probate court excluded from Wallace's augmented estate the property distributed to Sarah in the 1982 divorce. The court said the property distribution in the divorce was not a transfer of Wallace's property to Sarah, but rather was a distribution of the marital estate of the parties. The court concluded the property distributed to Sarah was not "`derived' from Wallace, but if it was so derived, Sarah, by virtue of the distribution in the divorce is deemed to have given money's worth for that property" under N.D.C.C. § 30.1-05-02. The probate court also allowed the personal representative attorneys' fees and denied Sarah's request for interest on her elective share.
[¶ 9] The personal representative argues the probate court erred in excluding from Wallace's augmented estate property distributed to Sarah in the 1982 divorce. The personal representative argues the property was derived from Wallace without a full consideration in money or money's worth under N.D.C.C. § 30.1-05-02(2). Sarah responds the distribution of property to her in the divorce was for full consideration in money or money's worth under N.D.C.C. § 30.1-05-02(2), because her share of the property distribution was in recognition of her contribution to the marriage.
[¶ 10] Chapter 30.1-05, N.D.C.C., was repealed effective January 1, 1996, and replaced by a new N.D.C.C.ch. 30.1-05. See 1995 N.D. Sess. Laws ch. 322, § 27 and 1993 N.D. Sess. Laws ch. 334, §§ 50 and 51. The current provisions of N.D.C.C. ch. 30.1-05 permit a surviving spouse to take an elective share of one-half of the decedent's augmented estate. The former N.D.C.C. ch. 30.1-05 applies to this case, and all references to N.D.C.C. ch. 30.1-05 in this opinion refer to former N.D.C.C. ch. 30.1-05.
[¶ 11] Under the version of N.D.C.C. ch. 30.1-05 in effect when Wallace died on January 1, 1994, the surviving spouse of a married person domiciled in this state had the right to take an elective share of one-third of the decedent's augmented estate. Under that law, the decedent's augmented estate consisted of the decedent's net probate estate plus (1) the value of property transferred by the decedent during the marriage to any person other than the surviving spouse to the extent the decedent did not receive adequate and full consideration in money or money's worth for the transfer, and (2) the value of property owned by the surviving spouse at the decedent's death to the extent that property was derived from the decedent by any means other than testate or intestate succession without a full consideration in money or money's worth. N.D.C.C. § 30.1-05-02.1 See Matter of Estate of Luken, 551 N.W.2d 794, 797 (N.D. 1996)
. See generally Sheldon F. Kurtz, The Augmented Estate Concept Under the Uniform Probate Code: In Search of an Equitable Elective Share, 62 Iowa L.Rev. 981, 1012 (1977). Under N.D.C.C. § 30.1-05-02(2)(c), property owned by the surviving spouse at the decedent's death is presumed to have been derived from the decedent except to the extent the surviving spouse establishes it was derived from another source. To rebut the presumption, the surviving spouse must show the extent to which his or her property was derived from sources other than the deceased spouse. Luken, at 798.
[¶ 12] Section 30.1-05-02, N.D.C.C. is derived from Uniform Probate Code § 2-202, and the Editorial Board Comment to that section explains the purposes of augmenting a probate estate and the two categories of property that are added to the probate estate to compute the augmented estate:
The purpose of the concept of augmenting the probate estate in computing the elective share is twofold: 1. to prevent the owner of wealth from making arrangements which transmit his property to others by means other than probate deliberately to defeat the right of the surviving spouse to a share, and 2. to prevent the surviving spouse from electing a share of the probate estate when the spouse has received a fair share of the total wealth of the decedent either during the lifetime of the decedent or at death by life insurance, joint tenancy assets, and other nonprobate arrangements. Thus essentially two separate groups of property are added to the net probate estate to arrive at the augmented net estate which is the...
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