In re Estate of McFarland

• Decision Date: 07 July 2005
• Parties: In re ESTATE OF Merle Jeffers McFARLAND.
• Court: Tennessee Supreme Court

Page 299

167 S.W.3d 299

In re ESTATE OF Merle Jeffers McFARLAND.

Supreme Court of Tennessee, at Knoxville.

May 3, 2005 Session.

July 7, 2005.

Charles R. Terry, Morristown, Tennessee, Douglas T. Jenkins, Rogersville, Tennessee, and William Lewis Jenkins, Jr., Dyersburg, Tennessee, for the appellant, Stephen D. McFarland, Administrator C.T.A. of the Estate of Merle Jeffers McFarland.

Gene Paul Gaby, Greeneville, Tennessee, for the appellee, James Cox.

James Robert Walker, Knoxville, Tennessee, for the appellee, The University of Tennessee.

Patrick Ledford, Kingsport, Tennessee, for Amicus Curiae, Elizabeth Walker, Administratrix C.T.A. of the Estate of Charles Dow Chase.

Daniel B. Minor, Kingsport, Tennessee, for Amicus Curiae, Jackie Terry Olinger.

OPINION

WILLIAM M. BARKER, J., delivered the opinion of the court, in which E. RILEY ANDERSON, and ADOLPHO A. BIRCH, Jr., JJ., joined. FRANK F. DROWOTA, III, C.J., filed a dissenting opinion in which JANICE M. HOLDER, J., joined.

We granted review in this case to determine the appropriate manner of distributing lapsed residuary gifts in a will. Specifically, we are confronted with a holographic will containing a residuary clause which devised percentages of the testatrix's estate to certain named beneficiaries. Three of these beneficiaries predeceased the testatrix, causing their gifts to lapse. Because these beneficiaries also died without issue, the Tennessee anti-lapse statute is not applicable.¹ Thus, the question presented is whether the lapsed residuary gifts are to be divided among the remaining residuary beneficiaries or pass through intestate succession to the testatrix's heirs at law. The probate court concluded that the lapsed gifts created a partial intestacy, and the lapsed gifts passed to the heirs at law. The Court of Appeals affirmed. Upon review, we affirm the judgment of the Court of Appeals.

Facts

On November 14, 1994, Ms. Merle Jeffers McFarland executed a holographic will. In this will, Ms. McFarland named an administrator for her estate, gave directions regarding her burial, set aside two percent of her estate to provide funds for funeral expenses, and also devised a specific bequest of three thousand dollars to the Tieke-McCullough Cemetery bank fund. The will further directed that the remainder of her estate was to be divided among eighteen named individuals and entities.

Specifically, Ms. McFarland provided in her will that "[t]he rest of the estate I wish to be divided to the following." She then listed the following beneficiaries along with the percentages of her estate devised to each. Her two brothers, Willie Lee Jeffers and Minnis Rankin Jeffers, were each to receive a ten percent share of the residuary estate. Clarence Lee McFarland, Mary Louise McFarland, and Evelyn B. McFarland McCulley were each also devised a ten percent share. Another ten percent share was to be divided equally between the three sons of Clyde E. McFarland. The First United Methodist Church of Bulls Gap received a five percent share. Larry and Virginia Carpenter were to divide a five percent share. A two percent share was devised to the city of Bulls Gap. Another two percent share went to the Tieke-McCullough Cemetery for "mowing and up keep of the cemetery." The Thompson Cancer Center in Knoxville was devised a ten percent share to be used for research, and the University of Tennessee was also to receive ten percent "for scholarships or what they need most." Ms. McFarland granted one percent shares to the Bulls Gap Masonic Lodge and Eastern Star Lodge. Finally, the United Way Fund or any other "worthy charity fund" was devised a two percent share.

On October 12, 2001, seven years after making the will, Ms. McFarland passed away at the age of eighty-four. An administrator was appointed by the trial court, and the will was admitted to probate. However, the administrator subsequently filed a declaratory judgment action seeking the court's guidance as to how the proceeds of the estate were to be distributed. This action was necessitated due to the fact that three of the residuary beneficiaries named in the will, Minnis Rankin Jeffers, Willie Lee Jeffers, and Mary Louise McFarland, had predeceased the testatrix, Ms. McFarland. Also, none of these predeceased beneficiaries had left a surviving spouse or issue. It was therefore uncertain as to how these individuals' shares were to be distributed.

The chancery court, exercising probate jurisdiction, determined that the gifts to each of the three predeceasing beneficiaries had lapsed. Because each had died without leaving surviving issue, Tennessee's anti-lapse statute, Tennessee Code Annotated section 32-3-105 (2001), did not apply. The probate court concluded that these circumstances resulted in a partial intestacy in Ms. Farland's estate. The chancellor also acknowledged that the long-standing common law rule, as announced in Ford v. Ford, 31 Tenn. 431 (1852), was that lapsed residuary gifts do not remain as part of the residue of the will to be distributed to remaining beneficiaries, but instead pass by intestate succession to the testator's next of kin. Therefore, the chancellor directed that those shares of the estate devised to the predeceased beneficiaries were to be distributed to Ms. McFarland's heirs at law, rather than being divided among the remaining residuary beneficiaries.

The estate administrator filed an interlocutory appeal in the Court of Appeals, where the decision of the probate court was subsequently affirmed. We then granted review. The issue presented is whether the lapsed residuary gifts pass to the testatrix's heirs at law or to the remaining residuary beneficiaries. The estate administrator, along with the remaining residuary beneficiaries, argue that the lapsed gifts should be divided among the remaining residuary beneficiaries in proportion to their interests granted in the will. In opposition, the surviving heirs argue that the lapsed gifts pass by intestate succession.

Standard of Review

When this Court is called upon to construe a will, and there is no dispute in the evidence as to any material fact, then the question on appeal is one of law. In re Estate of Vincent, 98 S.W.3d 146, 148 (Tenn.2003). Accordingly, our review is de novo with no presumption of correctness accompanying the lower courts' conclusions of law. Id. (citation omitted).

Analysis

I. Principles of Will Construction

In construing a will, the cardinal rule is that the Court must attempt to ascertain the intent of the testator and to give effect to that intent unless prohibited by a rule of law or public policy. Id. at 150; see Winningham v. Winningham, 966 S.W.2d 48, 50 (Tenn.1998). Holographic wills drawn by unskilled drafters are given a liberal construction. See Garner v. Becton, 187 Tenn. 34, 212 S.W.2d 890, 891 (1948). Nevertheless, the intention of the testator must be ascertained, if at all possible, from the particular words used in the will and from the context, general scope, and purpose of the instrument. Daugherty v. Daugherty, 784 S.W.2d 650, 653 (Tenn.1990). The Court "cannot determine the devolution of estates based upon the mere surmise as to the testator's intention." Pinkerton v. Turman, 196 Tenn. 448, 268 S.W.2d 347, 350 (1954).

The administrator of the estate argues that Ms. McFarland's will manifested a clear preference for those specified beneficiaries rather than for the heirs at law. He argues that Ms. McFarland clearly intended the residuary beneficiaries to receive the remainder of her estate, in its entirety, and to the exclusion of all other persons, including her heirs. The administrator also correctly notes that when a person makes a will there is a presumption that the person did not intend to die intestate as to any part of his or her property. See Tenn.Code Ann. § 32-3-101 (2001); In re Walker, 849 S.W.2d 766, 768 (Tenn.1993).

On the other hand, the law requires us to read a will as if it had been executed immediately prior to the testator's death. Tenn.Code Ann. § 32-3-101 (2001); see also Bell v. Shannon, 212 Tenn. 28, 367 S.W.2d 761, 766 (1963). Furthermore, a person is presumed to be acquainted with applicable rules of law when executing a will. McCarley v. McCarley, 210 Tenn. 484, 360 S.W.2d 27, 29 (1962). We must presume, therefore, that Ms. McFarland, prior to her death, knew that several of the beneficiaries had predeceased her, and we can further presume that she knew these lapsed gifts would pass by intestate succession to her heirs. Also, there is no evidence in the record that she attempted to redraft or revise her will to provide for an alternative distribution of the lapsed gifts.

Faced with a lack of any clear evidence concerning the testatrix's intent on this point, we are left to apply the general rules governing residuary clauses and lapsed gifts.

II. General Rules of Property Descent and Distribution

A gift or devise in a will which fails because the beneficiary predeceases the testator is said to lapse. White v. Kane, 178 Tenn. 469, 159 S.W.2d 92, 94 (1942). To avoid this problem, Tennessee, like many other states, has enacted an "anti-lapse" statute which works to save lapsed gifts for the representatives of the predeceased beneficiary. Id. The Tennessee anti-lapse statute provides, in part:

(a) Whenever the devisee or legatee or any member of a class to which an immediate devise or bequest is made, dies before the testator, or is dead at the making of the will, leaving issue which survives the testator, the issue shall take the estate or interest devised or bequeathed which the devisee or legatee or the member of the class, as the case may be, would have taken, had that person survived the testator, unless a different disposition thereof is made or required by the will.

Tenn.Code Ann. § 32-3-105 (2001) (emphasis added).

This statute attempts to further the presumed intent of the testator in the absence of any contrary intent expressed...