In re Estate of Thompson
| Decision Date | 15 February 2012 |
| Docket Number | No. 11–0940.,11–0940. |
| Citation | 812 N.W.2d 726 |
| Parties | In the Matter of the ESTATE OF Justin F. THOMPSON, Mary C. Ewoldt, Co–Executor–Appellant. |
| Court | Iowa Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from the Iowa District Court for Palo Alto County, Don E. Courtney, Judge.
A co-executor and beneficiary of the estate appeals the probate court's transfer of life insurance proceeds to the widow and approval for spousal allowance. AFFIRMED.
Jeffrey D. Ewoldt of Davis, Brown, Koehn, Shors & Roberts, P.C., Des Moines, for appellant.
Nicholas J. Brown of Dan Connell, P.C., Storm Lake, for Maxine Thompson.
Richard J. Barry of Montgomery, Barry & Bovee, Spencer, for George Thompson.
Heard by VAITHESWARAN, P.J., and TABOR and MULLINS, JJ.
Mary Ewoldt is a co-executor and beneficiary of Justin Thompson's estate, as well as the surviving sister of Justin's first wife. Mary appeals from a ruling of the probate court transferring life insurance proceeds from the estate to Justin's second wife, Maxine Thompson, based on the couple's premarital agreement. Mary also challenges the probate court's approval of a spousal allowance in the amount of $1000 per month.
Because we interpret the premarital agreement—including its attachments incorporated by reference—as creating a contractual obligation for Justin to maintain the life insurance policy as an asset for Maxine, we affirm the order of the probate court directing the estate to transfer $100,226 in proceeds and interest to Maxine. Because we do not find that the court abused its discretion in providing the spousal allowance, we also affirm that order.
Justin and Kathleen Thompson were married for fifty years. They lived on an acreage in Cylinder, Iowa. They had no children. Kathleen died in November 2007. On August 31, 2008, Justin married Maxine Thompson and moved into her home in Emmetsburg. Maxine's first husband was Justin's brother Richard; Maxine and Richard divorced in the 1980s.
Shortly before Justin married Maxine, they entered into a premarital agreement. Under the agreement, notarized on August 25, 2008, each party waived
all rights of dower, courtesy, homestead, distributive share, right of election against a will, widow's allowances, any spousal rights to separate property which may accrue in dissolution, and any other marital right arising by virtue of statute or otherwise, in and to the separate property the other party now owns or may hereafter acquire.
Paragraph 4 of the agreement discussed each party's disclosure of his or her property and financial obligations for examination by the other party. A list of Justin's assets and liabilities was attached to the agreement as Exhibit “A” and “by this reference was made a part hereof.” Among Justin's assets listed in Exhibit “A” was a life insurance policy from Midland Life Insurance Company (Midland) with a cash value of $15,000 and a face value of $100,000.00 “now payable to Maxine Thompson.”
As it turns out, the proceeds were not payable to Maxine because Justin had not completed the beneficiary change process. On July 23, 2008—about one month before Justin and Maxine executed their premarital agreement—Midland received a request from Justin to name Maxine as the new beneficiary of the policy. But Midland returned the ownership and beneficiary change forms to Justin without recording them. The company informed him by letter that it still needed documentation naming the executor of Kathleen's estate or her next of kin. Midland addressed the letter to Kathleen Thompson at the Cylinder address. Our record does not indicate whether Justin saw Midland's letter. The company did not receive any revised documents from Justin in response to its letter.
Justin died of heart failure on February 23, 2010, leaving Maxine as his surviving spouse. Midland paid the death benefit of $100,000 to Justin's estate based on the policy's rider on Justin's life.
Justin's will—executed on January 11, 2008—nominated his first wife's sister, Mary Ewoldt, and his brother George Thompson as co-executors of his estate. The will also listed those two individuals as the only beneficiaries of Justin's estate, with farm real estate devised to George and the remainder of the estate devised to Mary. George and Mary were appointed as executors on March 5, 2010.
On April 23, 2010, Maxine filed an application for a spousal support allowance in the amount of $3361 per month. On April 27, 2010, co-executor George Thompson filed an application for directions under Iowa Code section 633.76 (2009).1 Specifically, George's application asserted that $100,226 in death benefits and interest from the Midland Life Insurance policy, paid to the estate, should be transferred to Justin's widow Maxine as provided in the attachment to the premarital agreement. The application noted that co-executor Mary Ewoldt was “not agreeable” to the transfer.
Mary resisted the application for directions, arguing Maxine waived all rights to Justin's property in the premarital agreement, the body of the premarital agreement did not mention the life insurance policy, and Maxine was never named as the beneficiary of the policy. Mary also filed a motion to compel discovery, requesting information pertaining to the surviving spouse's monthly expenses.
On June 25, 2010, the probate court held a hearing on the application for spousal support. At the start of the hearing, Mary renewed her motion to compel discovery and asked for a continuance. The court declined to continue the matter and went on to receive testimony from Maxine.
On July 15, 2010, Maxine filed an election of the surviving spouse to take her statutory share of the estate as provided by Iowa Code section 633.236.
On July 23, 2010, the court held a hearing on co-executor George Thompson's application for directions. Witnesses at that hearing included attorneys Todd Buchanan and Roger Berkland, as well as both co-executors, and the surviving spouse. The court left the record open for submission of an affidavit from Elaine Nash, a claims manager for Midland National Life Insurance Company. The Nash affidavit outlined the history of an insurance policy issued on the life of Justin's first wife Kathleen, which included a rider on Justin's life. The affidavit confirmed that the company paid $100,226 in policy rider benefits to Justin's estate on March 24, 2010.
On October 8, 2010, the probate court issued two rulings. In the first ruling, the court denied Maxine's request for spousal support, finding that given her income and assets she did not require an allowance under Iowa Code section 633.374. The court also noted that Maxine “signed a premarital agreement in which she waived her right to a widow's allowance.” In the second ruling, the court granted George Thompson's application for directions, finding it was Justin's intent that the insurance proceeds be distributed to Maxine.
On October 20, 2010, Mary filed a motion to amend or enlarge the findings and modify the ruling on the application for directions. That same day, Maxine filed a motion to reconsider. Maxine alleged the motion to amend was untimely, but if it was granted, the court should reconsider its denial of spousal support.
On November 8, 2010, Mary filed a notice of appeal from the October 8, 2010 ruling. On November 10, 2010, she filed a motion for limited remand. On November 12, 2010, the probate court issued an order finding it lacked jurisdiction to rule on the pending motions. On February 21, 2011, the Iowa Supreme Court found the motions to reconsider to be timely and the appeal to be premature. The appellate court issued procedendo, sending the case back to Palo Alto County.
On May 11, 2011, the probate court issued two new rulings. In response to Mary's motion to amend or enlarge, the court declined to modify its original ruling on the application for directions. In response to Maxine's motion to reconsider, the court reversed its earlier ruling and granted the surviving spouse an allowance of $1000 per month for twelve months. On June 9, 2011, Mary filed a notice of appeal challenging both May 11 rulings.
We review the probate court's rulings de novo. See In re Estate of Serovy, 711 N.W.2d 290, 293 (Iowa 2006). We give weight to the court's fact-findings, but we are not bound by them. Id.
In addition, the general rule is that “issues concerning the validity and construction of premarital agreements are equitable matters subject to our de novo review.” In re Marriage of Shanks, 758 N.W.2d 506, 511 (Iowa 2008).
We review support orders issued under section 633.374 for an abuse of discretion, keeping in mind the statute's requirement that the court “take into consideration the station in life of the surviving spouse and the assets and condition of the estate.” In re Estate of Sieh, 745 N.W.2d 477, 479 (Iowa 2008). A premarital agreement waiving spousal support does not prevent the probate court from awarding the allowance, but the award is discretionary. Iowa Code § 596.5(2); In re Estate of Spurgeon, 572 N.W.2d 595, 599 (Iowa 1998).
III. AnalysisA. Did the Premarital Agreement Between Justin and Maxine Require His Estate to Pay Life Insurance Proceeds to the Surviving Spouse?
Co-executor George Thompson asked the probate court for directions under section 633.76. The question was whether the estate should transfer life insurance proceeds to Maxine Thompson, Justin's surviving spouse, as contemplated in an attachment to the couple's premarital agreement. The court determined that Justin intended Maxine to have the insurance proceeds, despite his failure to complete the process to name her as the beneficiary.
Stating that it would “enforce the terms of the premarital agreement as it is written,” the probate court concluded:
From the language of the premarital agreements, and from the credible testimony of witnesses with knowledge of the premarital agreement, the Court finds Justin's intent was...
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