In re Estate of Owen
| Decision Date | 20 October 2006 |
| Docket Number | No. 65A05-0602-CV-53.,65A05-0602-CV-53. |
| Citation | 855 N.E.2d 603 |
| Parties | In the Matter of the ESTATE OF Pattie L. OWEN, Deceased, Rodney M. Logan and Carol Logan, Co-Personal Representatives, Appellants-Respondents, v. Toni L. Lyke, Appellee-Petitioner. |
| Court | Indiana Appellate Court |
Patrick A. Shoulders, Jean M. Blanton, Ziemer, Stayman, Weitzel & Shoulders, LLP, Evansville, IN, Attorneys for Appellants.
Edward W. Johnson, Johnson, Carroll and Griffith, Evansville, IN, for Attorney for Appellee.
Rodney and Carol Logan, as co-personal representatives of the Estate of Pattie L. Owen, appeal the probate court's construction of Owen's will in favor of Toni Lyke. The probate court correctly determined Article V of Owen's will is ambiguous but erred when construing certain portions of it. We affirm in part and reverse in part.1
Owen died on August 25, 2005. Her will, dated July 15, 2005, provides in relevant part as follows:
I hereby give, devise and bequeath my real estate located in Robb Township, Posey County, Indiana, being eighty (80) acres, located in § 17-4-13, more or less, and legally described as follows:
[legal description omitted]
to my daughter, Toni L. Lyke, for her lifetime, and at her death, then to her children Jason A. Lyke, Joshua L. Lyke and Virginia S. Lyke, equally, in fee simple ownership. I further request that the amount of Four Thousand Five Hundred Dollars ($4,500.00) be put aside soon after my death, from the next harvest, to pay the real estate taxes and to plant next year's crop.
I further appoint my friends Rodney Logan and Carol Logan to act as Co-Trustees of the farm during my daughter Toni L. Lyke's lifetime, and they shall be paid the joint amount of One Thousand Dollars ($1000.00) per year for acting as Co-Trustees. My Co-Trustees appointed herein shall also be responsible for leasing the residence located on that real estate to the person or persons and for the rental amount as they shall see fit. My daughter, Toni L. Lyke shall not be permitted to rent that residence if she is married at that time to Brian Lyke.
It is my desire that so long as feasible, my Co-Trustees shall continue the tenancy of that farm with Beuligmann Brothers, due to my long and satisfactory relationship with Beuligmann Brothers.
If at any time that that [sic] 80 acres or any part thereof shall be placed for sale, then my friends Rodney and Carol Logan shall be permitted first opportunity to purchase the real estate or they shall be given the opportunity to match any offer made for the purchase of the real estate.
The will was admitted to probate on September 7, 2005, and the Logans were appointed co-personal representatives. On November 1, 2005, Lyke filed a petition to construe the will under Ind.Code § 29-1-6-5, claiming Article V was ambiguous. After a hearing on November 28, 2005, the probate court entered the following relevant findings and conclusions:
CONSTRUCTION OF WILL
(January 3, 2006)
* * * * * *
II.
Ms. Owen intended that her daughter, Toni L. Lyke, was to receive a life estate in the entire eighty (80) acres and its improvements.
Ms. Owen intended that Toni's children were to be the remaindermen.
Both Toni's life estate and the grandchildren's future fee simple interest vested upon Ms. Owen's death. See Lewis v. Clifton, (Ind.App.2005), 837 N.E.2d 1016, 1019.
While the Will used language that indicates Ms. Owen intended to establish a trust to manage the farm, such an arrangement would be incompatible with the use of estate monies to pay only the first year's taxes and the first crop year's expenses.
Generally, one receiving a life estate under Indiana law takes real estate subject to the obligations thereon. And, if the property involved is to be held in trust, the trust would be responsible for all obligations on the real estate. Wright v. James [Jones], (Ind.1886), 105 Ind. 17, 4 N.E. 281[;] Commons v. Commons, (Ind.1888), 115 Ind. 162, 16 N.E. 820[.]
Here, Ms. Owen provided for the first year's obligations to be paid by devise from her estate, but did not instruct that any other obligation be paid by the purported trust. Therefore, Toni L. Lyke takes the life estate subject to all obligations.
And while Ms. Owen indicates her preference that the Beuligmann Brothers be retained as tenants, this later appearing language is not sufficient to take away or decrease Toni's life estate and Toni's legal right to manage the farm. Oliphant v. Pumphrey, (Ind. 1923), 193 Ind. 656, 141 N.E. 517.
Also, Article V's ostensible restriction on Toni's right to either rent or rent out the residence on the eighty (80) acres if she is married to Brian Lyke is not only confusing and ambiguous, it may well be against public policy. Gladden v. Jolly, (Ind.App.1995), 655 N.E.2d 590.
In essence, Ms. Owen never created a trust subsequent to her devise of a life estate to her daughter and the vesting of the remainder in her grandchildren. Stockton v. Northwestern Branch of the Women's Foreign Missionary Soc., (Ind. App.1956), 127 Ind.App. 193, 133 N.E.2d 875.
Then, Article V purports to place a restriction on the sale of all or any part of the real estate by giving the Logans, who would have absolute control over the real estate, first right of refusal if the property is ever offered for sale.
Such an arrangement might well frustrate Ms. Owen's intent to provide for her daughter during Toni's lifetime and might divest the grandchildren also.
Finally, Indiana's Rule Against Perpetuities might well be violated by these unlimited options. I.C. 32-17-8-5[.]
III.
Article V of Ms. Owen's Will is ambiguous. The Court must construe the entire Will to give effect to Ms. Owen's intent.
Ms. Owen intended that Toni L. Lyke was to have a life estate in the eighty (80) acres and its improvements.
Ms. Owen intended that Ms. Owen's grandchildren . . . would take the real estate equally in fee simple upon Toni's death.
The purported restrictions on Toni's life estate are incompatible with Ms. Owen's intent. Therefore, no trust was created and the Logans have no authority to interfere with Toni's enjoyment of her life estate nor with the remaindermen's interest upon Toni's death.
(Id. at 29-32) (formatting and punctuation altered).
Ordinarily when the probate court enters findings of fact and conclusions of law, we apply a two-tiered standard of review: we determine whether the evidence supports the findings and then whether the findings support the judgment. St. Mary's Medical Center, Inc. v. McCarthy, 829 N.E.2d 1068, 1072 (Ind.Ct. App.2005), reh'g denied. Findings and conclusions are set aside only if they are clearly erroneous, that is, when the record contains no facts or inferences supporting them. Id. However, because the facts are not in dispute, the only issue is whether the probate court correctly construed Owen's Will. The interpretation, construction or legal effect of a will is a question to be determined by the court as a matter of law. In re Estate of Meyer, 668 N.E.2d 263, 265 (Ind.Ct.App.1996), reh'g denied, trans. denied 683 N.E.2d 581 (Ind.1997). We review such questions of law de novo and owe no deference to the probate court's legal conclusions. St. Mary's, 829 N.E.2d at 1072.
Our objective in construing a will is to determine and give effect to the testator's true intent as expressed in the will. Gladden v. Jolly, 655 N.E.2d 590, 592 (Ind.Ct.App.1995). We must consider and give effect to every provision, clause, term and word of the will, if possible, to determine that intent. Id. We look to the "four corners" of the will and the language used in the will to determine the testator's intent. Meyer, 668 N.E.2d at 265. We assume the testator used the words in a will in their common and ordinary sense and meaning. Id. If there is an ambiguity in the language of the will, we must first determine whether other provisions of the will make clear the testator's intent. In re Estate of Saylors, 671 N.E.2d 905, 908 (Ind.Ct.App.1996).
Once the testator's intent has been determined, it is controlling and must be given effect so long as it is not contrary to law. Gladden, 655 N.E.2d at 592. "The provisions of a will must be upheld and construed to give effect to the intent expressed in it, if possible, rather than have that intent frustrated." Id. A testator may devise her property with attached terms or subject to conditions, "regardless of how capricious or unreasonable the terms or conditions may seem, unless they violate some statute or established principle of law." In re Estate of Kirkendall, 642 N.E.2d 548, 552 (Ind.Ct.App.1994).
In Article V, Owen both devises an 80-acre farm to Lyke for her lifetime and appoints the Logans as co-trustees of the farm during Lyke's lifetime, requiring us to determine whether Owen intended Lyke's life estate to be held in trust by the Logans or to be held by Lyke without trust.
In both the will and trust3 contexts, substance trumps form. As to trusts, Ind.Code § 30-4-2-1(b) provides:
Except as required in the applicable probate law for the execution of wills, no formal language is required to create a trust, but its terms must be sufficiently definite so that the trust property, the identity of the trustee, the nature of the trustee's interest, the identity of the beneficiary, the nature of the beneficiary's interest and the purpose of the trust may be ascertained with reasonable certainty.
Similarly, a devise in a will need use no particular form or words to create a life estate. Gladden, 655 N.E.2d at 592. A devise for or during the devisee's lifetime, or for as long as the devisee shall live, or until the devisee's death, or such similar phrase, creates a life estate in the devisee, unless other provisions show another intent. Id.
If Article V grants a life estate free of trust, as Lyke suggests,...
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