Merkel's Estate, Matter of, 80-53

Decision Date27 October 1980
Docket NumberNo. 80-53,80-53
Citation190 Mont. 78,618 P.2d 872
PartiesIn the Matter of the ESTATE of Herman G. MERKEL, Deceased.
CourtMontana Supreme Court

Steven D. Nelson argued, Bozeman, for appellant.

Moore, Rice, O'Connell & Refling, Perry J. Moore argued, Bozeman, for respondent.

HASWELL, Chief Justice.

The personal representative of the Estate of Celia J. Merkel appeals from an order entered in the District Court, Eighteenth Judicial District, dismissing a petition for allowance of claims on behalf of the estate of Celia J. Merkel. In his ruling, the district judge denied the claims for the homestead allowance, exempt property, and an elective share. We affirm in part and reverse in part.

The facts giving rise to this decision are important, particularly with respect to the time sequence involved. In 1967, Herman G. Merkel and Celia J. Merkel married, both of them over 70 years old at the time. In October 1977, Sterling Hunter was appointed guardian of Celia Merkel by a Montana court. Herman Merkel died in December 1978, having executed a will earlier which left nothing to his wife Celia. On June 4, 1979, Celia Merkel, through her guardian, filed a claim for exempt property and homestead allowance, and filed a petition for an elective share. Celia died 9 days later on June 13, 1979.

On August 6, 1979, Sterling Hunter, the personal representative of the estate of Celia J. Merkel, filed a petition for allowance of the same claims on behalf of the estate of Celia Merkel. The personal representative of Herman Merkel's estate moved to dismiss the petition, asserting that Celia's failure to survive extinguished her claims, and that her estate had no valid claims. The district judge granted the motion, ruling that the homestead allowance and exempt property were life estates only. The district judge also denied Celia Merkel's petition for an elective share, because a court order had not been entered in which a finding was made that the election was necessary to support Celia Merkel as a protected person.

The appellant brings two issues before this Court:

(1) Whether section 72-2-703, MCA, requiring a showing of need in order for a protected spouse to claim an elective share, is violative of the equal protection clauses of the United States Constitution and the Montana Constitution?

(2) Whether sections 72-2-801 and 72-2-802, MCA, providing for a homestead allowance and exempt property, contemplate life estates only or rather estates in fee for which a surviving spouse's estate can bring claim?

Appellant's first contention is that section 72-2-703 is unconstitutional. That statute describes who may exercise the right of election:

"Right of election personal to surviving spouse. The right of election of the surviving spouse may be exercised only by him. In the case of a protected person, the right of election may be exercised only by order of the court in which protective proceedings as to his property are pending after finding that exercise is necessary to provide adequate support for the protected person during his probable life expectancy."

As the statute indicates, a competent spouse is not restricted in any way in making the election, but a protected spouse has to pass the hurdle of showing need before claiming the possible benefits of an election. Clearly, the statute sets up a classification-a classification which appellant contends denies equal protection to protected spouses.

The legislature is empowered to classify persons for purposes of legislation, State v. Craig (1976), 169 Mont. 150, 156, 545 P.2d 649, 653, and in reviewing a statute, this Court presumes that the statute is constitutional. Great Falls Nat. Bk. v. McCormick (1968), 152 Mont. 319, 323, 448 P.2d 991, 993. Appellant admits that this classification does not involve a "fundamental right" or a "suspect class", which would require a finding by this Court of a compelling state interest in order to uphold the class. State v. Jack (1975), 167 Mont. 456, 461, 539 P.2d 726, 729. Rather, this Court need only determine that the " 'classification (is) reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike...' " State v. Craig, supra, 169 Mont. at 156, 545 P.2d at 653.

The appellant has the burden of proving that the classification is arbitrary, State v. Jack, supra, 167 Mont. at 461, 539 P.2d at 729, a burden which appellant has not sustained here.

We note at the outset that the State legislatures have traditionally set apart the class which is involved here, delegating the care of incompetent persons to the State. The Colorado Supreme Court stated in the early case of Shapter v. Pillar (1900), 28 Colo. 209, 63 P. 302, 304, "It falls to the State to take care of those who, by reason of mental incapacity, cannot take care of themselves."

This tradition of delegating care of incompetent persons to the State was the basis of a recent Colorado Supreme Court decision which upheld the constitutionality of the Colorado code section which corresponds to section 72-2-703, MCA. See Sweeney v. Summers (1977), 194 Colo. 149, 571 P.2d 1067. That court noted that the entire statutory scheme pertaining to incompetent persons has placed their care ultimately with the State. Sweeney, supra, 571 P.2d at 1069. See sections 72-5-401 et seq., MCA. Additionally, pre-Uniform Probate Code law in most states gave to a court of competent jurisdiction the responsibility for making the decision of whether or not the incompetent spouse should elect against the decedent's will, 80 Am.Jur.2d Wills §§ 1614-1615, Annot., 3 A.L.R.3d 6, § 3, a decision which was based primarily on the needs of the incompetent spouse.

The primary purpose of the elective share statutes is to insure that the surviving spouse's needs are met, and that the spouse is not left penniless. Annot., 3 A.L.R.3d 6, § 3. Presumably, in making the decision whether to elect or not, the competent spouse would consider many factors, with need being the most persuasive. Because of the statute in question, the court is required to make the election decision for the incompetent solely on the basis of need. Section 72-2-703, MCA.

This statute clearly deprives the incompetent spouse of a choice, and further deprives the incompetent of any excess property to pass on to heirs, to invest, or to use for unnecessaries. However, providing funds for these purposes is not the primary aim of the statute and is merely an incidental benefit, available only if the decedent's estate happens to be large enough to allow these extras.

By being subject to a protective order, the incompetent has already been deprived of the right to make choices in regard to property. Additionally, the court has before it, by virtue of the protective proceedings, all of the information necessary to determine what is in the best interests of the protected spouse. The statute insures that the spouse will be adequately cared for, thus fulfilling the ultimate purpose of the statute, while denying the spouse only the discretionary income.

We find this statute to be reasonable and not arbitrary when considered in light of the traditional role of the court with respect to incompetent persons and when considered in light of the purpose of the statute. The district judge acted properly in denying the petition for an elective share.

The second issue which appellant brings before this Court involves a determination of the nature of the interest created by the homestead allowance and exempt property statutes. Those statutes provide in part:

"Homestead allowance. (1) A surviving spouse of a decedent who was domiciled in this state is entitled to a homestead allowance of $20,000.

"(2) The homestead allowance is exempt from and has priority over all claims against the estate.

"(3) Homestead allowance is in addition to any share passing to the surviving spouse or minor or dependent child by the will of the decedent unless otherwise provided, by intestate succession, or by way of elective share." Section 72-2-801, MCA.

"Exempt property. (1) In addition to the homestead allowance, the surviving spouse of a decedent who was domiciled in this state is entitled from the estate to value not exceeding $3,500..." Section 72-2-802, MCA.

Neither of the statutes indicates what type of interest is created, i. e., whether it is a fee interest in the surviving spouse, or a life estate only which is extinguished by the spouse's death. Celia Merkel attempted to claim these benefits as a surviving spouse, but she died before receiving them. Appellant contends that Celia Merkel's estate is entitled to these benefits because she was a surviving spouse at the time she attempted to claim them.

The courts of other states which have enacted the Uniform Probate Code (UPC) have not considered this question, nor do the Commission comments specifically address this issue. Pre-code law in Montana indicates that the homestead was a life estate only. The purpose of the homestead was to preserve the fee interest for the heirs of the decedent, while setting aside a life estate, safe from creditors, for the spouse and family of the decedent. Kerlee v. Smith (1912), 46 Mont. 19, 22, 124 P. 777; 40 Am.Jur.2d, Homestead, § 4. The early cases, however, were based on a Montana statute which specifically mandated that the homestead was a life estate, a statute that was repealed with the adoption of the UPC:

"... If the...

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