Rose v. Waldrip

• Decision Date: 12 July 2012
• Docket Number: No. A12A0393.,A12A0393.
• Citation: Rose v. Waldrip, 730 S.E.2d 529, 316 Ga. App. 812 (Ga. App. 2012)
• Parties: ROSE et al. v. WALDRIP.
• Court: Georgia Court of Appeals

316 Ga.App. 812

730 S.E.2d 529

ROSE et al.

v.WALDRIP.

No. A12A0393.

Court of Appeals of Georgia.

July 12, 2012.

David C. Jones Jr., for Appellants.

Steward, Melvin & Frost, Frank Armstrong III, for Appellee.

ADAMS, Judge.

Linda Rose ("Linda") and Joy Garcia ("Joy") appeal the trial court's order of declaratory judgment in an action filed by "Colleen Waldrip [‘Colleen’] as Administrator with Will Annexed of the Estate of Lee R. Waldrip [‘Waldrip’]." In that order, the trial court enforced the "after-acquired property" clauses contained in a "Revocable Living Trust" agreement (the "Trust Agreement") establishing the "Lee R. Waldrip Living Trust Dated April 29, 2002" (the "Trust") and in its contemporaneous Comprehensive Transfer Document (the "CTD").¹ The trial court found that the language in these clauses alone was sufficient to convey Waldrip's entire estate into the Trust. We disagree for the reasons set forth below.

Lee R. Waldrip, who died on March 10, 2008, was Linda's father and Joy's grandfather. Colleen was his widow but apparently is not otherwise related to Linda and Joy. Colleen was named the primary beneficiary of the Trust as amended. Although earlier versions of the Trust also gave Linda an income of $1,000 per month per life, a second amendment to the Trust dated January 10, 2005, eliminated that provision and gave Linda a one time payment of $1,000. Linda and Joy, however, were named beneficiaries of a will Waldrip executed on January 1, 2008 (the "Will"), which provided for the funding of a trust to furnish Linda with an annual lifetime annuity (the "Linda Trust") and also excused certain indebtedness Joy owed her grandfather.

At issue is in this case is whether the Trust Agreement and the supporting documents that Waldrip executed on April 29, 2002, six years prior to the Will, had the effect of placing all of Waldrip's property in Trust and removing it from his estate. The Trust Agreement created the Trust and named Waldrip as the trustee and primary beneficiary. In executing the Trust Agreement, Waldrip undertook "to execute and deliver all deeds, assignments, bills of sale, written instructions and other legal documents necessary to convey and register all of my assets that I choose to place in trust under this trust...." The agreement indicates that Waldrip was transferring to the Trust his assets evidenced by titles or deeds as contained in an attached Schedule A. That schedule lists "all bank accounts, all stocks, all bonds, all accounts receivable, all business assets, all real estate, all motor vehicles, all personal property, and all assets of any kind and wherever located." The schedule notes that this list was illustrative only and should "in no way be construed to limit the number or amount of assets held by this living trust."

The Trust Agreement also indicated that Waldrip was transferring the following assets to the Trust:

all assets not requiring titles or deeds, including but not limited to my furniture, wearing apparel, and personal possessions. Additionally, [Waldrip was then] holding and will hold, solely and exclusively for and on behalf of such trust, the following: any and all properties of all kinds, whether presently owned or hereafter acquired including, without limitation: bank accounts, certificates of deposit, mutual and money market funds of all kinds, securities, agency and custody accounts, notes and real estate wherever located.

(Emphasis supplied.) The Trust Agreement reiterated that "[a]ll such property is hereby transferred to and the same shall be owned by such trust" and further provided that

[t]his declaration shall apply even though record ownership or title, in some instances, may, presently or in the future, be registered in my individual name, in which event such record ownership shall hereafter be deemed held in trust even though such trusteeship remains undisclosed.

(Emphasis supplied.)

Contemporaneously with the Trust agreement, Waldrip also executed the CTD, which contained similar language transferring Waldrip's assets to the Trust, whether currently owned or later acquired:

The undersigned hereby declares that solely as trustee of and for the benefit of the [Trust] ... and under the provisions of the [Trust Agreement], the undersigned is now holding and will hold, solely and exclusively for and in behalf of such trust, the following: any and all properties of all kinds, whether presently owned or hereafter acquired ... including, without limitation ...: bank accounts, certificates of deposit, mutual and money market funds of all kinds, securities, agency and custody accounts, notes, real estate wherever located ... jewelry, antiques, and any and all other assets wherever located.

(Emphasis supplied.) The CTD also contains the same language found in the Trust Agreement providing that Waldrip's declaration applies even if the assets are held in his name individually, "in which event such record ownership shall hereafter be deemed to be held in trust even though such trusteeship remains undisclosed."

The same day, Waldrip also executed a Bill of Sale granting to himself as trustee his interest "in all tangible personal property," and defining such property to include, "without limitation, ... such items as articles of personal property and household use which [Waldrip] presently owns or hereafter acquires (regardless of the means by which acquired or the record title in which held )" and providing an illustrative list, without limitation, of such personal property.

Colleen subsequently filed this declaratory judgment action to ascertain what assets, if any, remained in Waldrip's estate in light of the broad after-acquired property language in the Trust documents. Linda and Joy answered and counterclaimed to assert their rights under the Will, contending that the Waldrip estate had sufficient assets to fund Linda's trust and seeking an accounting from Colleen. After establishing the Trust, Waldrip apparently executed the necessary paperwork to transfer certain property into the Trust, but Linda and Joy allege that at the time of his death, not all of his property had been so transferred, and they argue that this property should have been used to fund the bequests in the Will.

During the course of the litigation, the trial court issued an order finding that the parties had agreed during an October 20, 2010 motion hearing to submit the matter to a bench trial pursuant to OCGA § 9–11–39. The trial court found that the parties had also agreed to present evidence and argument to the court through briefs and affidavits. The trial court concluded that only one issue remained for its considerations:

The sole issue for decision by the Court is whether that certain Comprehensive Transfer Document (the "CTD"), as amended, was legally effective and operated to vest in the Trust all properties acquired by Lee R. Waldrip acquired after the execution of the CTD, regardless of the names by which Lee R. Waldrip acquired the properties. In a later order, the trial court stated that the parties, in fact, had consented and stipulated "that the sole decision was whether a certain comprehensive transfer document executed by ... Waldrip on April 29, 2002 was legally effective and operated to vest in the [Trust] all of the properties acquired by ... Waldrip after the execution thereof."

After considering the parties' arguments and evidence, the trial court found (1) that Waldrip intended that "all property acquired by him after the creation of the trust ... become a part of the trust;" and (2) that the after-acquired property provisions of the Trust documents were enforceable under Georgia law.

1. "The trial court is the trier of fact in a bench trial, and its findings will be upheld on appeal if there is any evidence to support them. The plain legal error standard of review applies where the appellate court determines that the issue was of law, not fact." (Citations and punctuation omitted.) Hong Investments v. Sarsfield, 312 Ga.App. 82, 717 S.E.2d 679 (2011). Applying this standard, we must uphold the trial court's determination that Waldrip intended to transfer all his property to the Trust if there is any evidence to support it, but we review de novo the trial court's conclusion that the Trust's after-acquired property provisions effectively fulfilled this intention under the applicable law.

(a) Intent —"Broadly speaking, the terms of a trust are whatever the settlor²

intended them to be at the time of the creation of the trust, so long as those terms are permitted by law." (Citation omitted.) Heiman v. Mayfield, 300 Ga.App. 879, 882(1), 686 S.E.2d 284 (2009). As with any contract, we look first to the language of the Trust documents themselves to determine Waldrip's intent. See generally Tadlock v. Tadlock, 290 Ga.App. 568, 573(2), 660 S.E.2d 430 (2008) (courts look first to the language of agreement to determine parties' intent; if the language is plain and unambiguous and the intent is clear, the court need look no further). As quoted above, each of the documents executed by Waldrip on April 29, 2002 contemplates that Waldrip's after-acquired property will become a part of the Trust. Although as settlor, Waldrip committed to complete all necessary paperwork to transfer his assets into the Trust, the Trust documents each provide that the assets are deemed transferred to the Trust even if they are held in Waldrip's name individually. And though the provisions of the Will are in conflict with the Trust, we must presume that when Waldrip executed the Will he was aware of the contents of the Trust documents he executed six years earlier.³ See Brinson v. Martin, 220 Ga.App. 638, 639(1), 469 S.E.2d 537 (1996) (party who signs a contract or agreement is presumed to know its contents). We conclude, therefore, that the record contains sufficient evidence to support the trial court's finding that Waldrip intended at the time he executed the Trust documents that the Trust would...