Swanson v. Swanson

• Decision Date: 19 March 1999
• Docket Number: No. S98A1615.,S98A1615.
• Citation: Swanson v. Swanson, 514 S.E.2d 822, 270 Ga. 733 (Ga. 1999)
• Parties: SWANSON v. SWANSON et al.
• Court: Georgia Supreme Court

514 S.E.2d 822

270 Ga. 733

SWANSON v. SWANSON et al.

No. S98A1615.

Supreme Court of Georgia.

March 19, 1999.

Reconsideration Denied April 1, 1999.

John M. Graham III, Mather Daniel Graham, Shaw, Maddox, Graham, Monk & Boling, LLP, Rome, Marshall M. Bandy, Jr., Bandy & Stagg, P.C., Ringgold, for Laura C. "Peggy" Swanson.

Everett Layne Hixson, Jr., Jane McNeil Stahl, Shumacker & Thompson, P.C., Chattanooga, TN, for Dewey Swanson et al.

FLETCHER, Presiding Justice.

The issue in this appeal is whether Laura C. "Peggy" Swanson inherits from her deceased husband Bennie Swanson the remainder interests he had in trusts created by his father. Because Bennie Swanson's remainder interests vested before his death and conditions subsequent contained in the trust provisions did not occur before the life beneficiary of the trusts died, Bennie's vested remainder was not defeased and instead passed according to the terms of his will. Therefore, we reverse.

When George Swanson died testate in 1970 he was survived by his wife Gertrude Swanson and his nine children. George's will created two trusts in which Gertrude had a life estate with the remainder left to the nine children, who were all named in the will. Bennie Swanson was one of these children. Bennie died testate prior to Gertrude. He had no children, but was survived by his wife Peggy Swanson, who is the sole beneficiary under his will. After Gertrude's death, Peggy Swanson and other relatives of George and Gertrude brought this action seeking a declaration of their rights under the trusts. The trial court granted summary judgment against Peggy on her claim that she was entitled to Bennie's remainder interests in the trusts. Peggy appeals and six of George and Gertrude's children are appellees.

1. To distinguish between vested remainders and contingent remainders, a court

must determine whether at the time the instrument takes effect there is "a person who in his own right, or as a part of his estate, would take all of this property if [the life estate] ended now."¹ If there is such a person, then the remainder is vested subject to partial or complete defeasance.² If no such person is identifiable, then the remainder is subject to a condition precedent and is a contingent remainder.³ In determining the type of remainder created, Georgia has consistently followed two common law principles: (a) the law favors construing "conditions to be subsequent"⁴ and (b) the law favors the "vesting of remainders in all cases of doubt," which is also called the "early vesting" of remainders.⁵ Professor Chaffin has noted that "[a]lthough it is possible to create nondescendible defeasible remainders by using very clear conditions of survivorship by way of condition subsequent, it is difficult to do so in view of the preference for defeasibly vested rather than contingent interests."⁶

THE ITEM IV TRUST

2. The Item IV trust provided that,

[t]he corpus of this trust shall be disposed of according to the directions of my wife, Gertrude Swanson, either given by her appointment during her lifetime or by will upon her death. If she fails to make such disposition, then and in that event, the corpus of this trust, upon her death, shall pass to my nine children, hereinabove named, to be divided among them in equal shares, share and share alike. If any of my children should not be in life at the time of death of my said wife, the share of such deceased child shall go to his or her surviving children, per stirpes.

Following George's death, there were immediately identifiable persons who would take if the life estate ended: George's nine children. Therefore, each child had a vested remainder interest.⁷ Additionally, there were two conditions subsequent attached to the vested remainder. These conditions, which could bring about total defeasance of the vested remainder, were: (1) Gertrude's exercise of her power of appointment;⁸ and (2) a child predeceasing Gertrude, but leaving children who survived Gertrude.⁹ Neither of these conditions occurred prior to the termination of Gertrude's life estate.¹⁰ She did not exercise her power of appointment and although Bennie died before Gertrude, he left no children who survived Gertrude. Furthermore, the Swanson trusts contain no "very clear conditions of survivorship,"¹¹ and, therefore, Bennie's interest remained fully vested and passed under his will. ¹²

Holding these remainders to be vested and not defeased by the occurrence of a condition subsequent is consistent with our prior decisions. In Witcher v. Witcher,¹³ the testator devised a life estate to his wife with "remainder over to my children, share and share alike" and "[i]n the event either of my children should predecease me or my wife, then it is my will ... the child or children of such deceased child take the share that would have gone to his or her parent, per stirpes." The testator was survived by his wife and four sons. One of the sons predeceased his mother and left no children, but his wife survived him. Finding that the condition subsequent did not occur, this Court held that the son's vested remainder passed by inheritance to his widow.

Similarly, in Fields v. Lewis,¹⁴ the grantor conveyed a life estate to his wife with remainder over "to such child or children or representatives of child or children as above mentioned or that she may bring forth by the said [grantor] and leaves in life." One child, who was living when the deed was executed, died intestate without children prior to the termination of the life estate. Thus, the sole condition that could cause a defeasance, dying before the life tenant and leaving a child who survived the life tenant, did not occur. Therefore, we held that the vested remainder was not divested and passed to the child's surviving spouse and sole heir.

The plain language of the Item IV trust, which follows the language of Witcher and Fields, evidences the testator's intent that the remainder be shared by nine families.

THE ITEM V TRUST

3. The Item V trust provided that "the remaining assets of this trust shall be divided into nine equal shares, one share for each of my surviving children or for the then surviving issue of each deceased child of ours." As with the Item IV trust, there were immediately identifiable persons who would take if the life estate ended: the surviving children. OCGA § 44-6-66 directs that we construe words of survivorship to refer to the death of the testator in order to vest remainders. Although Lemmons v. Lawson¹⁵ construed similar language to create a condition of surviving the life beneficiary, we now recognize its rationale to be flawed¹⁶ and therefore, it is no longer persuasive. In light of the strong preference in this state for construing conditions as subsequent, we will not construe the mere adjective "surviving" as a condition precedent.¹⁷

There was one condition subsequent attached that could have caused a total defeasement of the vested remainder in each of George's children: the child predeceasing Gertrude, but leaving children who survived Gertrude. Although Bennie died prior to Gertrude, he had no children and, therefore, just as with the Item IV Trust, Bennie's vested remainder was not defeased and his one-ninth interest flowed into his estate.

In conclusion, we hold that Bennie Swanson's one-ninth interest in the trusts passes to his wife, his sole heir and beneficiary under his will because (1) his remainder was vested; (2) no condition subsequent occurred prior to the termination of the life estate; (3) there is no language in the will that plainly manifests a contrary intent; and (4) this construction is supported by case law and the applicable common law principles.

Judgment reversed.

All the Justices concur, except BENHAM, C.J., SEARS and HINES, JJ., who dissent.

SEARS, Justice, dissenting.

I disagree with the majority's conclusion that the appellant, Peggy Swanson, is entitled to the remainder interests of Bennie Swanson, her deceased husband, in the two trusts created by Bennie's father. Even assuming Bennie had a vested interest in the trusts, I conclude that the trusts contained a condition subsequent that required Bennie to survive the life tenant to maintain his right to the property. Because he did not do so, he was divested of any interest he had in the property, and Peggy therefore has no interests in the trusts. For these reasons, I respectfully dissent.

1. Bennie's father's will established an "Item IV Trust" and an "Item V Trust," both of which established Gertrude Swanson, Bennie's mother, as the life beneficiary of the corpus of the trusts. The Item IV Trust gave Gertrude Swanson a power to dispose of the property either during her life or by will at her death, and provided that, if she failed

to make such disposition, then and in that event, the corpus of this trust, upon her death, shall pass to my nine children, hereinabove named, to be divided among them in equal shares, share and share alike. If any of my children should not be in life at the time of death of my said wife, the share of such deceased child shall go to his or her surviving children, per stirpes.

The Item V Trust provided that upon the death of Gertrude Swanson, the "remaining assets of this trust shall be divided into nine equal shares, one share for each of my surviving children or for the then surviving issue of each deceased child of ours, if any, per stirpes." Item V also provided that the corpus "shall be paid over" to the beneficiaries free of the trust.

Item VII of the Trust provides that, upon the sale of property contained in the Item V trust following its termination, it is the testator's "intention that any of my heirs shall have the right and privilege to purchase and retain any of my property they so desire to the exclusion of a stranger to my estate."¹⁸

Item VIII provides that if any of the children die before receiving the corpus of the share allocated to...