Van Schaack v. AmSouth Bank, N.A.
| Decision Date | 13 May 1988 |
| Citation | 530 So.2d 740 |
| Parties | Margaret D. VAN SCHAACK v. AMSOUTH BANK, N.A., as executor of the estate of Annie Hargrove Donald, deceased 86-727. |
| Court | Alabama Supreme Court |
Richard H. Gill of Copeland, Franco, Screws & Gill, Montgomery, for appellant.
Douglas L. McWhorter of Najjar, Denaburg, Meyerson, Zarzaur, Max, Boyd & Schwartz, Birmingham, for appellee.
William Dowsing Davis III of Davis, Knopf, Laning & Goldberg, Birmingham, guardian ad litem.
Margaret D. Van Schaack appeals from an order entered on final settlement of the estate of her mother, Annie Hargrove Donald, who died testate November 12, 1979. We affirm in part, reverse in part, and remand.
Annie Hargrove Donald executed her last will and testament on June 22, 1979. In it, she appointed the First National Bank of Birmingham (now AmSouth Bank, N.A., and hereinafter referred to as "the Bank") as the executor of her estate. Mrs. Donald was survived by her three adult children: Anne Shannonhouse, Robert Glenn Donald, and the appellant, Margaret Van Schaack. 1 In her will, Mrs. Donald bequeathed all of her personal property to her three children equally. She also created a residual trust to benefit her three children, and the Bank was designated as trustee. The pertinent terms of the will creating the residual trust are as follows:
Shortly after her death, Mrs. Donald's will was admitted to probate, and, because of a will contest that the appellant filed but subsequently dismissed, the probate of the estate was removed to circuit court. At the time of her death, Annie Hargrove Donald's gross estate was valued for federal estate tax purposes at $643,000 and included four parcels of real property. During the administration of the estate, three of the parcels were sold by the Bank for payment of estate taxes and administration expenses. The remaining real property, hereinafter referred to as the "Burroughs Building," was appraised for federal estate tax purposes at $335,000 as of the date of the testatrix's death.
During the pendency of the above-mentioned will contest, the Bank sought instructions from the trial court on the proper distribution of the income generated by the trust estate prior to a final settlement of the estate. The trial court entered an order directing that $1,000 per month be paid to each of the testatrix's children during the pendency of the will contest. That amount ended up being less than the total income that had been generated by the trust estate prior to the Bank's petition for final settlement, so that on March 16, 1984, when the Bank calculated the respective shares of the children, the residual trust estate consisted not only of the Burroughs Building but also $68,166 in accrued and undistributed income. The Bank retained $25,000 of the undistributed income for future administrative fees and expenses, leaving the remaining income and property to be distributed according to the terms of the testamentary trust created in the residual clause of the testatrix's will.
Pursuant to its interpretation of those terms, the Bank added the remaining cash, $43,166, to the 1979 appraised value of the Burroughs Building for a combined figure of $378,166 with which to fund the residual trust. The Bank then proceeded to divide this amount among the three "equal" residual shares. However, because the will also provided that appellant's share was to be "of a value $50,000 less than the value of each of the other [two] shares," the Bank deducted $100,000 from the combined figure, leaving a balance of $278,166. The Bank then divided this figure by three to arrive at a per share value of $92,722 $50,000 was then added to the value of the shares of Robert Donald and Anne Shannonhouse, giving each a value of $142,722. The value of appellant's share remained $92,722. The respective share values were then divided into the original combined figure of $378,166 to arrive at a percentage value for each share:
(1) Anne Shannonhouse $142,722 37.75%
(2) Robert Glenn Donald $142,722 37.75%
(3) Margaret Van Schaack $ 92,722 24.50%
TOTAL: $378,166 100.00%
These percentages represented each share's proportionate ownership of the property in the residual estate (i.e., the remaining cash, the Burroughs Building, and its rental income). Following the division of the residual estate into three shares on March 16, 1984, the income that was generated thereafter was distributed to each of the testatrix's three children in the percentages shown above.
On April 14, 1986, the Bank filed its petition for final settlement of the estate, wherein it sought an award of attorney fees and executor's fees and expenses, claiming the following:
Thereafter, the trial court entered an order appointing an attorney as guardian ad litem "to represent the interests of the descendants of Robert Glenn Donald, Margaret Caldwell Donald van Schaack and Anne Donald Shannonhouse." A hearing was scheduled for May 23, 1986, and notice of the Bank's petition for final settlement and the hearing date and time was published in the Alabama Messenger once a week for three consecutive weeks. A continuance was granted, and additional notice of the rescheduled hearing was given to the parties and by publication in the Alabama Messenger, as notice had been given previously.
A hearing on the petition for final settlement of the estate was held July 21, 1986. Thereafter, on August 29, 1986, another hearing was held for the purpose of ascertaining certain attorney fees and for any other business necessary to be considered by the court before final determination and closure of the estate. In its order dated October 31, 1986, the trial court decreed that the valuations and computations applied by the Bank were proper and declared the estate settled. The court also awarded the attorney for the estate a fee of $50,000 and the executor a fee of $30,000, finding that they had performed extraordinary services. In addition, the trial court awarded a fee of $5,000 to the guardian ad litem. A trial judge different from the one who had heard the case denied appellant's post-judgment motion to set aside the Bank's property assessment and division, to set aside or reduce the fees of the attorney, executor, and guardian ad litem, and to make findings of fact pursuant to Rule 52, A.R.Civ.P. This appeal followed.
The first issue appellant raises concerns the propriety of the Bank's valuation of the property contained in the residual estate for purposes of satisfying the pecuniary bequest and the fractional shares of the residual trust estate. Specifically, appellant contends that the Bank should have valued the Burroughs Building, the principal asset of the trust, as of the date of distribution in 1984, rather than as of the testatrix's death in 1979. Appellant contends that the value of the building had greatly appreciated between the date of death in 1979 and the date of distribution in 1984. The appellant maintains that, contrary to the Bank's interpretation, the terms of the trust do not call for a simple fractional share division of the residual estate; rather, the appellant contends, the trust requires the Bank to make a $50,000 pecuniary adjustment against the value of the appellant's fractional share and in favor of each of the other two shares. Thus, the appellant argues that, in view of the pecuniary aspect of this otherwise fractional share bequest, the respective share values should have been...
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