Watson v. Underwood

• Citation: 407 S.C. 443,756 S.E.2d 155
• Decision Date: 19 March 2014
• Docket Number: No. 5206.,Appellate Case No. 2012–211966.,5206.
• Court: Court of Appeals of South Carolina
• Parties: Willie D. WATSON, Appellant, v. Nancy Carol UNDERWOOD, individually and as putative trustee of the Willie D. Watson Trust; John H. Watson, individually and as putative trustee of the Willie D. Watson Trust; and Future and Potential Heirs for Willie D. Watson, Respondents.

407 S.C. 443

756 S.E.2d 155

Willie D. WATSON, Appellant,

v.Nancy Carol UNDERWOOD, individually and as putative trustee of the Willie D. Watson Trust; John H. Watson, individually and as putative trustee of the Willie D. Watson Trust; and Future and Potential Heirs for Willie D. Watson, Respondents.

Appellate Case No. 2012–211966.

No. 5206.

Court of Appeals of South Carolina.

Heard Oct. 8, 2013.

Decided March 19, 2014.

Edward S. McCallum, III, of Law Offices of Edward S. McCallum, III, of Greenwood, and Thomas Jefferson Goodwyn, Jr., of Goodwyn Law Firm, LLC, of Columbia, for Appellant.

B. Michael Brackett, of Moses & Brackett, PC, of Columbia, for Respondents.

KONDUROS, J.

Willie D. Watson appeals the circuit court's grant of partial summary judgment finding her daughter, Nancy Carole Underwood, as Watson's attorney-in-fact, had the authority to create and fund an irrevocable trust with Watson's assets. We affirm.

FACTS/PROCEDURAL HISTORY

Watson and John Calvin Watson were married for sixty-two years and had three children: Underwood, John H. Watson, and Sherry Long. On October 4, 2006, Watson ¹ filed a complaint with the sheriff's department that Long had been harassing her for years and on September 28, 2006, began to yell at her and call her names. She further reported that Long had assaulted her in the past by throwing objects at her. Watson told her attorney, Richard T. Townsend, she did not wish to leave her husband or Long anything in her will. Watson told Townsend, Underwood, and John H. that Long encouraged and supported Watson's husband's mental abuse towards Watson, physically abused Watson, and only wanted Watson's money.

On October 5, 2006, Watson granted Underwood a durable power of attorney. The power of attorney gave Underwood the power “[t]o establish trust funds, revocable or irrevocable, funded or unfunded, for the benefit of [Watson], [her] spouse, [her] children and [her] lineal descendants, and to transfer any of [her] assets to such trusts.” It also provided Underwood could transfer any of Watson's assets to her “spouse, [her] children and [her] lineal descendants by gift, including to any such person serving as attorney[-]in[-]fact, or to any trust funds which [she] may have established, revocable or irrevocable....” The power of attorney provided mental incapacity or physical disability by Watson would not effect it.

On the same day, Watson executed a last will and testament. She devised $2,000 to each of her grandchildren and $1,000 to each of her great-grandchildren living at the time of her death. She bequeathed her husband and Long ² $1 each.³

Underwood and John H. were devised the residuary to be split equally. Both the will and the power of attorney were prepared by Townsend.

On March 13, 2009, during the night, Long moved Watson out of the assisted living facility ⁴ where she resided, Sterling House, without notifying Underwood or John H. On March 31, 2009, Watson's husband died, and Long later withdrew funds from his bank account with his power of attorney, withholding from the bank that he had died. The account was payable to Watson on her husband's death. In mid-March 2009, Underwood, John H., and their spouses visited Townsend's office to discuss how to protect Watson's assets from Long. Watson had complained to Townsend numerous times about Long's abusiveness and desire for her money.⁵ Townsend recommended an irrevocable trust be created and Watson's assets be transferred into the trust. On April 2, 2009, Underwood executed an irrevocable trust naming herself and John H. as co-trustees. Watson received all net income and principal necessary for her upkeep, maintenance, and support from the trust, and at her death, the trust would terminate and the assets were to be distributed in accordance with her will dated October 5, 2006. The trust was funded with three bank accounts ⁶, a car, and real property consisting of the approximately 26.5 acres Watson owned, upon which her house was located. According to Underwood, Watson initially approved of the trust.

On June 18, 2009, Long moved Watson out of an assisted living facility, Generations, where Watson had been living for about a month. Also that day, Watson revoked Underwood's power of attorney. On January 12, 2010, Watson executed a codicil to the 2006 will, naming Long as the sole beneficiary of the will. On January 26, 2010, Watson filed an action against Underwood and John H., as individuals and trustees, as well as her future and potential heirs of the trust (collectively, Respondents), challenging the validity and funding of the trust. Underwood and John H. answered on February 16, 2010. On April 29, 2010, Watson filed a petition ⁷ to terminate the trust under section 62–7–411 of the South Carolina Code, contending she, as the lifetime beneficiary of the trust, and the residuary beneficiary, Long, consented to its termination. Respondents filed a return with supporting affidavits and a deposition of Townsend. Following a hearing, the circuit court denied the petition on October 1, 2010. The circuit court found “(1) the codicil could not serve as a document incorporated by reference into the trust;” (2) the codicil, as Watson attempts to use it, is a modification of the trust, which requires the consent of all trust beneficiaries; and “(3) the effective date of the codicil does not relate back to the time of the execution of the annexed October 5, 2006 will, rather the annexed will advances to become effective as of the time of the execution of the codicil.” Watson filed a motion to reconsider, which was also denied.

Respondents filed a motion for partial summary judgment on the issue of whether the power to create an irrevocable trust may be expressly granted and delegated by a competent principal to his or her agent in a power of attorney. Watson filed a cross-motion for summary judgment, contending (1) the deed was void as matter of law because it conveyed property to a trust rather than the trustees and (2) Underwood's using her fiduciary powers to create an irrevocable trust that incorporates a fully revocable will, created a will in violation of the powers of a power of attorney. The circuit court held a hearing on the matter on August 26, 2011. On December 13, 2011, the circuit court filed an order granting Respondents' motion and denying Watson's. The court found (1) the power of attorney expressly authorized Underwood to create the trust, such power was legally delegable to the attorney-in-fact, and the trust was not a will and (2) the deed transferring real property was not invalid for lack of a properly named grantee. Watson filed a motion for reconsideration ⁸, which the circuit court denied. This appeal followed.

LAW/ANALYSISI. Creation of a Will by a Power of Attorney

Watson argues the circuit court erred in denying her motion for summary judgment and granting Respondents' partial summary judgment motion on the question of the validity of the trust because the effect of the trust is to create a will in violation of the powers of a power of attorney under South Carolina law.⁹ We disagree.

To the extent that Watson's argument addresses the denial of her motion for summary judgment, we will not consider it. The denial of a motion for summary judgment is not appealable because it does not finally determine anything about the merits or strike a defense. Ballenger v. Bowen, 313 S.C. 476, 476–77, 443 S.E.2d 379, 379 (1994).

The purpose of summary judgment is to expedite the disposition of cases not requiring the services of a fact finder. George v. Fabri, 345 S.C. 440, 452, 548 S.E.2d 868, 874 (2001). When reviewing the grant of a summary judgment motion, this court applies the same standard that governs the trial court under Rule 56(c), SCRCP; summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fleming v. Rose, 350 S.C. 488, 493, 567 S.E.2d 857, 860 (2002). In determining whether a genuine issue of fact exists, the evidence and all reasonable inferences drawn from it must be viewed in the light most favorable to the nonmoving party. Sauner v. Pub. Serv. Auth. of S. C., 354 S.C. 397, 404, 581 S.E.2d 161, 165 (2003).

“A trust ... may be created by: (i) transfer of property to another person as trustee during the settlor's lifetime or by will or other disposition taking effect upon the settlor's death....” S.C.Code Ann. § 62–7–401(a)(1) (Supp.2013).

The power of attorney specifically granted Underwood the power to create trusts, both revocable and irrevocable. Simply because the trust used the will to specify how to distribute the assets held by the trust, this in no way impeded Watson's right to change her will. Watson can still execute a new will or a codicil specifying how her other assets ¹⁰ should be distributed upon her death and modify any burial plans. Underwood's creation of the trust did not amount to the execution of a will. Accordingly, the circuit court properly granted Respondents' partial summary judgment motion.

II. Scope of Power of Attorney

Watson further asserts Underwood did not have the authority to execute the trust because the power of attorney was only to be used if her health failed. We disagree.

“ ‘A power of attorney is an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. The written authorization itself is the power of attorney.’ ” In re Thames, 344 S.C. 564, 569, 544 S.E.2d 854, 856 (Ct.App.2001) (footnotes omitted by court) (quoting 3 Am.Jur.2d Agency § 23 (1986)). “A durable power of attorney allows a person, the principal, to designate another as his or her attorney [-] in[-] fact to act on the principal's behalf as provided in the document even if the principal becomes mentally incompetent.” Id. (citing S.C.Code Ann. §...