[¶ 1.] The State of South Dakota and the Office of the Commissioner of School and Public Lands (State) appeal from a trial court's order denying the State's claim of escheat. We affirm.
FACTS AND PROCEDURE
[¶ 2.] Robert G. Jetter (Jetter) and his brother Martin farmed and ranched together in Haakon County near Milesville, South Dakota. Neither brother ever married nor had children. They spent their entire lives solely devoted to their ranching pursuits and through decades of diligent hard work, they were successful at it.
[¶ 3.] In 1981, Jetter contacted attorney Russell C. Molstad and executed a will which devised all of his property to his brother Martin in the second provision to the will. Viewed in isolation, the will's third provision purported to disinherit all of Jetter's other relatives:
The following year, Martin contacted attorney Molstad and executed a nearly identical will, leaving all of his property to Jetter and including a provision purporting to disinherit all of Martin's other relatives.
[¶ 4.] Martin died in December 1990. Jetter inherited all of Martin's property under his will. At the time of Martin's death, Jetter was incompetent and remained so up until his death. He was living in a nursing home and did not attend his brother's funeral. He was unaware his brother had died and was likewise unaware of any of his relatives or of the nature and extent of any property he owned. A guardianship was established for Jetter approximately one month after Martin died.
[¶ 5.] Jetter died six years later on October 2, 1996. At the time of his death, he was still residing in a nursing home in Philip, South Dakota. He had amassed an estate estimated to be worth 3.2 million dollars in real and personal property. The will he executed in 1981 was admitted into probate and declared valid.
[¶ 6.] The personal representative petitioned for determination of heirship. A hearing on this petition was held December 5, 1996. Following that hearing, the trial court ruled the disinheriting clause in Jetter's will was not applicable and that his estate was to pass to his heirs by intestate succession unrestricted by the disputed "disinheritance" clause. The court concluded "[t]he plain language of Robert G. Jetter's Will indicates that he wanted to disinherit his other heirs if Martin was [sic] alive, but there is no indication that he intended to disinherit them if Martin Jetter predeceased him." From this, the trial court concluded the will made an ineffective disposition and that Jetter's property would be distributed pursuant to the law of intestacy.
[¶ 7.] The trial court denied the State's escheat claim. The State motioned for reconsideration of the court's decision. Following a hearing, this motion was denied. The State now appeals raising the following issues:
[¶ 8.] Appellees are heirs of Frances Schwab Jetter, Jetter's mother, and heirs of John Carl Jetter, Jetter's alleged half-blood brother. Heirs of John Carl Jetter filed a notice of review but waived consideration of any issues raised therein by failing to brief them. SDCL 15-26A-60(6); Peterson v. Safway Steel Scaffolds Co., 400 N.W.2d 909, 912 (S.D.1987).
1. Whether SDCL 29A-2-101 mandates that words of disinheritance in Jetter's will apply to the testator's property?
[¶ 10.] SDCL 29A-2-101 is part of the newly-enacted South Dakota Uniform Probate Code and this Court has not, until now, had the opportunity to interpret this statute.
[¶ 11.] In addition, this Court has previously noted:
Rushmore State Bank v. Kurylas, 424 N.W.2d 649, 653 (S.D.1988).
[¶ 12.] SDCL 29A-2-101 provides that:
(emphasis added). This statute was adopted from the Uniform Probate Code § 2-101, 1990 version, and is nearly identical to UPC § 2-101.
Comment, UPC § 2-101, 8 ULA 105 (Supp. 1997).
Id. at 105.
[¶ 13.] Thus, we are called upon to determine what constitutes a "class" within the confines of SDCL 29A-2-101. Is it limited to certain finite groups such as "my brothers and sisters," or is it so expansive as to constitute all those who would take as intestate heirs under a will thus allowing the State to argue that an escheat now exists?
[¶ 14.] Prior to the adoption of the Uniform Probate Code, a majority of states held that attempting to exclude an intestate heir from his or her share of intestate property was ineffective. This was referred to as the "American Rule." Other states followed what was known as the "English Rule," under which a testator could deprive an intestate heir of his or her intestate share if there were other heirs of the testator to take such property. See generally, "The Intestate Claims of Heirs Excluded by Will: Should `Negative Wills' be Enforced?," 52 U.Chi. L.Rev. 177 (1985). South Dakota never had cause to adopt either of these rules.
[¶ 15.] We were informed by the Jetter heirs that they can locate no case in the past three hundred years either in England or the United States whereby heirs were known to exist and yet an escheat was still allowed in favor of the crown or state. The State of South Dakota concedes this to be correct. However, the State argues that the South Dakota Legislature, in adopting the Uniform Probate Code, in essence rejected both the traditional American and English rules and opted for a new rule which would authorize an escheat even where heirs are known to exist. The Jetter heirs counter that the UPC adopted the English rule.
[¶ 16.] As an overall view, we would note that the UPC does not appear to be a revolutionary departure from past probate procedure. SDCL 29A-1-103 provides that: "[u]nless displaced by the particular provisions of this code, the principles of law and equity supplement its provisions."
(emphasis added). The other statute which deals with escheat is SDCL 29A-2-105. It provides "[i]f there is no taker under the provisions of this chapter, the intestate estate passes to the State of South Dakota as provided in § 29A-3-914." (emphasis added). Both statutes by their express terms limit escheat to the State to situations where the heirs "cannot be found," but not where they were disinherited by a will.
[¶ 18.] Thus, a review of all the pertinent statutes convinces us that the enactment of the UPC in South Dakota intended to adopt the English rule and that an escheat can exist only where no heirs can be found. Here heirs have been found. As such the State's claim for escheat fails under the above statutes.
[¶ 19.] 2.
Whether the disinheriting clause in Jetter's will is ambiguous?
[¶ 20.] "`Language is ambiguous when it is reasonably capable of being understood
[¶ 21.] The trial court prefaced its decision in this regard at the December 1996 hearing with the acknowledgment that the law abhors an escheat.
Nelson v. State, 59 S.D. 410, 414, 240 N.W. 345, 347 (1932).
[¶ 22.] The State argues that the disinheriting clause does not state its effectiveness is contingent upon Martin's surviving Jetter, nor does it imply the same. Furthermore, the State claims that if Martin had survived Jetter, there would be no need for the disinheriting language as Martin would have taken all of Jetter's property under the second provision to the will; there would no be one to disinherit. The State argues that the disinheriting clause is only effective in the present situation—where Martin predeceases Jetter. "[A]ll words and provisions appearing in [a] will must be given effect as far as possible...." Bock, 85 S.D. at 115, 177 N.W.2d at 735. "To hold otherwise would be to convict a testator of performing useless acts." Id.
[¶ 23.] The trial court based its determination that the will was ambiguous on the following facts. The State of South Dakota was not expressly named as an heir under any circumstances in the will conveying an estate worth over three million dollars at the date of Jetter's death. The devise to Martin failed whether it be a general devise or a residuary clause as Martin predeceased Jetter leaving no descendants to take under an anti-lapse statute.
[¶ 24.] In this type of a factual setting we find the analysis of the Supreme Court of Oregon in Bruner v. First National Bank, 250 Or. 590, 443 P.2d 645, 646 (1968) persuasive:
[¶ 25.] Attorney Molstad in drafting Jetter's will may well have had similar concerns. John Carl Jetter, Jetter's alleged half-blood brother would be treated the same under the then-existing South Dakota law, SDCL 29-1-13, repealed 1995 S.D.Sess.L. ch. 167, § 96,
[¶ 26.] The language of the third paragraph is supportive of this interpretation as Robert "specifically disinherit[s] ... all persons whomsoever who, if I died intestate, would be entitled to any part of my estate except those herein provided for."
[¶ 27] There is evidentiary support for this view. Craig Hanrahan, a witness to the discussions between Jetter and Molstad and the signing of the will, testified that Molstad emphasized to Jetter that this was only a temporary will that would not constitute a permanent estate plan. Hanrahan quoted Molstad as telling Jetter this would, "just be a temporary will, and you need to get some estate planning set up, and figure out who you want to leave things to and get that down." In addition Molstad's notes
[¶ 28.] People do not go to a lawyer to have a will drawn with the idea that their estate will pass under the intestate succession laws. That is the whole purpose of a will, to avoid the State's estate plan by creating your own. Thus, it seems eminently more logical that Jetter had Molstad draft the disinheritance language of the third paragraph to preclude
[¶ 29.] Ordinarily in an escheat issue, there is no will and thus the escheat arises by force of law. Here however, intent is a crucial issue. The record is absolutely void of any hint that Jetter wished to leave the substantial fruits of his life-long labors to the State. There is no evidence of inter vivos gifts to the State and not one statement attributed to either of the Jetter brothers that they wanted their assets to go to the State. Based on this, can it be concluded that Jetter elected to leave nothing to his relatives, leave nothing to his friends, leave nothing to the local charities and churches, or leave nothing to the local schools so that all his worldly possessions could go to the State of South Dakota?
[¶ 30.] We conclude the will is ambiguous and affirm the trial court on this issue.
[¶ 31.] 3.
Whether the trial court erred in holding that Jetter's estate passes by intestate succession to his heirs?
[¶ 32.] As has been determined, the will of Jetter is ambiguous and under the South Dakota Uniform Probate Code the State is not entitled to an escheat. This final issue then addresses what is the proper disposition of Jetter's estate. The question calls for a construction of SDCL 29A-2-604. This statute provides:
[¶ 33.] As noted previously in paragraph 23, the devise to Martin, which is for Jetter's entire estate, cannot be preserved by South Dakota's anti-lapse statute, SDCL 29A-2-603(a)(ii), as Martin left no descendants surviving Jetter. Thus, this devise lapses and becomes part of the residue under SDCL 29A-2-604(a). Since Jetter made no provision for the distribution of the residue, SDCL 29A-604(b) provides the estate passes to Jetter's heirs.
[¶ 34.] In accord is SDCL 29A-2-101(a) which states that: "[a]ny part of a decedent's estate not effectively disposed of by will or otherwise passes by intestate succession to the decedent's heirs as prescribed in this code, except as modified by the decedent's will." We agree with the rationale of the trial court that the term "except as modified by the decedent's will" can only be interpreted as meaning that the modifications in the will must effectively dispose of the estate and if the modifications in the will do not do so, then the estate "passes by intestate succession to the decedent's heirs as prescribed in this code." As there is no modification plainly indicated, the statutes control and the estate passes to the intestate heirs. Schalk v. Dickinson, 89 S.D. 263, 272, 232 N.W.2d 140, 145 (1975).
[¶ 35.] We affirm the trial court for the above reasons. We remand to the trial court for completion of the probate proceedings.
[¶ 37.] SABERS, J., and DeVINE, Circuit Judge, dissent.
[¶ 38.] DeVINE, Circuit Judge, sitting for MILLER, Chief Justice, disqualified.
SABERS, Justice (dissenting).
[¶ 39.] I join the dissent of Judge DeVine.
[¶ 40.] It seems to me that the majority opinion strains mightily to make nonsense out of sense and ambiguity out of clarity. Robert's will provides:
[¶ 41.] One would think it would be adequate to "intentionally omit" all of one's relatives—not generally, but specifically and not once, but twice. How many times must Robert say it to satisfy the majority opinion? If that language does not satisfy the majority opinion, then what, if anything, will?
[¶ 42.] The majority opinion even twists Robert's stated intention. Robert wanted two things. He wanted to leave everything to Martin and he wanted to disinherit his relatives. Instead of accepting Robert's intentions as stated, the majority opinion states:
I submit that such direction can (and should) be found in that document. In fact, Robert's stated intention to disinherit his relatives was not limited to his will. There was testimony that Robert stated that he and Martin were "getting kind of tired of loaning money" to these other relatives and that "Barb and her brother and sisters, they think we're a couple of crazy old bastards living out here and we don't want them to have a f—k—g thing."
[¶ 43.] The majority opinion uses this testimony to state: "Where a will is ambiguous on its face, such extrinsic evidence is admissible to establish the intent of the testator." I submit that the majority opinion is using this extrinsic evidence to defeat, rather than to establish, the intent of the testator.
[¶ 44.] I would reverse and remand for the trial court to follow the testator's intention and disinherit the relatives as he directed.
DeVINE, Circuit Judge (dissenting).
[¶ 45.] The plain language of SDCL 29A-2-101 mandates that words of disinheritance in a will apply to the testator's property passing by intestate succession. The majority opinion results in distribution of Jetter's estate to his intestate heirs which does not give this statute or the will their intended effect.
[¶ 46.] A reason exists why the Jetter heirs could not find any cases in three hundred years where an escheat was allowed when heirs existed. Before the Uniform Probate Code was adopted, no testator could disinherit heirs by will if his estate passed intestate. The Court should presume that the legislature enacted SDCL 29A-2-101 to change existing law. Delano v. Petteys, 520 N.W.2d 606, 609 (S.D.1994); John Morrell & Co. v. Dept. of Labor, 460 N.W.2d 141 (S.D. 1990); Rosander v. Bd. of Cty. Comm'rs., 336 N.W.2d 160 (S.D.1983). Today, SDCL 29A-2-101 does allow a testator to disinherit an individual or a class in a will, and therefore, may result in an escheat to the state if all heirs are disinherited by that will.
[¶ 47.] Finding the disinheriting clause ineffective or the will ambiguous is stretching the facts to obtain the desired result. "All the words and provisions appearing in [a] will must be given effect as far as possible, and none should be cast aside as meaningless." In re Estate of Bock, 85 S.D. 113, 115, 177 N.W.2d 734,
[¶ 48.] Examination of the next provision in Jetter's will further supports the conclusion that he intended for the disinheriting clause to apply if Martin predeceased him. "It is axiomatic that in gathering the intention of the testator a will must be considered as a whole." In re Barrett's Estate, 70 S.D. 475, 478, 18 N.W.2d 787, 789 (1945). The fourth provision of the will not only names Martin as executor of Jetter's will, but also provides for an alternate executor should Martin predecease Jetter. Clearly, Jetter had this contingency in mind when he drafted his will, and intended that the disinheriting clause would come into effect if Martin predeceased him.
[¶ 49.] As the majority stated, the purpose of a will is to avoid the State's estate plan and to create your own. Jetter drew up a will to ensure that his heirs would not take any of his estate which they would be entitled to if he had not drafted a will. The clause in Jetter's will unambiguously states that he disinherits all persons who would be entitled to his estate if he died intestate. Because his brother predeceased him, the Court holds that Jetter's estate passes intestate under the anti-lapse rules. The disinheritance clause was included in the will to prevent the exact result from happening.
[¶ 50.] The majority finds Jetter's will ambiguous partly because he did not specifically name the state as a subsequent taker in the event his brother predeceased him. Jetter should not have to specifically name the state as subsequent taker. By drafting his will leaving everything to Martin without naming a subsequent taker and including a clause disinheriting all his heirs, Jetter should have been able to accomplish the same result: escheat to the state. This Court's finding that Jetter's will is ambiguous for not naming the state as a devisee has the effect of passing his estate to his intestate heirs whom he unambiguously disinherited in his will.
[¶ 51.] Even if the will were ambiguous, that should not change the result. When an ambiguity exists, the court determines the intent of the testator based on extrinsic evidence. The extrinsic evidence clearly shows that Jetter did not want his heirs to have a thing, but this Court ignored that evidence and constructed a way to give Jetter's estate to his intestate heirs.
[¶ 52.] Applying SDCL 29A-2-604, the anti-lapse statute, is not appropriate in Jetter's estate because contrary intent exists.
In re Estate of Burk, 468 N.W.2d 407, 412 (S.D.1991); In re Estate of Borsch, 353 N.W.2d 346, 349 (S.D.1984). This privilege and right has never been conditioned to only be available to a testator when disposition of his or her property does not result in an escheat. See Nelson v. State, 59 S.D. 410,
[¶ 54.] The disinheriting provision in Jetter's will excluded all other heirs from taking under the will and the estate passes as if those persons "had disclaimed their intestate shares." Because all of Jetter's heirs have been excluded, no heirs can be found, and under SDCL 29A-2-105 "Jetter's estate passes to the State of South Dakota as provided in SDCL 29A-3-914."
[¶ 55.] Clearly, Robert Jetter did not want any of his heirs besides his brother Martin to receive any of his estate. Robert Jetter would turn in his grave if he knew that his estate was being distributed to the very people he specifically and intentionally disinherited in his will. The majority and the trial court both reached a holding that replaced Jetter's last wishes with their own.
[¶ 56.] Therefore, I dissent, and would reverse the circuit court's ruling.
Sudbeck v. Dale Electronics, Inc., 519 N.W.2d 63, 67 (S.D.1994) (internal citations omitted).
It would also conflict with the well-settled rule of statutory construction that "[w]ords and phrases in a statute must be given their plain meaning and effect." Schipke v. Grad, 1997 SD 38, ¶ 6, 562 N.W.2d 109, 111. The plain language meaning of the phrase "cannot be found" is "cannot be located" or "cannot be discovered" as other courts have determined in interpreting similar statutory phrasing. See United States v. Rivera, 942 F.Supp. 247, 249 (E.D.Va.1996) (interpreting federal immigration statutes); Bogert v. Davis, 214 Cal.App.3d 774, 263 Cal.Rptr. 129, 129 (1989) (discussing wills statute); Comm. v. Walloe, 472 Pa. 473, 372 A.2d 788, 790 (1977) (interpreting statute governing admission of testimony of a witness given at prior trial). "When the language in a statute is clear, certain and unambiguous, there is no reason for construction, and the Court's only function is to declare the meaning of the statute as clearly expressed." Schipke, 1997 SD 38, ¶ 6, 562 N.W.2d at 111. In the present case the heirs have been found; SDCL 29A-3-914 cannot then apply.
Thus far, no state court has had cause to construe this statute, however, it is briefly mentioned in In re Estate of Krokowsky, 182 Ariz. 277, 896 P.2d 247, 249 n.2 (1995). We find the court's dictum unpersuasive as there is no analysis to support its conclusion that: "[h]ad this statute [2-101] been in effect at the time of decedent's death, the residuary estate here may have escheated to the state ... because all surviving heirs and their families were disinherited in decedent's will."
If an heir, devisee, or claimant cannot be found, the personal representative shall distribute the share of the missing person to the person's conservator, if any, otherwise the court shall enter an order directing that the share vest in the state of South Dakota for the support of the common schools.