In re: Estate of Deborah Ann Poire, a/k/a Debra A. Poire, Decedent. ( 2015 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A14-1617
In re: Estate of Deborah Ann Poire, a/k/a Debra A. Poire, Decedent
Filed August 3, 2015
Reversed and remanded
Peterson, Judge
Winona County District Court
File No. 85-PR-11-2061
Raymond L. Hansen, O’Brien & Wolf, L.L.P., Rochester, Minnesota (for appellant
Michael Martinson)
Thomas R. Braun, David L. Liebow, Bruce K. Piotrowski, Restovich Braun &
Associates, Rochester, Minnesota (for respondent Diocese of Winona)
Considered and decided by Peterson, Presiding Judge; Johnson, Judge; and Minge,
Judge.*
UNPUBLISHED OPINION
PETERSON, Judge
This appeal is from a probate order that interprets a will that the district court
determined is not ambiguous. Because we conclude that the will is ambiguous, we
reverse and remand for further proceedings.
*
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
FACTS
Deborah Ann Poire died testate on August 4, 2011. Poire left a five-page
holographic will that she drafted on December 14, 2003, and amended by codicil on June
11, 2010. Two will provisions control the distribution of Poire’s undivided one-half
interest1 in a half section of land (subject property). The first provision directs that
Poire’s nominated personal representative, appellant Michael Martinson, is to
divide and distribute [her] possessions as follows:
...,
West 1/2 of section 20 in Rochester Township, Rochester,
MN (1/2 interest in property) to Mike Martinson & the
Department of Natural Resources. Mike shall own 1/2 and be
entitled to farm the entire portion willed & distributed from
my estate until he shall choose to stop renting it out, and/or
working it himself. At that time he may sell his portion – the
other portion may then be developed as a game preserve by
the department of natural resources. If the department of
Natural Resources declines to use this property for preserving
plant & animal life, the property then shall completely &
totally be the sole ownership of Mike Martinson & Diocese of
Winona – c/o Bishop John Quinn.
The will contains another provision that states:
Monies & property distributed to Michael Martinson shall be
held in a trust that only he can access. It may not be accessed
for child support or to be accessed by other creditors. After
Michael Martinson’s death, if there is money still in the trust
these monies shall be distributed to Diocese of Winona.
The estate proceeded to formal unsupervised administration, and the district court
appointed Martinson to serve as personal representative. Martinson petitioned for
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Poire and her sister were tenants in common.
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interpretation of Poire’s will and sought an interim distribution of the subject property to
Martinson. Respondent Diocese of Winona (Diocese) responded to the petition and
asked the district court to interpret the will “to reflect a life estate for Mike Martinson and
a vested contingent rem[a]inder for the Diocese of Winona.” The Diocese also sought
the establishment of a trust and, in the alternative, requested an evidentiary hearing to
determine Poire’s testamentary intent. The Minnesota Department of Natural Resources
(DNR) disclaimed any interest in the subject property because the property did not meet
its land-acquisition goals.
The district court held a hearing on the matter that was limited to the arguments of
counsel. The parties agreed that the DNR had disclaimed any interest in the subject
property and that the will provides that Martinson is entitled to farm or rent out the entire
subject property for as long as he wishes. They disagreed about what is to happen when
Martinson chooses to stop farming or renting out the property.
Martinson’s attorney argued that one-half of the subject property should go to
Martinson and that Martinson may immediately sell that half. And because the DNR had
disclaimed any interest in the subject property, the other half should be divided into
halves and one of the halves should go to Martinson and the other half should go to the
Diocese. The end result would be that Martinson would receive three-quarters of the
subject property and the Diocese would receive one-quarter of the subject property.
Martinson’s attorney also argued that the will provision regarding a trust was ineffective
because Poire did not separate the legal interest in the trust property held by the trustee
from the beneficial interest held by the beneficiary.
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The Diocese argued that the one-half interest in the subject property that Poire
intended to give to Martinson “is to be held in a non-revocable trust with spendthrift
provisions against payment for child support or any other creditors” and that money or
property in the trust when Martinson dies should vest with the Diocese. And, because the
DNR had disclaimed any interest in the subject property, the other one-half interest in the
subject property should pass to the Diocese in fee simple when Martinson stops farming
or renting the property or dies.
Following the hearing, the district court found that an evidentiary hearing was not
necessary because the will is not ambiguous and resort to extrinsic evidence was,
therefore, unnecessary. The district court also found:
14. The Will expresses [Poire’s] intent to give 1/2 interest in
the property (“First Half of the Real Property”) to
[Martinson] and the other 1/2 interest in the property
(“Second Half of the Real Property”) to the DNR (or in
the alternative, the Diocese of Winona) after [Martinson]
stops farming or renting out the land for farming.
15. [Poire], by stating in the Will that any money in the trust
after Michael Martinson’s death shall be distributed to
the diocese of Winona, intended to give whatever is left
of the First Half of the Real Property after [Martinson’s]
death to the Diocese of Winona.
16. The DNR, by letter dated January 24, 2014, has indicated
that they are not interested in acquiring the property via
donation.
17. [Poire], in her Will, created a valid spendthrift trust by
stating, “[m]onies & property distributed to Michael
Martinson shall be held in a trust that only he can access.
It may not be accessed for child support or to be
accessed by other creditors. . .”
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....
20. . . .[N]o trust is invalid or terminated, and title to trust
assets is not merged, because the trustee or trustees are
the same person or persons as the beneficiaries of the
trust. Minn. Stat. § 501B.13.
The district court denied the Diocese’s request for an evidentiary hearing. The district
court also denied Martinson’s request for immediate distribution of all interest in the
subject property. The district court ordered the subject property to
be distributed to [Martinson] and the Diocese of Winona,
with [Martinson] retaining an interest in farming and renting
the entire property until such time as he decides to no longer
do so. At which time, he may sell his 1/2 of the property
(First Half of the Property) and the other half (Second Half of
the Property) will be owned by the Diocese of Winona. Upon
[Martinson’s] death, whatever remains of the First Half of the
Property shall be distributed to the Diocese of Winona.
DECISION
I. Will provisions
“The primary purpose of construing a will is to discern the testator’s intent.” In re
Estate & Trust of Anderson, 654 N.W.2d 682, 687 (Minn. App. 2002), review denied
(Minn. Feb. 26, 2003). “[W]e determine the testator’s intent from a full and complete
consideration of the entire will.” In re Estate of Lund, 633 N.W.2d 571, 574 (Minn. App.
2001); see In re Shields, 552 N.W.2d 581, 582 (Minn. App. 1996) (“In construing a will,
the cardinal rule is that the testator’s intention is to be gathered from the language of the
will itself.” (quotation omitted)), review denied (Minn. Oct. 29, 1996).
If there is no ambiguity when the will is read as a whole, extrinsic evidence is not
admissible. In re Trust of Hartman, 347 N.W.2d 480, 483 (Minn. 1984). However, if
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ambiguity “exist[s] in the will, extrinsic evidence may be admitted to resolve the
ambiguity.” In re Estate of Arend, 373 N.W.2d 338, 342 (Minn. App. 1985). “Whether a
will is ambiguous is a question of law that this court reviews de novo.” Shields, 552
N.W.2d at 582. A will is ambiguous if “the language of the will, on its face, may suggest
more than one interpretation.” Arend, 373 N.W.2d at 342.
We disagree with the district court that the will provisions regarding the division
and distribution of the subject property are not ambiguous. The will provides that
Martinson “shall own” one half of the subject property but will be entitled to farm or rent
out the entire subject property until he chooses to stop doing so. Then, Martinson may
sell his half, and, with respect to the other half of the subject property, the will provides,
“If the [DNR] declines to use this property for preserving plant & animal life, the
property then shall completely & totally be the sole ownership of [Martinson] and [the
Diocese].” (Emphasis added.)
The DNR has declined to use any of the subject property, which means that the
Diocese will acquire some ownership. But it is not clear whether “this property” and “the
property” refer to the same property. It is clear that “this property” refers to one half of
the subject property because Martinson is to receive one half of the subject property and
the DNR was only given an opportunity to use the remaining half of the subject property.
Therefore, the only property that the DNR could decline to use was the remaining half.
But “the property” could refer to the one half that the DNR declined to use, which would
mean that only that half of the subject property would be in the ownership of Martinson
and the Diocese. Or “the property” could refer to the entire subject property, which
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would mean that the entire subject property would be in the ownership of Martinson and
the Diocese. Because we conclude that the will is ambiguous, but the district court
interpreted the will based on its determination that the will is not ambiguous, we reverse
and remand for further proceedings to interpret the ambiguous will.
II. Trust provisions
In Minnesota, an express trust consists of “(1) a designated trustee with
enforceable duties; (2) a designated beneficiary vested with enforceable rights; and (3) a
definite trust res in which the trustee has legal title and the beneficiary has the beneficial
interest.” Thomas B. Olson & Assocs., P.A. v. Leffert, Jan & Polglaze, P.A., 756 N.W.2d
907, 914-15 (Minn. App. 2008) (quotation omitted), review denied (Minn. Jan. 20, 2009).
“The manifestation of intent to create a trust will be effective even if the settlor’s
language is inept, clumsy, or even unsuitable.” Id. at 915 (quotation omitted).
A settlor’s intention must be ascertained from the
language of his will, which may have a meaning controlled by
surrounding circumstances or context. The specific
provisions of the document should not be read in isolation
and whenever possible, effect should be given to every
provision of the instrument. . . . On review, appellate courts
evaluate the district court’s findings concerning wills and
trusts under a clearly erroneous standard and review
conclusions of law de novo.
In re Trust Created Under Agreement with Lane, 660 N.W.2d 421, 425-26 (Minn. App.
2003) (quotations omitted).
Martinson argues that the will fails to impose a trust on Martinson’s interest in the
subject property because it does not separate the legal and beneficial interests in the
subject property. The district court rejected this argument and ruled that the trust is “a
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valid spendthrift trust.” The district court was correct that Martinson’s status as both the
trustee and primary beneficiary of the trust did not invalidate the trust. Under Minnesota
law, “[n]o trust is invalid or terminated, and title to trust assets is not merged, because the
trustee or trustees are the same person or persons as the beneficiaries of the trust.” Minn.
Stat. § 501B.13 (2014); see Morrison v. Doyle, 582 N.W.2d 237, 242 (Minn. 1998)
(applying section 501B.13, stating, “[T]here is no merger of Doyle’s legal and beneficial
interests simply because he is both the trustee and the primary beneficiary of the trust.”).
Martinson also argues that the district court erred by ordering that his interest in
the subject property be both distributed to him and placed into trust. The district court
found that the will “created a valid spendthrift trust by stating, ‘[m]onies & property
distributed to Michael Martinson shall be held in a trust that only he can access.’” The
district court also granted the request of the Diocese to interpret the will as creating a
trust. But the district court ordered:
The subject property shall be distributed to
[Martinson] and the Diocese of Winona, with [Martinson]
retaining an interest in farming and renting the entire property
until such time as he decides to no longer do so. At which
time, he may sell his 1/2 of the property (First Half of the
Property) and the other half (Second Half of the Property)
will be owned by the Diocese of Winona. Upon
[Martinson’s] death, whatever remains of the First Half of the
Property shall be distributed to the Diocese of Winona.
The district court’s statement that “the subject property shall be distributed to
[Martinson]” makes it unclear whether the subject property will be held in a trust that
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only Martinson can access. On remand, the district court should specify what property
will be held in the spendthrift trust.
Reversed and remanded.
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