In Re the Estate of Watson , 227 Mont. 212 ( 1987 )

No. 86-424
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987
IN THE MATTER OF THE ESTATE OF
GRACE ALTCE WATSON, Deceased.
APPEAL FROM: The District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable Peter Rapkoch, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Robert L. Johnson, Lewistown, Montana
For Respondent:
Timothy J. OIHare, Lewistown, Montana
Submitted on Briefs: April 3, 1987
Decided: June 17, 1987
J UN 1 7 1 8
97
Filed:
Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
Appellants Orville Watson and Garnet Watson appeal an
order of the Tenth Judicial District Court, Fergus County.
The order determined that appellants' deceased. mother had
testamentary capacity, and admitted the mother's will into
formal probate. We affirm.
Appellants present a single issue for our review: Did
the District Court err in failing to give Orville and Garnet
Watson the benefit of the presumption of § 72-20-208, MCA,
which states: "Presumption against trustees. All transac-
tions between - trustee - - beneficiary during the exis-
a and his
tence of the trust or while the influence acquired by the
trustee remains & which - obtains any advantage - -
he from his
beneficiary are presumed - - entered into by the latter
to be
without sufficient consideration and under undue influence."
(Emphasis added. )
Grace A. Watson and her husband, Cyrus, were dry land
farmers near Moccasin, Montana. They had three sons: Henry,
Orville and Garnet. Cyrus died in 1945 leaving his entire
estate to Grace. Over the next thirty years, the sons filed
suits and countersuits against Grace and against each other.
Henry, the oldest son, and Garnet, the youngest, left the
farm. Grace moved to Lewistown, and Orville remained on the
farm. In 1974, Grace and the sons settled a property divi-
sion, and Orville moved off the farm. In 1976, while under
the care of Henry, Grace made a will which left her estate to
Henry and Garnet in equal shares, and named them as
co-personal representatives. The will expressly excluded
Orville from any share of the estate.
On January 18, 1980, Grace gave Henry her power of
attorney. Later, while Grace was in a nursing home on Octo-
ber 31, 1980, she executed a trust agreement with Henry.
Under the trust, Grace would receive a life income from the
trust estate; and upon Grace's death, the trust estate would
be distributed in accordance with Grace's will.
On November 21, 1980, at age 86, Grace executed a new
will. The will was signed in the presence of her attorney
and witnessed by a third party. Henry was not present when
the will was signed. The will named Henry as the sole devi-
see. The will also provided that if Henry pre-deceased
Grace, then Grace's estate would pass to Henry's widow,
Virginia R. Watson. Henry was named as personal representa-
tive, with Virginia as the alternate. Henry died on July 14,
1984. When Grace died on April 21, 1985, Virginia was the
sole remaining devisee under Grace's will.
On May 23, 1985, as personal representative of Grace's
estate, Virginia applied for informal probate. The applica-
tion for determination of inheritance tax placed the total
value of Grace's estate at $78,454. On July 2, 1985, Orville
and Garnet filed an action which sought to set aside the
probate of Grace's will, declare that Grace Watson died
intestate, and appoint Orville and Garnet as personal
representatives.
On June 20, 1986, the District Court made the following
findings:
9. That at the time the decedent, GRACE
A. WATSON, executed her said Last Will
and Testament, the Will admitted into
informal probate in Fergus County Pro-
bate Cause No. 7607, she understood the
nature and extent of her estate and
understood that ----
that Will she was
making the appointment provided - -
for in
the Trust Agreement previously executed
& her. She also understood that she
excluded any devise to her son, CYRUS
ORVILLE WATSON, and made a somewhat
unique provision for her son, GARNET A.
WATSON; and understood why she made that
latter provision: to avoid anything
going to GARNET A. WATSON'S wife.
By reason of the foregoing, it is the
finding of this Court that in making and
executing the said Will the decedent had
testamentary capacity.
10. That decedent's son, OREN HENRY
WATSON, may have had opportunity to
exercise undue influence upon his moth-
er, the decedent, but there is no evi-
dence that he did so in fact. The Will
is the result of the decedent's desires
and intentions, and hers only. [Empha-
sis added.]
The court then concluded:
3. The said Will, having been contested
and having been found to be valid and
unrevoked, should be admitted into
formal probate and VIRGINIA R. WATSON is
entitled to remain the Personal Repre-
sentative of the Estate of GRACE A.
WATSON.
Orville and Garnet contend that the District Court was
required to give them the benefit of the presumption of
§ 72-20-208, MCA. They assert that 5 72-20-208, MCA, places
the burden of proving no undue influence on the proponents of
the will. Orville and Garnet contend that Henry bore a
confidential relationship with Grace as a result of the power
of attorney she gave him, and that Henry contrived to exclude
them from the estate. They argue that Grace lacked adequate
testimonial intent or capacity due to her memory loss, confu-
sion, and Henry's undue influence. They further argue that
Henry acted within his capacity as trustee when he helped
Grace try to retrieve a doll she had given to Garnet's wife.
On this issue, our standard of review is whether sub-
stantial evidence supports the District Court's findings,
when viewed in a light most favorable to the prevailing
party. Adams v. Allen (Mont. 1984), 679 P.2d 1232, 1234, 41
St.Rep. 610, 612.
In analyzing the issue we note the intention of Grace,
as expressed in her will, controls the legal disposition of
her estate. Section 72-2-501, MCA. If the true intentions
of the testatrix are manifest in her will, we will not con-
tradict those intentions. Matter of Estate of Hogan (Mont.
1985), 708 P.2d 1018, 1020, 42 St.Rep. 1711, 1713.
Grace knew the objects and extent of her bounty, and
specifically mentioned both Orville and Garnet in her will.
A special provision stated that Henry should look after
Garnet. Orville was expressly excluded from both the 1976
will and the 1980 will.
Contrary to the contentions of Orville and Garnet, the
contestant of a will has the burden of establishing undue
influence. Section 72-3-310, MCA. Adams, 679 P.2d at 1235.
However, Orville and Garnet only showed that Henry had the
opportunity to exercise undue influence, but presented no
evidence that he did so in fact. We hold that the mere
opportunity for undue influence is not tantamount to the
actual exercise of undue influence.
Orville and Garnet presented no evidence of any improp-
er act by Henry in the administration of the trust. The
trust agreement was properly executed by Grace, as grantor,
and Henry, as trustee. It contained the following disposi-
tive provision:
During the lifetime of the Grantor, the
Trustee shall pay to the Grantor all of
the net income from the trust estate;
and, upon the death of the Grantor, the
Trustee shall dispose of the remainder
of the trust estate in such shares,
proportions, and estates, in trust or
otherwise, as the Grantor may direct and.
appoint by her Last Will and Testament
Grace's will was incorporated by reference into the
trust agreement. The execution of Grace's will was a unilat-
eral act by her as testatrix. The execution neither affected
Grace's status as grantor of the trust nor altered Henry's
status as trustee.
The general principle of liability of a trustee neces-
sarily applies only to those acts related to his administra-
tion of the trust, and not for acts or omissions outside the
trust. The preparation of a will by a grantor wherein the
trustee is granted the residue of the estate, is not, stand-
ing alone, a trust transaction between the trustee and
grantor/beneficiary within the meaning of S 72-20-208, MCA.
Furthermore, § 72-20-208, MCA, only creates a rebutta-
ble presumption of undue influence. Presumptions may be
rebutted and overcome by relevant evidence. Substantial
relevant evidence supports the court's determination that
Grace's will was properly executed, and that Grace was compe-
tent and acted without undue influence by Henry. Grace's
nurse, physician and attesting witness all testified that
Grace was competent at the time she executed her will, less
than one month after she executed the trust.
Orville and Garnet's reliance on the presumption of
S 72-20-208, MCA, is misplaced. This statute has specific
application where a trustee takes trust property for his
personal benefit. Orville and Garnet presume a transaction
where none existed. The mere naming of Henry as both trustee
and residuary devisee does not create a transaction between
the trustee and grantor/beneficiary and thereby shift the
burden of proof to the trustee.
We will not apply § 72-20-208, MCA, where the subject
matter of the statute is not applicable to the facts and is
not supported by the evidence. We hold that S 72-20-208,
MCA, does not apply to this case.
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