Smith v. Ashford

In the Supreme Court of Georgia
Decided: February 1, 2016
S15A1515. SMITH v. ASHFORD et al.
THOMPSON, Chief Justice.
Jay Richard Smith (Smith) died testate on October 29, 2013, survived by
his wife, Kathy Kristina Smith, appellant in this case, and the couple’s two
minor daughters. At the time of his death, Smith was the beneficiary of the Jay
Richard Smith Irrevocable Trust (the “Trust”) established by his parents, the
provisions of which granted Smith an unrestricted testamentary power of
appointment of the Trust assets remaining after his death. Following Smith’s
death, appellant filed a petition to probate Smith’s will dated September 5, 2013
(the “Will”) in Gwinnett County Probate Court. Thereafter, the probate court
appointed appellant to serve as personal representative of Smith’s estate and
appellee, Dana C. Ashford, to serve as Guardian Ad Litem representing the
interests of the minor children.
Appellant filed a Petition for Declaratory Judgment and Construction of
a Will, seeking construction of the Will by the probate court and a declaration
as to whether Smith, under the terms of the Will, exercised the testamentary
power of appointment granted him by the Trust. Appellee filed a response on
behalf of the children, asserting that the language of the Will was clear and
unambiguous, that no construction of the Will was necessary or appropriate, and
that no justiciable controversy existed to support the declaratory relief sought.
After reviewing the pleadings, motions, briefs and arguments of counsel, the
probate court entered an order on February 2, 2015, finding that the Will was
not ambiguous and that the court thus could not look beyond the four corners of
the document to ascertain Smith’s intent. Going further, the court decided that
the plain language of the relevant provisions of the Will clearly and
unambiguously showed Smith failed to exercise the testamentary power of
appointment granted him by the Trust. Accordingly, the probate court ordered
the Trust assets to be distributed pursuant to the terms of the Trust where no
power of appointment had been exercised. Appellant appeals this order, and
because we agree the language of the Will is unambiguous, but disagree with the
probate court’s determination that Smith failed to exercise his testamentary
power of appointment therein, we affirm in part and reverse in part the probate
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court’s order in this case.
1. A review of the evidence shows that the power of appointment granted
Smith is clearly set forth in the Trust documents. Article Six, Section 6.01 (c)
of the Trust provides in pertinent part:
[Smith] shall have the unlimited and unrestricted testamentary
general power to appoint all or any portion of the principal and
undistributed income remaining in his trust at his death upon one or
more persons or entities and the creditors of [Smith’s] estate.
[Smith] shall have the sole and exclusive right to exercise this
general power of appointment. . .
Insofar as any part of [Smith’s] trust shall not be effectively
appointed, the Trustee shall distribute the remaining unappointed
balance per stirpes in trusts to the descendants of [Smith].
Correspondingly, Article Nine, Section 9.11 of the Trust allows
[a] testamentary power of appointment granted under this Trust [to]
be exercised by a Will, Living Trust or other written instrument
specifically referring to the power of appointment.
Appellant contends that Smith sought to exercise the testamentary power of
appointment granted him under the Trust by including the following language
in Article IV, Section 4.3 of the Will:
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Trust Interest from Family Limited Liability Corporation.1 Upon
my death I give a power of appointment to my spouse related to any
real and personal property and other tangible assets that I benefit
from under the Limited Liability Corporation created by my
deceased parents which is formally known as ALPERT CAPITAL
INVESTMENTS LLC, C/O DORIS ALPERT MANAGING, 3115
S. Ocean Blvd., # 904, Highland Beach, Florida 33487-2575 and
which is currently shared by me with my siblings. If my spouse
shall predecease me or fails to exercise this power of appointment,
this gift shall benefit my children either by direct exercise of the
power so long as they have achieved the age of 30 years or to the
trustee under Article V of this Will if they are under age 30.2
We agree with the probate court that the language of Section 4.3 of the Will is
plain, unambiguous and capable of only one interpretation. By its plain
language, the first sentence of this section provides that, upon his death, Smith
gives appellant a power of appointment over property contained in the trust.
“Under Georgia law, a power of appointment can be exercised only in the
manner specified by the donor.” Hargrove v. Rich, 278 Ga. 561, 562 (604 SE2d
475) (2004). Here, the provisions of the Trust granted Smith an “unlimited and
1
Provisions regarding proper construction of the document are set forth in Article VIII of
the Will, Section 8.4 of which expressly provides that “headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in any construction of the provisions
hereof.”
2
Article V of the Will, entitled J-K Smith Family Trust, creates a trust, the stated primary
purpose of which is “to provide for the health, support, maintenance, and education of my children.”
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unrestricted general power to appoint all or any portion of the principal and
undistributed income remaining in his trust at his death” and the “sole and
exclusive right to exercise this general power of appointment” by a will
“specifically referring to the power of appointment.” Thus, while Smith had the
power to appoint the property remaining in the Trust at the time of his death, he
did not have the authority to give this power of appointment to another. Instead,
the trust donors specifically provided that in the event Smith failed to effectively
appoint the trust property himself, upon his death the remaining unappointed
balance would be distributed per stirpes in trusts to his descendants.
Citing OCGA § 53-4-55,3 appellant asserts that even though parol
evidence is inadmissible to vary the unambiguous terms of a will, the
circumstances surrounding a testator at the time of execution of a will should
always be considered by the court in interpreting the meaning of a will’s
3
This statute specifically provides:
In the construction of all wills, the court shall seek diligently for the intention of the
testator and shall give effect to such intention as far as it may be consistent with the
rules of law. Provided the proof of intention is clear and convincing, the court may
transpose sentences or clauses, change conjunctions, and supply or delete words in
cases in which a sentence or clause as it stands is unintelligible or inoperative in
context.
OCGA § 53-4-55.
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provisions and that, in this case, parol evidence would establish Smith’s intent
to give her the trust assets via the will. This argument, however, misconstrues
the statute which only applies after a determination has been made that an
ambiguity exists requiring the will’s construction. See Banner v. Vandeford,
293 Ga. 654, 655 (1) (748 SE2d 927) (2013) (“Courts are without authority to
rewrite by construction an unambiguous will.”) (quoting Hungerford v. Trust
Co. of Ga., 190 Ga. 387, 389 (9 SE2d 360) (1940)).
The cardinal rule in construing the provisions of a will is to determine the
intent of the testator. See OCGA § 53-4-55; Banner, supra. It is well settled,
however, that “there is no room for construction when the meaning of the words
used in the will is so plain and obvious that it cannot be misunderstood.” Erwin
v. Smith, 95 Ga. 699 (22 SE 712) (1895). This is true even if the words used in
the will express a meaning entirely at variance with the real intention of the
testator. Id. See Banner, supra at 655. The plain and unambiguous terms of a
will must control and “[p]arol evidence cannot be used to contradict or give new
meaning to that which is expressed clearly in the will.” Reynolds v. Harrison,
278 Ga. 495, 498 (604 SE2d 184) (2004), citing Hall v. Beecher, 225 Ga. 354,
357 (168 SE2d 581) (1969). Thus, only where a will is ambiguous can the court
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apply the rules of construction and consider parol evidence of circumstances
surrounding the testator at the time of execution of the will in order to ascertain
the testator’s intent. See OCGA § 53-4-56 (“In construing a will, the court may
hear parol evidence of the circumstances surrounding the testator at the time of
execution to explain all ambiguities, whether latent or patent.”).
2. Appellant additionally argues that the property described in Section
4.3 of the Will does not exist because Smith personally owned no interest in the
referenced LLC. Appellant contends this alleged discrepancy creates a latent
ambiguity in Section 4.3 of the Will which requires application of the rules of
construction by the probate court. See OCGA § 53-4-56. Pointing to cases in
which this Court has considered parol evidence to correct misnamed or
misidentified property and/or beneficiaries in a will, see, e.g., Dyess v. Brewton,
284 Ga. 583, 585 (669 SE2d 145) (2008) (will dated in May incorrectly
referenced as “March will”); Legare v. Legare, 268 Ga. 474, 475 (490 SE2d
369) (1997) (will combined the names of two relatives despite indicating only
one beneficiary), appellant asserts that the probate court’s failure to find a latent
ambiguity with respect to the property referred to in this section of the Will and
its refusal to consider parol evidence constituted reversible error. We disagree.
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In Section 4.3 of the Will, Smith describes the property over which he
seeks to give appellant a power of appointment as “any real and personal
property and other tangible assets that I benefit from under the Limited Liability
Corporation created by my deceased parents . . . which is currently shared by me
with my siblings.” As it is undisputed that Smith benefitted from the LLC’s
assets through the terms of the Trust, we find no ambiguity in this description.
Moreover, appellant has failed to demonstrate how any ambiguity created by a
mis-characterization of the property in the Will would create an ambiguity with
respect to the issue of whether Smith, by purporting to give appellant the power
of appointment over the trust assets, properly exercised his testamentary power
of appointment over those assets. Regardless of how the property is described
in the Will, the language of the Will makes clear that Smith was not giving the
property to appellant, but rather, was giving her a power of appointment over the
property. See Oliver v. Henderson, 121 Ga. 836, 839 (49 SE 743) (1905)
(“Parol evidence is not admissible to show that the testator meant one thing
when he said another.” ).
3. Our consideration of whether Smith validly exercised his testamentary
power of appointment in the Will does not end here because, having found that
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Smith lacked the authority to give appellant the power to appoint the Trust
property in his stead, we must also consider the effect of Smith’s alternative
instructions regarding the power of appointment as set forth in the second
sentence of Section 4.3. This sentence states:
If my spouse shall predecease me or fails to exercise this power of
appointment, this gift shall benefit my children either by direct
exercise of the power so long as they have achieved the age of 30
years or to the trustee under Article V of this Will if they are under
age 30.4
By this language, Smith created a contingent remainder devising to his children
a contingent future estate in the Trust property which would vest, if at all, upon
appellant’s failure to survive Smith or her failure to exercise the power of
appointment Smith sought to give her over the Trust property. See OCGA § 44-
6-60 (a) (“An estate in remainder is one limited to be enjoyed after another
estate is terminated or at a time specified in the future.”). See also Padgett v.
Hatton, 200 Ga. 209, 210 (1) (36 SE2d 664) (1946) (“A contingent remainder
is one limited to an uncertain person, or upon an event which may or may not
4
We note that this language in Section 4.3 of the Will was not addressed by the parties in
their briefs below or at the hearing before the probate court on appellant’s petition for declaratory
judgment.
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happen.”).5 Because Smith lacked the authority to confer on appellant his power
to appoint the Trust property, see Div. 1, supra, thus rendering the first provision
of Section 4.3 of the Will invalid, the remaining contingent provision became
operative.6
As stated, Smith’s devise to his children is contingent upon appellant’s
failure to survive Smith or her failure to exercise the purported power of
appointment. The first contingency has not been met because Smith
predeceased appellant. The contingency of appellant’s failure to exercise the
power of appointment has been satisfied, however, because appellant has no
authority to exercise the power of appointment Smith ineffectively bestowed
upon her. Thus, the contingency of failure to exercise found in the remainder
5
Under Georgia law, it does not matter that the power of appointment Smith sought to
convey to appellant was not itself an estate in the Trust property, but merely the absolute authority
to dispose of the estate prior to it vesting in Smith’s children pursuant to the contingent remainder
provision of Smith’s will. See Bienvenu v. First Nat. Bank of Atlanta, 193 Ga. 101, 107 (17 SE2d
257) (1941) (“Where remainders are subject to be divested, in whole or in part, by a disposition of
the whole or some part of the property, this contingency does not deprive the remainder of its
character.”). See also OCGA § 44-6-42 (“Since no particular estate is necessary to sustain a
remainder, the defeat of the particular estate for any cause does not destroy the remainder.”).
6
Article IX, Section 9.2 of the Will entitled “Saving Clause” provides:
If any court of competent jurisdiction invalidates any portion of this Will or
otherwise finds any provision unenforceable, such finding shall not be construed as
invalidating the entirety of this Will and all remaining provision shall remain in legal
force and effect.
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clause is met by virtue of this legal impossibility. See generally OCGA § 44-6-
42; Gresham v. Gannon, 243 Ga. 269 (253 SE2d 748) (1979) (following failure
of charitable devise, disposition of estate was controlled by reversionary clause
in will).
Next, we find that Smith effectively exercised the testamentary power of
appointment granted him by the Trust to devise property in the Trust to his
children. That is because the language of this section clearly and
unambiguously provides that if appellant fails to exercise the power of
appointment Smith sought to give her, then by “direct exercise of the power [of
appointment]” Smith’s children shall benefit from “this gift,” i.e., the property
and assets Smith benefitted from under the LLC, which were held in the Trust.
By directly exercising his sole and exclusive right to appoint the Trust’s assets
upon his death while referring to the power of appointment, Smith exercised his
power of appointment in the manner specified by the Trust’s donors. See
Hargrove, supra at 562.
Based on these findings, we reverse that part of the probate court’s
decision finding Smith failed to exercise the testamentary power of appointment
granted him by the Trust and requiring that the Trust assets be distributed
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pursuant to the terms of the Trust where no power of appointment had been
exercised. Instead, pursuant to the provisions of the Will, any real and personal
property and other tangible assets that Smith benefitted from under the LLC
which are held in the Trust must be distributed to the trustee of the J-K Smith
Family Trust, identified in Article V of the Will, for the benefit of Smith’s
children. Accordingly, we remand this case to the probate court for the issuance
of an order in conformity with this decision.
Judgment affirmed in part and reversed in part. All the Justices concur.
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