Matter of Albert G. Aaron Living Trust

In the Matter of the Albert G. Aaron Living Trust, No. 21, September Term, 2017
TRUSTS — TRUST CONSTRUCTION — The circuit court correctly found that the
settlor, when he planned for a charitable distribution that would lapse “[i]f my wife survives
me,” intended to refer to his first wife rather than his second wife. The settlor expressly
defined “my wife” as his first wife in the Trust Agreement and never amended it;
specifically used the second wife’s name when he intended to refer to her; and made
amendments to the planned charitable foundation that, in light of his poor health, he would
likely not have made if he expected the distribution to lapse. The settlor’s first wife did
not survive him; therefore, the distribution to the foundation did not lapse.
Circuit Court for Baltimore City
Case No. 24-C-15-003610
Argued: November 2, 2017
IN THE COURT OF APPEALS
OF MARYLAND
No. 21
September Term, 2017
IN THE MATTER OF THE ALBERT G.
AARON LIVING TRUST
Barbera, C.J.,
Greene
Adkins
McDonald
Hotten
Getty
Rodowsky, Lawrence F.
(Senior Judge, Specially Assigned),
JJ.
Opinion by Barbera, C.J.
Filed: March 26, 2018
This appeal reaches us from a dispute between Petitioners, certain interested parties
and beneficiaries of a trust created by Albert G. Aaron, and Respondents, the Trustees
appointed to execute and oversee the trust. One term of the trust agreement provided that
a charitable foundation would be created unless Mr. Aaron was survived by his wife, in
which case the foundation would not come into existence. Mr. Aaron’s first wife
predeceased him, but Mr. Aaron remarried. The parties dispute to which wife the provision
should apply. Resolution of that dispute determines whether the charitable foundation
survives.
I.
Facts and Procedural History
The Trust
During his life, Albert G. Aaron (“Mr. Aaron”) transferred most of his assets to a
revocable trust, the Albert G. Aaron Living Trust (the “Trust” or, when appropriate, the
“Trust Agreement”). He created the Trust on August 27, 2008, restated it in full on August
10, 2009, and amended it eleven times between 2009 and 2013. Mr. Aaron was married to
Eileen Aaron (“Eileen”) for many years, but they were separated for the last several. Eileen
died on November 1, 2012. On or about November 6, 2012, Mr. Aaron married Myrna
Kaplan (“Myrna”), his long-time girlfriend.
On January 10, 2013, Mr. Aaron executed the Eleventh Amendment to the Trust. It
was the only amendment made after Eileen’s death and Mr. Aaron’s marriage to Myrna.
At the time of that amendment, Mr. Aaron was battling esophageal cancer. On January 26,
2013, sixteen days after making the Eleventh Amendment, Mr. Aaron died at the age of
85. Myrna survived Mr. Aaron.
Mr. Aaron and Eileen had one child together, Jonathan P. Aaron (“Jonathan”).
Jonathan is married to Cheryl Aaron (“Cheryl”). Jonathan and Cheryl have two daughters,
Theda R. Aaron (“Theda”) and Lena S. Aaron (“Lena”). Myrna, Jonathan, Cheryl, Theda,
Lena, and Frances A. Rossi (“Frances,” Mr. Aaron’s long-time assistant) are beneficiaries
of the Trust. All beneficiaries, aside from Myrna and several charitable organizations who
are not parties to this appeal, are Petitioners here (hereinafter, collectively, the
“Beneficiaries”). Upon Mr. Aaron’s death, Respondents, Steven G. Albert and Howard E.
Goldman, became the Trustees and Trust Advisors of the Trust.
The various Articles of the Trust Agreement lay out the terms of the Trust. Article
Two, “Family Information,” was never amended. It provided the following:
I am married to Eileen Aaron. Any reference in this agreement to “my wife”
is a reference to Eileen Aaron.
* * *
I have also provided for the following individuals in this agreement:
Name Relationship
Myrna Kaplan Friend[.]
Articles Six through Twelve provide for specific distributions of property and create
several trusts: the “Marital Deduction Trust,” the “Exempt Marital Deduction Trust,” the
“Non-Exempt Marital Deduction Trust,” the “Myrna Kaplan Trust,” the “Frances A. Rossi
Trust,” and the “Grandchildren’s Trusts.” Article Thirteen of the Trust Agreement, Section
13.01, provides for the creation of a Consolidated Residuary Trust. The Consolidated
2
Residuary Trust was created to hold the residuary of the trust property, so long as either
Myrna or Frances was living. The beneficiaries of the Consolidated Residuary Trust are
Myrna, Frances, Jonathan, Cheryl, and Jonathan’s descendants (Theda and Lena). The
Trustees were authorized to make distributions to those beneficiaries and to use it as a
source of payment for obligations created under other Articles of the Trust Agreement.
Section 13.02 directed that, on the death of both Myrna and Frances, the Consolidated
Residuary Trust be terminated and its assets distributed in accordance with the subsequent
sections of Article Thirteen. Once the Consolidated Residuary Trust was terminated,
Section 13.03 directed the Trustees to designate 25% of the remaining trust property as the
“Foundation Share” and the balance of 75% as the “Family Share.”
Section 13.04 directed the Trustees to use the Foundation Share to create the Aaron
Family Foundation (“Foundation”), a private organization within the meaning of § 509(a)
of the Internal Revenue Code and treated as tax-exempt under § 501(c)(3) of that Code.
Section 13.04 contained the following contingent clause at issue:
If my wife survives me, this distribution shall lapse and the property subject
to this distribution shall instead be distributed under the other provisions of
this agreement.
(Emphasis added). Consequently, if Mr. Aaron outlived his wife, the Foundation would
be created. But if his wife survived him, the distribution to the Foundation would lapse
and Mr. Aaron’s other beneficiaries—i.e., Jonathan, Cheryl, Theda, and Lena—would
receive the remaining 25% of the Consolidated Residuary Trust. The next five pages of
Section 13.04 stated the purpose of the Foundation, established an Advisory Committee to
3
control its charitable activities, and detailed specific recurring distributions that the
Foundation was to make, among other things.
Mr. Aaron amended the Trust Agreement eleven times before his death. The
majority of the changes in the first ten amendments concerned distributions to Myrna and
Frances. Those amendments did not reference Section 13.04 and are largely irrelevant to
the issue we decide.
The Eleventh Amendment, however, made several significant changes to the Trust
Agreement. It amended Section 6.01, which addressed the distribution of Mr. Aaron’s
automobiles, to add that “[t]he Jaguar is conveyed to Myrna Kaplan Aaron, my current
wife.” It also altered Section 6.04, which concerned the creation of a Marital Deduction
Trust. The Amendment provided that “Section 6.04 originally intended to be relevant for
provisions of my past deceased wife, Eileen Aaron, shall now be intended to be for my
current wife, Myrna Kaplan Aaron.” In addition, the amendment increased from $2 million
to $8 million the amount to be allocated to the Marital Deduction Trust and provided that
the Marital Deduction Trust should be used first to satisfy all distributions to Myrna. The
Eleventh Amendment also “specifically revoke[d] the provisions of the First Amendment
which provided that Sections 7.01, 7.02, 7.03, and 7.04 of Article Seven were to be deleted
if my spouse survived me” and mandated that “such sections shall apply to Myrna Kaplan
Aaron.”
Mr. Aaron made two other changes in the Eleventh Amendment that are worth
noting. Mr. Aaron changed the composition of the Advisory Committee. Originally, the
members were to be Jonathan, Myrna, Richard G. Wohltman (“Richard”), and Steven G.
4
Albert. Paragraph E of the Eleventh Amendment removed Myrna and Richard from the
Committee and provided that “[t]he remaining initial members shall select two other
members so that there will be four members in total.”1 Mr. Aaron also amended Section
6.06, which concerned his real property interests, to provide in part that “[i]f Myrna Kaplan
Aaron should predecease me, this distribution shall lapse[.]” Mr. Aaron referred either to
“Myrna Kaplan Aaron” or “Myrna Kaplan” each time she was mentioned in the Eleventh
Amendment.
The Trust Advisors were authorized under Section 3.10(j) of the Trust Agreement
to amend any provision of the agreement to “[c]orrect ambiguities, including scrivener
errors, that might otherwise require court construction or reformation[.]” The Trust
Advisors were not permitted to “limit or alter the rights of a beneficiary in any trust assets
held by the trust before the amendment.”
The Court Proceedings
Shortly after Mr. Aaron’s death, Myrna requested certain payments from the
Trustees pursuant to the amended Trust Agreement. The Trustees, believing the requested
payment amounts to be excessive, filed for a declaratory judgment pursuant to
Section 3-408 of the Courts and Judicial Proceedings Article and Maryland Rules 10-101
1
It is safe to assume that Mr. Aaron removed Myrna because the Foundation would only
come into existence after her death, so she could not possibly be part of the Advisory
Committee. At oral argument, counsel for the Beneficiaries speculated—not unreasonably
so—that Richard was removed from the Advisory Committee because he was no longer
Mr. Aaron’s attorney.
5
and 10-501.2 The parties reached a settlement, memorialized in a Settlement Agreement.
The Trustees then filed in the Circuit Court for Baltimore City a “Petition to Approve
Settlement and Modify Trust.” The Trustees requested the circuit court to assume
jurisdiction over the Trust, approve the Settlement Agreement, and approve the Trustees’
proposed restatement of the Trust Agreement (the “2016 restatement”). The intent of the
proposed restatement was to simplify the original Trust Agreement and eleven amendments
into one unified document that incorporated all of the changes. One change the Trustees
proposed was to remove the clause in Section 13.04 containing the language “[i]f my wife
survives me, this distribution [to the Foundation] shall lapse and the property subject to
2
Section 3-408 of the Maryland Code Annotated, Courts and Judicial Proceedings Article,
“Declaration of rights or legal relations,” provides, in relevant part:
Any person interested as or through a personal representative, trustee,
guardian or other fiduciary, creditor, devisee, legatee, heir, next of kin, or
beneficiary of a trust, in the administration of a trust, or of the estate of a
decedent, a minor, a disabled person, or an insolvent, may have a declaration
of rights or legal relations in respect to the trust or the estate of the decedent,
minor, disabled person, or insolvent in order to:
* * *
(2) Direct the personal representative, guardian, or other fiduciary or trustees
to do or abstain from doing any particular act in their fiduciary capacity;
or
(3) Determine any question arising in the administration of the estate or trust,
including questions of construction of wills and other writings.
Md. Code Ann., Cts. & Jud. Proc. § 3-408 (2017). Maryland Rule 10-101 states, in
pertinent part:
(a) Applicability. Except as otherwise provided by law, the rules in this Title
apply to proceedings concerning:
* * *
(3) a fiduciary estate[.]
Maryland Rule 10-501(a) provides:
(a) Who may file. A fiduciary or other interested person may file a petition
requesting a court to assume jurisdiction over a fiduciary estate other than
a guardianship of the property of a minor or disabled person.
6
this distribution shall instead be distributed under the other provisions of this agreement.”
The Trustees reasoned that, upon Eileen’s death in November 2012, the provision became
unnecessary.
On August 26, 2015, the circuit court issued a Show Cause Order directing the
Beneficiaries to show cause why the petition should not be granted. At issue were three
contentions raised by the Beneficiaries that are not relevant to this appeal. Then, on
February 4, 2016, the Beneficiaries filed a Supplemental Response disputing the propriety
of removing the “if my wife survives me” clause in Section 13.04. The Beneficiaries
contended that a bequest providing for the creation of the Foundation had lapsed because,
they argued, the term “my wife” referred not to Eileen but rather to Mr. Aaron’s second
wife, Myrna.
After a hearing, the Honorable Althea M. Handy, ruling from the bench, granted the
relief requested by the Trustees and approved the 2016 restatement. The court, reasoning
that “once Ms. Eileen Aaron passed away[,] . . . that was the critical date,” agreed with the
Trustees that the reference to “my wife” in Section 13.04 of the Trust Agreement did not
transfer automatically from Mr. Aaron’s first wife, Eileen, to his second wife, Myrna.
The Beneficiaries noted an appeal. The sole issue before the Court of Special
Appeals, as it is here, was whether the circuit court had erred in approving the 2016
restatement and declaring, in particular, that the words “my wife” in Section 13.04 of the
Trust Agreement refer to Eileen, not Myrna.
The Court of Special Appeals affirmed the judgment of the circuit court. In a
soundly reasoned, unreported opinion, the Honorable James R. Eyler, writing for the panel,
7
held that the words “my wife” referred to Eileen; therefore, the distribution to the
Foundation did not lapse. In the Matter of the Albert G. Aaron Living Trust, No. 253, slip
op. at 4 (Md. Ct. Spec. App. Apr. 14, 2017). We agree with the panel’s reasoning and
affirm the holding of the Court of Special Appeals.
Additional facts will be supplied as necessary in the sections below.
II.
Standard of Review
“It is axiomatic that the intention of the settlor governs the interpretation of a trust
agreement.” Brent v. State of Md. Cent. Collection Unit, 311 Md. 626, 631 (1988). The
interpretation of a trust, like a will, is a legal determination, and we review de novo the
lower court’s decision. Vito v. Grueff, 453 Md. 88, 106 (2017); Pfeufer v. Cyphers, 397
Md. 643, 648 (2007). Therefore, we determine whether the circuit court was “legally
correct.” Schisler v. State, 394 Md. 519, 535 (2006); Nesbit v. Gov’t Emps. Ins. Co., 382
Md. 65, 72 (2004).3
3
The Trustees do not contest that, in general, the standard of review in trust construction
cases is de novo. Here, however, they assert that the Trust Agreement authorized the
Trustees (as Trust Advisors) to “[c]orrect ambiguities, including scrivener errors, that
might otherwise require court construction or reformation.” The Trustees cite the
Restatement (Third) of Property, which declares that “if the donative document grants the
fiduciary . . . authority to resolve questions of construction and provides that the fiduciary’s
decision shall be binding on all interested parties[,] . . . the clause does not make the
fiduciary’s decision controlling but does entitle it to a strong presumption of correctness
that is to be set aside only if it is arbitrary or made in bad faith.” Restatement (Third) of
Prop.: Wills & Donative Transfers § 11.2(e) (Am. Law. Inst. 2003) (emphasis added).
The Trustees do not cite any case in which a Maryland court specifically adopted,
let alone approvingly cited, § 11.2 of the Third Restatement. We need not decide that issue
here.
8
III.
Discussion
A. The Parties’ Contentions
Neither party in this case advocates for a rule of law regarding trust construction
that has not already been articulated by this Court. Rather, the Beneficiaries and the
Trustees agree that the intent of the settlor controls the disposition of a trust. They disagree,
however, as to what Mr. Aaron’s intent was. In particular, the parties interpret differently
the effects of Mr. Aaron’s amendments to the Trust as they pertain to the meaning of “my
wife” in Section 13.04.
The thrust of the Beneficiaries’ argument is that Mr. Aaron’s clear intent “was to
assure that his direct decedents [sic] had sufficient funds for their future.” They argue that
if Mr. Aaron’s “wife” (whomever she may be, past or current) died before Mr. Aaron, she
would not require any distributions from the corpus of the Trust. Thus, absent those
distributions to the wife, the Trust would contain sufficient assets for both Mr. Aaron’s
descendants and the Foundation, so the Foundation could validly be created.
The Beneficiaries further maintain that if Mr. Aaron’s wife survived him, he
intended to provide funds for her to live comfortably for the rest of her life. The
Beneficiaries reason that with a living wife receiving regular distributions, less funds would
be available for Mr. Aaron’s descendants. Therefore, as the Beneficiaries see it, because
significant amounts of money—money that would have otherwise been used to create and
sustain the Foundation—were now going to his surviving wife, in keeping with Mr.
Aaron’s intent, the Foundation would not be created, thereby preserving adequate funding
9
for his descendants. Mr. Aaron’s wife, Myrna, survived him. Therefore, according to the
Beneficiaries, the distribution to the Foundation should lapse and available funds should
be used to provide support to Myrna and, eventually, Mr. Aaron’s descendants.
In support of their argument, the Beneficiaries offer a lengthy recitation of
secondary material and case law, some from other jurisdictions, purporting to synthesize
the majority view of trust construction. Essentially, the Beneficiaries set forth the
following general tenets to support their interpretation of Mr. Aaron’s intent.
First, relying on two American Law Reports annotations and Lavender v.
Rosenheim, 110 Md. 150 (1909), the Beneficiaries assert that a trust or will referring to a
spouse is ordinarily presumed to mean the spouse at the time the instrument was executed,
but courts must take into account all provisions of the instrument and the surrounding
circumstances to determine a settlor’s intent. The Beneficiaries read Mr. Aaron’s
references to Myrna in the Eleventh Amendment as indications that, at the time the
Amendment was executed, he knew that his wife was Myrna, and that those references are
enough to overcome the presumption extant at the time the Trust was originally executed.
Second, the Beneficiaries posit that a former spouse is distinguishable from a
surviving spouse. They cite Wright v. State, 198 Md. 163, 171 (1951), for the proposition
that a marriage presumptively lasts until it is terminated by death, annulment, or divorce.
They also cite In re Atwood’s Trust, 114 N.W.2d 284 (Minn. 1962), a Minnesota Supreme
Court case in which the court stated that “[a] divorced husband or wife is a former spouse
and cannot be a surviving spouse.” Id. at 288. Though not explicitly stated, the
Beneficiaries apparently wish to convey that because Eileen died and Mr. Aaron remarried,
10
her marriage to Mr. Aaron was terminated, and, thus, she could not properly be referred to
as his wife.
Third, the Beneficiaries submit that all language in a trust instrument must be given
effect, including modifications or amendments; and, when a conflict exists between two
provisions, they should be reconciled to give meaning to every part of each. If that is not
possible, the provision adopted later in time that expresses the testator’s or settlor’s intent
should control. The Beneficiaries cite cases from various of our sister states that, according
to the Beneficiaries, establish that courts “have given effect to modifications of trusts that
changed the identities of beneficiaries or parties.”
Fourth, citing the Restatement (Third) of Property, the Beneficiaries claim that a
settlor’s specific intent and general dispositive plan to provide for a surviving spouse and
family members should be preferred over a contingent charitable beneficiary. The
Beneficiaries argue that Mr. Aaron’s “general or overall dispositive scheme” was to
provide for his family members if Myrna survived him, and that such a construction
comports with the preference of the Restatement to “favor[] family members over non-
family members.” Restatement (Third) of Property, § 11.3(c)(3). Fifth and finally, the
Beneficiaries recite the proposition that trusts that are indefinite as to beneficiaries should
be declared void and ask us to declare the Trust invalid in part.
Pointing to the terms of the trust instrument and the subsequent amendments thereto,
the Beneficiaries insist that Mr. Aaron’s overarching intent was to provide for his surviving
spouse and family members. Otherwise, Mr. Aaron would not have structured the Trust
such that the distribution to the Foundation would lapse if both his spouse and family
11
members were still alive. As applied to the facts of this case, the Beneficiaries argue, the
principles summarized above establish that construing the term “wife” as referring to
Myrna is the only construction that comports with Mr. Aaron’s intent. The Beneficiaries
offer Mr. Aaron’s repeated references to Myrna in the Eleventh Amendment as evidence
that he intended to provide for her—his wife—and his descendants; if Myrna was still
living at the time of his death, adequate funds might not be available for his descendants.
The Beneficiaries further argue that the record contains no evidence that Mr. Aaron
was facing imminent death. They therefore challenge as unsupported by the record the
Trustees’ inference of his intent from the “virtual certainty” that he would die before
Myrna. Finally, the Beneficiaries contend that this Court should “opt for the construction
of the phrase that accords with the Settlor’s general or overall dispositive scheme and/or
the one that favors family members over non-family members.” If those arguments fail,
the Beneficiaries would have us hold that the Trust is invalid in part for indefiniteness as
to a beneficiary or beneficiaries.
The Trustees counter that the Court of Special Appeals correctly focused on Mr.
Aaron’s expressed intent—the definition of “my wife” contained in Article Two, which
Mr. Aaron never amended—rather than, as the Trustees characterize it, the intent that the
Beneficiaries merely infer from the structure of the Trust. The plain language of the Trust
Agreement, the Trustees insist, controls the disposition of this case. The Trustees also
point to the Eleventh Amendment, in which Mr. Aaron referred to Myrna by name on
several occasions. When he did use the word “wife,” he never did so without specifying
Eileen or Myrna. Such a distinction is evidence that when Mr. Aaron wanted to refer to
12
Myrna, he did so specifically and with qualification. Because he never altered the term
“my wife” in Section 13.04, the definition in Article Two continues to apply.
The Trustees note as well that, in the Eleventh Amendment, Mr. Aaron changed the
makeup of the Advisory Committee. The Trustees contend that this change, coupled with
the “virtual certainty” that Myrna would survive him, would make no sense if Mr. Aaron
did not intend for the Foundation to exist. And, according to the Trustees, Mr. Aaron took
care to emphasize the importance of his charitable objectives through the Trust Agreement.
As characterized by the Trustees, the Beneficiaries’ entire argument is that under
the common law, a testator’s spouse is presumed to be the spouse at the time of execution,
but a party can rebut that presumption by presenting evidence of a contrary intent. And
because the Beneficiaries have presented no evidence of such an intent, offering
speculation at best, the Trustees assert that a holding in their favor is required.
B. Analysis
As did the Court of Special Appeals, we begin by reciting the well-settled rules
governing the construction of a trust. The process of construing a trust instrument follows
the same rules as construing a will. Vito, 453 Md. at 106; Bogert et al., The Law of Trusts
and Trustees, ch. 11, § 182 (3d rev. ed. 2017); see also Restatement (Third) of Trusts § 4
cmt. d (Am. Law. Inst. 2003). Accordingly, the “paramount concern of the court” in
interpreting a trust, as with interpreting a will, “is to ascertain and effectuate the [settlor’s]
expressed intent.” Pfeufer v. Cyphers, 397 Md. 643, 649 (2007) (quoting Emmert v. Hearn,
309 Md. 19, 23 (1987)). “This expressed intention must be gathered from the language of
13
the entire [trust], particularly from the clause in dispute, read in the light of the surrounding
circumstances” at the time the trust was created. Leroy v. Kirk, 262 Md. 276, 280 (1971).
Ordinarily, a settlor’s intent is discerned from within the four corners of the trust
agreement, and language is given its plain and ordinary meaning. Emmert, 309 Md. at 23.
Where possible, and in accord with the objects and purposes of the trust, all of the language
in a trust agreement should be given effect. First Nat’l Bank of Md. v. Dep’t of Health &
Mental Hygiene, 284 Md. 720, 728–29 (1979) (citing Vickery v. Md. Tr. Co., 188 Md. 178,
188 (1947)); McCrory Stores Corp. v. Bennett, 159 Md. 568, 573 (1930).
We agree with the Trustees that the phrase “my wife” in Section 13.04 refers to
Eileen rather than Myrna. Therefore, in their proposed 2016 restatement of the Trust, the
Trustees appropriately revised that section to remove as unnecessary the portion at issue—
“if my wife survives me, this distribution shall lapse”—because Eileen’s death
immediately rendered that contingency provision unnecessary.
The starting point for our analysis is the phrase “my wife” and its accompanying
definition in Article Two, both found within the four corners of the document. It is beyond
dispute that at the time Mr. Aaron first executed the Trust Agreement, “my wife” explicitly
meant Eileen. The language is clear: Article Two provides, “I am married to Eileen Aaron.
Any reference in this agreement to ‘my wife’ is a reference to Eileen Aaron.” Through
eleven amendments—the last of which occurred after both Eileen’s death and Mr. Aaron’s
remarriage to Myrna—this definition was never amended.
As described above, Mr. Aaron made several important changes in the Eleventh
Amendment. In none of the changes did he use the phrase “my wife” without making a
14
further qualification about whom he meant. He amended Section 6.01 to add that “[t]he
Jaguar is conveyed to Myrna Kaplan Aaron, my current wife.” He altered Section 6.04,
stating that “Section 6.04 originally intended to be relevant for provisions of my past
deceased wife, Eileen Aaron, shall now be intended to be for my current wife, Myrna
Kaplan Aaron.” Further, in the First Amendment, Mr. Aaron had provided that certain
sections in Article Seven were to be deleted if his spouse, then Eileen, survived him. In
the Eleventh Amendment, Mr. Aaron specifically revoked those deletions, instructing
instead that the provisions in Article Seven “shall apply to Myrna Kaplan Aaron.” Section
6.04 was also modified to substantially increase the amount to be allocated to the Marital
Deduction Trust—from $2 million to $8 million—and designated the Marital Deduction
Trust as the primary source of distributions to Myrna. He also amended Section 6.06,
which dealt exclusively with the use and distribution of certain residential properties,
stating in part that “[i]f Myrna Kaplan Aaron should predecease me, this distribution shall
lapse[.]” In numerous other clauses in the Eleventh Amendment, Mr. Aaron referred
specifically to Myrna only by name.
Other textual evidence in the Trust Agreement convinces us that Mr. Aaron intended
for the Foundation eventually to come into being. When viewing the Trust Agreement as
a whole, there are signals that Mr. Aaron believed strongly in fulfilling a charitable
objective. Section 6.11 of the original Trust Agreement, for example, provided that “[u]ntil
the establishment of the Aaron Family Foundation in accordance with Section 13.04, I
authorize my Trustee to make regular charitable donations in his discretion,” and further
15
mandated that the Trustee make annual distributions to four named charities. In Article
Sixteen of the original Trust Agreement, Mr. Aaron provided the following:
If at any time there is no person or entity qualified to receive final distribution
of my trust estate or any part of it, I direct that the portion of my trust estate
with respect to which the failure of qualified recipients has occurred be
distributed to the Aaron Family Foundation established in Section 13.04.
Put differently, the Foundation was designated as the contingent beneficiary of any or all
trust assets in the event that Mr. Aaron had no living descendants.4
In addition, in the First Amendment, Mr. Aaron designated his only child, Jonathan
Aaron, as the “principal administrative officer of the Foundation” and listed the charities
to which distributions were mandatory, with the others being discretionary. The
Beneficiaries urge that Mr. Aaron planned for the contingency that he might outlive Myrna,
and thus, in light of the changes in the Eleventh Amendment, Mr. Aaron must have been
referring to Myrna. Mr. Aaron, though, explicitly acknowledged in the First Amendment
that when he created the Trust, he “made the assumption that [he] would survive Eileen”
because she had been dealing with “stage 4 Lung Cancer for more than nine years.” He
therefore added contingent provisions, some of which were revoked in later amendments,
addressing what would happen in the event that Eileen survived him and then contested the
terms of the Trust after his death. Such a recognition is evidence that Mr. Aaron was aware
of, and knew how to plan for, contingencies related to survivorship. Given Mr. Aaron’s
other changes in the Eleventh Amendment, in which he specifically named Myrna and
4
The Trustees submit that the language in Article Sixteen presents a problem—that if Mr.
Aaron died without descendants and the Foundation ceased to come into existence, part of
the estate would fall into intestacy. We discuss this issue below.
16
substituted her for Eileen on multiple occasions, it would be unreasonable to infer an intent
to change the meaning of a term defined elsewhere. Mr. Aaron easily could have made a
similar substitution to the provision at issue in Section 13.04, but he did not.
Finally, Mr. Aaron’s change to the composition of the Advisory Committee in the
Eleventh Amendment comports with an intent to establish the Foundation. Put simply,
given his health and the slim possibility that he would survive Myrna, Mr. Aaron would
have had little reason to amend the membership of the Advisory Committee if he did not
wish for there ever to be an Advisory Committee. Indeed, at a hearing in the circuit court,
counsel for the Beneficiaries conceded that it was a “virtual certainty” that Mr. Aaron
would predecease Myrna.
All of these textual clues indicate not only that the words “my wife” retained their
express definition from Article Two, but also that Mr. Aaron specifically amended the
Trust in this manner to provide for Myrna (his “current wife”) and his descendants while
still maintaining adequate funds for the eventual creation of the Foundation. If Mr. Aaron
intended for certain funds otherwise earmarked for the Foundation to go to a wife who
outlived him, it would make little sense for him to increase drastically the distributions she
was to receive, specifically qualify that she was his “current wife” without modifying the
definition of “my wife” in Article Two, and remove her from an Advisory Committee on
which she would have been, by definition, unable to serve.
Beyond the evidence of Mr. Aaron’s intent in the Trust Agreement and relevant
amendments, we find further support for the Trustees’ position in Maryland case law,
though our cases addressing this subject are few and far between. The common law
17
recognizes a presumption, which both parties acknowledge, that a spouse referred to in a
trust or will is the spouse at the time of execution of the instrument. See 4 Page, The Law
of Wills §§ 34.2, 34.3 (Rev. 2004 & Supp. 2017); C. R. McCorkle, Annotation, Person
Entitled to Devise or Bequest to “Husband,” “Wife,” or “Widow,” 75 A.L.R.2d 1413(1961). In Estep v. Mackey, 52 Md. 592 (1879), a testator divided in a bequest most of his
estate equally among his three illegitimate children. Id. at 595. If one child died without
heirs, the estate was to be divided between the remaining two children; if two children died
without heirs, the estate should pass to the surviving child; and if all three children died
without heirs, the testator’s brother and sister would inherit the remainder of the estate. Id.
at 595, 597. One of the children, Henry Clay Cross, died without heirs after the will was
executed, and another son bearing the same name was born. Id. at 597. The second Henry
Clay Cross made a claim to the portion of the estate originally meant for the first son of the
same name. Id.This Court declared in Estep that a testator’s intent “must clearly appear from the
language used in the various parts of the will; and, unless the intent is clearly and certainly
different from that which the technical language he has used may import, we must adhere
to their technical signification, and give effect to the will accordingly.” Id. at 598. Because
the second Henry Clay Cross “was not in being and could not have been intended,” he
could not take under the will. Id. at 597. No amendments existed in Estep as they do here,
but the reasoning of Estep applies nonetheless. When Mr. Aaron created Section 13.04, he
could not have intended to refer to Myrna because she was not yet his wife. No
modification to the provision at issue having been made thereafter, it cannot be said that
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he intended to refer to a separate person, Myrna, simply because she eventually came to be
his wife.
Though not squarely on point, this Court’s decision in Lavender v. Rosenheim, 110
Md. 150 (1909), provides an important guidepost. The testatrix in Lavender, Elizabeth
Whalen, provided in her will that all of her estate should be devised in trust to Benjamin
Rosenheim for the benefit of her son, Oliver Whalen, during Oliver’s life. When Oliver
died, the corpus of the estate would be distributed to Oliver’s “child or children” who
survived him. Id. at 151. If Oliver died without a surviving child, however, the testatrix
directed payment to certain nieces and nephews, and then provided, “I give, devise and
bequeath all the rest and residue of my estate, after the payment of the above-mentioned
legacies, unto the wife of my said son, Oliver R. Whalen, absolutely.” Id. When the will
was created, Oliver was married to Mary Whalen, who “knew [Elizabeth]; lived in the
same house with her, and was present at [the] time [Elizabeth] made her will.” Id. at 152.
Elizabeth Whalen then died. A few years later, Oliver and Mary divorced, and Mary
married Frank Lavender. Oliver then died without children or remarrying. The trustee
under the will sought direction from the court as to how to distribute the estate. Id. Relying
in part on Estep, this Court decided that Oliver’s former wife, Mary, was entitled to the
estate because the will did not express an intent that Mary had to be Oliver’s wife on the
date of Oliver’s death. Id. at 157–59. In so holding, we recited the following rule from a
then-leading English wills treatise:
First, that a devise or bequest to the wife of A. who has a wife at the date of
the will relates to that person, notwithstanding any change of circumstances
which may render the description inapplicable at a subsequent period . . . ;
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but that, secondly, if A. have no wife at the date of the will, the gift embraces
the individual sustaining that character at the death of the testator; and,
thirdly, if there be no such person, either at the date of the will or at the death
of the testator, it applies to the woman who shall first answer the description
of wife at any subsequent period.
Id. at 157–58 (citing 1 Jarman, A Treatise on Wills 285 (1844)).
As the Trustees concede, Lavender is distinguishable from the case at bar because
Oliver died without heirs or a spouse, and thus Mrs. Whalen otherwise would have died
intestate. The Court, recognizing “the abhorrence of [c]ourts to intestacy,” based its
holding, at least in part, upon its desire to avoid a result involving intestacy. Id. at 153.
But the teachings of Lavender are not entirely inapposite. Mr. Aaron did not identify any
distant relatives, so if Mr. Aaron’s living descendants all died without heirs, a substantial
portion of the corpus of the Trust would fall into intestacy—a result that Mr. Aaron could
not possibly have intended.
As the Beneficiaries have argued, if a will and codicil (or a trust and amendment)
stand in conflict, the codicil or amendment controls because it contains the most recent
expression of a testator’s or settlor’s intent. Wiesenfeld v. Rosenfeld, 170 Md. 63, 70
(1936). The Eleventh Amendment memorialized that standard, providing that “[a]ny
conflict between what is contained in my Living Trust and what is contained in this
Eleventh Amendment to my Living Trust will be resolved in favor of this document.” The
Eleventh Amendment also included a prefatory phrase before the list of substantive
changes: “Irrespective of any other provisions of this Living Trust and its prior Ten
Amendments, I declare the following . . . [.]” The Beneficiaries take this language and
attempt to run with it, arguing that the conflict between the definition of “my wife” in
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Article Two and Mr. Aaron’s reference to Myrna as his “current wife” in the Eleventh
Amendment cannot be reconciled.
The problem with the Beneficiaries’ argument is that the two instruments need not
be read in conflict with one another. In Jones v. Holloway, 183 Md. 40 (1944), we repeated
the “established rule in this State that a will and codicil are to be construed together as one
instrument and reconciled as far as practicable.” Id. at 45 (emphasis added). The
Holloway Court continued:
It is also a settled rule in Maryland that when a certain term appears in a will
more than once, the Court will infer that the testator intended the term to have
the same meaning wherever used, unless a contrary intention clearly appears
from the context. If the testator has used words in one part of his will in a
way that clearly indicates his own understanding of their import, whether or
not it differs from their ordinary or legal meaning, there can be no safer way
to ascertain his purpose than to give to the same words when they appear
elsewhere in the will the same meaning that he attached to them in the
instance where his understanding of them is apparent, except when a
different purpose in their use is disclosed.
Id. It does not take a stretch of the imagination to read Article Two and the Eleventh
Amendment in harmony. As mentioned, when Mr. Aaron referred to Myrna in the
Eleventh Amendment, he did so by name, and he never used the phrase “my wife” in
isolation.
This conclusion is further supported by Johns Hopkins University v. Pinckney, 55
Md. 365 (1881). There, the testator created a will that directed the executors of his estate
to invest $10,000 and distribute annually to Ms. Pinckney the income from the investment.
Id. at 366–67. Thereafter, the testator made a codicil bequeathing “any other personalty of
which I am possessed” to the trustees of Johns Hopkins University. Id. at 380. In support
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of its holding that the codicil did not revoke the bequest to Ms. Pinckney, the Court of
Appeals stated the following rules:
1st. That the codicil does not operate as a revocation of a devise or
bequest in a will, unless there is an express clause of revocation, or unless
the provisions in the codicil, are so inconsistent with the will, that the two
cannot stand together.
2nd. If revocation is to be implied from inconsistent provisions, it will
be limited to such provisions of the will, as are plainly inconsistent with the
codicil.
3rd. Where the devise or bequest in the will, is clear and free from
doubt, the intention to revoke by the codicil, must be equally clear and
explicit.
Id. at 380–81. By analogy, we see no clear intention to change the nature of the charitable
gift to the Foundation, a contingent beneficiary. Therefore, absent other express or implicit
signs that Mr. Aaron intended the phrase “my wife” to change meaning from Eileen to
Myrna, Holloway and Pinckney together compel the conclusion that its meaning remained
the same.
The Beneficiaries’ reading also presents a dilemma that is at odds with the holding
of Pinckney: if “my wife” is merely a guideline and Myrna had predeceased Mr. Aaron
and he remarried, it might be said that the provision containing “[i]f my wife survives me”
was somehow resurrected to apply to the new wife. Without any clarification or other sign
of intent, the presumption that Mr. Aaron intended to refer to his wife at the time of
execution cannot be overridden. Moreover, the cases cited by the Beneficiaries are
unhelpful in ascertaining Mr. Aaron’s intent. The discussion of the meaning of the word
“wife” in Wright v. State, 198 Md. 163 (1951), centered on the validity of a divorce in a
criminal bigamy case. In re Atwood’s Trust, 114 N.W.2d 284 (Minn. 1962), involved a
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trust in which the settlor did not define the word “wife.” None of the other cases upon
which the Beneficiaries rely provide support for their argument that, where a settlor
expressly defines the term “my wife,” and in the absence of other evidence, the meaning
of the word “wife” automatically changes if a settlor remarries.
In light of this precedent, nothing in the record convinces us that Mr. Aaron intended
to refer to Myrna with the unmodified phrase “my wife” in Section 13.04. In their reply
brief in this Court, the Beneficiaries admonish us not to focus, as they believe the Court of
Special Appeals did, on a single, solitary sentence at the beginning of the Trust Agreement,
especially without considering the surrounding circumstances and subsequent
modifications to the Trust. As the Court of Special Appeals explained, however, Article
Two is merely the “clearest expression” of Mr. Aaron’s intent, and, when viewed in light
of the other changes he made—for instance, his practice of repeatedly clarifying to whom
he was referring in the Eleventh Amendment—it becomes clear that “my wife” meant
Eileen, and Eileen alone.
Even if we were to accept the Beneficiaries’ argument that Mr. Aaron’s
overwhelming intent was to provide adequately for his descendants, and that providing for
both a living wife and the Family Foundation would undermine that intent, the
Beneficiaries still must demonstrate that Mr. Aaron meant any living wife rather than
Eileen specifically. The Beneficiaries have not done so, especially given the express
definition in Article Two and evidence of his intent derived from the substantial provisions
made for Myrna elsewhere in the Trust Agreement.
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IV.
Conclusion
For the reasons stated above, we hold that Mr. Aaron expressed a reasonably clear
intention that the phrase “my wife” as used in Section 13.04 referred to his first wife,
Eileen, rather than his second wife, Myrna. As such, the distribution to the Foundation did
not lapse, and the circuit court correctly accepted the Trustees’ proposed restatement of the
Trust with respect to that issue. Accordingly, we affirm.
JUDGMENT OF THE COURT OF
SPECIAL APPEALS AFFIRMED.
COSTS TO BE PAID BY
PETITIONERS.
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