Opinion
No. 4-523 / 04-0110
Filed December 8, 2004
Appeal from the Iowa District Court for Mitchell County, Stephen P. Carroll, Judge.
Co-executors of decedent's estate appeal from a district court order that concluded the surviving spouse had not yet made an election to take against the will, and that granted the surviving spouse an extension of time for making such an election. AFFIRMED.
Mark L. Walk of McKinley, Folkers, Walk Murphy, P.L.C., Osage, for appellants.
Patrick B. Byrne, Clear Lake, for appellee conservator.
Heard by Huitink, P.J., Miller, and Vaitheswaran, JJ., and Brown, S.J., and Hendrickson, S.J.fn_
Senior judges assigned by order pursuant to Iowa Code section 602.9206 (2003).
Two issues are presented in this appeal from the probate proceedings in the estate of C. Hugh Neeley. Both concern the application of the statute controlling the election of a surviving spouse respecting the decedent's will, Iowa Code section 633.237 (2003). First, did decedent Neeley's surviving spouse make a de facto election to take under the decedent's will by her conduct? Second, did the court err in extending the time for the surviving spouse to elect to take against or under the will? We believe the district court was correct as to both issues and affirm.
I. Background facts and proceedings.
The decedent, C. Hugh Neeley, died May 5, 2003 and was survived by his spouse of some sixteen years, Virginia Neeley. This was a second marriage and they had no children of their own. Hugh had four children by his previous marriage, all of whom survived him. His will was admitted to probate on May 12, 2003 and two of his children, Garry Neeley and Keith Neeley, were qualified and appointed as co-executors.
Prior to Hugh and Virginia's marriage, they entered into an antenuptial agreement. The agreement maintained the separate nature of their respective property, but provided Virginia with the life use of a home and household goods, which would terminate upon remarriage or if Virginia ceased living in the home. The will made the same provision, and in addition, established a trust for Virginia's benefit in the amount of $100,000. The trust would also terminate on Virginia's remarriage or her death, and in that event the remaining trust funds would go to Hugh's four children.
After Hugh's death, Virginia's daughter, Diana Kramersmeier, was appointed as Virginia's conservator and continues to act as such at the relevant times here.
There are obviously bad feelings between Virginia and her conservator on the one hand, and the Neeley children on the other. Virginia made an application to have the Neeley sons removed as co-executors. This was denied by the court following a hearing on August 11, 2003. On August 12, the co-executors served a Notice To Surviving Spouse To Elect, as provided by Iowa Code section 633.237, notifying Virginia she had four months in which to elect to take against the will. This was followed by Virginia's motion to adjudicate law points, which sought a declaration that the antenuptial agreement was invalid. Because the court determined resolution of the issue required additional facts and would require a declaratory judgment action, the motion was denied.
In December 2003, Virginia made application to the court to extend the four month period for her to elect to refuse to take under the will until a determination could be made as to the validity of the antenuptial agreement. The co-executors resisted the application, claiming Virginia had in fact made an election to accept the will by her conduct and also by statements made by her conservator in the hearing on the application to remove the co-executors. They also claimed the court had no authority in these circumstances to extend the time for the election or, alternatively, there was no good cause for doing so. Following a hearing, the court filed its ruling which discussed and rejected the fiduciaries' challenges and granted the application.
II. Standard of review.
Our review of probate matters, subject to certain exceptions not applicable here, is de novo. Iowa Code § 633.33. However, to the extent our decision requires us to determine the correctness of the district court's interpretation of a statute, we review for errors at law. In re Estate of Thomann, 649 N.W.2d 1, 4 (Iowa 2004).
III. Surviving Spouse's de facto election to take under the will.
Our probate scheme affords to a surviving spouse the protection of an opportunity to reject the terms of the deceased spouse's will, and elect to receive a statutory share of the estate in lieu of the provisions of the will. Iowa Code §§ 633.236-.246. The procedure for making this election is found in Iowa Code section 633.237. However, the statutory process is not exclusive. A surviving spouse may be deemed to have made the election by conduct which unequivocally demonstrates such a choice. In re Estate of Epstein, 561 N.W.2d 82, 85 (Iowa Ct.App. 1996). To make such a de facto election, the surviving spouse must be aware of the extent of the estate, know that she is choosing between two inconsistent rights, and then intend to make such a choice. Id.; Schubert v. Barnholt, 177 Iowa 232, 238, 158 N.W. 662, 664 (1916). These elements must be shown by clear and satisfactory evidence. Epstein, 561 N.W.2d at 85; In re Estate of Heuberger's, 191 Iowa 59, 61, 181 N.W. 773, 773 (1921). With these rules in mind, we now analyze the contentions of the co-executors.
A. Testimony of conservator. The co-executors first claim Virginia elected to take under the terms of the will as a result of testimony by her conservator at the hearing on Virginia's application to disqualify the co-executors. Diana Kramersmeier testified as follows:
Q. (by Mr. McKinley, attorney for co-executors) Am I to understand then, Mrs. Kramersmeier, that you will elect on behalf of your mother to take under the Will, the terms of the Will? A. Pardon?
Q. You intend to elect to take under the terms of the Will. Is that what you're telling me? A. Just what Hugh wanted her to have.
Q. In other words, if presented with an election at this point, you will elect to take under the terms of the Will on behalf of your mother? A. I'm not familiar with all these terms that you're using.
Q. Well, you have an option — there is an option of taking or not taking under the terms of the Will. I think you have stated that you have no intent of asking for more than the provisions that are set out in Mr. Neeley's Will. A. Just so Mom gets what Hugh wanted her to have.
Q. So you will be taking under the Will not contrary to the terms of the Will. A. Yes.
Q. Okay.
The district court concluded this testimony was ambiguous and did not rise to the level of clear and satisfactory evidence that Virginia's conservator was making a binding election to take under the will for her ward. We agree. The statements indicate the conservator did not have a clear understanding of the principles about which she was being asked, and there is no other evidence regarding Virginia's, or her conservator's, knowledge of the options available to her. In addition, no inventory of the estate property was yet on file and there is no showing that Virginia was aware of the extent of the assets.
We also note, as did the district court, that Iowa Code section 633.647(6) requires that a conservator seek and obtain permission from the court in order to make an election for the ward to take against the will under section 633.236, and there was no such application or order in this case. The district court held permission of the court was required for the conservator to either accept or reject the terms of the will. It is not clear, however, whether court permission would be required for the conservator to commit her ward to take under the will by simply not electing within the four month period, thus triggering the automatic election provision of section 633.237. If the court must authorize the election in both cases, it could preclude Virginia's conservator from making a binding election for her by the conservator's testimony.
Iowa Code section 633.236 states:
When a married person dies testate as to any part of the person's estate, the surviving spouse shall have the right to elect to take against the will under the provisions of sections 633.237 to 633.246. If the surviving spouse has a conservator, the court may authorize or direct the conservator to elect to take under or against the will as the court deems appropriate under the circumstances.
(emphasis added).
In either event, we conclude the district court was correct in ruling the conservator did not make an election for Virginia to take under her spouse's will.
B. Surviving spouse's continued occupancy of home. The co-executors also contend the fact that Virginia continued to live in the home after her spouse's death shows she has elected to accept the provisions of the will. As noted, both the antenuptial agreement and the will gave Virginia the right to occupy the home and use the household goods for her life, under certain conditions. After her husband's death, she continued to reside in the home for about four and one-half months before she moved out.
The co-executors do not cite any authority for this proposition, and our research does not disclose any situations where continued occupancy for such a short period would be tantamount to an election to accept the will. See Phillips v. Phillips, 204 Iowa 78, 80, 214 N.W. 548, 549 (1927) (holding the use of land and rents and sale of personal property over a three year period was an election to take under will); Bullock v. Smith, 201 Iowa 247, 249, 201 N.W. 241, 242 (1926) (citing general rule that exercise of control by widow over property devised to her as life estate held not election to take under will).
The district court held that occupying the home for such a limited period did not express clearly and satisfactorily that Virginia intended to accept the provisions of the will. We agree with this conclusion.
C. Attempt to remove co-executors. The fiduciaries also state in their brief that Virginia's attempt to remove the co-executors is further evidence of her intent to accept the provisions of the will. They cite no authority for this proposition and do not argue it further. We deem it waived. Iowa R. App. Proc. 6.14(1)( c).
IV. District court's authority to extend time in which to make election under or against the will.
The co-executors' contend that the district court had no authority to extend the time within which Virginia must make an election regarding the will. This issue involves interpretation of the statute involved and thus we review the court's decision for legal error. The overriding goal of statutory interpretation is to determine the intent of the legislature. Wellsburg-Steamboat Rock Cmty Sch. Dist. v. Iowa Dept. of Ed., 523 N.W.2d 749, 751 (Iowa 1994). In doing so
[w]e consider not only the language of the statute, but also its subject matter, the object sought to be accomplished, the purpose to be served, underlying policies, remedies provided, and the consequences of various interpretations. We will not construe a statute in a way that would produce impractical or absurd results. Finally, when searching for legislative intent, we look at the whole statute and not the separate parts.
United Fire Casualty Co. v. Acker, 541 N.W.2d 517, 519 (Iowa 1995).
To understand the arguments, we feel it is necessary to set out Iowa Code section 633.237 in its present form in full.
If a voluntary election to take or refuse to take under a will has not been filed by a surviving spouse or the spouse's conservator, if any, within two months of the date of the second publication of notice of admission of the will to probate, and the surviving spouse is not the executor of the will, the executor shall cause to be served a written notice upon the surviving spouse and the spouse's conservator, if any, in the manner directed by the court, advising the surviving spouse and the spouse's conservator that the will of the decedent has been admitted to probate, stating the name of the court where the will was admitted and the date when the will was admitted to probate, and notifying the spouse and the spouse's conservator that unless within four months after service of the notice, the spouse or the spouse's conservator files an election in writing with the clerk of that court refusing to take under the will, the spouse shall take under the will. If the surviving spouse or the spouse's conservator files an election to take under the will at any time the requirements of this section for serving notice are waived. If within the period of four months an affidavit is filed setting forth that the surviving spouse is incapable to make the election and does not have a conservator, the court shall determine whether there shall be an election to take under or against the will in accordance with section 633.238 as the court deems appropriate under the circumstances. The court on application may, prior to the expiration of the period of four months, for cause shown, enter an order extending the time for making the election.
If the surviving spouse is an executor of the will and fails, within four months after the date of the second publication of notice of admission of the will to probate, to file with the clerk of the court an election to refuse to take under the will of the deceased, it shall be conclusively presumed that the survivor consents to the provisions of the will and elects to take under it. However, the court on application may, prior to the expiration of the period of four months, on cause shown, enter an order extending the time for making the election.
Iowa Code § 633.237 (emphasis added).
The co-executors argue the italicized sentence in the first unnumbered paragraph only refers to the circumstance immediately preceding it: where the spouse is not the executor and an affidavit is timely filed stating the surviving spouse is incapable of making the election and has no conservator. In support of this contention, they urge that to hold otherwise, as the district court did, would result "in uncertainty in the administration of this estate and loss and injustice to innocent parties who might have to wait several years for the Court to determine the validity of the pre-nuptial contract." They further urge, citing N. William Hines, Freedom of Testation and the Iowa Probate Code, 49 Iowa L. Rev. 724, 731 (1964), the court's ruling is contrary to the legislative intent to "depict free testation as the general rule and the restrictions as exceptions thereto."
The surviving spouse and the district court, however, construed the statute so that the final italicized sentence also modifies the other circumstances referred to in that paragraph. Thus, their construction would also allow the district court to extend the time in the event the surviving spouse is not the executor and is capable of making the election, either with or without a conservator.
For the following reasons, we agree with the district court's decision. First, we note this statute, prior to 1984, consisted of only one paragraph containing the present provisions for election by the surviving spouse both where she was the executor and was not the executor. It was amended in 1984 by separating out the provision where the surviving spouse is the executor of the will and making it the present second unnumbered paragraph. 1984 Iowa Acts, ch. 1080, § 3. Significantly, in doing so, the legislature also added the provision allowing the court to extend the time for cause where the spouse is the executor, which was not present in the original statute. We think this shows a clear legislative intent to assure the election time limit for all of the alternatives dealt with in both unnumbered paragraphs of section 633.237 may be extended for cause. The addition of the delay provision where the spouse is an executor undercuts the argument that the legislature only intended delay be available where the spouse was under some disability. Furthermore, had the legislature intended to restrict the time extension to only one part of the first unnumbered paragraph, it would logically have made a separate paragraph of that part.
The references to the surviving spouse's conservator in the first unnumbered paragraph were added by amendment in 1988. 1988 Iowa Acts ch. 1064, § 2.
We also fail to discern a logical reason to limit the time extension provision to the single circumstance proposed by the co-executors. Certainly, there will be occasions when persons who are capable of making decisions will have a legitimate need to extend the time for making that decision. For example, under the co-executors interpretation, a person capable of electing but who wished to challenge an antenuptial agreement before making the election would, as a practical matter, be foreclosed from doing so because of the unrealistic time constraint imposed by a four-month absolute lid on the decision making process. So too for various other legitimate reasons for extending the time, such as a dispute as to the value of the estate, or difficulty in discovering assets. The potential unfairness lies partially in the fact the process is controlled by those who also control the estate; the executors initiate the limited time period to make the election. We believe the legislature recognized a safety valve was needed in all of the circumstances described in the statute.
As noted by the district court, the spouse's position is reinforced by a leading authority on Iowa probate.
Notwithstanding the foregoing procedures, Section 633.237 expressly authorizes the court, for good cause shown, to extend the period during which an election may be filed if an application for an extension is filed with the court prior to the expiration of the four-month period.
Sheldon Kurtz, Kurtz on Iowa Estates, § 8.3 at 299 (3rd ed. 1995). This broad statement, which expresses no limitation on the election delay option of section 633.237, supports the district court's decision.
Even if the extension is authorized, the co-executors dispute there was good cause demonstrated by the surviving spouse for the extension. Respecting this claim, the district court stated:
Professor Kurtz also notes in his treatise, "no reported cases specifically identify what causes would be sufficient to justify an extension under this rule." Kurtz on Iowa Estates, section 8.3, at 299. I conclude, however, that good cause exists in this case. The Conservator would like the Court to determine the validity of the Antenuptial Agreement. If the Antenuptial Agreement is valid, then her Ward must take in accordance with that agreement. If that Antenuptial Agreement is invalid, however, then the Ward would have the ability to elect to take or not to take under the Will. Until the issue of the validity of the Antenuptial Agreement is determined, the Conservator does not know if she even has the option to take a statutory election. The need for a determination of the validity of the agreement, I conclude, constitutes good cause to extend the election period until after disposition has been made of the issue of whether the Antenuptial Agreement is valid.
We agree.
We recognize this result may well involve delay in the administration of this estate, but litigation which prolongs the estate process is not unusual. Intrafamily disputes are frequent and it is often necessary to resolve the substantial rights of parties before an estate may be closed. We recognize the right of a spouse to reject the will does restrict the freedom of testation. However, we think it is justified for the protection of surviving spouses and required under the circumstances. As Professor Hines noted "[t]his right has always existed in Iowa in one form or another." Hines, Freedom of Testation and the Iowa Probate Code, 49 Iowa L. Rev. at 731.
V. Summary and disposition.
We agree with the district court that the surviving spouse has not made an election to take under the will of her deceased spouse. We also agree the district court had the authority under Iowa Code section 633.237 to extend the time within which the surviving spouse must elect to take against or under the provisions of the will of her deceased spouse, and that good cause existed for the exercise of that authority. Consequently, we affirm the district court.