Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County No. 37-2008-00151033- PR-TR-CTL, Julia C. Kelety, Judge.
NARES, J.
After decedent John Joseph Carolan's will was admitted into probate, and Cherie Mathews was appointed executor of Carolan's estate, Cathy A. Feneis and Barbara Garusi filed a petition alleging that a previous trust executed by Carolan, called the Carolan Family Trust (the trust), was never properly revoked, Carolan's assets were property of the trust, and Feneis and Garusi, as successor cotrustees and beneficiaries of the trust, were entitled to those assets. Mathews filed an objection to the petition, asserting that under the case Gardenhire v. Superior Court (2005) 127 Cal.App.4th 882 (Gardenhire), the will acted as a revocation of the trust. The court denied Feneis and Garusi's petition, finding that the will expressed an intent to revoke the trust and to distribute Carolan's assets pursuant to its terms.
Feneis appeals, asserting (1) the facts of this case are distinguishable from the Gardenhire decision, (2) the court misapplied the Gardenhire decision, and (3) public policy demands a bright-line rule on the means by which a will may revoke a trust. We affirm.
Garusi is not a party to the appeal.
FACTUAL AND PROCEDURAL BACKGROUND
A. Factual Background
On April 3, 2002, Carolan executed the trust as trustor, designating himself as trustee and beneficiary during his lifetime. Garusi, his stepdaughter, and Feneis, his step grand daughter, were designated as successor trustees of the trust in the event of his death, incompetence, or disability, and were the beneficiaries upon his death. The trust listed assets of the trust estate as two accounts, one at Bank of America and one at USE Credit Union. However, the bank accounts were never transferred to the trust.
Article 3.1 of the trust provided the method of revocation of the trust during Carolan's lifetime, stating:
"During the Trustor's lifetime, this trust may be revoked in whole or in part, or amended, by sending a written instrument signed by the Trustor to the Trustee. On revocation, the Trustee shall promptly deliver to the Trustor all, or the designation portion, of the Trust assets." (Italics added.)
In January 2005 the then-80-year-old Carolan was admitted to the Veteran's Home in Chula Vista, California. At the time of admission, he completed a questionnaire, which included a question asking if he had a living trust. Carolan answered "No" to this question. He did list his assets as including the Bank of America and USE Credit Union accounts. He also listed his 2002 Buick as an asset.
On October 17, 2006, Carolan executed a will drafted by Senior Citizen's Legal Services (the will). In the first paragraph of the will, Carolan declared:
"I, JOHN JOSEPH CAROLAN, a resident of San Diego County, State of California, being of lawful age and of sound mind, and not being actuated by any duress, menace, fraud or undue influence, hereby make, publish, and declare this to be my Last Will and Testament. I hereby revoke all Wills and Codicils previously made by me."
The second article of the will provided:
"It is my intention to dispose of all of my property, real, personal and mixed, tangible and intangible, wherever situated, which I have the power to dispose of by this Will."
The fourth article provided for the disposition of the estate, giving 80 percent to Children's Hospital in San Diego, and 20 percent to "my friend, Cherie Mathews." Cherie Mathews was nominated as executor of his estate.
At the time Carolan executed his will, his assets consisted of the Bank of America and USE Credit Union accounts, totaling approximately $103,000, and an automobile.
B. Procedural Background
Carolan's will was admitted into probate and Cherie Mathews was appointed executor of the estate. Thereafter, Feneis and Garusi filed a petition to determine ownership of estate property, alleging the bank accounts were trust property, and they, as cotrustees of the trust, were owners of the accounts. Mathews, acting as executor, filed an objection, asserting the will had revoked the trust. Feneis and Garusi filed a response, arguing the will did not a manifest a clear and unambiguous intent to revoke the trust.
At the hearing on Feneis and Garusi's petition, the court found the Gardenhire case was on point and that the will acted as a proper revocation of the trust under Probate Code section 15401, subdivision (a)(1). The court found that by executing the will Carolan expressed his intent to dispose of his assets in the manner expressed in that document. In doing so, the court noted that given Carolan's living situation and his limited assets, it appeared he intended to dispose of all of his assets through the will. The court noted it was unlikely he did not intend to dispose of the largest assets (the bank accounts) and would not have spent the money to prepare a will only to dispose of his car.
All further statutory references are to the Probate Code.
DISCUSSION
A. Construction of Wills and Trusts
" 'In construing trust instruments, as in the construction and interpretation of all documents, the duty of the court is to first ascertain and then, if possible, give effect to the intent of the maker.' [Citations.] 'The interpretation of a written instrument, even though it involves what might properly be called questions of fact [citation], is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. [Citations.] Extrinsic evidence is "admissible to interpret the instrument, but not to give it a meaning to which it is not reasonably susceptible" [citations], and it is the instrument itself that must be given effect. [Citations.] It is therefore solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence.... "An appellate court is not bound by a construction of the contract based solely upon the terms of the written instrument without the aid of evidence [citations], where there is no conflict in the evidence [citations], or a determination has been made upon incompetent evidence [citation]." [Citations.]' [Citation.]" (Gardenhire, supra, 127 Cal.App.4th at p. 888.)
B. Analysis
Section 15401, subdivisions (a)(1) and (2) provides:
"(a) A trust that is revocable by the settlor may be revoked in whole or in part by any of the following methods: [¶] (1) By compliance with any method of revocation provided in the trust instrument. [¶]
(2) By a writing (other than a will) signed by the settlor and delivered to the trustee during the lifetime of the settlor. If the trust instrument explicitly makes the method of revocation provided in the trust instrument the exclusive method of revocation, the trust may not be revoked pursuant to this paragraph." (Italics added.)
In Gardenhire, supra, 127 Cal.App.4th 882, the decedent created a trust in which she was settlor, trustee, and income beneficiary during her lifetime. On her death, the trust assets were to be distributed to a named hospital, in trust for three individuals. The trust provided for revocation as follows: " 'While living, the Trustor may at any time and from time to time by written notice signed by the Trustor and delivered to the Trustee: [¶] A. Revoke or change the interest in any trust... of any beneficiary.... [¶] B. Amend any provision of this Declaration.... [¶] C. Revoke in whole or in part any trust or trusts created by or to be created pursuant to this Declaration. [¶] D. Withdraw all or any part of the Trust Estate.' " (Id. at p. 886, fn. omitted.) Subsequently, the decedent executed a will. The will did not mention the trust, but stated it was the decedent's intent " 'to dispose of all real and personal property which I have the right to dispose of by Will....' " (Ibid.)
After the decedent's death, one of the beneficiaries under the will sought a determination that decedent had revoked the trust by will before she died and an order transferring legal title to the property from the trust to decedent's estate. Gardenhire, as trustee of the trust, filed a motion for summary judgment, seeking a determination that the decedent could not revoke the trust by a will. The trial court denied the motion, and Gardenhire petitioned for a writ of mandate. (Gardenhire, supra, 127 Cal.App.4th at pp. 886-887.)
The Court of Appeal denied the petition. In doing so, the Gardenhire court considered whether the revocation provision in the trust instrument authorized revocation by will. (Gardenhire, supra, 127 Cal.App.4th at pp. 886-887.) The court concluded "that because [the decedent] did not limit or qualify the term 'written notice,' she authorized revocation via any writing that unambiguously manifested her intent to revoke, including a will. We find significant support for such broad latitude in the fact that she named herself the trustee. The trust allowed [the decedent] to revoke simply by giving herself written notice of her intent to do so. Since she could not be mistaken about her own intent no matter how she chose to manifest it in writing, the broad, unqualified language of the trust reasonably implies that she did not intend to restrict the form of written notice or the nature of the documents used to provide it. Rather, any writing that unambiguously manifested her intent would do." (Id. at p. 888.)
The Court of Appeal in Gardenhire also rejected the argument that section 15401 required that a decedent specify in the trust document that the trust may be revoked by a later will. As the Gardenhire court explained: "[S]ection 15401, subdivision (a)(1) allows a trust to provide any method of revocation. If the trust is silent and does not provide a method, then section 15401, subdivision (a)(2) allows revocation by a writing, other than a will, signed and delivered by the trustor to the trustee during the trustor's lifetime. If the trust is not silent and instead provides a method of revocation, then section 15401, subdivision (a)(2) is inapplicable. On its face, the statute does not require that a trust contain a specific and express provision authorizing revocation by will. Nor does subdivision (a)(2) represent a proviso to subdivision (a)(1) to the effect that although a trust may provide any method of revocation, if the trustor wants to allow revocation by will, then he or she may not use general language, such as written notice, that would necessarily encompass[] a will; rather the trustor must instead expressly specify that a will can constitute written notice. Moreover, we do not find the statute ambiguous concerning whether subdivision (a)(1) implicitly requires an express provision if a trustor wants to authorize revocation by will." (Gardenhire, supra. 127 Cal.App.4th at p. 894, fns. omitted.)
In this case, as in Gardenhire, the trust allowed for revocation "by sending a written instrument signed by the Trustor to the Trustee...." Because it did not specify the method of written notice, a later will that expressed an intent to revoke the trust, delivered to Carolan as the trustee, would suffice. As the court properly found, as did the Court of Appeal in Gardenhire, that intent was unambiguously stated in Carolan's will, which expressed an intent to dispose of all of his property through that will. That intent is further bolstered by the fact he never transferred the bank accounts into the trust, and, upon admission to the Veteran's Home, denied having a trust.
Following oral argument in this matter, we requested supplemental briefing to address the effect, if any, of Carolan's failure to fund the trust on the issues raised by the appeal. With the exception of Mathew's assertion the failure to fund the trust provides further evidence of Carolan's intent to dispose of his assets by way of the later will, both parties agree that the failure to fund the trust has no impact on this appeal.
Feneis attempts to distinguish Gardenhire by the fact that in Gardenhire the later will referenced a specific asset that had previously been a part of the trust, whereas here the will did not specify any particular assets. However, this factual difference does not assist Feneis. The Gardenhire decision was not based upon a reference to property contained in the will revoking the trust. Rather, the court based its holding on the fact the will unequivocally changed the distribution of the decedent's assets and was done so in a manner consistent with the revocation provision of the trust.
Feneis also asserts the court misapplied Gardenhire because it (1) did not find an unambiguous manifestation of an intent to revoke the trust, (2) based its decision on the size of Carolan's estate, and (3) applied the wrong intent requirement. Thesecontentions are unavailing.
The court did find that Carolan manifested an unambiguous intent to revoke the trust. This was based upon the language of the will that, similar to the will in Gardenhire, expressed his intent to dispose of all his property by the will.
The court also did not improperly base its decision on the size of Carolan's estate. Rather, the court's comments upon which Feneis focuses were comments made by the court in attempting to discern Carolan's intent by reviewing Carolan's situation at the time he executed the will. The court pointed out his limited assets and his expressed desire to dispose of all of his property through his will. The court was merely commenting that it thought it unlikely Carolan would prepare a will just to dispose of his automobile, as opposed to all of his assets, including the bank accounts.
Finally, the court did not apply the wrong intent requirement. Feneis asserts the court improperly focused on Carolan's intent as to how he would distribute his assets, instead of on his intent to revoke. However, the court (as did the court in Gardenhire)properly considered the language of the will and its expressed intent to dispose of all assets via that will as evidence of an intent to revoke the prior will.
Feneis last argues the Gardenhire decision should be limited to a holding that a will may only revoke a trust if it "mentions particular trust assets or references the trust itself." According to Feneis, "public policy demands that [Gardenhire] be narrowly construed to apply only to similar facts."
However, as discussed, ante, the court in Gardenhire did not base its holding on the fact the will specifically referred to the trust or particular trust assets. Rather, the court found that under section 15401, subdivision (a)(1), if the trust did not limit the type of writing that could serve as a notice of revocation, a will delivered to the trustee was sufficient notice of an intent to revoke the trust.
Feneis asserts that if Gardenhire's holding that a will may revoke a trust is allowed to stand, "dire consequences" will result, with estate plans at risk of "being undermined by 'whim, caprice, momentary indecision, or of undue influence by other persons.' " However, wills drafted as a result of undue influence are still subject to attack. Further, there is no evidence in this case that the provisions of Carolan's will did not reflect his careful consideration or actual intent. Moreover, Feneis's concerns are better addressed to the Legislature who could require, but have not, revocation by will only if the trust expressly allows such a revocation, and/or where the will refers to the trust or trust assets. Section 15401 as currently written has no such limitations.
DISPOSITION
The judgment is affirmed. Mathews shall recover her costs on appeal.
WE CONCUR: McConnell, P. J., McIntyre, J.