No. 90-537
IN THE SUPREME COURT OF THE STATE OF MONTANA
IN THE MATTER OF THE ESTATE OF
ALICE LUND LETTENGARVER, JUN 3 8 1991
a/k/a ALICE B. LUND,
Deceased.
APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable Peter L. Rapkoch, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Stephen C. Moses, Moses Law Firm,
Billings, Montana
For Respondent:
William E. Berger, Wilkins & Berger,
Lewistown, Montana
Submitted on Briefs: March 7, 1991
Decided: June 18, 1991
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
The personal representatives of the estate of Alice Lund
Lettengarver, also known as Alice B. Lund, appeal from an order of
the Tenth Judicial District Court, Fergus County, awarding family
and homestead allowances and exempt property to the surviving
spouse. The surviving spouse cross appeals fromthe court's denial
of his petition for an elective share of the augmented estate. We
affirm.
The issues raised by the parties overlap a great deal. We
therefore frame the questions that will be considered on appeal as
follows:
1. Did the District Court abuse its discretion in awarding
the surviving spouse a family allowance?
2. Did the District Court err in determining the ownership
of the home in Lewistown?
3. Did the District Court properly determine and distribute
the augmented estate?
Alice Lund Lettengarver (decedent) died intestate on August 4,
1986. She was survived by her husband, William Lettengarver
(surviving spouse), and two children of previous marriages, Dolly
V. Smith (daughter) and Monte Lund (son).
On August 15, 1986, letters of appointment issued, naming the
daughter and son as joint personal representatives of the estate.
That same day, the surviving spouse filed a renunciation of claim.
The surviving spouse subsequently moved to be released from the
renunciation and petitioned to take a one-third elective share of
the augmented estate. The daughter and son waived their objections
to the surviving spouse's withdrawal of the renunciation.
Following a hearing held September 21, 1988, the District
Court issued an order in which it determined the nature of the
ownership of several pieces of property left by the decedent. The
court found that the surviving spouse and the decedent had held a
contract for deed for the sale of a ranch as joint tenants with
right of survivorship. Accordingly, it concluded that the
surviving spouse, as the sole surviving tenant, was entitled to the
proceeds from the contract.
The court also determined that the surviving spouse had no
interest in the home in Lewistown in which he and the decedent had
resided before her death and in which the surviving spouse
continued to reside during the administration of the estate. The
title to the home had been deeded solely to the decedent, who in
turn deeded the property to herself and her daughter as joint
tenants with the right of survivorship. The District Court
concluded, however, that the value of the home should be included
in the augmented estate because the conveyance had been made
without consideration. The court similarly concluded that other
property that the decedent had deeded to the daughter would be
included in the augmented estate because, during her marriage to
the surviving spouse, the decedent had transferred the property to
the daughter without consideration.
The court awarded the surviving spouse a $6,000 family
allowance, a $20,000 homestead allowance, and $3,500 in exempt
property. It ordered the personal representatives to compute the
augmented estate and the surviving spouse's elective share.
When the parties could not reach agreement on the calculation
of the augmented estate, they petitioned the court to compute the
estate for them. The court did so, determining that the surviving
spouse's one-third share of the augmented estate totalled $97,129.
The court refused to award the surviving spouse that amount,
however, because it found that the date-of-death balance of the
contract for deed received by the surviving spouse through joint
tenancy exceeded the one-third share of the augmented estate. The
court therefore denied his petition for an elective share. Both
parties appeal.
The personal representatives contend that the District Court
abused its discretion in awarding the surviving spouse a family
allowance of $6,000. We do not agree.
The surviving spouse may be entitled to a family allowance
while an estate is administered. Section 72-2-803 (I), MCA,
provides :
In addition to the right to homestead allowance and
exempt property, if the decedent was domiciled in this
state, the surviving spouse and minor children whom the
decedent was obligated to support and children who were
in fact being supported by him are entitled to a
reasonable allowance in money out of the estate for their
maintenance during the period of administration, which
allowance may not continue for longer than 1 year if the
estate is inadequate to discharge allowed claims. The
allowance may be paid as a lump sum or in periodic
installments.
The amount awarded as a family allowance depends on the
circumstances of each case. Uniform Probate Code 5 72-2-803, MCA,
official comments. However, the personal representative may not
grant an allowance in excess of a lump sum of $6,000 or monthly
payments of $500 for one year. Section 72-2-804(1), MCA. A party
who disagrees with the amount of the family allowance granted by
the personal representative may petition the district court for a
larger or smaller sum. Section 72-2-804 (2), MCA. The district
court's decision regarding whether to grant an award and the amount
of the award will not be overturned absent a showing of an abuse
of discretion. In re the Estate of Glein, 162 Mont. 464, 467, 512
P.2d 1151, 1153 (1973).
In this case, the surviving spouse's standard of living
decreased during the administration of the estate because he lived
on only one-half of the proceeds received from the contract for
deed while the other half was placed in an escrow account. Under
these circumstances, the District Court did not abuse its
discretion in awarding a $6,000 family allowance.
The surviving spouse argues that the District Court erred in
concluding that he had no interest in the home in Lewistown. He
contends that he is entitled to at least a one-half interest in the
house because the property was purchased with proceeds from the
sale of property he owned with the decedent in joint tenancy. He
maintains that a resulting trust arose in his favor when the house
was purchased with joint tenancy funds but title to the house was
placed solely in the decedent's name.
u[P]roceeds of a sale of joint tenancy property pursuant to
a contract a r e held in joint tenancy." In re the Estate of
Rickner, 164 Mont. 51, 56, 518 P.2d 1160, 1162 (1974). If real
property sold under contract for deed was held in joint tenancy,
the contract itself and the proceeds generated by the sale are also
held in joint tenancy.
Although the proceeds from the sale are held in joint tenancy,
the parties are not limited in the manner in which they dispose of
the proceeds. Here, the parties purchased the home in Lewistown
with funds from the sale of ranch property held in joint tenancy.
They placed the title to the home, however, solely in the
decedent's name. Where a title is held by one party but the
consideration paid by another, a resulting trust arises in favor
of the latter. Section 72-33-218(1), MCA. A resulting trust does
not arise, however, where the party holding the title is the spouse
of the party providing the consideration. Section 72-33-218 (2)(b),
MCA. In such cases, a gift is presumed, a presumption that may be
overcome only with clear and convincing evidence. Lewis v. Bowman,
113 Mont. 68, 77-78, 121 P.2d 162, 167 (1942).
The surviving spouse testified that he allowed the decedent
to put the title to the house in her name to avoid a fight. He
also testified that the decedent agreed to grant him a life estate
in the property, which the decedent never did. The evidence
established that both parties paid for utilities and repairs on the
house, but that the decedent paid the taxes and insurance as well.
Under the circumstances, the surviving spouse failed to marshal1
clear and convincing evidence to rebut the presumption that he gave
his share of the house to the decedent as a gift. The District
Court did not err in determining that the surviving spouse had no
interest in the house.
The parties argue that the District Court failed to properly
calculate and distribute the augmented estate. The District Court
added one-half of the date-of-death balance of the contract into
the augmented estate. The personal representatives contend that
the entire value of the contract should have been incorporated into
the augmented estate while the surviving spouse argues that only
one-quarter of the contract should have been included.
Montana adopted the Uniform Probate Code in 1974. Uniform
Probate Code, ch. 365, 5 1, 1974 Mont. Laws 1378. The code
contains provisions for allowing a surviving spouse to elect a
one-third share of the augmented estate. sections 72-2-701through
-707, MCA. The augmented estate consists of the net probate estate
increased by (1) the value of certain lifetime transfers of
property made without consideration in money or money's worth by
the decedent during marriage to donees other than the surviving
spouse; and (2) the value of all property owned by the surviving
spouse and certain transfers of property made by the surviving
spouse during marriage to donees other than the decedent, to the
extent the owned or transferred property was derived from the
decedent. Section 72-2-705, MCA. The election is made from a
device called the augmented estate rather than from the probate
estate alone for two reasons:
(1) [T]o prevent the owner of wealth from making
arrangements which transmit his property to others by
means other than probate deliberately to defeat the right
of a surviving spouse to a share, and (2) to prevent the
surviving spouse from electing a share of the probate
estate when the spouse has received a fair share of the
total wealth of the decedent either during the lifetime
of the decedent or at death by life insurance, joint
tenancy assets and other nonprobate arrangements.
Uniform Probate Code 5 72-2-705, MCA, official comments.
In this case, the sole issue is what portion of a contract for
deed held by the decedent and the surviving spouse should be
included in the augmented estate where the contract is held in
joint tenancy with the right of survivorship. section 72-2-705,
MCA, which defines the augmented estate, provides in pertinent
part:
The augmented estate means the estate, reduced by funeral
and administration expenses, homestead allowance, family
allowances and exemptions, and enforceable claims, to
which is added the sum of the following amounts:
(3) the value of property owned by the survivinq spouse
at the decedent's death, plus the value of property
transferred by the spouse at any time during marriage to
any person other than the decedent which would have been
includable in the spouse's augmented estate if the
surviving spouse had predeceased the decedent, to the
extent the owned or transferred ~ropertvis derived from
the decedent by any means other than testate or intestate
succession without a full consideration in money or
money's worth. For purposes of this subsection:
(a) property derived from the decedent includes but is
not limited to . .
. any property held at the time of
decedent's death by decedent and the surviving spouse
with right of survivorship . . . .
(c) property owned by the surviving spouse as of the
decedent's death or previously transferred by the
surviving spouse is presumed to have been derived from
the decedent, except to the extent that the surviving
spouse establishes that it was derived from another
source. (Emphasis added.)
Under the statute, property held by the decedent and the
surviving spouse as joint tenants with the right of survivorship
is included in the augmented estate only to the extent that the
property was derived from the decedent without full consideration
in money or money's worth. Section 72-2-705 (3) , MCA. The statute
presumes that the property was derived from the decedent;
nonetheless, the surviving spouse may rebut the presumption by
establishing that the property was obtained from a different
source. Section 72-7-305(3)(c), MCA.
In the present case, the record established that the ranch
sold under the contract for deed was purchased at least in part
with funds gained from the sale of property owned solely by the
surviving spouse. The record also showed that the decedent
contributed her own money for ranch payments. Under the
circumstances, the District Court did not err in finding that the
parties contributed equally to the purchase of the ranch.
Nor did the District Court err in denying the surviving spouse
an elective share of the estate. Section 72-2-706 (I), MCA,
provides in pertinent part:
In the proceeding for an elective share, values included
in the auqmented estate which pass or have passed to the
survivins spouse, or which would have passed to the
spouse but were renounced, are applied first to satisfy
the elective share and to reduce any contributions due
from other recipients of transfers included in the
augmented estate. (Emphasis added.)
Thus, "the value of all property owned or transferred by the
surviving spouse that is derived from the decedent and included in
the augmented estate [should] first be applied against the elective
share . . . . Kurtz, The Augmented Estate Concept Under the
Uniform Probate Code: In Search of an Equitable Elective Share,
62 Iowa L.Rev. 981, 1046 (1977). Here, the surviving spouse's
elective share totalled $97,128 while one-half of the value of the
contract for deed amounted to $109,588. Consequently, the value
the surviving spouse received from joint tenancy property derived
from the decedent more than satisfied his one-third share of the
augmented estate.
The personal representatives argue that the District Court
erred in failing to distribute the remaining two-thirds of the
augmented estate to the son and daughter. We do not agree. The
augmented estate is merely an accounting device "designed to
protect a spouse of a decedent who was a domiciliary against
donative transfers by will and will substitutes which would deprive
the survivor of a 'fair sharet of the decedent's estate. " Uniform
Probate Code, title 72, ch. 2, part 7, part official comments. The
remaining heirs do not receive distributions from the augmented
estate.
Affirmed.
We Concur: H
chWief Justice
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