In re Barrish 1994 Trust

Filed 6/7/06 In re Barrish 1994 Trust CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

In 1994 Jack and Patrice Barrish (settlors), as husband and wife, executed a declaration of trust (Declaration) that created a revocable inter vivos trust (the Trust). Christ Unity Church appeals from that portion of a final order of distribution (judgment) decreeing that the settlors' specific bequest of their house to appellant was adeemed by its sale after the death of Jack Barrish but before the death of Patrice Barrish. We conclude that an ademption did not occur and therefore reverse the disputed portion of the judgment. We modify the judgment to direct the trustee to pay to appellant the identifiable proceeds of the sale of the house. As so modified, we affirm.

Factual and Procedural Background

The Declaration states that, upon the death of the surviving settlor, the trustee shall distribute the Trust estate pursuant to an attached schedule of beneficiaries. The schedule shows that appellant shall receive a "House and Lot located at 1650 10th Avenue, Sacramento, CA." Other beneficiaries are to receive a 1957 Ford Thunderbird, two bequests of $2,500 each, the settlors' personal effects exclusive of jewelry, and a gold chain bracelet. Although a separate attached schedule shows that the Trust estate contained additional assets, the Declaration does not include a residuary clause. The Declaration states that Tama-Lee Dane is the adopted daughter of Patrice Barrish, but she is not named as a beneficiary.

Concurrently with the execution of the Declaration, Patrice Barrish executed a will that refers to Tama-Lee Dane as her sole child. The will bequeaths certain personal property to Jack Barrish. It bequeaths the residue to the trustee of the Trust, "to be held and administered by the trustee according to the terms and conditions of that trust . . . ."

Jack Barrish died childless on March 27, 1999. Before his death, the settlors had agreed to sell the house in Sacramento. Escrow closed after his death on April 23, 1999. The property was sold for $257,500.

Patrice Barrish died on May 5, 2004. At the time of her death, she was estranged from her adopted daughter and had not had any contact with her for many years.

In June 2005 the successor trustee of the Trust, Paul D. Barrish, Sr. (the Trustee), filed a verified petition seeking instructions concerning the distribution of the Trust estate. When the petition was filed, the assets of the Trust were valued at approximately $595,000. The Trustee sought an order authorizing the distribution of the house sale proceeds ($257,500) to appellant. He alleged that the sale proceeds "were never spent, and are still available to pass on to [appellant]." The Trustee contended that the bequest of the house to appellant had not been adeemed by its sale in 1999.

The Trustee also sought an order authorizing the distribution of the residue of the Trust estate to himself. Although the Trustee noted that the Declaration did not contain a residuary clause, he declared that the settlors had told him that he "was to be the residuary beneficiary of their trust . . . ." However, the Trustee later filed points and authorities in which he requested that the residue be distributed under the laws of intestate succession to Tama-Lee Dane: "By law the proferred [sic] extrinsic evidence of the settlors' intent does not appear sufficient to override the default statutory provisions regarding intestate succession. Therefore, the Petitioner withdraws his proposed plan of distribution for the residue and requests court confirmation that the residue is distributable to Tama-Lee Dane, the adopted daughter of Patrice Barrish."

The probate court found that the Trustee's allegations in the petition are true. It determined that the bequest of the house to appellant had been adeemed by its sale in 1999: "The bequest of the settlors' house and lot . . . to [appellant] is deemed to be a specific bequest. Since the house and lot were sold during the settlors' lifetimes, this is an adeemed gift and nothing of the trust estate is to be distributed to [appellant]."

The probate court ruled that Tama-Lee Dane is "the lawful intestate heir of the settlors . . . ." It ordered that the residue of the Trust estate, including the proceeds from the sale of the house, be distributed under the laws of intestate succession to Tama-Lee Dane.

After the filing of appellant's opening brief, the Trustee informed this court that he would not be filing a respondent's brief and that he supported appellant's position. Tama-Lee Dane failed to file a brief.

The Bequest of the Settlor's House to Appellant

Was Not Adeemed by its Sale in 1999

The doctrine of ademption applies to specific gifts. (Estate of McLaughlin (1929) 97 Cal.App. 485, 488; see also Estate of Jones (1943) 60 Cal.App.2d 795, 797-798.) "A specific gift is a transfer of specifically identifiable property." (Prob. Code, § 21117, subd. (a).)[1] A general gift, on the other hand, "is a transfer from the general assets of the transferor that does not give specific property." (Id., subd. (b).) In determining whether a bequest is general or specific, "[t]he question is whether the testator intended to give a specific thing and that alone, or to give a bequest which, in any event, should be paid out of his general estate. In determining whether a bequest is specific or general, the fundamental and controlling factor is the intent of the testator at the time the will was drafted. [Citations.]" (Estate of Buck (1948) 32 Cal.2d 372, 374.)

" ' "Ademption of a specific legacy is the extinction or withdrawal of a legacy in consequence of some act of the testator equivalent to its revocation, or clearly indicative of an intention to revoke. The ademption is effected by the extinction of the thing or fund bequeathed, or by a disposition of it subsequent to the will which prevents its passing by the will, from which an intention that the legacy should fail is presumed." ' [Citation.]" (Estate of Mason (1965) 62 Cal.2d 213, 215.) Where, as here, there is no conflicting extrinsic evidence, we independently review the ademption issue. (Estate of Russell (1968) 69 Cal.2d 200, 213; Estate of Austin (1980) 113 Cal.App.3d 167, 170.)

Appellant contends that the trial court erroneously determined that the bequest of the settlors' house was adeemed by its sale in 1999. Appellant argues that the doctrine of ademption is inapplicable because the bequest was general instead of specific. Even if the bequest was specific, appellant maintains that the sale of the house did not result in an ademption. We need not consider whether the bequest was general or specific. Assuming that it was specific, there was no ademption.

"A change in the form of property subject to a specific testamentary gift will not effect an ademption in the absence of proof that the testator intended that the gift fail. [Citations.]" (Estate of Mason, supra, 62 Cal.2d at p. 215.) "In determining whether the change is in form only, California courts have lately tended to avoid strict rules of ademption; rather they look to the inferred or probable intent of the testator under the particular circumstances." (Estate of Austin (1980) 113 Cal.App.3d 167, 173.) On the other hand, "a specific testamentary gift is adeemed regardless of the testator's intention when the specific property has been disposed of by the testator and cannot be traced to other property in the estate [citations], or when the testator has placed the proceeds of such property in a fund bequeathed to another [citation] . . . ." (Estate of Mason, supra, 62 Cal.2d at p. 216.)

The record contains no proof that the settlors intended that their bequest of the house to appellant should fail because of the 1999 sale of that property. To the contrary, the absence of a residuary clause indicates that they did not intend that the bequest should fail. If such a failure occurred, the sale proceeds would be distributed according to the laws of intestate succession. "It is the strongly favored policy of the law that wills be construed in a manner that avoids intestacy. To this end, Probate Code section 21120 provides, 'The words of an instrument are to receive an interpretation that will give every expression some effect, rather than one that will render any of the expressions inoperative. Preference is to be given to an interpretation of an instrument that will prevent intestacy or failure of a transfer, rather than one that will result in an intestacy or failure of a transfer.' " (Estate of Goyette (2004) 123 Cal.App.4th 67, 74.)

Estate of Newsome (1967) 248 Cal.App.2d 712, is a relevant authority. In Newsome the testator devised certain parcels of real property to his wife and other parcels to his daughter. In the event that the testator predeceased his wife, his will contained no residuary clause. Following the execution of his will, the testator sold one of the parcels devised to his wife and deposited the sale proceeds in a savings and loan account. The testator predeceased his wife, and the daughter contended that the devise of the sold parcel had been adeemed by its sale.

Based on the absence of a residuary clause, the appellate court concluded that there was no ademption: "It is settled in California that whether an ademption occurs depends upon the intention of the testator that the devise or bequest should fail. [Citations.] . . . Where there is no residuary clause . . . it may be inferred the testator intended to dispose of all of his estate through the specified devises and bequests and not to cause any thereof to fail by his transmutation of the property devised or bequeathed. [Citations.]" (Estate of Newsome, supra, 248 Cal.App.2d at p. 714.)

As in Newsome, it may be inferred from the absence of a residuary clause that the settlors did not intend that the bequest of their house to appellant should fail because of its sale. Since the sale proceeds "were never spent, and are still available to pass on to [appellant] [,]" the probate court erred in ruling that the bequest was adeemed.

The probate court relied on Estate of Worthy (1988) 205 Cal.App.3d 760, but this case does not support its ruling. In Worthy the executrix of an estate filed a petition to determine heirship. She claimed that a devise of real property in the testatrix's will and codicil had been adeemed because the testatrix had sold the property before her death. The codicil contained a residuary clause. The trial court determined that there had been no ademption because escrow did not close, and the sale therefore was not completed, until three days after the testatrix's death. The residuary legatees appealed. They argued that, "[b]ased upon Newsome and other cases, . . . if a lack of a residuary clause implies a desire against ademption, then the opposite conclusion must be drawn when there is a residuary clause." (Id., at p. 766.)

The Worthy court rejected this argument: "If a will has no residuary clause, partial intestacy may result because of an unforeseen change of circumstances. Courts have found it appropriate to resort to rules of construction based upon the assumption the testator intended to avoid intestacy. Therefore, at times courts simply implied an intent to give the identifiable proceeds of a designated asset to the named heir, thereby avoiding partial intestacy. [¶] Because courts sometimes used a particular judicially created rule of construction to avoid intestacy does not mean the reverse of such reasoning must apply when resolving disputes between named devisees and residuary heirs. When there is no question of intestacy, the reason for the presumed intent is missing, leaving the courts to look for other rules of construction . . . in order to ascertain the testator's intent. We find nothing in the California cases indicating the mere presence of a residuary clause compels the court to find a presumed ademption." (Estate of Worthy, supra, 205 Cal.App.3d at pp. 766-767.) The Worthy court determined that "the trial court [had] correctly concluded that the incomplete sale did not cause an ademption since the will failed to so provide." (Id., at p. 769.)

Here, in contrast to Worthy, the sale of the settlors' house was complete before the death of Patrice Barrish. But, unlike the will in Worthy, the settlors' Declaration does not contain a residuary clause. Therefore, it is appropriate to imply an intent by the settlors "to give the identifiable proceeds of the designated asset [their house] to the named heir [appellant], thereby avoiding partial intestacy." (Estate of Worthy, supra, 205 Cal.App.3d at p. 767.)

Disposition

We reverse that portion of the judgment decreeing that the bequest of the settlors' house to appellant was adeemed by its sale in 1999. The judgment is modified to direct the Trustee to pay to appellant the proceeds ($257,500) of the sale of the settlors' house. As so modified, the judgment is affirmed. Appellant shall recover its costs on appeal, to be paid from the assets of the Trust estate. (§ 1002.)

NOT TO BE PUBLISHED.

YEGAN, J.

We concur:

GILBERT, P.J.

PERREN, J.

Martin J. Tangeman, Judge

Superior Court County of San Luis Obispo

______________________________

Claire M. Corcoran and Shaunna Sullivan; Sullivan & Corcoran, a Law Corporation, for Appellant.

No appearance for Respondent,

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[1] All statutory references are to the Probate Code.