2010-297 In Re Estate of Timothy M. Donovan

Laboe Associates, PLLC

No. 2010-297

Sullivan County Probate Court

including but not limited to bank accounts, stocks, mutual funds, and the like, 2005, provided, in pertinent part: “All my intangible personal property, Donovan, died in June 2009. Article 4 of his will, executed on September 14,

The record reveals the following facts. The decedent, Timothy M. Bernstein Shur, P.A.

Probate Court (Feeney Donovan (the Donovan Family), appeal the order of the Sullivan County DALIANIS, C.J. The petitioners, Brian, James, June, Laura and Robert

the sale of certain stock. We affirm. ruling that the Donovan Family is not entitled to a share of the proceeds from the summary judgment motion filed by the respondent, Cathy C. Carter, and

THE SUPREME COURT OF NEW HAMPSHIRE Sackman on the brief, and Mr. Volinsky orally), for the respondent.

orally), for the petitioners.

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E-mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as p. 2 Appendix to Trust, entitled “DISPOSITIVE PROVISIONS: AFTER DEATH OF 2001” (Third Amended Appendix to Trust). Article 4 of the Third Amended AMENDED APPENDIX TO THE TIMOTHY M. DONOVAN REVOCABL E TRUST

4(F) required the trustee to “apportion the balance of the principal and remaindermen, petitioners Robert, Brian, Laura and James Donovan. Article respondent, and twenty percent would be divided equally among his contingent Donovan, if she survived him, forty-five percent would be distributed to the of the proceeds would be distributed to the decedent’s mother, petitioner June which ten percent of the proceeds would go to the trustee, twenty-five percent Also on September 14, 2005, the decedent executed the “THIRD the net proceeds from the sale of the assets of Optimum Manufacturing under sole discretion of [the] Trustee.” Article 4(E) set forth a distribution scheme for such terms” as the trustee deemed “prudent under the circumstances, in the and/or assets of Optimum [Manufacturing] shall be operated and/or sold upon Manufacturing employees. If the trustee elected not to do this, then “the stock respect to . . . selling” stock in Optimum Manufacturing to Optimum after succeeding [the decedent] as Trustee,” to “enter upon a process with Article 4(D) specifically authorized the trustee “[w]ithin a reasonable time

limited to my shares of stock and/or other interests in Optimum (Emphasis added.)

“may deem advisable.” decedent’s business interests “at such price and on such terms” as the trustee [the decedent] could have done if living,” including selling or liquidating the was authorized to “do all things related to the operation of the Business that and description, and wheresoever situated, including but not Optimum Manufacturing Corporation” (Optimum Manufacturing), the trustee or by owning shares of stock, “including but not limited to the shares of from time to time hereafter amended. decedent’s death or incapacity, he owned or operated a business, either directly accordance with the terms of said instrument as now provided and death. Article 4(C) provided, in pertinent part, that if, at the time of the instructed the trustee about distributing the trust estate upon the decedent’s

All the rest, residue and remainder of my estate, of every kind

held in trust by him, and to be held and administered in Trust of 2001 (the “Revocable Trust”), to be added to the property executed by me and entitled the Timothy M. Donovan Revocable Trustee under a certain instrument or revocable trust heretofore devise and bequeath to that person or entity who is serving as my Manufacturing Corporation, and the Optimum Real Estate, I give,

respondent].” (Emphasis added.) Article 6 of the will provided: but excluding shares in Optimum Manufacturing, I devise and bequeath to [the our analysis of the matter at hand. In re Richardson Trust p. 3 We first examine the terms of the will. Three well-settled rules govern

will. We agree with the respondent. Manufacturing stock, and that she is entitled to them under Article 4 of the

Estate holds the proceeds” from the sale of the decedent’s Optimum scheme set forth in Article 4(E) of the trust. The respondent counters that “the moving party. In re Estate of Raduazo statute. See 3 death, and that they are entitled to a portion of them under the distribution inferences properly drawn from them, in the light most favorable to the non- Our standard for reviewing probate court decisions is set forth by of the decedent’s Optimum Manufacturing stock passed to the trust upon his summary judgment, we consider the affidavits and other evidence, and all On appeal, the Donovan Family asserts that the proceeds from the sale summary judgment to the respondent. In reviewing a trial court’s grant of (1993). First, the testator’s intent is our principal guide in interpreting a will. The Donovan Family argues that the trial court erred by granting , 138 N.H. 1, 3

the law to the facts de novo. Id. to judgment as a matter of law. Id. We review the trial court’s application of is in dispute, we will determine only whether the prevailing party was entitled of summary judgment.” Id. (quotation omitted). When no material issue of fact moving party is entitled to judgment as a matter of law, we will affirm the grant review of that evidence discloses no genuine issue of material fact, and if the

favor. This appeal followed. pass to the trust upon his death. The trial court ruled in the respondent’s proceeds from the sale of the decedent’s Optimum Manufacturing stock did not (quotation omitted). summary judgment motions on this issue. The respondent argued that the matter of law.” In re Guardianship of Domey to the trust upon his death, as set forth in article 6 of his will. The parties filed, 157 N.H. 775, 778 (2008) decree unless it is unsupported by the evidence or plainly erroneous as a proceeds from the sale of the decedent’s Optimum Manufacturing stock passed reasonably made.” Id Donovan Family filed the instant petition seeking a declaration that the. “Consequently, we will not disturb the probate court’s are final unless they are so plainly erroneous that such findings could not be assets to Optical Filter Corporation for $15 million. In November 2009, the stock in Optimum Manufacturing and certain other Optimum Manufacturing RSA 567-A:4 (2007). “The findings of fact of the judge of probate In August 2008, ten months before he died, the decedent sold all of his

accumulated income of said trust estate, . . . to [the respondent].” accumulated income of said trust estate, or the remaining principal and p. 4 The testator in Owen

claim on the proceeds of the sale. See will. We disagree. Under the will’s plain terms, the only does not acquire other stock, an ademption occurs, and a legatee has no valid apparently sold or transferred the stocks before he died. See makes a specific bequest of corporate stock, the testator sells the stock and his Optimum Manufacturing stock passed to the trust under Article 6 of the id. at 348, 349. It is well-settled that if, after a testator has executed his will in which he certificates for any of the stocks named in the will because the testator had The Donovan Family argues that the proceeds from the decedent’s sale of 346. After the testator died, the executors, however, were unable to find the to transfer to his daughter, immediately upon his death, certain stocks. Id. at

Owen v. Busiel, 83 N.H. 345, 348, 349 (1928). 61 A.L.R.2d 449, 452-53 (1958). New Hampshire follows this general rule. See Ademption of Specific Legacy of Corporate Stock or Other Corporate Securities,

changed as to be no longer identifiable. In re Estate of Reposa devised at the time of death, or when the character of that property has so Ademption applies when a decedent no longer owns property specifically Manufacturing stock was adeemed when he sold the stock before he died. an ademption. Id As the trial court aptly ruled, any bequest of the decedent’s Optimum. at 115. concluded that the farm’s sale was a sufficiently radical change to constitute cash, a mortgage and a promissory note for payment. Id. at 114-15. We adeemed when, four years before her death, she sold the farm in exchange for accounts, stocks, mutual funds, and the like, but excluding shares in instance, we held that the testatrix’s devise of her farm to her legatee was decedent’s “intangible personal property, including but not limited to bank complete change in nature and character is.” Id Manufacturing stock. Article 4 bequeathed to the respondent “[a]ll” of the. In Estate of Reposa, for 115 (1981). “A mere change in the form of the gift is not an ademption, but a

passed to the trust under Article 6 of the will. died. The rest of his estate, including his Optimum Manufacturing stock, Optimum Manufacturing except his Optimum Manufacturing stock, passed to the respondent when he.” (Emphasis added.) Under Article 4 of the will, all of the decedent’s “intangible property,”

that did not pass to the respondent was the decedent’s Optimum

will as a whole. Id. read in isolation; rather, their meaning is determined from the language of the to be given their common meaning. Id. Finally, the clauses in a will are not Id. Second, if no contrary intent appears in the will, words within the will are p. 5 When interpreting an inter

conclude that the distribution to which Article 4(E) of the Third Amended Viewing the plain meaning of the trust, when examined as a whole, we authorized the trustee to make after the decedent’s death. The plain meaning distribution set forth in Article 4(E) applies to the sale of stock that Article 4(D) circumstances, in the sole discretion of [the] Trustee.” In context, then, the employees or “upon such terms” as the trustee deems “prudent under the deciding, that the trust documents are incorporated by reference into the will. decedent’s Optimum Manufacturing stock either to Optimum Manufacturing forth therein. For the purposes of this discussion, we will assume, without Article 4(E) is preceded by Article 4(D), which authorizes the trustee to sell the Manufacturing must be distributed to the family according to the schedule set specifically concerns the disposition of assets after the decedent’s death. Amended Appendix to Trust, the proceeds from the sale of Optimum shares of Optimum Manufacturing stock. Article 4(E) is part of Article 4, which reference, it is necessary to review the trust’s terms, and that under the Third if, when he died, the decedent still owned The Donovan Family contends that because the will incorporated the trust by distribution set forth in Article 4(E) of the Third Amended Appendix to Trust. In arguing for a contrary result, the Donovan Family relies upon the is ambiguous. Id. evidence of the settlor’s intent only if the language used in the trust instrument omitted). We examine the instrument as a whole, and look to extrinsic the words and phrases be given their common meaning.” Id. (quotation proper interpretation of words used in a written instrument, we require that Thus, when the decedent died, neither intent, we first look to the language of the trust. Id. “In searching for the this court.” Id. (quotation and brackets omitted). To determine the settlor’s The “determination of the ultimate fact of the intent of the settlor rests with Trust by Dumaine, 146 N.H. 679, 681 (2001) (quotation and ellipsis omitted). of the intention of the settlor with respect to the trust.” In re Declaration of interpreted in the light of all the circumstances and other competent evidence “the terms of the trust are determined by the provisions of the instrument as

proceeds passed to the respondent under Article 4 of the will. of the stock was adeemed by his sale of the stock before he died, and the stock nor the proceeds from the sale thereof passed to the trust. The bequest

stock was adeemed. months before he died, his bequest to the trust of Optimum Manufacturing because the decedent sold all of his shares of Optimum Manufacturing ten to nullify the specific legacy given by the codicil.” Id. at 349. Similarly here, We held that “the subsequent transfer of the stocks operated as an ademption goodwill was not Affirmed p. 6 filed a motion asking the court to clarify either that the decedent’s personal The record reveals that after the trial court issued its ruling, the executor 6

DUGGAN, HICKS, CONBOY and LYNN, JJ., concurred.

appeal, it appears that this issue is not yet ripe for our review. personal goodwill in Optimum Manufacturing. From the record submitted on Family is entitled to a share of the proceeds from the sale of the decedent’s We decline the parties’ invitation to rule upon whether the Donovan

Family. goodwill in Optimum Manufacturing should be distributed to the Donovan first instance whether any proceeds from the sale of the decedent’s personal contest that decision.” Under these circumstances, we decline to decide in the the decisions that he has been empowered to make. Any party may then which he charges a significant fee. The Court suggests that he needs to make trial court denied the motion, stating: “The Executor has a job to perform, for goodwill], then amend its order to include specific direction” on that issue. The all of the above reasons, therefore, we uphold the trial court’s decision. pleadings are ripe for decision with respect to [the decedent’s personal died, the respondent would have been entitled to them under Article 4(F). For stock had passed to the trust, because the sale occurred before the decedent the subject of that ruling or, “[i]f the court determines that the Therefore, even if the proceeds from the sale of Optimum Manufacturing

proceeds from any sale of stock that occurred before the decedent’s death. death sale of stock authorized by Article 4(D), and does not apply to the proceeds from the sale of stock set forth in Article 4(E) applies only to a postof these provisions evince the decedent’s intent that the distribution of the