In Winward v. Goodliffe, 2011 UT App 292, the appeals court upheld the trial court’s ruling that the plaintiff/appellant be required to pay his sister (his only surviving sibling) over $550,000 in order to adjust for over $630,000 that he received in lifetime gifts from his parents.
Both parents’ revocable trusts contained the following language: “Assets received from the Trustor by any of the Trustor’s children by means other than the express conditions of this instrument, such as through life insurance beneficiary arrangements, joint tenancy survivorship, or express advancements, shall be taken into account in making such equal division.”
The plaintiff/appellant appears to have argued that the gifts were not advancements, strictly speaking, because the doctrine relating to advancements applies only where a decedent dies intestate, and neither of his parents died intestate. The court observed, however, that the reference to advancements in the trust was merely illustrative, not exhaustive.
It would seem that the relevant statute would be Utah Code §75-2-609, which provides that a lifetime gift by a decedent to a beneficiary named in the decedent’s will is to be treated as a satisfaction of the devise, and will thus be deducted from that beneficiary’s share of the estate if the decedent so indicates in the will. See §3.9.5 of The Utah Law of Trusts & Estates, an online legal reference treatise available at The Utah Trust & Estate Educational Resource Center for a detailed discussion of ademption of pecuniary gifts by satisfaction. Of course, the statute deals with wills, while the case dealt with revocable trusts. Nonetheless, the same principles should apply. See §4.1.8 of The Utah Law of Trusts & Estates for a detailed discussion of symmetrical treatment of wills and revocable trusts in Utah.
It is not clear why the court did not cite §75-2-609. In any event, it appears that the court reached the correct conclusion. The court held that the quoted language from the revocable trusts demonstrated an intention on the part of the parents to treat their children equally, such that any amounts received by either child outside of the revocable trusts was to offset amounts passing under the revocable trusts.
This appears to be the correct result for the following reasons: First, the reference in the trusts to “advancements” demonstrates an intention on the part of the parents to adjust not only for non-trust transfers at death, but also for lifetime gifts. Second, contrary to the plaintiff/appellant’s contention, the lifetime gifts need not have been accompanied by a contemporaneous statement that they constituted advancements against the son’s ultimate share. The concept of advancements and ademptions of pecuniary gifts are analogous, the former applying where the decedent died intestate, and the latter applying where the decedent left a will (or revocable trust). Such a contemporaneous statement is required in the case of advancements because there is no will in which such a statement could appear. But where the decedent dies with a will or a revocable trust, §75-2-609 provides that the statement may be in the will or revocable trust, which in this case, it was.
Rust Tippett is the author of this blog post.
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This blog post in no way creates an attorney-client relationship between the reader and either Robert S. (Rust) Tippett or Bennett Tueller Johnson & Deere, P.C. The reader should consult with his or her own estate planning attorney regarding his or her particular circumstances.