Tonn v. Sylvis Estate

Citations: 2018 MT 30; 412 P.3d 1055; 390 Mont. 268Docket: 17-0326

Court: Montana Supreme Court; February 26, 2018; Montana; State Supreme Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Michael J. Tonn, Anne L. Quast, William A. Tonn, Jr., and Cheryl R. Tonn (collectively referred to as the William Heirs) appeal a summary judgment decision from the Sixteenth Judicial District Court, which favored the respondents: The Estate of Elizabeth Sylvis, Daniel Sylvis, and Katie Atkinson. The primary issue for review is whether the District Court erred by not applying Montana’s anti-lapse statute (72-2-717(2), MCA) to the Armond W. Tonn Testamentary Trust.

Armond W. Tonn executed his Last Will and Testament in 1982, establishing two trusts: a marital trust for his wife, Hjordice, and a children’s trust for their three children—William, Marc, and Elizabeth Sylvis—consisting of the remaining estate. Following Hjordice's passing in 1991, her marital trust was merged into the children’s trust, which includes a one-half interest in a large ranch. Initially, Marcus J. Tonn served as the trustee until his death in 2006, after which Cheryl Tonn and Elizabeth Sylvis became co-trustees. The trust allows the trustee significant discretion in making distributions based on the beneficiaries' needs.

William Tonn, who died in 2001, did not have any trust principal distributed to his heirs at his death. The trustee eventually began distributing one-third of the Trust income to the William Heirs following William’s death while allocating two-thirds to Elizabeth after Marc’s passing in 2010, despite Marc having no descendants. The Court ultimately affirmed the District Court's decision, reinforcing the interpretation of the trust's provisions and the application of the anti-lapse statute.

Elizabeth, the last surviving child of Armond and Hjordice, died in 2016, leaving two children, Daniel Sylvis and Katie Atkinson (Elizabeth Heirs), as Appellees. Armond's will specified the distribution order of his trust's principal upon the death of his children. According to the fourth article of his Trust, if a child predeceases him, one-third of the trust's principal will go to that child's living descendants. Upon the death of the next child, one-half of the principal will be distributed similarly, and upon the death of the last child, all trust property will be distributed to that child's living descendants. If a child dies without descendants, their share will be held in trust for surviving children.

Concerns regarding unequal distributions between the William Heirs and Elizabeth Heirs arose in 2012. In 2014, the William Heirs filed a petition claiming entitlement to shares of the Trust, asserting four claims in their Third Amended Verified Petition for Declaratory Judgment. The District Court ruled in favor of the Elizabeth Heirs, granting them Marc’s share of the Trust, while awarding the William Heirs one-third of the Trust's value. The William Heirs appealed the ruling concerning Marc's share.

The appeal involves a review of the District Court's summary judgment, which is assessed de novo under the same standards as the original court. The discussion centers on whether the court erred in not applying Montana's anti-lapse statute to Armond's Testamentary Trust. This statute allows for the substitution of deceased beneficiaries with their surviving descendants unless a contrary intention is indicated in the testamentary document. The court’s interpretation of the testator’s intent will consider the trust's provisions in totality.

The William Heirs contest the District Court's ruling, asserting that the anti-lapse statute should have been applied to grant them a future one-half interest in Marc’s share of the Trust, despite William's death prior to distribution. They reference similar case precedents, including In re Nass’s Estate and Cox v. Forristall. However, the Court emphasizes that trust law prioritizes the testator's intent, as established in prior cases like Berthot and Wyman. The Trust's provisions indicate Armond's clear intent regarding distribution, stating that upon William's death, his one-third share would be distributed to his descendants. Since Marc died without descendants, the Trust stipulated that his share would be held for Armond’s surviving children, with the last survivor being Elizabeth, who is entitled to both her share and Marc’s. The language of the Trust indicates that distributions were not meant to be equal among Armond’s children or grandchildren, and the William Heirs were expressly excluded as Marc's heirs. Therefore, the District Court correctly concluded that the anti-lapse statute did not apply, affirming that the Trust document dictates a different distribution plan that does not include the William Heirs.