Wednesday, December 30, 2015
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Court of Appeal Holds:
Bequests of ‘Up to’ Specified Sums Were Enforceable
By a MetNews Staff Writer
Language in a will directing the executor to distribute to four nonprofit entities sums “up to” specified amounts was not precatory, the Court of Appeal for this district has ruled in a case involving an $8 million estate.
The testator, who died Oct. 15, 2010, at the age of 68, was Michael K. McShane. The executor was his second wife, Gwendolyn White-McShane, whom he had wed Nov. 29, 2009.
White-McShane resisted routing monies from securities to the named beneficiaries—the American Cancer Society, the Mental Illness Foundation, the University of Colorado School of Business, and the University of Wisconsin School of Business—contending that the words “up to” vested in her unfettered discretion as to what, if any, sums they would receive.
She expressed concerns over a need for funds to live on, noting that her sole source of income was social security benefits.
Cowan’s Ruling
Pressing their claims in the probate court, the four beneficiaries prevailed. Los Angeles Superior Court Judge David J. Cowan declared:
“Where securities are involved, there is inherently always a possibility that the value might go down and that there might not be enough money to pay everyone. Hence, the bequests were contingent on the securities having the necessary value. As it turned out, however, there was no evidence that the securities had gone down in value, that there was not enough money to make the other bequests – or to provide for [plaintiff’s] welfare....”
He awarded the objectors the maximum amounts provided for in the will, totalling $500,000.
Div. Five, in an unpublished opinion on Monday, affirmed. Presiding Justice Paul Arthur Turner wrote:
“Mr. McShane’s bequests in the will to the objectors do did not contain the terms ‘desire,’ ‘wish’, or any such similar words. The words ‘up to’ denote a maximum amount, which contemplates that these amounts may not necessarily be available for distribution. ‘Up to’ does not denote a ‘desire’ or ‘wish’ for plaintiff to do something.”
Command to Executor
Turner said that where precatory language does appear in a will, where the requests are “addressed to a devisee or legatee” they “do not import a command, a trust or a charge,” but do become “testamentary and imperative when used in direct reference to the estate and addressed or directed by the testator to his executor.” In the latter instance, he said, “they then, are construed not as a mere request limiting the estate given in absolute terms, but as a command.”
The jurist also pointed out:
“California policy favors construction of a will to uphold a charitable bequest.”
He observed that Cowan was appropriately skeptical of White-McShane’s expressed concern for her own financial welfare, reciting:
“Plaintiff would receive over $6.6 million of Mr. McShane’s estate. The probate court noted plaintiff had put a down payment of over $1 million on a home, incurred $1.2 million as a mortgage, spent money on a new Cadillac, traveled and gave to charities significantly.”
The testator’s former wife received $800,000 under the will and $45,000 went to two cousins.
The case is Estate of McShane, B261360.
Pasadena attorney Matthew C. Brown represented White-McShane. Lawyers for the objectors were downtown Los Angeles attorneys Richard H. Lee and Natalie Rastegari of Salisian | Lee LLP, along with Los Angeles attorney Tara L. Cooper.
Copyright 2015, Metropolitan News Company