SYLLABUS
(This syllabus is not part of the opinion of the Court. It has
been prepared by the Office of the Clerk for the convenience of the
reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not
have been summarized).
Argued January 4, 2006 -- Decided April 20, 2006
WALLACE, J., writing for a majority of the Court.
The issue before the Court is whether the decedent, Theodore Payne, intended to bequeath his New Jersey property to his partner debt-free.
Payne met Don Burton in 1997 when both were suffering from AIDS. In
May 1997, they began living together in Payne’s residence in Morristown. At the
time, Payne was a Managing Director of Finance at Metropolitan Life, and Burton
was disabled.
Payne had jointly purchased a vacation home in Harpswell, Maine with Frederick “Rick”
Wohlfarth, which provided for a right of survivorship. Payne and Wohlfarth had lived
together as partners but, at the time they purchased the vacation home, their
partnership had ended. The men remained friends and agreed that the first to
die would satisfy the balance of the mortgages on the property and that
each would provide for that provision in his respective will. Payne and Wohlfarth
exchanged drafts of their wills to ensure each contained similar language concerning the
payment of mortgage debts on the Maine property. In his March 13, 1998
will, Payne bequeathed to Wohlfarth his half interest in the Maine property and
a sum equal to the amount necessary to pay off the mortgage debts
on the Maine property reduced by the proceeds of any life insurance policy
on Payne’s life payable to Wohlfarth. Payne also bequeathed the personal property located
in Morristown to Wohlfarth and divided the residue among other beneficiaries. There was
no provision for Burton in this will.
In July 1998, Payne sold the Morristown residence and bought a home in
Harding Township, New Jersey. Burton lived in the home with Payne. According to
Burton, while traveling with Payne to Maine in the summer of 1999 or
2000, they discussed the care of Payne’s two dogs upon Payne’s death. Burton
told Payne that he was concerned about being able to provide a home
for himself and the dogs should Payne die. Burton claims that Payne told
him not to worry because he would leave the house to Burton and
that Payne’s life insurance proceeds would pay off the mortgage on the New
Jersey home. Burton also claimed that a similar conversation took place on another
trip to Maine during the summer of 2000. At that time, Payne allegedly
again said that Burton would inherit the New Jersey property debt-free.
At some point, Payne contacted his attorney, Jack Wolff, to change his 1998
will. On August 15, 2000, Wolff sent Payne a revised draft. The primary
change in the will provided a gift to Burton of Payne’s personal property
located in the New Jersey home. In November 2000, Payne reviewed the draft,
outlined several changes and mailed the will back to Wolff. The will neither
specified a bequest of the New Jersey home to Burton nor that it
be inherited debt-free. Wolff made the changes and sent another draft to Payne
on November 21, 2000.
Payne’s deteriorating health forced him to leave his job in September 2001. Burton
assisted Payne with his hygiene needs, the preparation of meals, transportation to and
from medical appointments, and the care of Payne’s dogs. Payne still had not
signed the revised will and on October 1, 2001, Payne wrote to Wolff
commenting that the will only gave the contents of the New Jersey home
to Burton, even though he intended to give the house and contents to
Burton. Payne also inquired about issues concerning language in the will relating to
the Maine property. Wolff made certain changes and forwarded a revised draft to
Payne on October 15, 2001. Again, there was no reference to a bequest
of the New Jersey home to Burton. Burton discussed with Payne his concerns
about this proposed draft and they both agreed that Burton should be referred
in the will as “partner” rather than “friend.” In addition, Burton wondered why
the will expressly provided for payment of mortgage debts for the Maine property
but did not contain similar language for the New Jersey property. Payne responded
that the specific language was required for the Maine property because it was
jointly owned but that the clause in his will directing payment of all
his just debts provided for the debt on the New Jersey property.
Payne wrote Wolff on November 11, 2001, instructing him to refer to Burton
as “partner,” to prepare a Power of Attorney and Medical Directive in favor
of Burton, and to provide guidance on the financial and tax aspects of
planning his estate. Crucial language in this letter refers to: liquidating the debt
encumbering his real estate so that it passes to his beneficiaries free and
clear; not wanting the properties sold to satisfy the debt; and desiring that
his life insurance, worth slightly over $1million, be used to pay off the
mortgage balances. Payne suggested that they discuss these issues when he comes to
sign the will and other documents. After receiving this letter, the only change
Wolff made was to designate Burton as “partner.” On March 4, 2002, Wolff
sent Payne the revised will, power of attorney, and living will.
Payne was hospitalized on March 13, 2002, the day before he was sign
the documents in Wolff’s office. Wolff came to the hospital the following day
and, after determining that Payne was lucid and wanted to execute the will
and related documents, had Payne sign these papers. The next day, Payne lapsed
into a coma and remained in that condition until his death on April
21, 2002. Daulton Lewis was named executor of the will and, ultimately, Payne’s
estate satisfied the mortgage on the Maine property but refused to pay the
debt on the New Jersey property.
Burton sued the estate, alleging that at the time of Payne’s death, he
had been living with Payne as his partner for about four years, that
Payne had told him that he would inherit the New Jersey property debt-free,
and that the November 11, 2001 letter to Wolff expressed that intent. Answers
were filed by Lewis and various other beneficiaries. At the bench trial, Burton
testified about the relationship and Payne’s expressed intention to bequeath the New Jersey
property to Burton debt-free. Wolff testified that Payne had not instructed him to
do the same thing regarding mortgage debts for the New Jersey property that
he did for the Maine property. Wolff also stated that he did not
interpret the November 11th letter to mean that Payne wanted the mortgage debts
on the New Jersey property satisfied out of his estate. Lewis and Wohlfarth
also testified.
The trial court found that the November 11th letter evidenced Payne’s desire to
find a way to protect Burton from the mortgage payments but nonetheless concluded
that Payne failed to meet the burden of establishing Payne’s intention of giving
him the property debt-free. The court reasoned that Payne was looking in other
directions to protect Burton and never expressed an intention that the other beneficiaries
bear the expense of having the estate satisfy the mortgage. The court rejected
the “all my just debts” clause as evidence of Payne’s intention to cover
the mortgage debts on the real estate, especially in light of the detailed
language regarding the Maine property.
The Appellate Division affirmed, finding that the trial court properly applied the doctrine
of probable intent in that Payne was unable to carry out his desire
to provide Burton with a debt-free property because of the priority attached to
the Maine property and the lack of sufficient residual assets remaining in the
estate to accomplish the other bequests.
The Supreme Court granted certification.
HELD: The application of the doctrine of probable intent demonstrates that Theodore Payne
intended to bequeath his New Jersey property to his partner debt-free.
1. In interpreting a will, the goal is to ascertain the probable intent
of the testator. Primary emphasis should be on the testator’s dominant plan and
purpose as they appear from the entirety of the will in consideration of
the surrounding facts and circumstances. The court should ascribe to the testator those
impulses that are common to human nature and construe the will to effectuate
those impulses. Courts are to effectuate the testator’s probable intent to accomplish what
he or she would have done had he or she envisioned the present
inquiry. Extrinsic evidence should be admitted to aid in ascertaining probable intent. (Pp.
11-14)
2. The most important evidence of Payne’s probable intent is set forth in
the November 11, 2001 letter to his lawyer. The fifth and sixth paragraphs
of the letter clearly evidence Payne’s probable intent and are consistent with an
intention that the “all my just debts” clause was a direction for the
estate to pay the mortgage debts on the New Jersey property. There is
a clear and unambiguous expression of Payne’s intent that his beneficiaries, Burton and
Wohlfarth, receive their respective real estate debt-free and that neither beneficiary should be
required to sell the property to pay off the mortgages. Payne’s use of
the plural “beneficiaries” and “properties” evidences that he was referring to both Wohlfarth
and Burton and to both the Maine and New Jersey properties. (Pp. 14-17)
3. The Court’s reasoning also supports the conclusion that Payne’s probable intent was
to pay off the mortgage debts on the Maine property first and then
pay off the debt on the New Jersey property. (P. 18)
Judgment of the Appellate Division is REVERSED and the matter is REMANDED to
the trial court for further proceedings consistent with this opinion.
JUSTICE RIVERA-SOTO, dissenting, is of the view that it is the November 11,
2001 letter that is ambiguous not the will, which clearly demonstrates that the
mortgages on the Maine home were to be satisfied from the estate, while
no such provision was made in respect of the New Jersey residence. Justice
Rivera-Soto would be guided by deference to the trial court’s findings properly given
them by the Appellate Division.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, and ALBIN join in JUSTICE
WALLACE’s opinion. JUSTICE RIVERA-SOTO filed a separate dissenting opinion.
SUPREME COURT OF NEW JERSEY
A-
12 September Term 2005
IN THE MATTER OF THE ESTATE
OF THEODORE M. PAYNE,
DECEASED.
Argued January 4, 2006 – Decided April 20, 2006
On certification to the Superior Court, Appellate Division.
Dennis T. Smith argued the cause for appellant, Donald P. Burton (Pashman Stein,
attorneys; Michael S. Stein, of counsel; Mr. Smith and Mr. Stein, on the
briefs).
John P. Beyel argued the cause for respondent Daulton J. Lewis, Executor of
the Estate of Theodore M. Payne, Deceased (McElroy, Deutsch, Mulvaney & Carpenter, attorneys).
Neal M. Frank argued the cause for respondent Frederick P. Wohlfarth.
JUSTICE WALLACE, JR. delivered the opinion of the Court.
In this will contest, decedent had executed a will with a specific provision
for his estate to pay to the joint tenant of a property he
owned in Maine an amount equivalent to the mortgage debts on that property.
Other than the “payment of all my just debts” clause, the will did
not have a provision for the estate to pay the mortgage debts on
decedent’s home in New Jersey. Decedent bequeathed his New Jersey property to his
partner, who lived with him in that residence. The trial court concluded that
decedent’s partner and not the estate was responsible for payment of the mortgage
debts on the New Jersey property. The Appellate Division affirmed. We conclude that
application of the doctrine of probable intent demonstrates that decedent intended to bequeath
the New Jersey property to his partner debt-free. We reverse.
Decedent Ted Payne met Don Burton in 1997. Both men were suffering from AIDS. By May 1997, they began living together at Payne’s residence in Morristown. At that time, Payne was a Managing Director of Finance at Metropolitan Life, and Burton was disabled.
Payne had previously acquired a vacation home in Harpswell, Maine. He purchased the property jointly with Frederick “Rick” Wohlfarth with the right of survivorship. Payne and Wohlfarth previously had lived together as partners but at the time they purchased the property their relationship had ended. They remained friends and agreed that the first to die would satisfy the balance of the mortgages on the property and that each would provide for that in his will.
Payne and Wohlfarth exchanged drafts of their wills to ensure the language concerning the payment of the mortgage debts on the Maine property would be similar. In his March 13, 1998, will, Payne bequeathed to Wohlfarth his half interest in the Maine property and a sum equal to the amount necessary to pay off the mortgage debts on the Maine property reduced by the proceeds of any life insurance policy on Payne’s life payable to Wohlfarth. Payne also bequeathed the personal property located in Morristown to Wohlfarth and divided the residue among nieces, nephews, godchildren, charities, and educational institutions. The March 13, 1998, will made no provision for Burton.
In July 1998, Payne sold the Morristown residence and purchased a home in Harding Township, New Jersey. Burton resided in the home with Payne. According to Burton, while traveling to Maine in the summer of 1999 or 2000, he and Payne discussed the care of Payne’s two dogs upon Payne’s death. Burton expressed concern about his ability to provide a home for himself and the dogs on his limited income. He claimed that Payne told him not to worry because he would leave the house to him and that his life insurance proceeds would pay off the mortgage on the house. Burton also maintained that a similar conversation took place on another trip to Maine during the summer of 2000. At that time, Payne allegedly again stated that Burton would inherit the New Jersey property debt-free.
At some point, Payne contacted his attorney, Jack Wolff, to change his 1998 will. On August 15, 2000, Wolff mailed to Payne a revised draft. The primary change in the will provided for the gift to Burton of Payne’s personal property located in the New Jersey home.
Payne reviewed the draft of the will and on November 16, 2000, wrote to Wolff outlining several other changes. Payne specified that there was a second mortgage on the Maine property and that his estate should pay that mortgage. In addition, he noted that the address of the New Jersey real estate should be listed as Harding Township and not Morristown. Wolff made the corrections in the will and forwarded another draft to Payne on November 21, 2000.
Payne’s deteriorating health forced him to leave his position with Metropolitan Life in September 2001. It became necessary for Burton to assist Payne with his hygiene needs, the preparation of meals, transportation to and from his medical appointments, and the care of his dogs.
Payne still had not executed his revised will. On October 1, 2001, he wrote to Wolff explaining that the will appeared to give only the contents of the house to Burton, but his intent was to give the house and the contents to Burton. Payne also inquired whether he should retain the reference to the Maine property in the will because a friend informed him that it would pass automatically to the surviving owner and that inclusion in the will might cause adverse tax consequences.
Wolff made the changes and on October 15, 2001, forwarded a revised draft to Payne. The draft deleted the reference to a gift of the Maine property to Wohlfarth. Wolff also expressed his desire to review the deed to the Maine property to confirm that title was taken jointly with the right of survivorship. He also noted the possibility of federal estate tax consequences even though the Maine property would pass outside of the will.
Payne reviewed the latest draft of the will with Burton, who expressed several concerns. Burton believed the description of him as a “friend” failed to accurately describe their relationship. They agreed that the will should refer to Burton as Payne’s “partner.” Burton also questioned why the will provided for the payment of the mortgage on the Maine property but lacked similar language concerning the New Jersey property. Payne responded that it was necessary to provide expressly for payment of the mortgage debts on the Maine property because it was jointly owned property, and that the clause in his will directing payment of all his just debts provided for the debt on the New Jersey property.
Following that discussion, Payne wrote Wolff on November 11, 2001, instructing him to refer to Burton as his “partner” instead of as his “friend.” He enclosed a copy of the Maine deed to verify that the property was held as joint tenants with the right of survivorship with Wohlfarth. Payne requested that Wolff prepare a Power of Attorney and Medical Directive in favor of Burton and asked for guidance concerning the tax and financial aspects of planning his estate due to its complexity. The crucial language in the November 11, 2001, letter provided that
[a]s may be evident from my will, I want the debt encumbering my real estate liquidated by whatever means so that it passes to the beneficiaries free and clear and I don’t want it to be necessary for the properties to be sold in order to satisfy the debt, which, I assume, would come due upon my death. Providing for the mortgage financing on the house in Maine has been a prominent issue with Oakey Point, which Mr. Wohlfarth and I may resolve by using credit life insurance in a refinancing which we are presently contemplating.
At present, the major source of cash to the estate would come from
life insurance proceeds of about $1 million and I have viewed this cash
as available to be directed to pay off the mortgage balances which may
exist at the time. However, this might not be true if estate taxes
are assessed on the gross value of the real estate, which is currently
worth between $1.7 million and $2.2 million, and there is a big tax
liability to satisfy ahead of addressing the mortgages. There is another $300,000-$400,000 (assuming
the stock market is bottoming out) of investments which would be available to
the estate to pay taxes and debt.
It has been suggested that I structure the life insurance proceeds to be
paid into a trust outside of the estate where the trust would be
directed to use the proceeds to repay the real estate debt. I am
not inclined to create another level of complexity such as this unless it
is necessary.
Maybe we can sort through some of these issues when I come in
to sign the will and other documents.
[(emphasis added).]
After receiving that letter, the sole change Wolff made in the will was
to designate Burton as “partner.” On March 4, 2002, Wolff wrote to Payne
enclosing the revised will, power of attorney, and living will.
Wolff arranged to have Payne execute the documents in his office on March
14, 2002. Unfortunately, Payne was hospitalized on March 13, 2002. The following day
Burton telephoned Wolff, informed him of Payne’s hospitalization, and requested that Wolff deliver
the original documents to the hospital for Payne to execute. Wolff went to
the hospital and spoke to Payne in the Intensive Care Unit. After asking
Payne several questions, Wolff was satisfied that Payne was lucid and wanted to
execute the will and related documents. Payne then signed the will, power of
attorney and living will.
The next day Payne lapsed into a coma and remained in that condition
until his death on April 21, 2002. Daulton Lewis was named executor of
the will. Lewis informed Burton that he was responsible for paying the outstanding
debt on the New Jersey property. Burton replied that Payne wanted any mortgages
on the house satisfied from his estate and intended that the property would
pass to him debt-free.
At the time of Payne’s death, the approximate value of his real estate
was $900,000 for the New Jersey property and $375,000 for his one-half interest
in the Maine property. The New Jersey property was encumbered by a mortgage
in the amount of $347,190 and a line of credit of $92,458, and
the Maine property was encumbered by a mortgage of $302,450 and a second
mortgage of $106,092. The estate ultimately received life insurance proceeds totaling $1,053,425. Payne’s
estate satisfied the obligations on the Maine property but refused to pay the
debt on the New Jersey property because it was bequeathed to a named
beneficiary.
Burton filed a complaint against the estate. He alleged that at the time
of Payne’s death, he had been living with Payne as his partner for
approximately four years, that Payne informed him that he would inherit the New
Jersey property debt-free, and that the November 11, 2001, letter from Payne to
Wolff expressed that intent. Answers were filed by the executor and various other
beneficiaries. At the bench trial, Burton testified that his relationship with Payne was
like a marriage in every way. He outlined three conversations he had with
Payne in which Payne expressed his desire to give Burton the New Jersey
property debt-free.
Wolff, who had drafted the will, testified that Payne instructed him to provide
for the estate to pay the balance of the mortgages on the Maine
property but had not instructed him to do the same for the mortgage
debts on the New Jersey property. Wolff acknowledged that he had neither discussed
with Payne the difference in treatment of the two properties nor estate tax
issues. When he received the November 11, 2001, letter, Wolff did not interpret
the letter to mean that Payne wanted the mortgage debts on the New
Jersey property satisfied out of his estate. It was Wolff’s belief that except
for changing the description of Burton from “friend” to “partner,” the will was
satisfactory to Payne. On cross-examination, Wolff explained that despite the reference in the
November 11, 2001, letter that Payne wanted the mortgage debts encumbering the real
estate paid off so “it passes to my beneficiaries free and clear,” he
believed Payne was only referring to the Maine property. Wolff admitted that following
the November 11, 2001, letter, he never met with Payne to sort through
some of the issues raised in the letter and never discussed with Payne
whether his use of the word “properties” was a mistake.
Lewis, the executor of the estate, testified that he was a long-time friend
of Payne, and that Payne was the godfather to his daughter. He said
that his daughter was one of numerous beneficiaries under the residuary clause of
Payne’s will. It was not until after Payne’s death that he became aware
that Payne had named him executor. Lewis, who was a lawyer, said that
Wohlfarth was one of his clients. Lewis recalled a conversation with Payne and
Wohlfarth wherein they discussed a testamentary plan in which the first to die
would pay off the mortgage debts on the Maine property.
Wohlfarth testified that he had both a personal and a business relationship with
Payne. Even after their close personal relationship ended, he said they continued to
maintain a business relationship. In 1997, the two of them purchased the Maine
property jointly, each contributing to the purchase price and being obligated on the
mortgage. Wohlfarth stated that Lewis was his attorney and had drafted his will.
Following a discussion with Lewis, it was Wohlfarth’s understanding that “at some point
the money in the estate would be disbursed to pay off the various
mortgages.” He had agreed with Payne that the first to die would pay
off the mortgage debts on the Maine property either through the estate or
with life insurance proceeds. He and Payne had exchanged wills and both had
a similar clause about paying off the mortgage debts on the Maine property.
The trial court found that the November 11, 2001, letter was evidence of
Payne’s desire to find a way that Burton would be protected from the
mortgage payments. However, the court concluded that Payne was looking in other directions
for that help and never expressed an intent that other beneficiaries be saddled
with the expense of having the estate satisfy the mortgage. The court rejected
the “all my just debts” clause of the will as evidencing Payne’s intention
to cover the mortgage debts on the real estate because he “had a
detailed disposition with respect to the [Maine] property owned by decedent and Wohlfarth.”
The court reasoned that it would not be necessary to specifically provide for
the debt on the Maine property if “the all my debts clause could
just have easily covered the same item with respect to the Maine property.”
Additionally, the court held that Payne’s alleged intention to have the “all my
just debts” clause apply to the mortgage debts for both properties was inconsistent
with Wolff’s testimony that Payne was detail oriented in their dealings. The court
concluded that Burton failed to meet the burden of establishing that Payne intended
to give him the New Jersey property debt-free.
The Appellate Division affirmed in an unpublished opinion. The panel found that the
trial court properly applied the doctrine of probable intent “by attempting to accomplish
what the testator would have done if confronted with the issues.” The panel
concluded that the trial court “essentially found that although Payne would have liked
to provide Burton with the property debt-free, he was unable to do so
in light of the priority he attached to the Maine property and the
lack of sufficient residual assets remaining in the estate to accomplish his other
bequests.”
We granted Burton’s petition for certification.
185 N.J. 35 (2005).
Burton contends that the trial court failed to properly apply the doctrine of probable intent in interpreting the will. Specifically, Burton argues that the court failed to consider that the common human impulse is to make appropriate provisions for one’s spouse and that same sex couples are entitled to that reasonable inference. Further, Burton claims the trial court applied the incorrect standard of proof.
The executor of the estate disagrees. He argues that the controlling statute, N.J.S.A. 3B:25-1, makes the doctrine of probable intent inapplicable to this case, and that in any event, the evidence did not establish Payne’s probable intent to pass the New Jersey property to Burton free and clear of debt.
Wohlfarth adds that the doctrine of probable intent should not apply in this case because the will was clear and unambiguous. Further, he argues that the common human impulse to provide appropriate care for one’s spouse is not a relevant consideration.
In interpreting a will, our aim is to ascertain the intent of the testator. “[W]hen we say we are determining the testator’s intent, we mean his probable intent.” Fidelity Union Trust Co. v. Robert, 36 N.J. 561, 564 (1962) (citation omitted). We continue to adhere to the view of the doctrine of probable intent expressed in Fidelity Union. In that case, the Court stated that in determining the testator’s subjective intent, “courts will give primary emphasis to his dominant plan and purpose as they appear from the entirety of his will when read and considered in the light of the surrounding facts and circumstances.” Id. at 564-65. The trial court should “ascribe to the testator ‘those impulses which are common to human nature and . . . construe the will so as to effectuate those impulses.’” Id. at 565 (citation omitted). More recently, this Court emphasized that “[c]ourts are enjoined to ‘strain’ toward effectuating the testator’s probable intent ‘to accomplish what he would have done had he envisioned the present inquiry.’” In re Estate of Branigan, 129 N.J. 324, 332 (1992) (citation omitted).
The trial court is not “limited simply to searching out the probable meaning intended by the words and phrases in the will.” Engle v. Siegel, 74 N.J. 287, 291 (1977). Extrinsic evidence may “furnish[] information regarding the circumstances surrounding the testator [and] should be admitted to aid in ascertaining [the testator’s] probable intent under the will.” Wilson v. Flowers, 58 N.J. 250, 260 (1971). To be sure, the testator’s own expressions of his or her intent are highly relevant. Id. at 262-63. Once the evidence establishes the probable intent of the testator, “the court may not refuse to effectuate that intent by indulging in a merely literal reading of the instrument.” Id. at 260.
We note also, that at the time of Payne’s death, N.J.S.A. 3B:25-1 provided that “unless the Will of the testator shall expressly or impliedly direct that the mortgage interest be otherwise paid,” the property passing to a devisee “shall be primarily liable for the mortgage debt.” Effective 2004, the Legislature amended N.J.S.A. 3B:25-1 to make it clear that a “general direction in the will to pay debts shall not be deemed a direction to pay the mortgage or security interest.” L. 2004, c. 132, §88. Prior to that amendment, the Appellate Division noted that a direction in the will to pay “‘just debts’ does not clearly indicate that the outstanding mortgage is included in the executor’s responsibilities.” In re Estate of Zahn, 305 N.J. Super. 260, 270-71 (App. Div. 1997).
With this background, we turn now to review the evidence to ascertain Payne’s probable intent. The most important evidence of Payne’s probable intent is set forth in his November 11, 2001, letter to his attorney. Before discussing that letter, we restate the pertinent circumstances surrounding Payne’s revisions of his will.
Payne had reviewed and made changes on several drafts of his will. Each draft contained a direction to pay off his just debts and an express provision to pay to Wohlfarth an amount equivalent to the debt on the Maine property. It is uncontested that Payne and Wohlfarth had equally contributed to purchasing and maintaining the Maine property and both had executed the Maine mortgages. Payne had agreed with Wohlfarth that the first to die would pay off any mortgage debts on the Maine property even though the surviving owner was still obligated on those debts.
It is reasonable to infer that Payne believed that upon his death, unless he made a special provision in his will, his estate would be responsible only for his one-half share of the mortgage debts on the Maine property. Thus, a specific bequest in the will to pay off the entirety of the mortgage debts on the Maine property was necessary to effectuate the desire of Payne and Wohlfarth.
The crucial document in determining Payne’s intent is his November 11, 2001, letter. The first paragraph of the letter expressed satisfaction with the will, except that Payne wanted Burton identified as his “partner.” The fifth and sixth paragraphs clearly evidence Payne’s probable intent and are consistent with an intention that the “all my just debts” clause was a direction for the estate to pay the mortgage debts on the New Jersey property. Payne stated
[a]s may be evident from my will, I want the debt encumbering my real estate liquidated by whatever means so that it passes to the beneficiaries free and clear and I don’t want it to be necessary for the properties to be sold in order to satisfy the debt, which, I assume, would come due upon my death.
That sentence is a clear and unambiguous expression of Payne’s intentions that his beneficiaries, Burton and Wohlfarth, receive their respective real estate debt-free and that neither beneficiary be required to sell the property to pay off the mortgages. Payne’s use of the plural for “beneficiaries” and for “properties” evidences that he was referring to both Wolfarth and Burton and the Maine and the New Jersey properties. Moreover, the interpretation that Payne intended the “all my just debts” clause in his will to satisfy the mortgage debts on the New Jersey property is consistent with the opening phrase in his letter that “as may be evident from my will.” That is, it was only “evident” from his will that the property would pass to his beneficiary free and clear if the just debts clause required his estate to pay the mortgage debts on the New Jersey property.
After expressing his desire that payment of the mortgage debts on the Maine property was “a prominent issue,” Payne stated that the $1 million in life insurance proceeds was available to pay off the mortgage balances. He recognized, however, that “this might not be true if estate taxes are assessed on the gross value of the real estate, which is currently worth between $1.7 million and $2.2 million and there is a big tax liability to satisfy ahead of addressing the mortgages.” The estimated values that Payne listed for his real estate is further proof that he was discussing all of his real estate because if he were referring only to the Maine property the value of the real estate would have been substantially less than $1 million, i.e. $375,000.
In short, the November 11, 2001, letter demonstrated that Payne intended his real estate to pass to his “beneficiaries free and clear” and that the “properties” should not have to be sold to pay off “the mortgage balances.” The use of the plural form in those several instances evinces Payne’s intention to pass both the New Jersey property and the Maine property to his beneficiaries, Burton and Wohlfarth, free and clear of mortgage debts.
We conclude that Payne’s probable intent was to give the New Jersey property to Burton free and clear of mortgage debts.
The reasoning that persuades us to find in favor of Burton on the New Jersey property and to interpret the “just debts clause” to require the estate to pay off the mortgage debts on the New Jersey property also supports our conclusion that Payne’s probable intent was to pay off the mortgage debts on the Maine property first and then to pay off the mortgage debts on the New Jersey property. In his November 11, 2001, letter, Payne reinforced that position by stating that payment of the mortgage debts on the Maine property “has been a prominent issue.” Further, Payne provided for the payment of the mortgages on the Maine property in his March 13, 1998, will, and he never wavered in that regard. At all times, Payne expressed his intent to pay off the mortgage debts on the Maine property by a specific bequest to Wohlfarth.
We conclude that if Payne were faced with the question of priority as between payment of the mortgage debts on the Maine and the mortgage debts on the New Jersey property, his probable intent would be to pay the Maine debts first. See N.J.S.A. 3B:23-14 (“[s]hares of the distributees abate as may be found necessary to give effect to the intention of the testator.”)
The judgment of the Appellate Division is reversed, and the case is remanded to the trial court for further proceedings consistent with this opinion.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ZAZZALI, and ALBIN join in JUSTICE WALLACE’s opinion. JUSTICE RIVERA-SOTO filed a separate dissenting opinion.
SUPREME COURT OF NEW JERSEY
A-
12 September Term 2005
IN THE MATTER OF THE ESTATE
OF THEODORE M. PAYNE,
DECEASED.
JUSTICE RIVERA-SOTO, dissenting.
In this case, the testator held ownership interests in two homes in different
states. More importantly, the nature of testator’s ownership in those two properties was
different: he owned his vacation home in Maine in joint ownership with another,
which joint ownership had a right of survivorship, while he alone owned his
primary New Jersey home. The testator’s will reflected this dichotomy: although it specifically
provided that, as part of his estate, the mortgages on the Maine home
were to be satisfied out of his estate, there was no parallel provision
made for any mortgages that may have encumbered his New Jersey home.
In the face of clearly dissimilar treatment by the testator of his two
separate real property holdings, the majority holds that both the trial court and
the Appellate Division erred in determining this testator’s probable intent and that, instead,
the “application of the doctrine of probable intent demonstrates that decedent intended to
bequeath the New Jersey property to his partner debt-free.” Ante, ___ N.J. ___
(2006) (slip op. at 2). I cannot agree.
The only credible proofs tendered that the testator’s will did not represent fairly
the testator’s intent consisted of extrinsic evidence in the form of a letter
from the testator to his counsel that preceded the testator’s execution of the
will by several months.
See footnote 1
Unlike the majority’s expansive application of extrinsic evidence in
order to divine the testator’s probable intent, caution mandates that we hew closely
to the limits we have placed on the use of extrinsic evidence as
a barometer of a testator’s probable intent. As we made clear in Wilson
v. Flowers,
58 N.J. 250, 263 (1971):
[I]n deciding whether there is an ambiguity, a court should always admit extrinsic
evidence including direct statements of intent since experience teaches that language is so
poor an instrument for communication or expression that ordinarily all such evidence must
be examined before a court can be satisfied of whether an ambiguity exists.
We do not, of course, mean to imply that such evidence can be
used to vary the terms of the will, but rather that it should
be admitted first to show if there is an ambiguity and second, if
one exists, to shed light on the testator’s actual intent.
[(citation omitted.)]
Held side-by-side, there is no ambiguity in the explicit terms of the will
generated by that letter. The testator simply does not state in that letter
what the majority holds here, that it was the testator’s intent that his
New Jersey home pass unencumbered to his devisee. On the contrary, it is
the letter that is ambiguous while the will itself is patently clear: the
mortgages on the Maine vacation home were to be satisfied from the estate,
while no such provision was made in respect of the New Jersey home.
See footnote 2
In these circumstances, I would be guided by the deference for the trial
court’s findings properly accorded to them by the Appellate Division. Therefore, I would
affirm for substantially the reasons thoughtfully expressed by both the trial court and
the panel here.
I respectfully dissent.
SUPREME COURT OF NEW JERSEY
NO. A-12 SEPTEMBER TERM 2005
ON CERTIFICATION TO Appellate Division, Superior Court
IN THE MATTER OF THE ESTATE
OF THEODORE M. PAYNE,
DECEASED.
DECIDED April 20, 2006
Chief Justice Poritz PRESIDING
OPINION BY Justice Wallace
DISSENTING OPINION BY Justice Rivera-Soto
CHECKLIST
Footnote: 1
The only other evidence tendered concerning the purported ambiguity consisted solely of
the devisee’s claim of oral promises allegedly made by the testator to the
effect that the devisee would receive the New Jersey home free and clear
of all debts. Neither the trial court, nor the Appellate Division, nor the
majority, nor I credit those allegations.
Footnote: 2
The majority correctly notes that, in the absence of a specific testamentary
direction that property is to pass to a devisee free and clear of
any debts, the devise is “as is,” that is to say, it passes
to the devisee subject to whatever encumbrances it may have at the time
of passing. Ante, ___ N.J. ___ (2006) (slip op. at 14).