Equalization Payments in Will Prevailed Over Testator’s Intent for Equal Treatment of Beneficiaries

The Iowa Court of Appeals affirmed the probate court’s decision to enforce a will as written even though this resulted in materially unequal distribution among the beneficiaries. With five land parcels and seven children, the decedent created a distribution scheme where five children received land and the other two children would receive a set payment amount. The set payment amounts were low compared to the financial value of the land given to the other five children. There was ample extrinsic evidence that the decedent intended for each beneficiary to receive equal treatment from a financial perspective. However, the language of the will was unambiguous and the stated dollar figures within the will were upheld.

Facts

Delores Todd was a farm wife with seven children. Throughout her life, she would go to great lengths to ensure that her children were always treated equally. She even “set a timer to ensure equal time with toys[.]” In 1995, her husband passed away. That year she made a will that devised her estate to her children in equal shares.

The family farm consisted of five parcels, and Delores did not want the parcels to be split. She decided to rewrite her will in order to prevent the parcels from being subsequently split. In order to achieve this goal, she decided that some children would receive the land and other children would receive cash. Delores was aware it would be impossible to know the land value at the time of her death. She discussed the issue with Mark, her son, who managed the farm. Mark told Delores that if the cash values in the will were low and “not right” that the children would “have to make it right.”

Delores went to her attorney with handwritten notes that detailed a plan where the land was distributed to five of her children. Each child who received a land distribution was directed to give a cash payment of a specific amount to one of the two children who did not receive land. The calculations on Delores’s notes show that the cash payments were meant to be equalization payments to the children who did not receive land. Her calculations were based on 1995 land values. In 2010, she executed the new will.

Delores died in 2020. During the probate process it was discovered that 30 acres were not included in the real estate legal descriptions found within the will. All the beneficiaries agreed that Delores wanted 10 acres to go one child and 20 to go another. The attorney who drafted the will testified that the omission of the acres was a scrivener’s error.

The two children who did not receive land asked the probate court to review the portion of the will that addressed the real estate and equalization payments. They wanted the court to construe the will in order to achieve equal division of the entire estate. They argued that this was Delores’s overall intent.

The probate court found that the will was unambiguous and enforced the fixed dollar amounts of the cash equalization payments. It further found that the 30 acres missing from the will were bequests by implication to two sons, and did not require modification of the cash equalization payments.

The two children who did not receive land appealed the probate court’s decisions by challenging the cash equalization payments.

Analysis

The Court of Appeals began its analysis by reviewing the rules of will interpretation. Importantly, the intent of the decedent is the guiding principle, but intent must be found from the language contained within the will. Extrinsic evidence of intent is only considered when there is ambiguity with the will. 

The Court agreed that Delores’s overall intent was an equal distribution. However, in order to reach this conclusion, they relied on extrinsic evidence like the handwritten note Delores brought to her attorney and testimony about how she raised her children. The Court can only look at this extrinsic evidence to determine the meaning of the will when the will is ambiguous.

Upon examining the will, the Court found that the cash equalization payment provisions were not ambiguous. The law does not allow the Court to “reform and rewrite the will, swapping out the cash values Delores determined with values of [the Court’s] creation.” In this spirit, the Court disavowed the portion of the probate court’s ruling that speculated on Delores’s motivation for using the 1995 values. Finally, the Court stated that its role is not “to question the wisdom of [Delores’s] arithmetic or choices she made.”

The Court also addressed the missing 30 acres, affirming the probate court’s decision. The Court noted that there is a long history of permitting probate courts to address incomplete or inaccurate property descriptions. Further, the drafting lawyer admitted the omission was a scrivener’s error and not intentionally done by Delores.