WILL OF WRIGHT, Wis., Judgment, Law, casemine.com

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For the appellant there were briefs by Frank P. Fosgate, collection and, deportation counsel, and Charles C. Lubcke and Clarence Simon, assistant counsel, and oral argument by Mr. Simon. For the respondent there was a brief by Stafford, Pfiffner Stafford of Chippewa Falls, and oral argument by Richard H. Stafford.

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Smart Summary

Factual and Procedural Background

Alfred Wright is an adult inmate of the Chippewa County Hospital who is supported and cared for at public expense. He was over twenty-one years old when first hospitalized and neither he nor his father, Samuel C. Wright, were liable to defray his institutional expenses apart from the trust.

By his will Samuel C. Wright created a trust of $2,000, naming First National Bank of Chippewa Falls as trustee, to provide benefits for Alfred in excess of those provided by the institution and to pay for his burial. The trust expressly stated its purpose was to fund comforts, luxuries, necessities and other provisions not provided by the institution, to place assets beyond Alfred's creditors, to prevent Alfred's power to anticipate or assign benefits, and to protect the fund from claims of creditors including the State of Wisconsin. The will provided that the trustee had discretion in management, that the trust would terminate on the beneficiary's death (with remaining assets payable to the American Bible Society), and that if Alfred recovered sanity the assets would be paid directly to him. The trustee had made no disbursements from the fund.

The State Department of Public Welfare petitioned the county court directing the trustee to pay the principal and accumulated interest to the department and adjudging that the American Bible Society had no interest in the fund, asserting the statutory authority to appropriate the trust for Alfred's maintenance. The county court denied the department's petition. The department appealed. The Supreme Court of Wisconsin affirmed the county court's order.

Legal Issues Presented

Whether the State Department of Public Welfare may, under statutory authority, compel appropriation of the trust fund (or its income) to reimburse the department for the cost of Alfred Wright's maintenance in the county institution.
Whether sec. 231.21(2), Stats., authorizes appropriation of the trust fund despite express testamentary directions limiting the fund's use to benefits not provided by the public institution.
Whether sec. 231.11(8), Stats., which makes unlawful limitations that deprive the department of recovery rights for institutional maintenance, is violated by the trust's restrictions.

Arguments of the Parties

Appellant (State Department of Public Welfare)

The department contends the trust was created to supply Alfred's comforts and necessities and that his maintenance in the hospital is a comfort and necessity; therefore the trust fund should be applied to the cost of his maintenance there.
The department relies principally on sec. 231.21(2), Stats., asserting that the court having jurisdiction over the trust may authorize appropriation of trust funds for the care or maintenance of a beneficiary.
The department also cites sec. 231.11(8), Stats., arguing that restrictions in the trust should not prevent recovery of maintenance costs by the department.

Respondent (First National Bank of Chippewa Falls, Trustee)

The trustee (respondent) enforced the trust according to its terms and has made no disbursements; respondent (as noted by the court) argued that the trust's express provisions limit payments to comforts and necessities not provided by the institution and therefore do not permit use for ordinary hospital maintenance.
The respondent pointed to precedents (the Boyle cases) demonstrating that sec. 231.21(2) applies only where the beneficiary has an absolute and uncontingent interest in the trust estate, which Alfred does not have under the will's terms.
The respondent also implicitly relied on the county court's discretionary decision to preserve the trust and not to appropriate funds to the department.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
re Estate of Treat (1948), 253 Wis. 527, 529, 34 N.W.2d 685	The rule that in construing a will the general intent of the testator, if not inconsistent with law or public policy, must govern.	The court invoked this rule to emphasize that the testator's expressed intent to limit the fund to benefits not provided at public expense should control interpretation of the trust.
Will of Rice (1912), 150 Wis. 401, 136 N.W. 956, 137 N.W. 778	The principle that the right to make a will is sacred and constitutional and includes the right to have it carried out.	The court cited this authority to support the proposition that testamentary dispositions should be respected and carried out according to the testator's intent.
Estate of Ogg (1952), 262 Wis. 181, 186., 187, 54 N.W.2d 175	Reinforcement of the principle that wills should be carried out in accordance with the testator's intent.	The court relied on this precedent in affirming the general tenet that testamentary intent has equal dignity and should be honored when consistent with law and public policy.
Estate of Boyle (1939), 232 Wis. 631, 640, 288 N.W. 257	The rule that a petitioner lacking an interest that can be appropriated or sold cannot place himself within the provisions of sec. 231.21(2), Stats.	The court used this case to illustrate that Alfred does not possess an interest in the trust that permits appropriation under sec. 231.21(2).
Boyle v. Marshall Ilsley Bank (1942), 242 Wis. 1, 4, 6 N.W.2d 642	The holding that, to come under sec. 231.21(2), the beneficiary must have an absolute and uncontingent interest in the trust estate.	The court applied this precedent to conclude that Alfred's interest, being contingent and limited by the will's terms, does not fall within the statute's provisions authorizing appropriation.

Court's Reasoning and Analysis

The court's analysis proceeded from construction of the trust instrument to application of statutory provisions and precedents. First, the court read the trust clauses literally and concluded the settlor expressly limited the fund's use to "extra" comforts, luxuries, necessities and provisions not supplied by the institution; the trust was not intended for ordinary hospital maintenance or the routine cost of institutional support.

The court acknowledged that sec. 231.21(2), Stats., confers discretionary power on a court having jurisdiction over a trust to appropriate trust funds for a beneficiary's care or maintenance, but emphasized that such discretion is conditioned on the court's judgment that appropriation will not prejudice the rights and interests of others. Appropriating the fund to reimburse the department would destroy the contingent remainder interest of the American Bible Society and thus prejudice its rights.

The court observed that the county court had exercised its discretion by denying the department's petition and that the department did not claim an abuse of that discretion. The court relied on prior decisions (the Boyle cases) holding that sec. 231.21(2) applies only where the beneficiary has an absolute and uncontingent interest in the trust; Alfred's interest is limited and contingent under the will and therefore not subject to appropriation under that statute.

Finally, the court addressed sec. 231.11(8), Stats., which makes unlawful testamentary limitations that would deprive the department of recovery rights for maintenance costs. The court found no violation because Samuel C. Wright had not been liable for Alfred's institutional support and the department conceded as much; therefore the trust restrictions did not deprive the department of any right it otherwise had.

Holding and Implications

Holding: The Supreme Court of Wisconsin affirmed the order of the county court denying the State Department of Public Welfare's petition to appropriate the trust fund. (Order affirmed.)

Implications: The direct consequence is that the trustee must retain and administer the trust according to the testator's terms; the department may not compel appropriation of the fund for the beneficiary's ordinary institutional maintenance under the circumstances presented. The opinion does not purport to establish a new broad rule beyond applying existing principles and precedent to the facts; it enforces the testator's expressed limitations and confirms the county court's discretionary decision not to appropriate the trust.

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WILL OF WRIGHT: STATE DEPARTMENT OF PUBLIC WELFARE, Appellant, v. FIRST NATIONAL BANK OF CHIPPEWA FALLS, Trustee, Respondent: AMERICAN BIBLE SOCIETY, Defendant.

Proceeding by the State Department of Public Welfare to capture a trust fund set up primarily for the benefit of an incompetent. The order denied the department's petition.

Alfred Wright, an adult inmate of the Chippewa County Hospital, is supported and cared for there wholly at public expense. He was more than twenty-one years of age when he was first hospitalized and it is conceded that there was no liability on the part of his father, Samuel C. Wright, to defray the expense so incurred.

By his will the father set up a trust of $2,000, naming the First National Bank of Chippewa Falls as trustee, to provide benefits for the son in excess of the benefits provided for him by the institution and to defray the expense of his burial. The will provided for termination of the trust under certain conditions and any funds remaining in the trust estate at the termination are to be paid over to the American Bible Society.

The incompetent has no property of his own from which to contribute to his support. The department has applied for an order directing the trustee to pay to the department the principal of the trust fund and its accumulated interest, and to adjudge that the Society has no interest in the fund.

The pertinent part of Samuel C. Wright's will respecting the trust is as follows:

"My son, Alfred Wright, is incompetent and is now an inmate at the Chippewa County Insane Asylum and is more than earning his maintenance and care by his labors on the farms of said institution, and the purpose of this trust is to conserve such assets for the benefit of my said son, Alfred Wright, and for his burial so that such funds shall be used for such comforts, luxuries, necessities, and such other provisions as may not be provided for by said institution, and to place such assets beyond the reach of his creditors. However, this trust is made with the express condition that said beneficiary, Alfred Wright, shall not have the power to anticipate or assign the benefits which the trustee may pay to him, or expend in his behalf under this trust; these trust provisions are to be free from the claims of the creditors of said Alfred Wright, including the state of Wisconsin, or any subdivision thereof, or municipality therein, both as to principal and income.

"The trustee shall have control and discretion in the management of this trust. It shall not be liable for more than ordinary care in the management of this trust, and shall receive a reasonable compensation for its services, to be determined by itself, subject to the approval of the probate court in the county in which the trust estate is managed.

"The trustee may advise with legal counsel to be selected and employed by itself at the expense of the trust estate in the construction and administration of this trust; and anything done or suffered in good faith by the trustee in accordance with the opinion of counsel shall be conclusive and relieve the trustee of all liability to the trust estate.

"That this trust shall terminate at such time and in such manner as such trustee may determine, and shall in any event terminate upon the death of the beneficiary, Alfred Wright, and upon such termination the remaining assets of said trust fund shall be paid over to the American Bible Society; provided, however, that in the event that my said son, Alfred Wright, should recover his sanity and be discharged as mentally competent and capable of looking after his own affairs then and in that event all assets of said trust estate shall be paid directly to said Alfred Wright.

"That in the event that any of the creditors of my said son, Alfred Wright, including the state or any subdivision thereof, or municipality therein shall be held to be entitled to share in the provisions of this trust estate, or in the event that said trustee shall for any reason deem it appropriate so to do then this trust estate shall immediately terminate and the balance in said trust fund shall be paid over to said American Bible Society."

The trustee has made no disbursements from the fund.

The department asserts that retention of the trust fund by the trustee and the trustee's performance of the trust according to its terms contravenes the statutes and such statutes authorize and command the order for which the petition prays.

The department has appealed from the court's order denying the department's petition.

Additional facts are given in the opinion.

BROWN, J.

The department concedes that Samuel C. Wright in his lifetime and his estate thereafter were not liable, apart from the terms of the trust, for Alfred Wright's support in the county hospital but the department says that the will set up the trust solely to supply Alfred's comforts and necessities; his maintenance in the hospital is a comfort and a necessity to him; therefore the application of the trust fund to the expense of Alfred's maintenance there carries out the purpose of the trust.

A reading of the trust clauses of the will must convince the reader that the fund is not to be spent for the ordinary expense of Alfred's hospitalization. They expressly declare that the fund is to be conserved for benefits not provided at public expense. It is only the specified extra comforts and necessities which are to be financed by the trust. Any interpretation of the trust provisions which permits the use of the fund to pay for Alfred's ordinary maintenance as a charity patient is directly contrary to the settlor's express direction and desire.

In re Estate of Treat (1948), 253 Wis. 527, 529, 34 N.W.2d 685, we said:

"In construing a will the most-important rule to be followed is, of course, the one which requires that the general intent of the testator, if not inconsistent with some established rule of law or public policy, . . . must govern."

We know of no public policy to prohibit a person who is not liable for the support of a charity patient in a public institution to give to the patient extra comforts or luxuries or, at need, necessities which the institution does not furnish nor do we find a public policy to seize such gifts before the patient has received them.

Appellant relies principally on sec. 231.21 (2), Stats., to support its contention that the trust fund may be appropriated regardless of the intent of the testator. The pertinent part of that section is:

". . . in case a beneficiary is an adult whose maintenance is not sufficiently provided for by the trust, who has become, or is unable to take care of himself the court having jurisdiction over the trust estate, may, if in his judgment the rights and interests of others in said trust, will not be thereby prejudiced, authorize and adjudge the appropriation and application of so much of the trust fund, or the income thereof, or the proceeds of the trust property, or the principal of such loans as are hereinafter provided for, as he may deem necessary or proper for the care, maintenance, or education of such beneficiary, to be used for said purpose, . . ." (Italics supplied.)

The use of the word may in the above statute gives certain discretionary powers under certain conditions to the court having jurisdiction of the trust, enabling the court to apply trust funds to the support of a beneficiary. One such condition of the use of the discretionary power is that, in the judgment of the court, the rights and interests of others will not be prejudiced by such use of the fund. It is obvious that the transfer of the fund to the department to reimburse the department for the cost of Albert's maintenance wipes out the contingent remainder of the American Bible Society, thus prejudicing its right to receive any part of the fund remaining at the termination of the trust.

The county court did not file a written opinion supporting the order denying the department's petition but it can hardly be supposed that the court overlooked that the right and interest of the Society would be prejudiced by the disposition of the fund which the department seeks. The court, too, might conclude that the terms of the will ought to be carried out and that the fund should remain intact in the trustee's hands, available to meet extraordinary necessary or desirable expenses beyond the hospital's ability or disposition to incur (for example, expensive medical services), or to meet the condition of a delivery of the fund to Alfred if he recovers his sanity. And to grant the department's petition destroying the trust would destroy also Samuel C. Wright's purpose to save his son from a pauper's grave.

We have held frequently that in Wisconsin a right to make a will is a sacred and a constitutional right and that right includes a right of equal dignity to have it carried out. Will of Rice (1912), 150 Wis. 401, 136 N.W. 956, 137 N.W. 778; Estate of Ogg (1952), 262 Wis. 181, 186., 187, 54 N.W.2d 175.

In any event the county court did not exercise its power to appropriate the fund which, at the most, was a discretionary power and the department has not contended that the court abused its discretion in denying the department's application.

Whatever the interest which Alfred has in the trust fund, it is not such an interest which permits the fund to be appropriated for his support in the institution. In Estate of Boyle (1939), 232 Wis. 631, 640, 288 N.W. 257, the petitioner was the beneficiary. He attempted to have the court order the immediate use of the fund for the payment of his debts, contrary to the terms of the trust instrument. He contended that sec. 231.21 (2), Stats., authorized such an order. In response we said:

"The petitioner cannot possibly place himself within reach of the provisions of sec. 231.21 (2 ), Stats. He has no interest which can be appropriated to him, no interest which can be sold, and nothing that can be used as a security for a loan."

Respondent also refers us to Boyle v. Marshall Ilsley Bank (1942), 242 Wis. 1, 4, 6 N.W.2d 642. There we held that in order to come under the provision of sec. 231.21 (2), Stats., the beneficiary must have an absolute and uncontingent interest in the trust estate.

So, here, Alfred's interest has the same limitations as those in the two Boyle Cases and is not within the provisions of that statute.

Appellant calls our attention to sec. 231.11 (8), Stats., reading as follows:

"It shall be unlawful to limit or restrict in any manner whatsoever the use of real or personal property or the rent or income thereof, owned, possessed, or enjoyed by any person to the extent of depriving the state department of public welfare or county of legal settlement of its right to recover the actual per capita cost of maintenance furnished an inmate of any state institution, or any county institution, in which the state or county of legal settlement is chargeable with all or a part of the inmate's maintenance."

We find no help for the department there. Samuel C. Wright was not liable for the support of his son in the institution. The department concedes it. The department, then, has no right to recover from him the cost of Alfred's maintenance. Consequently the terms of the trust do not deprive, limit, or restrict the department in any such right. Contrary to appellant's contention, we conclude that the restrictions expressed in the trust instrument do not violate sec. 231.11 (8), Stats., because they do not deprive the department of any right which it would otherwise have.

We conclude the order of the county court must be affirmed.

By the Court. — Order affirmed.

WILL OF WRIGHT