James Brown Irrevocable Trust Agreement v. S Below (In re Estate of Brown)
James Brown Irrevocable Trust Agreement v. S Below (In re Estate of Brown)
Opinion of the Court
*790**140In this estate controversy, we must decide whether some of the beneficiaries (the Probate Code defines them as "successors") under a Will can agree to settle an action they brought to contest the Will and the accompanying Estate plan without the consent of all the beneficiaries. We hold that, under the unique circumstances of this case, they can because the settlement neither binds the non-settling beneficiaries nor changes the Will or the Estate plan.
In 2000, the legendary singer and entertainer James Brown executed a Will that devised his personal property and household effects to his six children and poured over the remainder of his estate to a charitable and educational Trust. Brown died in 2006. His Estate has been ensnared in relentless litigation ever since. See, e.g., Wilson v. Dallas ,
In 2015, the Estate and the Trust, acting through the Personal Representative, the Trustee, and the Limited Special Administrator and Trustee (the Fiduciaries),
**141The circuit court further ruled Respondent children had probable cause to contest the Will and the Trust, and the settlement was just and reasonable.
Terry Brown (Appellant) now appeals, claiming the Fiduciaries lacked authority to enter the settlements because his consent was required by §§ 62-3-912, 62-3-1101, and 62-3-1102 of the South Carolina Code (Supp. 2018). He further contends the circuit court erred in finding probable cause and in finding the settlements just and reasonable.
I.
According to Appellant, under South Carolina law there are only two ways to settle a will contest: by entering into a private family settlement agreement as provided by § 62-3-912, or presenting the settlement to the court for approval as provided by §§ 62-3-1101 and 1102. Because he contends both ways require the consent of all successors, Appellant claims the settlements here are invalid because he did not agree to them.
The issues Appellant raises require interpretation of several sections of the Probate Code, which are questions of law that we review de novo. Univ. of S. Cal. v. Moran ,
II.
A. Section 62-3-912
Appellant first argues the settlements must conform to § 62-3-912 and, consequently, require his consent to be valid. Section 62-3-912 provides in pertinent part that "successors may agree among themselves to alter the interests, shares, or amounts to which they are entitled under the will ... in any way that they provide in a written contract executed by all who are affected by its provisions." As the reporter's comment explains, " Section 62-3-912 sanctions settlement agreements among successors allowing them to *791vary the distributions of an estate ... without the necessity of seeking court approval." Appellant and Respondent children are "successors" as they **142are "persons, other than creditors, who are entitled to property of a decedent under his will."
We hold the settlements here are not governed by § 62-3-912 because they do not alter the interests, shares or amounts to which the successors are entitled under Brown's Will. The settlements do not disturb Brown's Will or Estate plan; they preserve it.
Appellant maintains the settlements do alter Respondent children's interests because Respondent children would otherwise be disinherited by the no contest clauses of the Will and the Trust. We find this logic presupposes the no contest clause would be found effective to disinherit Respondent children. No such finding has been made. And nothing in § 62-3-912 requires a settlement of a will contest to be executed by all successors who stand to have their share, interest, or amount under the will increased by enforcement of a no contest clause. More fundamentally, the plain language of § 62-3-912 demonstrates it applies only to agreements by successors who have agreed "among themselves" to alter their take under a will. The statute makes no mention of agreements between successors and third parties, including the estate and its fiduciaries. We therefore hold § 62-3-912 does not apply to these settlements.
B. Sections 62-3-1101 and 1102
Appellant next asserts the circuit court was required to approve the settlements pursuant to §§ 62-3-1101 and 1102. Because he did not sign the settlements, Appellant insists they could not be approved as they were not "executed by all competent persons ... having beneficial interests or having claims which will or may be affected by the compromise." § 62-3-1102.
We find Appellant's premise faulty. Sections 62-3-1101 and 1102 apply only in the event a party seeks to make the settlement of an estate controversy "binding on all the parties." See also § 62-3-1101 Reporter's Cmt. (" Section 62-3-1101 provides that compromises of controversies regarding estates can be made binding on interested parties by court confirmation."). As the circuit court noted, the settlements did not bind **143Appellant, a non-party to them, or any other non-party. The Fiduciaries and Respondents did not seek court approval or confirmation based on §§ 62-3-1101 and 1102.
Section 62-3-1102 is designed to require court approval of the settlement of estate controversies when the settlement (1) will impact persons holding beneficial interests in the estate and (2) is sought to be binding on non-parties. See § 62-3-1101 ; § 62-3-1102. The Probate Code does not tell us what a "beneficial interest" is. See Wilson ,
*792The proper and intended scope of § 62-3-1102 is revealed by the effect of approval of a settlement under it: once approved, "all further disposition of the estate is in accordance with the terms of the agreement." Id . This language tells us the mission of the statutory scheme: to allow parties to alter the distribution of an estate in a manner that (1) binds the parties, successors, interested parties, and the fiduciaries (this is why **144§ 62-3-1102(3) provides the court can order the fiduciaries to execute these agreements), and (2) binds others, including "unborn or unascertained persons and [ ] persons who could not be located." § 62-3-1101 Reporter's Cmt. Section 62-3-1102 is based on the Uniform Probate Code § 3-1102, which was designed to bind fiduciaries and remove their ability to veto a settlement that may affect a successor's beneficial interest. Unif. Probate Code § 3-1102 cmt. (Unif. Law Comm'n 2010) ("The thrust of the procedure is to put the authority for initiating settlement proposals with the persons who have beneficial interests in the estate, and to prevent executors and testamentary trustees from vetoing any such proposal. The only reason for approving a scheme of devolution which differs from that framed by the testator or the statutes governing intestacy is to prevent dissipation of the estate in wasteful litigation. Because executors and trustees may have an interest in fees and commissions which they might earn through efforts to carry out testator's intention, the judgment of the court is substituted for that of such fiduciaries in appropriate cases.").
Appellant is asking us to amend § 62-3-1102 to allow a non-settling successor to veto the settlement of an estate controversy even where the settlement does not affect his beneficial interest and does not bind him. This of course we cannot do, and Appellant's position would allow a holdout successor to force the Fiduciaries to engage in the very thing § 62-3-1102 is intended to avoid: dissipating the Estate in wasteful litigation. See Nelson v. Ozmint ,
Appellant argues upholding the settlement here would ignore the requirements of § 62-3-1102, and also the holding of Wilson v. Dallas . See Wilson ,
We note the above quote from Wilson (which in turn quoted the Arizona court of appeals decision) was made in the context of discussing whether the settlement was eligible for court approval because it had not been executed by the then fiduciaries. Id . at 426-27,
A close reading of Appellant's brief shows his main contention is the Fiduciaries shirked *793their duties by agreeing to the settlement and not enforcing the no contest clause against Respondents. Appellant may be able to pursue this theory elsewhere; whether the Fiduciaries had a duty to litigate the will contest to conclusion (a battle Appellant acknowledged had already cost many millions and the circuit court found would cause "significant financial detriment to the beneficiaries" of the Trust) is not before us. Because the settlements here did not bind Appellant, it would appear they do not prevent him from seeking the very remedies he argues the settlements deprived him: enforcing the no contest clause against Respondents and pursuing a breach of fiduciary duty claim. We express no opinion whatsoever on these potential **146claims, including whether they would have merit or even a good faith basis, or whether they may be foreclosed by legal, equitable, procedural, or other grounds.
C. The Fiduciaries' Authority to Enter into the Settlements
Appellant has not appealed the circuit court's finding that the Fiduciaries were authorized and empowered by § 62-3-105, other provisions of the Probate Code, their appointment orders, and the Will and the Trust to enter the settlements. These findings are therefore now the law of the case. See Atl. Coast Builders & Contractors, LLC v. Lewis ,
Although the Fiduciaries were authorized to enter the settlement agreements, and despite our conclusion that §§ 62-3-912 and 1102 do not apply to or prohibit these settlements, a threshold question remains: identifying what allows a will contest to be settled without the consent of all beneficiaries of the will.
To answer this question, we consider this is a formal probate proceeding. S.C. Code. Ann. § 62-1-304 (Supp. 2018). No specific provision of the Probate Code categorically prohibits the settlement of will contests or conditions their settlement upon the consent of all successors. Where the Probate Code is silent, our common law can speak.
In a formal probate proceeding, both the South Carolina Rules of Probate Court Procedure and the South Carolina Rules of Civil Procedure govern. § 62-1-304 ; see In re Estate of Weeks ,
In light of our holding that the settlement is valid, we need not address Appellant's claims that the trial court erred in finding the settlement just and reasonable and probable cause supported Respondents' will contest, as those findings are not relevant to the issues on appeal. See Futch v. McAllister Towing of Georgetown, Inc. ,
*794We therefore affirm the ruling of the circuit court that the settlements are valid.
AFFIRMED.
THOMAS and MCDONALD, JJ., concur.
We are aware the Estate, the Trust, and the Fiduciaries are also Respondents to this appeal, but we will call the Personal Representative, Trustee, Special Administrator, and Limited Special Administrator "Fiduciaries" in this opinion for ease of reference.
We decide this case without oral argument pursuant to Rule 215, SCACR.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.