
    Lily Heart SOL v. Richard Ernest MILLER, Jr.
    2001066.
    Court of Civil Appeals of Alabama.
    June 7, 2002.
    
      Gary L. Armstrong of Armstrong, Vaughn & Scroggins, Daphne, for appellant.
    Charles H. Dodson, Jr., of Sims, Grad-dick & Dodson, P.C., Mobile, for appellee.
   PITTMAN, Judge.

Lily Heart Sol sued Richard Ernest Miller, Jr., for a divorce after 11 years of marriage. She requested periodic alimony, custody of and child support for their one child, and a division of marital property and debts. Following the presentation of ore tenus evidence, the trial court divorced .the parties; awarded the wife sole physical custody of the child and $719 monthly in child support; awarded the husband visitation with the child; divided the marital assets, including a family trust; divided the marital debts; and awarded the wife $1,000 per month as periodic alimony. The wife and the husband each filed a postjudgment motion. The trial court granted the husband’s postjudgment motion in part and provided that the husband would pay the periodic-alimony award for only 12 months. The wife appeals.

The wife argues that, in several ways, the trial court’s division of property was inequitable and its periodic-alimony award was insufficient. We conclude that the dispositive issue as to these assignments of error is the wife’s contention that the trial court erred by finding that the Sol/Miller Revocable Living Trust was a marital asset and awarding the husband an interest in the trust.

Before the wife filed for divorce, the husband signed an agreement that stated, in pertinent part:

“I, the [husband], do hereby release, relinquish, forego, renounce, give up and forever abandon any and all interest I may have as a beneficiary of that certain Sol/Miller Revocable Living Trust dated December 30, 1992, ... including, but not limited to, my interest as a current beneficiary under said trust, any right I may have to insist that the trust be perpetuated beyond this date and any right I may have to the distribution of any assets of the trust upon its dissolution.”

The husband does not contend that the release he signed is invalid; rather, he contends that, because the trust is marital property, and in spite of the fact that he signed a release relinquishing his right as a beneficiary and his right to receive any assets from the trust, the trial court has the power to award him assets from the trust as a part of the divorce judgment. We disagree.

As is the case with a contract, whether a release is ambiguous is a question of law. Baker v. Blue Circle, Inc., 585 So.2d 868 (Ala.1991). As stated above, the release the husband signed unambiguously releases any beneficial interest in the trust and any right to receive any assets from the trust. A release, like a contract, is enforced as written. McNeely v. Spry Funeral Home of Athens, Inc., 724 So.2d 534 (Ala.Civ.App.1998), citing § 12-21-109, Ala.Code 1975. We conclude that the husband, by signing the release, relinquished his right to any distribution of the trust assets, including a distribution pursuant to a divorce judgment. Therefore, the trial court erred by awarding the husband any assets from the trust.

The division of property and the award of alimony are interrelated, and the entire judgment must be considered in determining whether the trial court abused its discretion as to either issue. See O’Neal v. O’Neal, 678 So.2d 162, 164 (Ala.Civ.App.1996), citing Montgomery v. Montgomery, 519 So.2d 525, 526 (Ala.Civ.App.1987). Because we hold that the husband is not entitled to any assets from the trust, the remaining property division and the periodic-alimony award must be reexamined. Therefore, the trial court’s judgment is reversed insofar as it divided the marital property and the debts and awarded periodic alimony. The trial court is instructed on remand to make an equitable division of property and to recalculate the periodic-alimony award in light of the wife’s exclusive right to the Sol/Miller Revocable Living Trust.

The wife also argues that the trial court erred by not finding a child-support arrearage because the husband had not complied with the child-support orders. The wife claims that the arrearage arises from the fact that the husband did not start paying the child support ordered by the trial court until the date the trial court entered its judgment; the wife argues that the child support ordered in the divorce judgment should be retroactive to the date of the parties’ separation. The amount of child support the trial court ordered the husband to pay was slightly lower than the child support ordered in the final judgment. Therefore, there is no child-support arrearage, because the husband satisfied the court’s interim order and final judgment.

The wife next argues that the trial court erred by not stating that one of the obligations of the parties was the child’s medical expenses not covered by insurance. The judgment ordered the husband to pay the child’s medical insurance. The judgment did not provide for the payment of uninsured medical expenses. The wife does not argue that the trial court’s judgment in this regard is inequitable. The wife requests that this court reverse that portion of the trial court’s judgment and instruct the court to order the husband to pay the uninsured medical expenses. We conclude that this issue is more properly the subject of a petition to modify the divorce judgment, and we will not reverse the trial court’s judgment as to this issue.

The wife lastly argues that the trial court erred by not addressing the issue of college expenses for the parties’ 11-year-old son. This court has consistently held that an award of postminority educational support based on consideration of the Ex parte Bayliss, 550 So.2d 986 (Ala.1989), factors when a child is still a few years from attending college is reversible error. See Martin v. Martin, 624 So.2d 192 (Ala.Civ.App.1993) (holding that trial court should not consider postminority educational support for children ages 11, 13, and 16 because such consideration is premature in light of the Bayliss factors). Therefore, the trial court properly did not address the issue of college expenses for the 11-year-old son.

The trial court’s judgment is affirmed in part and reversed in part, and the cause is remanded for proceedings consistent with this opinion.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED WITH INSTRUCTIONS.

THOMPSON, J., concurs.

YATES, P.J., concurs in the result.

CRAWLEY and MURDOCK, JJ., dissent.

YATES, Presiding Judge,

concurring in the result.

Section 30-4-9, Aa.Code 1975, provides:

“The husband and wife may contract with each other, but all contracts into which they enter are subject to the rules of law as to contracts by and between persons standing in confidential relations.”

Such contracts between a husband and wife, whether made before or after marriage, are recognized as valid. Tibbs v. Anderson, 580 So.2d 1337 (Ala.1991); Campbell v. Campbell, 371 So.2d 55 (Ala.Civ.App.1979). These agreements are subject to close scrutiny. § 30-4-9; Payne v. Payne, 284 Ala. 699, 228 So.2d 15 (1969).

In Tibbs, supra, the wife signed an agreement, just two hours after the couple married, that provided that she waived her right to any interest in real or personal property the husband acquired before the marriage. When the husband died, the wife sought an elective share of his estate. The trial court determined that her claim was barred. The supreme court held that § 43-8-72 permits a spouse to waive all statutory rights in the other spouse’s property before or after marriage. The court noted that although the parties presented their arguments under caselaw interpreting prenuptial agreements, a husband and wife can contract with each other pursuant to § 30-4-9, and the judgment could have been affirmed on that ground.

In Payne, supra, the wife had started divorce proceedings against the husband on several occasions, and she finally secured a divorce shortly after the husband had transferred his interest in a motel to her. The husband had purchased the motel in 1964. The husband was hospitalized for alcoholism in April and again in May 1966. In September 1966, the husband transferred his interest in the motel to the wife. In November 1966, the husband was hospitalized again. He argued that the wife exercised undue influence over him when she was the dominant party in their relationship. The court held that the trial court did not err in refusing to set aside the conveyance.

Taylor v. Martin, 466 So.2d 977 (Ala.Civ.App.1985), involved two contracts between the parties who were then husband and wife. Both contracts, executed at different times, required the wife to sign a joint federal income tax return with the husband for the preceding year, and in consideration of her signing the return, the husband agreed to make periodic payments to the wife during the next school year to be used for college expenses for the wife’s daughter from a previous marriage. Shortly after the execution of the second contract, the wife filed for a divorce; the divorce was later granted. She sued the husband, alleging a breach of both contracts because he failed to make some of the payments under each of the contracts. The trial court found in favor of the wife; this court affirmed.

In the present case, the parties were married in 1988. In 1993, the wife inherited over $500,000, which was placed into a trust. The husband has a degree in accounting; he also has a master’s degree in business from Harvard University. The husband was named as a cotrustee. It appears that since the time of the wife’s inheritance, the wife worked only seasonally and the husband has held relatively low-paying jobs and that the parties have lived off the assets of the trust. On December 10, 1999, the husband resigned as cotrustee. He testified that the wife asked him to resign because of the way he had handled a “margin call” on an account. The husband then moved to Pennsylvania in search of better employment. On February 28, 2000, he signed an agreement releasing all his interest in the trust. The release provided:

“Know all men by these presents that for and in consideration of $10.00 and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, I, the undersigned Richard Ernest Miller, Jr., do hereby release, relinquish, forgo, renounce, give up and forever abandon any and all interest I may have as a beneficiary of that certain Sol/Miller Revocable Living Trust dated December 30,1992, consisting of nineteen typewritten pages, executed by myself and Lily Heart Sol, including, but not limited to, my interest as a current beneficiary under said trust, any right I may have to insist that the trust be perpetuated beyond this date and any right I may have to the distribution of any assets of the trust upon its dissolution.
“Further, I hereby release, relinquish, forgo, renounce, give up and forever abandon any right I may now have, or may have ever had, to claim or contend that the arrangement between myself and Lilly Heart Sol whereby we both executed the above described trust and our separate last wills and testaments constituted joint and mutual wills or a contract to make a will, and I hereby confirm the right of Lily Heart Sol to make a new will without any restriction whatever.
“And finally further, I hereby ratify and confirm my resignation as a trustee of the above described trust by typewritten instrument signed by me dated December 10,1999.”

On March 22, 2000, the husband testified that the parties’ son had called him to wish him “happy birthday,” and that he had spoken with the wife and stated “I’d made a decision, I was coming home and I wanted to try to save the marriage.” On March 24, 2000, the wife filed a complaint for divorce.

The husband admitted in his testimony that he voluntarily signed the release agreement drafted by the wife’s attorney. It is clear from his testimony and from the fact that he served as cotrustee that he knew the full value of the trust when he relinquished his interest.

Section 30-4-9 allows husbands and wives to enter into contractual transactions with each other. That is, one spouse is allowed to convey to the other his or her interest in marital property before divorce or death. Doing so takes the property out of the marital estate, leaving it as the separate property of the spouse to whom it is conveyed. The husband was well-educated, and sophisticated in business matters, and he admitted that he was aware that he was relinquishing his interest in the trust. Although the husband stated that he signed the agreement because of his desire to reconcile with the wife, he admitted that he was not coerced into signing the agreement. While I agree that the trust was used as marital property during the marriage, the trust became the separate property of the wife through a valid, express agreement signed by the husband relinquishing his rights to the distribution of any assets of the trust.

Based on the foregoing, I concur in the result.

MURDOCK, Judge,

dissenting.

In addressing the revocable family trust at issue, the trial court found as follows:

“After the wife received her inheritance, a family trust was created. The court deems that since the wife’s inheritance was used for the support and maintenance of the family that it became a marital asset. The court further finds from the evidence that the trust was created for tax saving purposes and to avoid probate. The court would therefore treat the assets in the trust as part .of the marital estate and disregard the trust entity.”

In essence, without expressing an opinion as to the efficacy of the trust vis:a-vis third parties (i.e., “for tax saving purposes and to avoid probate”), the trial court concluded that, as between the parties, the trust did not prevent the.property at issue from being treated as marital property for purposes of Ala.Code 1975, § 30-2-51(a). Under the equitable principles reflected in § 30-2-51(a) and in our caselaw generally with respect to property division upon divorce, and under the unique facts of this case, and given the absence of any authority having been cited by the wife for the proposition that the trust insulates this property from treatment under § 30-2-51(a), I cannot conclude that the judgment of the trial court should be reversed as to this issue.

In addition, I would note that, although the largest asset placed into the trust herein at issue was the wife’s inheritance of over $500,000 worth of Regions Bank stock, the record shows that the husband put $90,000 of his own funds into the trust and that various other marital properties with substantial value were also placed into the trust. Among the trust assets were the parties’ “home place” and two condominiums in Colorado. One of the condominiums, valued at $100,000, is the only trust asset the husband was awarded in the divorce judgment.

Notwithstanding the fact that both parties had contributed assets to the trust, the wife argues that by signing the release in question, the husband gave up his rights to receive any portion of the property. Even if we accept the proposition that by signing the release at issue the husband lost certain rights, the rights he released thereby were only his rights as beneficiary of the trust.

Further, even if the assets of the trust became the separate estate of the wife upon the husband’s signing of the release, § 30-2-51(a) would still require us to affirm the trial court. That statute provides, in part, that in making a property division in a divorce:

“the judge may not take into consideration any property acquired ... by inheritance or gift unless the judge finds from, the evidence that the property, or income produced by the property, has been used regularly for the common benefit of the parties during the marriage.”

(Emphasis added.) In this case, there is no dispute that substantial amounts of both the income and the assets in question were used for the common benefit of the parties during their marriage.

As noted, the wife cites no authority for the proposition that assets placed in a revocable trust of the nature of the trust at issue in this case are somehow insulated from the equitable principles of property division set out in § 30-2-51 and in our caselaw. I believe the trial court’s judgment was consistent with those equitable principles.

In light of the foregoing, I respectfully dissent.

CRAWLEY, J., concurs. 
      
      . During 1998 to 1999, the husband earned approximately $50,000. However from 1992 to 1997 and during 2000, he did not earn over $10,000 year.
     
      
      . Neither party argues that, because the husband also resigned as trustee and the wife thereby became both the sole beneficiary and the sole trustee, the merger doctrine applied in First Alabama Bank of Tuscaloosa v. Webb, 373 So.2d 631 (Ala.1979), also is applicable in this case. Even if the merger doctrine were applied in this case so as to support the conclusion that the property of the trust became the separate estate of the wife, the discussion in this writing assumes that this property is the separate estate of the wife and explains why I nonetheless would affirm the trial court's division of that property.
     