## Facts

- David T. Farley and Pennsy Davis Farley were married for decades, had no children, lived frugally, and accumulated significant assets.
- In 1973, the spouses executed reciprocal “mirror” wills leaving each spouse’s entire estate to the other.
- In March 1976, Pennsy suffered a mental collapse, was hospitalized, and was later adjudicated incompetent; shortly thereafter David suffered serious heart problems.
- In May 1976, David created and funded a revocable inter vivos trust naming Kanawha Banking & Trust Company, N.A. (KB & T) as trustee, transferring approximately $145,000 into the trust.
- The trust paid net income to David during his lifetime and, if Pennsy survived him, directed income to her only if her other income known to the trustee was insufficient for her comfortable support and medical care; remainder distributions were to named beneficiaries after both spouses died.
- David expressly retained the right to amend or revoke the trust during his lifetime and executed a new will leaving relatively little outside the trust.
- David died in July 1976; his probate estate was appraised at roughly $12,000, with most assets held by the trust.
- Pennsy independently owned substantial assets (approximately $700,000 and a home).
- Pennsy’s committee sued to renounce the will and to subject the trust corpus to Pennsy’s statutory dower/elective share; the trial court upheld the trust and excluded its assets from the dower base.

## Issues

1. Whether a surviving spouse’s statutory dower/elective share reaches assets transferred during marriage to a revocable inter vivos trust where the settlor retained broad control until death.
2. Whether the trust should be treated as an invalid device to defeat spousal rights (or as effectively testamentary) such that the trust property would be included in the property subject to dower/elective share.

## Decision

- The Supreme Court of Appeals of West Virginia affirmed.
- The court held the inter vivos trust was valid and effective as a lifetime transfer of interests even though David retained a life income interest and a power to amend or revoke.
- The trust corpus was not part of the decedent’s estate for purposes of computing the surviving spouse’s statutory dower/elective share.
- The court declined to expand the statutory reach of dower/elective share to nonprobate trust assets absent legislative authorization.
- On the facts presented, the court found no basis to treat the trust as a sham or fraudulent effort to deprive the surviving spouse of statutory protection.

## Legal Principles

- A properly created and funded inter vivos trust is not rendered invalid or testamentary merely because the settlor retains a life interest and a broad power of revocation or amendment.
- For dower/elective-share purposes, West Virginia’s statutory scheme applies to the property interests specified by statute; courts will not judicially enlarge that statutory base to include assets transferred to a revocable inter vivos trust without clear legislative direction.
- Absent proof that a transfer is illusory or tainted by fraud, overreaching, or sham, trust assets transferred during life are treated as outside the probate estate and outside the dower/elective-share computation.

## Conclusion

The court upheld a revocable inter vivos trust that removed most assets from the probate estate, ruling that the surviving spouse’s statutory dower/elective share did not attach to the trust corpus because the trust was a valid lifetime transfer and West Virginia law did not extend spousal-share rights to such nonprobate assets absent legislative action or fraud.


Davis v. KB & T Co., 172 W. Va. 546, 309 S.E.2d 45 (W. Va. 1983)