How to Transfer Automobiles without Probate in Mississippi

October 18, 2011 By Leave a Comment

I get a bunch of e-mails from people who want to know where to start with Mississippi probate.  Many of them have not considered whether probate is really required.

As I’ve mentioned in my discussion of how to determine whether Mississippi probate is necessary, so much depends on what assets the decedent owned, where they are located, and how they are titled.

Every once in a while I get a call from someone with a deceased friend or family member that had no assets other than an automobile.  Sometimes they have been told that they need to go through probate so that they can get clear title to the automobile.  But this isn’t always the case.

The Title Bureau for the Mississippi Department of Revenue has a little-known procedure for transferring a decedent’s automobile that is titled in Mississippi without the need for probate.  To take advantage of this procedure, the decedent’s closest relatives (“next of kin”) must file an affidavit with the Mississippi Department of Revenue that contains the following information:

  1. The decedent’s name, date of death, and the VIN, year, make, model, mileage, and title number of the vehicle that the decedent owned at the time of death.
  2. A sworn statement that no will was probated and no administrator, executor or other personal representative has been appointed to administer the decedent’s estate.
  3. Whether the decedent was married or had children.
  4. The surviving relatives (“next of kin”) of the decedent.
  5. The name of the person to who m the next of kin want the automobile to go to.

This information is all found in the form Affidavit When Owner Dies Without a Will, which is promulgated by the Mississippi Department of Revenue.

I sometimes get asked about whether this procedure is available if the decedent had a valid Last Will and Testament.  This question usually comes up when the decedent had a valid Last Will and Testament that is not expected to be admitted to probate.  This is usually the situation when the automobiles are the only assets involved.

The confusion is caused by the short title of the document (“Affidavit When Owner Dies Without a Will”).  At first glance, this seems to indicate that the procedure is only available if there is no will.  But this may be misleading.  The rest of the Affidavit indicates that reference to the owner dying without a will really refers to the owner dying without a will that has been or will be admitted to probate.  For example:

  • The first sentence fully describes the document as an “application for assignment of title to a vehicle when the owner dies without a will being probated and no personal representative appointed or widow’s allotment made.”
  • The second numbered paragraph states: “That no will was probated and no administrator, executor or other personal representative has been appointed to administer on his or her estate.”

This language indicates that that the procedure is available even if there is a valid Last Will and Testament, as long as the will is not expected to be probated, no executor is appointed, and no widow’s allowance is made.  This interpretation has been confirmed by my calls with the Title Bureau on this issue.

It is clear that the procedure is not available if the decedent’s will has been or is expected to be admitted to probate.  If the executor intends to probate the will, the automobiles will pass under the will and not through this special procedure.

I advise potential clients to contact the Title Bureau for the Department of Revenue (601-923-7200) with any specific questions about the form and the circumstances under which it can be used.  If the decedent’s only asset was an automobile and the Title Bureau confirms that the form can be used, Mississippi probate can usually be avoided.

Filed Under: Mississippi Probate

Mississippi Medicaid and Probate

April 14, 2011 By 1 Comment

Mississippi Medicaid and ProbateMedicaid is a Federal government program that is administered by state agencies. It provides for payment of medical expenses for persons age 65 or older or individuals that are disabled in accordance with Social Security disability definitions.  To qualify, applicants must fit within certain asset and income limitations.

Mississippi law implements the Federal policy of allowing the state to seek recovery from the Mississippi probate assets of some decedents.  It requires the executor or administrator of a Mississippi estate to notify the Division of Medicaid of the pendency of a probate proceeding involving the assets of a deceased recipient who was fifty-five (55) years of age or older when he or she received assistance.  The notification law ensures that the state will have the opportunity to submit a claim and gives Medicaid the authority to seek recovery for payment of certain benefits.

This enforcement mechanism is authorized by Federal law.  The Omnibus Budget Reconciliation Act of 1993 requires states to seek recovery of nursing home services, home and community-based services, and related hospital and prescription drug services from the estate of a deceased Medicaid recipient who was fifty-five years of age or older when the assistance was received.  This allows the state to seek reimbursement from a deceased person’s assets for Medicaid benefits received during the person’s lifetime.

Mississippi has implemented an estate recovery program in accordance with Federal requirements.  The Mississippi recovery statute provides:

  1. The division shall be noticed as an identified creditor against the estate of any deceased Medicaid recipient …
  2. In accordance with applicable federal law and rules and regulations, including those under Title XIX of the federal Social Security Act, the division may seek recovery of payments for nursing facility services, home- and community-based services and related hospital and prescription drug services from the estate of a deceased Medicaid recipient who was fifty-five (55) years of age or older when he or she received the assistance. The claim shall be waived by the division (a) if there is a spouse; or (b) if there is a surviving dependent who is under the age of twenty-one (21) years or who is blind or disabled; or (c) as provided by federal law and regulation, if it is determined by the division or by court order that there is undue hardship.

While Federal law clearly allows Medicaid to seek recovery against an estate, it is not always clear what property is included in an “estate.”  The Federal Omnibus Budget Reconciliation Act of 1993 defines an “estate” to include “all real and person property and other assets included within with the individual’s estate, as defined for purposes of State probate law …”  This means that the Federal definition of “estate” will piggyback on the state definition.

Since each state has the leeway to alter the definition of “estate” as it sees fit, there is some variation in how the term is defined under each state’s law.  The State Medicaid Manual, which is published by the U.S. Department of Health and Human Services, requires states to make a decision.  Specifically, states must decide on a definition of “estate” that will apply for Medicaid recovery purposes. States are also allowed to place liens against assets, even before the Medicaid recipient dies.

Some states have implemented broad definitions of “estate” for Medicaid recovery purposes, pulling in such assets as living trusts, jointly-titled assets, life insurance proceeds, and other assets that have traditionally considered to be “non-probate” assets. But Mississippi has taken a more conservative approach, limiting estate recovery to assets that are included in the Mississippi probate estate.  As noted above, the Mississippi statute does not expand the definition of “estate” beyond the traditional probate estate.  As a result, Medicaid must look only to the assets that pass through the decedent’s Mississippi probate estate.

Filed Under: Mississippi Probate Tagged With: , , ,

Mississippi Supreme Court: Marriage Alone Does Not Create Presumption of Undue Influence

March 14, 2011 By Leave a Comment

The Mississippi Supreme Court recently extended the holding of Genna v. Harrington to inter vivos gifts, holding that marriage alone does not create the presumption of undue influence.

I wrote about the Mississippi Court of Appeals decision in this case last year (see No Presumption of Undue Influence between Spouses). The case involved Patricia Langston’s decision to name her husband, Mansfield, as a joint tenant with right of survivorship on her home and a $200,000 certificate of deposit.  Patricia did not leave anything to Mansfield under her will.

When Patricia died, her estate sought to set aside the two transfers to Mansfield, claiming that they were the product of Mansfield’s undue influence over Patricia.  This raised the issue of a confidential relationship, which is where the real battle lies in undue influence cases.  If a confidential relationship exists, the person is presumed to have exerted undue influence over any gifts to that person. This puts the alleged influencer in the position of being guilty until proven innocent.

Relying on prior decisions, the court defined a confidential relationship to mean:

A relation between two people in which one person is in a position to exercise a dominant influence upon the other because of the latter’s dependency upon the former, arising either from weakness of mind or body, or through trust.

Mississippi courts have traditionally drawn a distinction between testamentary (at death) and inter vivos (during life) gifts:

[The] presumption of undue influence only arises in the context of gifts by will when there has been some abuse of the confidential relationship, such as some involvement in the preparation or execution of the will. On the other hand, with a gift inter vivos, there is an automatic presumption of undue influence even without abuse of the confidential relationship. Such gifts are presumptively invalid.

But the Mississippi Supreme Court has declined to apply the presumption of undue influence to the marital context.  As the Court explained in Genna v. Harrington:[1]

It is undoubtedly true that a husband or a wife may exercise undue influence upon the other spouse, but the mere fact that there is a close relationship between the parties in a marriage does not mean that one’s influence upon another is undue influence. The influence which a loyal wife, by her virtues, kindnesses and devotion, gains over her husband’s affection and conduct, whereby a husband is caused to make a will in her favor, is no ground for refusing to admit the will to probate.

A wife may be caused by her love and affection to make a will in favor of her husband in the same way.  In order to set a will aside upon the grounds of undue influence on the part of a spouse, it must be shown that the devisee spouse used undue methods for the purpose of overcoming the free and unrestrained will of the testator so as to control his acts and to prevent him from being a free agent.

In other words, there are many reasons other than undue influence that would cause one spouse to provide for another in a will, so the court won’t assume that something suspicious is going on merely because the parties happen to be married.  But, as the quoted language indicates, Genna applies specifically to testamentary transfers.  The question of its application to inter vivos transfers remained open.  This was what the Mississippi Supreme Court had to decide in this case.

The court had little trouble in extending Genna to inter vivos gifts, holding that “a confidential relationship between a surviving spouse and a deceased spouse does not create a presumption that the surviving spouse used undue influence with respect to inter vivos gifts and transfers.”  And it would be hard to come up with a convincing argument for why this should not be the case.  If a husband would be naturally inclined to leave something to his wife in his will, why wouldn’t he be inclined to transfer assets to her during his lifetime?

This case brings needed clarity to this area of law and provides guidance to chancery courts on how to apply the burden of proof in undue influence cases involving husbands and wives.  The full text of the case is available in the link below.

[1] 254 So. 2d 525 (Miss. 1971).

In re Estate of Langston, 2008-CT-01090-SCT (Feb. 24, 2011)

Filed Under: Mississippi Probate Tagged With:

Desoto County Constructive Trust Case

March 7, 2011 By 1 Comment

The Mississippi Court of Appeals recently upheld the Desoto County Chancery Court’s refusal to apply the remedy of constructive trust to an intrafamily ownership arrangement

People are always looking for ways to beat the system.  Take, for example, the individual who wants to leave property for the benefit of his grandchildren once they reach age 25.  This could easily be done through a trust, but the individual wants to save a little money.  So he transfers all of his real estate to a relative, trusting the relative to “do the right thing” and distribute the property once the grandkids reach age 25.  Right.

I’ve had to clean up a number of these cases.  In every one, without exception, the cost of clean-up has greatly exceeded what it would have cost to do the job right the first time.  And this is in the fortunate cases when the mess can actually be cleaned up.  Sometimes it can’t.

Case in point: Wright v. O’Daniel, a recent DeSoto County case involving an intrafamily housing arrangement.  Janet Wright was a widow who wanted to move in with her daughter (Patricia) and son-in-law (James).  They decided to build a house together.  Janet purchased a parcel of real estate and had it titled in her and Patricia’s names.  Janet, Patricia, and James then signed a construction contract for a 5,800 square foot home that was to cost between $420,000 and $440,000.

The parties apparently didn’t put much thought into this arrangement or seek legal advice on how to structure it.  There was no discussion about who would pay for the construction or how the resulting home would be titled.  Janet ended up paying about $400,000 toward the construction of the home, but it wasn’t enough.  They eventually had to obtain a mortgage to complete the construction.

The mortgage arrangement required the house to be titled in the name of James and Patricia.  Janet agreed to this, but instructed the law firm that prepared the document to “return Janet’s name to the title after closing.”  In other words, the plan was to word the deed as required by the loan company, but then to circumvent the requirement by putting Janet back on the title after the loan closing.

After the loan closing, the law firm that handled the closing (which was also where James’ mother worked) did put Janet’s name back on the deed, but left James’ name on it as well.  Janet, James, and Patricia each had a 1/3 interest in the property, a reduction from Janet’s original 1/2 interest in the property.  Janet noticed the discrepancy and was instructed by an attorney to contact a real estate lawyer to get it resolved, but she didn’t.

Several years later, James and Patricia divorce and Janet wants him off the title.  Claiming that she had an “implied 50/50 ownership arrangement” with Patricia, Janet brings suit on a variety of theories, including constructive trust (for an explanation of constructive trusts, see here).  But it was spilled milk at this point; the court didn’t feel that the case merited the equitable remedy of constructive trust.  The court found no evidence of “fraud, duress, or unconscionable conduct on James’s part.”  Despite Janet’s claims—which were probably in good faith—and the fact that she had put up most of the funds for construction of the home, there wasn’t anything she could do to remove her ex-son-in-law from the deed.

This situation would have been easily avoided by seeking legal counsel on the front end.  A knowledgeable attorney could have drawn up an intrafamily agreement, loan agreement, promissory note, or any number of other options to define the rights and obligations of the parties.  But to save a few hundred dollars, Janet ended up forfeiting perhaps a few hundred thousand dollars in home equity … after spending no-telling-how-much in attorney’s fees to litigate the issue.

Wright v. O’Daniel, 2009-CA-01531-COA (Mar. 1, 2011)

 

Filed Under: Mississippi Probate Tagged With: , ,

Failure to Update Account Title Results in Automatic Distribution to Ex-Spouse

December 13, 2010 By Leave a Comment

A recent Forrest County, Mississippi, probate case illustrates the importance of updating account designations after significant life events, such as a marriage or divorce.  Failure to do so could result in unintended consequences, such as leaving part of an estate to an ex-spouse.

Stephen and Margaret were married in 1974.  In 1995, Stephen acquired a mutual fund using $200,000 he had inherited from his deceased parents.  The mutual fund was taken out in Margaret’s and Stephen’s name as joint tenants with rights of survivorship.

Stephen and Margaret divorced in 2006.  The mutual fund was not adequately addressed in the final judgment of divorce. The mutual fund company (A.G. Edwards) notified Stephen of the deficiency and would not permit withdrawals from the account until the divorce decree allowed Stephen to withdraw funds.

Stephen died on June 18, 2006, before the defects in the divorce decree could be resolved.  His son, Stephen Junior, hired Brooks to serve as attorney.  Brooks appeared at an ex parte hearing before the Forrest County probate judge (chancellor) and improperly obtained an order disbursing funds.  When the order was furnished to A.G. Edwards, A.G. Edwards closed the account and transferred the funds to the estate.

In 2009, the Forrest County Chancery Court found that the reference to “Wal-Mart Stock” in the divorce decree referred to the A.G. Edwards mutual fund.  Stephen Junior, as executor of his father’s estate, sought to correct the divorce decree to reflect this.  The chancellor awarded the funds to Margaret and vested the funds in her as of Stephen’s death.  Stephen Junior appealed.

The Court of Appeals had to decide whether the funds would pass through Stephen’s estate or according to how the account was titled.  And the law in this area is clear: When funds are held as joint tenants with rights of survivorship, they pass outside of probate in accordance with the way the asset is titled.

In other words, the way an asset is titled will trump the provisions of a Last Will and Testament or Mississippi’s laws of intestacy.  Assets that pass automatically to a surviving joint tenant (or pursuant to a valid payable-on-death beneficiary designation) are “non-probate” assets, meaning that they are not assets of the probate estate and not subject to distribution under a Last Will and Testament or Mississippi’s laws of intestacy.

Applying this principal to the case, the Court of Appeals had little trouble in awarding the funds to Margaret.  She was listed on the account as a joint tenant with rights of survivorship, and this form of ownership was never dissolved.  The Court opined:

Ownership of the funds is determined by the language in the Agreement … The Agreement clearly states: “unless specified to the contrary below, this joint account will be carried as joint tenants with rights of survivorship and not as tenants in common.” If Stephen had intended to dissolve Margaret’s contractual interest in the AGE account, the law required that he take the appropriate affirmative actions to effectuate such a change. Therefore, because the agreement [sic] was never modified, it is clear that Margaret, at the moment of Stephen’s death, became the sole owner of the account by operation of law.

Here’s the take away:  Always check beneficiary designations after a significant life event, such as a birth, marriage, or divorce. Failure to do so could result in the assets going to the last person you intend to have them – an ex-spouse.

In re Estate of Bellino v. Bellino, 2009-CA-00785-COA (Nov. 2, 2010)

Filed Under: Mississippi Probate

Madison County Probate Case: No Undue Influence Involved with Life Estate Deed

December 6, 2010 By Leave a Comment

A recent Madison County, Mississippi, probate case (Olive v. McNeal, 2009-CA-01095-COA (Nov. 9, 2010)) held that there was no undue influence on transfers made by an elderly man to his step children shortly after his wife’s death.  The case demonstrates one of the perils of using a life estate as a probate avoidance device.

Ceasar Olive’s wife died in 2003.  Shortly thereafter, Olive was injured and hospitalized in two separate accidents.  At the time, Olive was 77 years old and had known his stepson McNeal for about 56 years.  Olive and McNeal were close, and McNeal drove Olive to doctor’s appointments and rehabilitative therapy.  McNeal also cleaned Olive’s home during his rehabilitation.

Sometime after Olive’s accidents, Olive asked McNeal to visit Olive’s attorney and have a deed drawn up conveying Olive’s home and 36 acres to McNeal and his sister.  It was unclear whether Olive intended to have this transfer occur immediately or at Olive’s death.  Olive testified that he intended to make a will transferring the property at his death; McNeal testified that Olive didn’t specify how the property would be transferred.  In any event, Olive’s attorney prepared, and Olive signed, a deed transferring the property to McNeal and his sister and reserving a life estate in Olive.

Later, Olive decided he wanted to transfer a one-third interest in the property to his natural children.  But since a deed reserving a life estate conveys an immediate interest to the remainder beneficiaries (for more on this and other problems associated with life estates, see What Is a Life Estate?), McNeal and his sister would have needed to consent to the transfer to Olive’s natural children.  They wouldn’t.  This meant that Olive was unable to convey a one-third interest to his natural children as he intended.

When Olive learned that he couldn’t transfer the property to his natural children, he brought a suit to set aside the deed on grounds of undue influence and mutual mistake.  But, unfortunately for Olive, the milk had been spilled.  The Madison County probate court would not set aside the conveyance.  Olive appealed.

On appeal, the Mississippi Court of Appeals had to decide whether the Madison County probate judge (chancellor) had abused her discretion in refusing to set aside the conveyance for undue influence.  The facts were not in Olive’s favor.  The deed was clearly labeled as a deed, and there was no indication that Olive didn’t know the difference between a deed and a will.  The nature of the document was explained to Olive.  He had every opportunity to discuss it with his attorney if he didn’t understand it.  The document was not executed with the formalities of a will.  There was no clear and convincing evidence that Olive was relying on McNeal’s judgment our counsel (confidential relationship) or that McNeal had an overpowering influence on Olive.  Olive lived independently and didn’t suffer from mental deficiencies as a result of his injuries.  With facts like these, the Court of Appeals had little trouble affirming the Madison County probate judge’s decision.

Here’s the takeway:

  • People should be cautious in communicating with an attorney through a third party.
  • When dealing with an intermediary, attorneys should be careful to be sure that it is the client’s (and not the intermediary’s) wishes that are being carried out.
  • Life estate deeds should be used sparingly, especially if the grantor is not confident that the remainder beneficiaries will cooperate in any future transfers.
Filed Under: Mississippi Probate Tagged With: ,

Adverse Possession in Lieu of Probate? Not a Good Idea

November 29, 2010 By Leave a Comment

Louise and L.E. Cox owned a parcel of land in the Vancleave community in Jackson County, Mississippi.  After L.E.’s death, Louise transferred the land to their children: Voitier, Audury, and Garland.  Audury’s interest passed via intestacy to her son, Jackson, and her granddaughter, Ragan.  Garland’s interest was transferred by deed to his daughter, Slade.

What happened to Voitier’s interest is less clear.  Voitier died intestate and her daughter, Jan, was determined by court order to be her only heir-at-law.  But Jan’s son Dean claimed that the land really belonged to him.

Dean’s argument was two-fold.  First, he claimed that Louise’s conveyance to her children (Voitier, Audury, and Garland) was a conveyance in joint tenancy with rights of survivorship. If this were true, the property would have passed automatically to the last of the owners to die.  Since Voitier died last, this would have vested Voitier with 100 percent of the property.  Second, Dean claimed that Voitier orally conveyed her interest in the land to him in 1993. If both of these claims were true, Dean would own 100 percent of the property.

Unfortunately for Dean, the Jackson County probate judge didn’t buy it.  She held that, as a matter of record title, Slade had a one-third interest, Jan (Dean’s mother) had a one-third interest, and Jackson and Ragan each had a one-sixth interest.  But record title doesn’t always equal actual title.  Dean claimed that, even if he wasn’t the owner by record title, he had obtained title to the property through Mississippi adverse possession.

Here’s where things get interesting from a probate perspective.  When Voitier died in Florida in 2000, Dean could have addressed the title issues through a probate proceeding.  If he had done so, he might have had a better shot at clearing title, at least to a one-third interest in the land.  But Dean claims that he was told that Mississippi probate would be too expensive.  Instead, he tried to beat the system by allowing the property to be sold for unpaid taxes at a Mississippi tax sale.  He bought the property at the tax sale and then attempted to use the adverse possession suit to clear title to the property.

Not surprisingly, Dean’s plan didn’t work.  There was conflicting evidence at trial on the adverse possession issue, including claims that Dean periodically asked Jackson and Slade to bear their share of the property tax payment and offered to buy out Jackson’s and Slade’s interest.  If true, this would indicate that Dean knew that Jackson and Slade were co-owners of the property.

Based on this testimony and a tour of the property, the Jackson County probate judge ruled that Dean’s possession was as a co-owner of the land and, as such, was not hostile to the other owners.  This was fatal to Dean’s adverse possession claim.  The Jackson County probate judge’s ruling was affirmed on appeal.

Dean v. Slade, 2009-CA-01793-COA (Nov. 9, 2010)

Filed Under: Mississippi Probate Tagged With: , , ,

Lee County Probate: IRS Battles MSTC Over Insolvent Estate

October 25, 2010 By Leave a Comment

I am close to finishing probate of an insolvent estate that has been a nightmare from the get-go.  I took this case to help out another firm and have regretted it ever since.  Lesson learned: if the estate is insolvent, let the creditors and their attorneys sort it out.

I ran across a recent Lee County Mississippi probate case that also involved an insolvent estate, but one with super-creditors.  It involved a dispute between the IRS and the Mississippi State Tax Commission over who was entitled to the approximately $24,000 left in the estate.  The IRS and the Tax Commission had each submitted claims for about $209,000 and $24,000, respectively.  The Lee County probate judge had to decide which creditor was entitled to the $24,000 available for distribution.

When no creditor has a priority claim, the probate judge will typically divide the assets pro rata in accordance with the claims submitted.  For example, if the IRS and the Tax Commission were the only creditors and neither had a priority claim, the Tax Commission would have taken about 11 percent of the total amount and the IRS would have received the remaining 89 percent.

The Lee County probate judge (chancellor) found that the IRS had a priority claim against the estate under Federal law.  But he also found that the Mississippi State Tax Commission’s claim had greater priority since the Tax Commission qualified as a “judgment lien creditor” under Federal law. This finding was based on provisions of Mississippi law that give an enrolled notice of tax lien the status of a judgment.  The Lee County Chancery Court awarded the entire amount of the estate to the Mississippi State Tax Commission.  The IRS appealed.

On appeal, the Mississippi Supreme Court noted the U. S. Supreme Court’s holdings that the need for uniformity requires that the definition of “judgment lien creditor” be determined under Federal law.  Notice of tax liens filed by the Mississippi State Tax Commission were determinations of a state administrative body, not Federal law.  So the Tax Commission was not a judgment lien creditor and was not entitled to priority.  The Supreme Court reversed the Lee County probate judge and remanded the case for distribution of the funds of the estate.

Filed Under: General Probate, Mississippi Probate Tagged With: ,

Stone County Probate Case: Estate Attorney’s Advice is not Coercion

August 25, 2010 By Leave a Comment

A recent Stone County, Mississippi, probate case involved allegations that the estate administrators were coerced into signing an agreed order. Eldon Ladner and his daughter served as co-administrators of the Estates of Lula Mae Davis and John Davis.  Eldon also served as conservator of the Estate of Daniel M. Thompson and Louise Thompson, deceased, and as administrator of the Estate of Daniel Thompson.

Alberta O’Neill didn’t like the way Eldon and his daughter were handling the various estates.  She filed documents asking for their removal and requesting an accounting of each estate.  The court ordered the accounting, which the administrators provided.  There seems to have been some information missing, though, due to their attorney’s closing of his law practice.

The case eventually went to trial, but the court continued the proceeding to a later date.  In the interim, the parties reached an agreed order, which was approved by the chancery court.  The administrators then changed their mind and asked the court to set aside the agreed order.  The administrators claimed that the threat of criminal charges had coerced them into signing the agreed order.

The administrators’ duress claim was somewhat novel.  They claimed that the duress was caused by their attorney when the attorney gave them advice regarding the matter.  The attorney apparently informed the administrators of the possibility of criminal action, loss of job, and doomed political aspirations.  The administrators claimed that this advice created so much fear as to overcome their free will and coerce them into signing the agreed order.

After a hearing, the Stone County Chancery Court determined that the administrators had signed the agreed order by their own free will and refused to set it aside.  On appeal, the Supreme Court had to determine whether judgment was the product of duress or whether it was executed voluntarily.

Normal stress associated with signing an agreement is not duress.  For an agreement to be set aside, the duress must have been so severe as to override the volition of the party to the agreement.  Applying this standard to the case, the Supreme Court did not find sufficient evidence that the administrators were under duress when they signed the agreement.

In re Estate of Davis v. O’Neill, 2009-CA-01025-SCT (Aug. 19, 2010).

Filed Under: Mississippi Probate Tagged With: , ,

Pearl River County Probate Case Involving Undue Influence

August 9, 2010 By 1 Comment

Family Status Does Not Always Result in Confidential Relationship

Over the past few months, I have highlighted the role that confidential relationships play in undue influence cases (see here, here, here, and here, to name a few).  But does a family relationship automatically give rise to a confidential relationship?  In a recent Pearl River County probate case involving a father’s claim of undue influence by his daughter, the Mississippi Court of Appeals held that a family relationship does not necessarily equal a confidential relationship.

In 1992, Bordman Humphrey signed over two pieces of property to his daughter Jeanette Smith. His other daughter, Nadine Stevens, with whom he was living, drew up the deeds. A year later Humphrey initiated suit against Jeannette, claiming that his daughter procured the deeds to the property by fraud and undue influence. He argued that he had only intended for Jeanette to have title to the property temporarily in order to protect it from his daughter Wilda, who he believed was trying to take the property. He claimed that Jeannette was supposed to re-convey the property to him once he was mentally able to tend to his own business affairs.

The suit was drawn out for four years before Humphrey voluntarily dismissed the action against Jeannette.  But in 1999, two years after dismissing the initial suit, Humphrey was under a conservatorship and Nadine (who had originally drawn up the deeds) was the appointed conservator.  While under the conservatorship, Humphrey refiled his suit against his daughter to get his property back. By this time, Jeannette had sold the property.  Humphrey sought to recover the property both from Jeannette and the purchasers.

Because Humphrey had dismissed the suit already, the purchasers claimed that Humphrey was barred from re-instituting the lawsuit.  He claimed that the dismissal was void because he was not of sound mind when he filed it. The case was remanded to the lower court. While the case was on remand, Humphrey and Jeannette died.  Nadine continued the suit as executor of Humphrey’s estate.

The lower court held that Humphrey was not of sound mind at the time of the voluntary dismissal and set it aside.  This brought the issue of undue influence back to the forefront.  Nadine asserted that Jeannette abused their confidential relationship by exerting influence over him to coerce him into signing over the property to her. The Pearl River County probate (chancery) court disagreed, dismissing Nadine’s claims of undue influence and lack of testamentary capacity.  Nadine appealed on behalf of Humphrey’s estate.

On appeal, the issue was whether the Pearl River County chancellor erred in finding that there was no undue influence involved.  Nadine argued that the transfer was presumptively invalid because there was a confidential relationship between Humphrey and Jeannette.  But the Court of Appeals disagreed, upholding the Pearl River County chancellor’s determination that the transfer was not the product of undue influence.

The Court of Appeals  applied the well-established rule that a confidential or fiduciary relationship exists whenever there is a relationship between two people in which one person is in a position to exercise dominant influence upon the other because of the latter’s dependency on the former arising either from weakness of mind or body, or through trust.[1] But the family relationship, standing alone, does not create a confidential relationship.  While Humphrey was at times weak and dependent, he was dependent on Nadine, not Jeannette.  Although both daughters were close to their father, Nadine had the closer relationship.  And it was Nadine that had actually prepared the deeds.

Although Nadine reasserted Humphrey’s claim that the deeds were intended for safekeeping, there was nothing on the face of the deeds to support that contention.  The deeds simply contained nothing to indicate that the conveyance was anything but an outright transfer.

The Appellate court affirmed the ruling of the lower court, holding that there was no fraud or undue influence in the procurement of the deeds.

Stevens v. Smith, 2007-CA-01664-COA (March 3, 2009)

[1] Hendrix v. James, 421 So. 2d 1031, 1041 (Miss. 1982) (overruled on other grounds).

Filed Under: Mississippi Probate Tagged With: ,
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