No Alimony for You
January 14, 2019 § Leave a comment
Robert Culumber was granted a divorce from his wife, Toni, on the grounds of habitual cruel and inhuman treatment and habitual drunkenness. They had separated after only 13 months together. The chancellor found that Toni was not entitled to alimony. Toni appealed both the granting of the divorce and the denial of alimony.
In the case of Culumber v. Culumber, handed down December 4, 2018, the COA affirmed on all issues. Chief Judge Lee wrote for the unanimous court (Tindell not participating) on the alimony issue:
¶28. Finally, Toni argues that in the event that the divorce was properly granted, then the chancery court improperly denied Toni’s request for rehabilitative alimony. Toni alleges that even though the marriage was short, she is entitled to rehabilitative alimony payments because Robert paid all the bills and expenses in the marriage and that she needs assistance to become self supporting after the marriage.
¶29. We first note that alimony is considered only if after equitable division, one party is left with a deficit. Carney v. Carney, 201 So. 3d 432, 440 (¶28) (Miss. 2016). “The decision of whether to award alimony, and if so, what amount, is left to the chancellor’s discretion.” Hearn v. Hearn, 191 So. 3d 129, 132 (¶10) (Miss. Ct. App. 2016). When determining whether to award alimony, the chancellor is to consider the Armstrong factors:
(1) the income and expenses of the parties; (2) the health and earning capacities of the parties; (3) the needs of each party; (4) the obligations and assets of each party; (5) the length of the marriage; (6) the presence or absence of minor children in the home, which may require that one or both of the parties either pay, or personally provide, child care; (7) the age of the parties; (8) the standard of living of the parties, both during the marriage and at the time of the support determination; (9) the tax consequences of the spousal support order; (10) fault or misconduct; (11) wasteful dissipation of assets by either party; or (12) any other factor deemed by the court to be “just and equitable” in connection with the setting of spousal support.
Larson v. Larson, 192 So. 3d 1137, 1142 (¶12) (Miss. Ct. App. 2016) (citing Armstrong v. Armstrong, 618 So. 2d 1278, 1280 (Miss. 1993)).
¶30. In regard to the type of alimony Toni argues she is entitled to, we note that rehabilitative alimony is “an equitable mechanism which allows a party needing assistance to become self-supporting without becoming destitute in the interim.” Serio v. Serio, 203 So. 3d 24, 30 (¶17) (Miss. Ct. App. 2016) (quoting Lauro v. Lauro, 847 So. 2d 843, 849 (¶15) (Miss. 2003)). It is “awarded to parties who have put their career on hold while taking care of the marital home.” Id. “Rehabilitative alimony allows the party to get back into the working world in order to become self-sufficient.” Id.
¶31. The chancellor stated that there was no basis for alimony. Toni alleges that the chancellor placed too much emphasis on the length of the marriage and did not properly consider the other factors. The record indicates otherwise. As the chancellor noted, Toni was not working at all when she came into the marriage. Additionally, she brought approximately $30,000 of debt into the marriage which Robert paid off in full. It is true, as the chancellor noted, that the marriage was very short—barely one year. The parties had no children. Per the chancellor’s findings, Toni was “actually better off by virtue of the marriage in terms of her education, having her student loan paid off and other things to help her further her career, rather than lose it.” Career wise, Toni was relatively young—being in her late thirties, while Robert was approaching retirement—being in his late fifties. In December 2013, Toni became employed, making around $38,000, and this employment continued at the time of trial. Robert paid all of the bills and expenses during the short-term marriage and assumed responsibility for all marital debt. Toni received payment for her
equitable share of marital assets in the amount of $13,442.00. As we now affirm, the chancellor found Toni at fault in the marriage on grounds of habitual cruel and inhuman treatment and habitual drunkenness. We do not find that the chancellor abused his discretion in denying Toni an award of rehabilitative alimony. This issue is without merit.
This is not a particularly noteworthy case, except that it illustrates how a chancellor, and the COA on review, may view rehabilitative (and other forms of) alimony in light of the Armstrong factors given a set of facts such as these.
Reprise; Checklists (Again)
January 11, 2019 § Leave a comment
Reprise replays posts from the past that you may find useful today:
THE CHARM OF CHECKLISTS
May 23, 2013 § Leave a comment
For those of you who are relatively new to this blog, I want to call your attention to how crucial it is to put on proof of the various factors that have been mandated by the appellate courts to make your case. It’s a subject I bring up every now and then to make sure that lawyers know about it.
It’s what I call trial by checklist. You can think of the factors as a checklist of what you need to prove to make your case. If you fail to put on proof of the factors, as I have said here many times, you are wasting your and the court’s time, as well as your client’s money, and you are committing malpractice to boot.
Many lawyers print out these checklists and use them at trial. Please feel free to copy these checklists and use them in your trial notebooks. You’re free to copy any post for your own personal use, but not for commercial use. Lawyers have told me that they are building notebooks tabbed with various subjects and inserting copies of my posts (along with other useful material, I imagine). Good. If it improves practice and makes your (and my) job easier and more effective, I’m all for it.
Here is a list of links to the checklists I’ve posted:
Doing an accounting in a probate matter.
Income tax dependency exemption.
Modification of child support.
Periodic and rehabilitative alimony.
Up there on the right is a box labeled “Select Category.” There is a “Checklist” category that will take you to all the posts with and about checklists.
January 9, 2019 § Leave a comment
The concept of Holy War (bellum sacrum in Latin) came about in the 11th century to justify attacking and attempting to annihilate infidels and those whose religious beliefs were different than those of the attacking sect.
Fast forward ten centuries and today’s bellum sacrum usually involves warring factions in church disputes. You can read a couple of posts dealing with similar issues here and here.
The latest to come wafting down from the appellate stratosphere involved Jacob Chapel MB Church, which found itself divided into two factions after its pastor died in December, 2015. One faction was headed by Richard Eskridge, a deacon of the church. The other was led by Louella Peacock, the church’s secretary/treasurer. The depository bank interpled the church’s accounts in chancery and summoned the church. Peacock’s group answered first, claiming the funds, followed by Eskridge’s faction, and the issue was joined. The funds were deposited into the registry of the court.
Eskridge claimed that Brenda Bowie had been elected and installed as the new pastor. Peacock replied that the election was not done according to church by-laws, and that the membership had voted to remove both Bowie and Eskridge from leadership roles in the church.
The chancellor ordered mediation to be conducted by the SCBA, a local Baptist Association, and that body facilitated a new pastoral and leadership election according to church by-laws. That action resulted in election of Kenneth Wraggs as pastor and Betty Quinn as treasurer. The Association recommended adoption of the action by the chancellor, which she did. Eskridge appealed, claiming that the chancellor erred in ordering mediation, in relying on the Association’s findings and recommendations, and in not making findings of fact and conclusions of law.
The COA affirmed in Eskridge v. Peacock, decided December 4, 2018. Chief Judge Lee wrote for the unanimous court:
¶6. Eskridge first argues that the chancellor’s decision to appoint mediators was premature. Eskridge claims that the church had established by-laws for selecting a new pastor and had the by-laws been followed, the chancellor would not have needed to appoint mediators. Eskridge also alleges that the “mediators had their own agenda and had no direction from the Court.” [Fn 1]
[Fn 1] According to Eskridge, the church was not a member of the SCBA and as a result, the mediators lacked authority over the church. During the hearing, however, two people testified that the church was a member of the [Association].
¶7. As our supreme court has stated, the “court’s jurisdiction is limited to purely secular issues, and the court must not be involved in ecclesiastical issues.” [Pilgrim Rest Missionary Baptist Church ex rel Bd. of Deacons v. Wallace, 835 So.2d 67,] at 72 (¶11) [(Miss. 2003)] … . In Pilgrim Rest, the church did not have clear by-laws, so the chancellor established a procedure for the church members to vote on whether to retain the current pastor. Id. The supreme court later stated that “Pilgrim Rest represents a narrow exception to the longstanding practice of this Court to refuse to involve itself in ecclesiastical matters.” Greater Fairview Missionary Baptist Church v. Hollins, 160 So. 3d 223, 231 (¶29) (Miss. 2015). Unlike this case, Hollins involved a pastor who sought a temporary restraining order (TRO) after his congregation voted to terminate his employment. Id. at 233 (¶33). There, the chancellor issued the TRO, vacated the church’s vote of termination, and ordered the church to hold another vote. Id. The supreme court reversed, holding that “a pastor who is unhappy about being terminated by a church simply does not present a secular controversy.” Id.
¶8. This case is similar to Pilgrim Rest, not Hollins. The chancellor did not rule on who was entitled to be the new pastor. Instead, because the two groups were at odds and arguing over the interpled funds, the chancellor appointed mediators to oversee the election of the new pastor. At a hearing on the matter, the chancellor stated that “whatever [your] rules and regulations and by-laws are, they’re going to be followed.” And according to the church’s minutes from the business meeting, the “election was carried out in a fair and proper way and in accordance with the [church’s] by-laws as well as in accordance with the policies and procedures of the [SCBA] as indicated by” the moderators.
¶9. In this instance, we cannot find the “chancellor overstepped her bounds of jurisdiction in ordering an election when doing so was secular in purpose and sanctioned by other jurisdictions.” Pilgrim Rest, 835 So. 2d at 72 (¶11) (citations omitted). This issue is without merit.
As for the mediator’s findings, the court said this:
¶10. Eskridge next argues that the chancellor’s “ruling was based solely on the decision of the court-selected mediators who failed to follow the by-laws of the church.” Eskridge further contends that the mediators failed to determine whether the members who voted during mediation were members of the church at the time of Reverend White’s death.
¶11. Eskridge, however, has failed to show that the by-laws were not followed. In fact, as previously stated, the church minutes indicated that the by-laws were followed during the election process. The supreme court’s conclusion in Pilgrim Rest is applicable here: “There is absolutely no indication of [the chancellor] imposing an ecclesiastical dictate on the congregation of Pilgrim Rest. On the contrary, she merely sought to establish a procedure in which the majority of the Church could be heard thereby preserving the peace.” Id. at 73-74 (¶14). This issue is without merit.
And addressing the argument that the chancellor erred in not making findings:
¶12. Eskridge finally contends that the chancellor failed to make findings of fact and conclusions of law. Here, much of Eskridge’s argument is simply a reiteration of his previous arguments, which we found meritless. Eskridge does argue that the “the court also opines that the election was fair, but there is no indication of the method of the voting or the results.” The chancellor relied upon the findings presented by the SCBA and the minutes of the church’s business meeting—the meeting at which the election occurred.
¶13. Uniform Chancery Court Rule 4.01 states that “[i]n all actions where it is required or requested, pursuant to M.R.C.P. 52, [Fn 2] the Chancellor shall find the facts specially and state separately his conclusions of law thereon.” Eskridge never asked the chancellor to make findings of facts and conclusions of law. And he has not shown that the chancellor was required to do so in this instance. This issue is without merit.
[Fn 2] Mississippi Rule of Civil Procedure 52(a) states that: “In all actions tried upon the facts without a jury the court may, and shall upon the request of any party to the suit or when required by these rules, find the facts specially and state separately its conclusions of law
thereon and judgment shall be entered accordingly.”
An observation or two or more:
- Where to draw the Pilgrim Rest line can be tricky. Here the chancellor merely employed a procedure to ensure that the church’s own by-laws were followed. The result was an election that did follow the by-laws.
- If you want the judge to make detailed findings you have to ask the judge to do that very thing.
- I don’t get the argument that the SCBA was without authority to act as mediator because the church was not a member of the association. There is usually no relationship between a court-appointed mediator and the parties in mediation. It seems to me that the chancellor could have appointed a neutral party such as an attorney or CPA, or even the local Presbyterian Association to mediate.
Separate Summons for Contempt in a Divorce Case
January 8, 2019 § Leave a comment
Note: this post was edited at 11:00, am to correct a misstatement in the first paragraph that contempt is a R81 matter, not a R4 matter as originally posted. Sorry for the error
It’s a fairly common occurrence that a counterclaim for contempt is filed in a divorce action, or a motion for adjudication of contempt is filed in a pending divorce. As we all know, divorce is a R4 matter, and contempt is a R81 matter, so is new, or different, process required to proceed on the contempt claim?
Here’s what the COA said in Thornton v. Thornton, an August 14, 2018, decision:
¶22. Additionally, regarding Brenda’s assignment of error attacking the chancellor’s ruling on her petition for contempt, we recognize that “[a]lthough contempt proceedings in divorce cases often are filed in the same cause number and proceed with the underlying divorce case, they are held to be separate actions, requiring new and special summons under Mississippi Rules of Civil Procedure 81.” Shavers v. Shavers, 982 So. 2d 397, 402 (¶25) (Miss. 2008). We therefore find that Brenda’s argument regarding the contempt proceedings is not properly before this Court because “the contempt action [is] separate from the divorce judgment cited in the notice of appeal.” Williamson v. Williamson, 81 So. 3d 262, 277 (¶34) (Miss. Ct. App. 2012). We now turn to address Brenda’s other issues before us on appeal.
Shaver is a tad peculiar because it involved a removal to federal court followed by a remand back to state court, and a question about what effect that had on state court jurisdiction. Williamson involves a post-appeal contempt in which the COA ruled that the contempt action was no part of the divorce that had been appealed.
Shaver does cite Sanghi v. Sanghi, 759 So.2d 1250, 1255 (Miss. App. 2000), in which the parties were engaged in a long-dormant divorce case. Mrs. Sanghi filed a pleading to have Dr. Sanhi held in contempt for failure to pay child support, and he was served by certified mail, since he was already before the court in the divorce action via R4 summons. Here is the COA’s discussion:
¶ 24. This takes us full circle back to the question of whether Dr. Sanghi received sufficient notice of the April 13 hearing that underlies the actions at the July 2 hearing. To reiterate, Dr. Sanghi received notice of the first hearing that had been scheduled for March 9. That notice was not a summons sent by certified mail under Rule 4(c)(5), though the “motions” were sent by that procedure. Instead it was a “Notice of Court Setting” sent first class mail by the court administrator. This notice made Dr. Sanghi aware of the need to seek a postponement and presumably also to seek counsel to initiate the removal. The result of the requested delay was that the court administrator then mailed a notice on February 16, 1998, that the new hearing would be on April 13, 1998. There is nothing in the record explicitly confirming that Dr. Sanghi received the second notice, but he does state in his brief that the April 13 date was set at his request. There are several indications in the record and briefs but no direct proof that he was aware of the April 13 setting from the time that he sought a postponement of the March 9 hearing, but he just did not appear. Again, the inadequacy of the record is at the peril of the appellant Dr. Sanghi, so we proceed under the stated assumptions.
¶ 25. We have just described what was done. We now look at what should have been done. Whether the judgment is valid depends largely on the nature of the defects that occurred.
¶ 26. Rule 81(d)(3) requires that a petition or complaint be filed to modify or enforce child support and alimony judgments or to seek contempt. The mislabeling of the initiating pleading is a matter of form and would not by itself create a lack of authority for the court to act.
¶ 27. After the petition is filed, a summons is to issue notifying the respondent of the time and place for an appearance. If an answer to the petition is required, the notice should state that as well. M.R.C.P. 81(d)(4) & (5). Nothing is said about the available means of service, but the rule provides that the procedures “control to the extent that they may be in conflict with any other provision of these rules.” M.R.C.P. 81(d). The implication is that where Rule 81 does not even address a necessary procedure covered in the general rules, then the general provisions apply. Since 81 does not speak to the means for service of summons, it cannot conflict with the general rules that do. Not to be overlooked, though, is that Rule 81 controls the content of the summons. Service on an out-of-state defendant cannot be completed under Rule 4 by sending a summons by regular mail. Had a return envelope to send an acknowledgment of receipt been included and then utilized by Dr. Sanghi, that would have sufficed. M.R.C.P. 4(c)(3)(A). Certified mail service on an out-of-state defendant also is adequate, if the receipt is returned. M.R.C.P. 4(c)(5).
¶ 28. The notice of the April 13 hearing was not a Rule 81(d)(5) summons, though it provided most of the relevant information. The only required information under the Rule is that a party is to be told the time and place for the hearing and that no answer is needed. M.R.C.P. 81(d)(4) & (d)(5). The sample form that sets out the summons also indicates that the case name is to be shown, the suit number, the name of the person being served, and that failure to appear may result in a judgment with monetary or other consequences; the petition that initiated the action also is to be attached. M.R.C.P. Form 1D. These forms are not mandatory, but use of them removes any question of sufficiency under the Rules. M.R.C.P. 84. The notice sent by the court administrator contained all of the information that Form 1D would have contained, except that there was no statement regarding the need for a written response nor any language commanding attendance or warning that failure to appear could have significant consequences. The same day or perhaps the day before, the three “motions” were separately sent by certified mail and received by Dr. Sanghi.
Most often these matters get tried by consent, so there is a waiver of the objection and the parties resolve it that way.
But when you are handling a R4 case in which R81 issues later arise, especially against a pro se litigant, I strongly encourage you to issue that extra R81 summons. It’s worth the extra cost, time and effort.
Big Changes Proposed for Probate
January 7, 2019 § 2 Comments
Secretary of State Hoseman convened a group to study and propose revisions to our estate and other fiduciary laws. Here is the summary provided by his office generally outlining the proposed statutory changes:
Revisions to Title 91 of the Mississippi Code governing estates and trusts will update statutory language and processes to provide clarity and ease of use for Mississippians. New statutes will be incorporated recognizing nonprobate transfers, ancillary and foreign administration, abatement, disclaimer of property interests, and revocation of probate and nonprobate transfers following divorce.
• Mississippi Real Property Transfer on Death Act “Transfer on Death Deed”: Enact a new statute to provide for nonprobate transfers of real property at death.
Example: John prepares before his death a transfer on death deed leaving his home to his two children so that his heirs may avoid probating the estate for purposes of transferring ownership of the family home. John’s transfer on death deed must be recorded, is only effective after his death, and is revocable at any time before his death.
• The Uniform Estate Tax Apportionment Act of 2003: Repeal Sections 27-10-1 through 27-10-25, the Uniform Estate Apportionment Act, and replace with the updated 2003 Uniform Estate Tax Apportionment Act under Title 91. The version of Uniform Estate Tax Apportionment Act previously adopted in Mississippi was originally drafted in the 1960s. In the last 50 years or so, people are using a revocable trust as a substitute for will and are using other forms of ownership to transfer assets at death. The federal estate tax provisions have also been substantially revised. The current version of the Uniform Estate Tax Apportionment Act recognizes these changes and provides detailed provisions for the apportionment of estate taxes when a decedent’s will or revocable trust does not provide for apportionment of estate taxes.
Examples: John executed a revocable trust during his lifetime. The revocable trust includes all of the provisions for the disposition of John’s property and provisions for the apportionment of estate taxes, if any, to various property. John’s will provides that all of his probate property is to be distributed to his revocable trust after his death. Unlike the previous version of the Uniform Estate Tax Apportionment Act, the more recent version of the Act makes it clear that the apportionment of estate taxes under the terms of the revocable trust will be respected.
John died without a surviving spouse. John’s executor filed a federal estate tax return reflecting a $1,000,000 federal estate tax liability. John’s will did not have provisions stating which assets should be used to satisfy the federal estate tax liability. Fifty percent (50%) of the assets includible in the taxable estate were owned by John at his death (“Probate Assets”) and Fifty Percent (50%) passed outside of probate by beneficiary designation, rights of survivorship or were held in his revocable trust (“Nonprobate Assets”). Generally, under the Uniform Estate Tax Apportionment Act, $500,000 of the estate taxes will be apportioned ratably to the Probate Assets and $500,000 ratably to the Nonprobate Assets. The Uniform Estate Tax Apportionment Act has provisions for payment of the estate tax and the process for collecting the apportioned estate taxes from the persons receiving the Nonprobate Assets.
• Affidavit of Successor: Amend Section 91-7-322, commonly referred to as the Small Estate Affidavit, to clarify the definition of successor and to increase the value of the probate estate to $100,000. This statute allows the transfer of personal property without the necessity of probate when the decedent’s probate estate is $100,000 or less.
Example: John dies leaving an estate, not including real estate or exempt property, which totals $60,000. Thirty days after John’s death, his spouse, Jane, would be able to present an affidavit to anyone possessing John’s personal property or owing a debt to him and have the property or payment of a debt transferred to Jane without the necessity of a probate proceeding.
• Fiduciary Transfer of Negotiable Paper: Amend Section 91-7-255 to permit a fiduciary to negotiate paper belonging to the estate without court approval and to update the standard of care applicable to the fiduciary. Often a fiduciary may need to enter into a transaction quickly to prevent a decline in value of stocks, bonds and other investments or to diversify investments when investments are too concentrated in a single investment.
Example: John’s son, Jim, becomes the court-appointed executor. Through his appointment Jim is granted the ability to trade or sell stocks, transfer any notes, convert certificates deposit and make other financial decisions necessary for the preservation of the probate estate. Jim is held to the same standard of care applicable to a trustee.
• Property Not to be Removed from State: Repeal Section 91-7-257 as this Section is no longer applicable. Often a will of a Mississippi resident designates a child or children living in another state as executor. In order to preserve or protect assets belonging to an estate, such as jewelry, silver, car, personal effects and other items of value from the decedent’s personal residence, an executor may need to remove the property for safekeeping during the administration of the estate.
• Foreign Personal Representatives and Ancillary Administration: Repeal Section 91-7-259, Foreign Fiduciaries, Lawsuits and Debts, and enact Foreign Personal Representatives and Ancillary Administration to provide a clear process for foreign personal representatives and ancillary administration. This amendment will bring Mississippi current with every other State in the nation.
Example: John is a resident of Alabama and dies in Alabama; however, John owns property in Mississippi. Ancillary administration law provides a clear process for John’s executor of his Alabama estate to collect and distribute the Mississippi property since he has already been appointed in another jurisdiction’s court of law. John’s executor will file in Mississippi the admitted will and his letters testamentary or letters of administration to begin the ancillary administration in Mississippi.
• Abatement: Enact a new statute to provide a statutory order of abatement when devises and bequests of the decedent must be used in order to settle the decedent’s debts, and no order has been provided in the will. Sections 91-7-91, 91-7-191, 91-7-195, 91-7-199, 91-7-261, and 91-7-271 will be amended to conform to the new enactment.
Example 1: John dies with a will that leaves his hunting land worth $100,000 to Jim and $100,000 cash to Jane. The residue of his estate ($50,000) is left to Jim and Jane equally. A creditor has a claim for $150,000. Unless John’s will provides otherwise, under current law, Jim gets the $100,000 hunting land, and Jane receives nothing. There is no residue to divide between Jane and Jim. Under the proposed bill, the result is the same, because Jane’s general bequest abates prior to Jim’s specific devise.
Example 2: John dies with a will that leaves his home worth $100,000 to his daughter, Jane; his hunting land worth $50,000 to his son, Jim; $5,000 to each of his two nieces; and his remaining property worth $40,000 equally to Jane and Jim. A creditor has a claim for $50,000. Unless John’s will provides otherwise, under current law, Jane gets the $100,000 home, Jim gets the $50,000 hunting land, and the nieces receive nothing. There is no residue to divide between Jane and Jim. Under the proposed bill, the result is the same because residuary and general legacies abate before specific bequests and devises.
Example 3: John dies with a will that leaves his hunting land worth $100,000 to Jim and his stock in his business worth $100,000 to Jane. The residue of his estate ($100,000) is left to Jim and Jane equally. A creditor has a claim for $150,000. Unless John’s will provides otherwise, under current law, Jim gets the $100,000 hunting land, and Jane receives $50,000. There is no residue to divide between Jane and Jim. Under the proposed bill, both Jim’s and Jane’s specific legacy would abate equally without regard to the distinction between real estate and personal property, so they would both receive $75,000.00.
• Creditor Rights With Respect to Beneficial Interests in Trusts: Repeal the Family Trust Preservation Act (Sections 91-9-501 through 91-9-511) and enact Article 5 of the Uniform Trust Code so that the language and defined terms are the same as currently provided for in the Mississippi Trust Code. Some specific new issues are addressed as follows:
Example: John sets up a revocable trust. Under Article 5 of the Uniform Trust Code, John’s assets in the revocable trust would be subject to the claims of creditors.
Example: Jane sets up a life insurance trust on her life for her son with withdrawal rights. Jane’s payments to the trust are not subject to her son’s creditors unless the son decides to withdraw the money and compromise the life insurance policy. The fact that the son does not contribute to the trust does not mean it’s self-settled.
• Muniment of Title: Amend Section 91-5-35 to allow a will to be admitted to probate as a muniment of title by filing a signed and sworn petition signed by either the personal representative or the spouse and beneficiaries of real property and to increase the value of the probate estate to $100,000. This statute allows the transfer of real property without the necessity of probate when the decedent’s probate estate is $100,000 or less.
Example: Jane dies leaving a will devising real property located in Mississippi to her son, Jim. If Jane’s estate, not including real estate or exempt property, totals $100,000 or less, the transfer of property is the only reason the will would need to be probated, and all Jane’s debts have been satisfied, Jim may file a sworn petition in chancery court asking the court to recognize the will as valid solely to transfer the real property without
the necessity of probate.
• Vouchers, 3 Appraisers, and Inventory: Remove requirements regarding vouchers and an appointment of three appraisers when conducting an inventory. Provide that an inventory may not be required if waived in the will. Amend Sections 91-7-93, 91-7-95, 91-7-109, 91-7-117, 91-7-135, 91-7-141, 91-7-277, 91-7-291, and 91-7-297. Repeals 91- 7-111, 91-7-113, 91-7-115, 91-7-137, 91-7-139, 91-7-279.
• Uniform Disclaimer of Property Interest Act: Repeal Sections 89-21-1 through 89-21-17) the prior version of the Uniform Disclaimer of Property Interests Act adopted in Mississippi in 1994 and replace with the current version as last revised or amended in 2010. The more recent version of the Uniform Disclaimer of Property Interests Act addresses not only disclaimers of property but also disclaimers of powers over property and disclaimers of powers held in a fiduciary capacity. It also addresses different types of interests in property, including interests in jointly-held property. The provisions of the more recent version of the Uniform Disclaimer of Property Interests Act provide much more detail on the form of the disclaimer, delivery of the disclaimer and the effect of the disclaimer.
• Example: In John’s will, John designates his brother, Bob, as executor of his estate and trustee of a trust for his surviving spouse. The terms of the testamentary trust provide that John’s wife is entitled to all of the income of the trust during her lifetime. Bob is also given the power, in his discretion, to invade principal for the benefit of the surviving spouse and John’s descendants. The power to make distributions to the descendants
would prevent the trust from qualifying for the federal estate tax marital deduction. In the interest of all of the beneficiaries of the trust and to qualify the trust for the federal estate tax marital deduction, Bob can disclaim the power to make discretionary distributions to John’s descendants during the lifetime of John’s surviving spouse.
• Revocation by Divorce: Enact new statute to provide for automatic revocation of probate and nonprobate transfers upon divorce.
Example: John provided for his wife, Jane, in his will. John also named Jane as the beneficiary of his IRA and life insurance policies. John and Jane divorce, but John forgets to remove Jane from his IRA and life insurance policies. Under this law, all provisions for a former spouse in probate and nonprobate transfers, like a will, trust, IRA, insurance, payable on death account, etc. will be automatically revoked.
January 4, 2019 § Leave a comment
“In spite of despair staring me in the face on the political horizon, I have never lost my peace. In fact, I have found people who envy my peace. That peace, I tell you, comes from prayer; I am not a man of learning, but I humbly claim to be a man of prayer. I am indifferent as to the form. Every one is a law unto himself in that respect. But there are some well-marked roads, and it is safe to walk along the beaten tracks, trod by the ancient teachers. Well, I have given my personal testimony. Let every one try and find that as a result of daily prayer, he adds some thing new to his life, something which nothing can be compared.” – Mahatma Gandhi
“Prayer seems to me a cry of weakness, and an attempt to avoid, by trickery, the rules of the game as laid down. I do not choose to admit weakness. I accept the challenge of responsibility. Life, as it is, does not frighten me, since I have made my peace with the universe as I find it, and bow to its laws. The ever-sleepless sea in its bed, crying out “how long?” to Time; million-formed and never motionless flame; the contemplation of these two aspects alone, affords me sufficient food for ten spans of my expected lifetime. It seems to me that organized creeds are collections of words around a wish. I feel no need for such. However, I would not, by word or deed, attempt to deprive another of the consolation it affords. It is simply not for me. Somebody else may have my rapturous glance at the archangels. The springing of the yellow line of morning out of the misty deep of dawn, is glory enough for me. I know that nothing is destructible; things merely change forms. When the consciousness we know as life ceases, I know that I shall still be part and parcel of the world. I was a part before the sun rolled into shape and burst forth in the glory of change. I was, when the earth was hurled out from its fiery rim. I shall return with the earth to Father Sun, and still exist in substance when the sun has lost its fire, and disintegrated into infinity to perhaps become a part of the whirling rubble of space. Why fear? The stuff of my being is matter, ever changing, ever moving, but never lost; so what need of denominations and creeds to deny myself the comfort of all my fellow men? The wide belt of the universe has no need for finger-rings. I am one with the infinite and need no other assurance.” – Zora Neale Hurston
“Just to be is a blessing. Just to live is holy. And yet being alive is no answer to the problems of living. To be or not to be is not the question. The vital question is: how to be and how not to be? The tendency to forget this vital question is the tragic disease of contemporary man, a disease that may prove fatal, that may end in disaster. To pray is to recollect passionately the perpetual urgency of this vital question.” – Abraham Joshua Heschel
Playing Cat and Mouse Games Can Cost
January 2, 2019 § Leave a comment
Most chancellors get testy when a party plays coy with financial information that is needed to decide a case. It usually happens in discovery where a party with financial assets gets vague with requests for information about account balances and the like. A recent case illustrates how that kind of tactic can cost a party dearly.
Julia and Steven Dauenhauer consented to a divorce on the ground of irreconcilable differences and left it to the chancellor to distribute the marital estate. Julia had some retirement accounts, but in discovery she did not produce statements and at trial she did not list all of them and their values on her 8.05. When the chancellor included them in the marital estate, Julia first filed a motion to “reconsider,” which was treated as a R60 motion because it was filed later than ten days after entry of the judgment. When she proved to be unsuccessful in that endeavor, she appealed claiming the accounts were separate property.
In the case of Dauenhauer v. Dauenhauer, decided November 13, 2018, the COA affirmed the chancellor’s ruling on the point. Judge Carlton wrote the unanimous opinion:
¶36. Julia next argues that the chancellor erred in classifying the following as marital property: (1) the money she withdrew from her PERS retirement account and (2) the contributions she made to her Empower 401K after the entry of the order for separate maintenance.
¶37. This Court employs a limited standard when reviewing a chancellor’s division and distribution of property in a divorce. Phillips v. Phillips, 904 So. 2d 999, 1001 (¶8) (Miss. 2004). “This Court will not disturb the findings of a chancellor unless the chancellor was manifestly wrong, clearly erroneous, or an erroneous legal standard was applied.” Id. Upon review, we examine the chancellor’s application of the Ferguson factors. Id. In so doing, we do not conduct a new Ferguson analysis; rather, we “review[ ] the judgment to ensure that the chancellor followed the appropriate standards and did not abuse his discretion.” Id.
¶38. Furthermore, “the party arguing to classify an asset as nonmarital property has the burden to demonstrate to the court the asset’s nonmarital character.” Wheat v. Wheat, 37 So. 3d 632, 640 (¶26) (Miss. 2010). The supreme court explained that meeting this burden requires going “beyond a mere demonstration that the asset was acquired prior to marriage.” Id. [My emphasis]
¶39. Julia explains that the $56,484.90 “withdrawals from retirement” listed in the Schedule of Marital Assets represents a PERS retirement account in the amount of $46,732.68 and a Great-West Retirement Services account in the amount of $9,752.22. In his judgment, the chancellor included a footnote explaining that the “total of the funds Julia withdrew from her retirement accounts is also a marital asset subject to equitable distribution.” However, Julia argues that she testified at trial that her PERS retirement was “originally acquired when [she] was divorced” from Steven the first time. Julia admitted at trial that contributions to the account had been made during their second marriage, but she now maintains that a portion of the total value of her PERS retirement account should be considered separate property.
¶40. At trial, the record shows that during cross examination, Steven’s attorney questioned Julia about whether she provided a statement showing the value of the PERS account on the date of her 2003 marriage to Steven. Julia responded that she was not requested to produce such a document. Steven’s attorney responded, “Well, ma’am, I definitely requested it in request of production documents, and you didn’t produce them, and I’m going to go through that.” The record shows that on her Rule 8.05 financial declaration, Julia attached a W-2 form indicating the value of the PERS account amounted to $46,732.68 when she cashed it out in 2015.
¶41. Regarding the $17,000 in her Empower 401K account, Julia asserts that the majority of the value of the Empower account constituted separate property. The chancellor’s judgment reflects that he divided the assets in the Empower account equally between the parties. In so doing, the chancellor also provided that “Julia voluntarily contributes approximately twenty percent of her income from West Jefferson [Medical Center] to her 401K retirement account.” Julia asserts that the three trial exhibits, including two of her pay stubs from April 2016, which the chancellor referenced as support for that amount, do not reflect contributions of twenty percent. Rather, Julia argues that her April 2016 pay stubs show that she only contributed fifteen percent of her monthly income to the account. Julia further submits that her contributions made to the account after the order for separate maintenance should be classified as separate property.
¶42. Steven argues, however, that Julia failed to produce a statement for the Empower account, despite being requested to do so in discovery. The trial testimony reflects that Steven’s attorney asked Julia if she had a pension plan. Julia responded, “Yes, I do.” Steven’s attorney asked, “But you didn’t put it on [your Rule 8.05 financial statement]?” Julia answered, “Correct.” Julia testified, however, that she started accumulating funds in
her Empower account in 2014.
¶43. Our review shows that the chancellor set forth the following findings with regard to Julia’s retirement account and Empower account:
Julia voluntarily contributes approximately twenty percent of her income from West Jefferson to her 401K retirement account.
. . . .
Prior to the separation, Julia purchased a home located at 209 Blue Heron Cove, Waveland, MS 39567, as well as a 2015 Mazda. When Julia purchased this home, she used $9,752.22 of her retirement funds from West Jefferson Medical Center to pay off the loan for the Honda Ridgeline. (See Exhibit 14, Page 10). Julia testified that she cashed in additional retirement savings in the amount of $46,732.68 and used these funds to purchase various items and appliances for her new home. (See Exhibit 14, page 8). Through post trial submissions, Julia has detailed how she spent $43,855.23 or this withdrawal.
¶44. The chancellor then performed a Ferguson analysis and found that “no non-marital property” existed. Under the factor of “the income and earning capacity of each party,” the chancellor made the following determination regarding Julia’s retirement accounts:
Both Steven and Julia have advanced degrees and therefore an ability to earn. However, because Steven has stated the desire to return to school to earn a teaching license, and Julia is currently working as a nurse practitioner, Julia’s current earning capacity is much higher than Steven’s. Julia also has the income and funds available to voluntarily contribute twenty percent (20%) of her income from West Jefferson to her retirement. This contribution is significantly more than required, and a much greater than Steven is saving towards his retirement through his PERS account.
¶45. Next, the chancellor set forth a schedule distributing the marital assets. Under Julia’s assets, the chancellor listed the $56,484.90 from the withdrawals from retirement as well as $8,500, which constituted one-half of her Empower account. The chancellor awarded Steven one-half of Julia’s Empower account, amounting to $8,500.
¶46. As stated, Julia bore the “the burden to demonstrate to the court [an] asset’s nonmarital character[,]” which requires going “beyond a mere demonstration that the asset was acquired prior to marriage.” Wheat, 37 So. 3d at 640 (¶26). Julia admitted that she did not produce a statement for her Empower account in discovery, nor did she produce a statement showing the value of the PERS account on the date of her 2003 marriage to Steven. Therefore we cannot say that the chancellor abused his discretion in classifying as marital property the money Julia withdrew from her PERS retirement account and the contributions she made to her Empower 401K after the entry of the order for separate maintenance.
So when you leave it up to the judge to make her best guess about the information you didn’t make clear in the record, you get what you get. If that gap in the record comes about from a cat-and-mouse strategy of non-disclosure, it can bite your client in a most sensitive and painful part of the anatomy.