A Caveat for Affidavits of Known Creditors

July 26, 2016 § 2 Comments

Your client is going to be appointed executor of an estate. So it makes perfect sense that, when he comes in to sign the petition, at the same time you have him sign the oath, affidavit of known creditors, and notices to those known creditors. Why should he have to make more than one trip to your office, right? Then, after the order appointing him is signed by the judge, you go ahead and file the pre-signed oath, affidavit, and notices.

But is that effective? Does it comply with the statute?

As far as the oath is concerned, I see no problem. The oath is taken in his capacity as an individual, and is only effective once the order appointing him is signed by the judge and the oath is thereafter filed.

But the notice and affidavit requirements are a different matter. MCA 91-7-45(1) specifically requires the “executor or administrator” to make reasonable and diligent efforts to identify and give notice to creditors. Only the executor or administrator can do this function, and there is no executor or administrator until the judge signs the appointing order, and a bond (if required) and oath are filed.

Likewise, MCA 91-7-45(2) requires the “executor or administrator” to file the affidavit of known creditors that must be on file before the Notice to Creditors is published. Only the executor or administrator can do this. Signing the affidavit before one is appointed and qualified is not signing in the capacity of executor or administrator.

I am not aware of any case law specifically addressing these points, but the many cases construing probate statutes are emphatic that the specific language of the statutes control, and that substantial or nominal compliance is not enough.

Another post discussing the right way and order to do the notice and affidavit is here.

More than Known Creditors

August 5, 2019 § Leave a comment

MCA 93-7-145 is the statute that requires publication of notice to creditors in an estate matter. A prerequisite to publication is the filing of an affidavit by the fiduciary.

Most lawyers with whom I come into contact call that affidavit “The Affidavit of Known Creditors.”

But that is a misnomer, and a dangerously misleading one at that, because it is not at all an affidavit stating only the creditors who are known; the statute requires that the fiduciary must make “reasonably diligent efforts to identify persons having claims against the estate,” and make affidavit of those efforts.

In Estate of Petrick, 635 So. 2d 1389, (Miss. 1994), the Mississippi Supreme Court stated:

“From a reading of this statute it is clear that an administratrix has four responsibilities: (1) she must make reasonably diligent efforts to ascertain creditors having claims against the estate and mail them notice of the 90 day period within which to file a claim; (2) she must file an affidavit stating that she has complied with the first subsection; (3) she must publish in some newspaper in the county a notice to creditors explaining that they have 90 days within which to file claims against the estate; and (4) she must file proof of publication with the clerk of court.”

In Petrick the court affirmed a chancellor’s ruling allowing the untimely $6,220 claim of a medical firm whose status as a claimant should have been reasonably known to the fiduciary, but the fiduciary did not include the firm in her affidavit and did not send it notice.

Another flaw in the fiduciary’s actions was that she published notice to creditors first, and filed her affidavit a month after beginning publication. The court in Petrick stated that publication may be done only after the affidavit is filed.

A previous post on point is at this link.

 

Affidavits in Chancery

October 10, 2018 § 4 Comments

An affidavit is a sworn statement. It must include an oath. You can read about the distinction between an oath and an acknowledgment at this link. A document purporting to do the work of an affidavit that bears an authentication instead of an affidavit is void for that purpose.

There are several affidavits that we use routinely in chancery:

  • Affidavit of known creditors. This affidavit is required by MCA § 93-7-145(2) to be filed before publication of notice to creditors. The statute reads, “The executor or administrator shall file with the clerk of court an affidavit stating that such executor or administrator has made reasonably diligent efforts to identify persons having claims against the estate and has given notice by mail as required in subsection (1) of this section to all persons so identified. Upon filing such affidavit … ” it is the duty of the fiduciary to publish notice [My emphasis]. Our courts have held that an affidavit filed after publication is a nullity.
  • Affidavit of unknown heirs. Before publishing process for unknown heirs in an action to determine heirship, one must file an affidavit that “the names of such heirs are unknown,” per MRCP 4(c)(4)(D), and it must also state per MRCP 4(c)(4)(A) that the post office address is unknown to the petitioner “after diligent inquiry.” These are key ingredients, and failure to follow the rules will mean that you don’t have good process. The affidavit must be made by the petitioner unless certain specific language is used as spelled out in the rule.
  • Affidavit of diligent inquiry for publication process. Before you can publish process for a non-resident or a person not to be found in the state per MRCP 4(c)(4)(A), there must be an affidavit filed with the clerk stating either that the person or persons are non-residents or are not to be found in the state after diligent inquiry. If the post office address is unknown, publication proceeds. If a post office address is known, you must include it in your publication and take the additional step of having the clerk mail a copy of the summons and pleading to that address by regular first-class mail, and the clerk must make a notation on the docket to that effect. The affidavit must be made by the petitioner unless the specific language required in the rule is applied.
  • Affidavits in support of and in opposition to summary judgment. Rule 56 says that, “When a motion for summary judgment is made and supported [by affidavits] as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or otherwise as provided in this rule. must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.”
  • Affidavit of non-collusion. MCA § 93-5-7, states that “(7) in all cases, except complaints seeking a divorce on the ground of irreconcilable differences, the complaint must be accompanied with an affidavit of the plaintiff that it is not filed by collusion with the defendant for the purpose of obtaining a divorce, but that the cause or causes for divorce stated in the complaint are true as stated.”
  • UCCJEA affidavit. In any case involving custody, each party is required to file an affidavit spelling out the information required in MCA § 93-27-209, and the duty to provide the information to the court is a continuing one, meaning that the affidavit must be updated as circumstances change or as newly discovered information becomes known.
  • Affidavits on motions. MRCP 43(e) states that, “When a motion is based on facts not appearing of record the court may hear the matter on affidavits presented by the respective parties, but the court may direct that the matter be heard wholly or partly on oral testimony or depositions.” Note that the rule applies only to motions, and not to hearings on pleadings that are on the merits seeking a final judgment. Rule 7 describes the difference between a pleading and a motion.
  • Sworn pleadings in probate and fiduciary matters. Uniform Chancery Court Rule 6.13 specifically states in part that, “Every pleading, including accounts and reports, filed by a fiduciary shall be personally signed and sworn to by him.” I take that to mean that every document filed by your fiduciary shall be sworn, thus making it the equivalent of an affidavit. MCA § 93-13-38(1) reads, “All the provisions of the law on the subject of executors and administrators, relating to settlement or disposition of property limitations, notice to creditors, probate and registration of claims, proceedings to insolvency and distribution of assets of insolvent estates, shall, as far as applicable and not otherwise provided, be observed and enforced in a guardianship of the person and estate.” MCA § 93-13-259 says that, ” … all laws relative to the guardianship of a minor shall be applicable to a conservator.”

THE AFFIDAVIT OF “REASONABLY DILIGENT INQUIRY” FOR CLAIMS AGAINST THE ESTATE

July 25, 2011 § 11 Comments

MCA § 91-7-145(1) requires the estate fiduciary to make “reasonably diligent inquiry” to identify persons who have claims against the estate, and to notify them by mail at their last known address that failure to probate a claim within the statutorily-prescribed time will bar their claims.

MCA § 91-7-145(2) provides that:

“The executor or administrator shall file with the clerk of the court an affidavit stating that such executor or administrator has made reasonably diligent efforts to identify persons having claims against the estate and has given notice by mail … to all persons so identified. Upon filing such affidavit, it shall be the duty of the executor or administrator to publish in some newspaper in the county a notice requiring all persons having claims against the estate to have same probated and registered by the cleerk of the court granting the letters, which notice shall state the time when the letters were granted and that a failure to probate and register within ninety (90) days after the first publication of such notice will bar the claim … ” [Emphasis added]

Most lawyers refer to this as the “Affidavit of Creditors.”

Clearly, then, the statute requires these measures, in this order:

  1. First, identify those having a claim against the estate;
  2. Send them notice conforming to the statute;
  3. File an affidavit with the clerk stating compliance with the statute;
  4. Publish notice to creditors.

Skip a step and you will have to start over. Go out of order and you will have to start over. Notice the language of the statute: it says that publication is undertaken “[u]pon filing such affidavit …” That clearly requires that you may not publish until after the affidavit has been filed. And, of course, the affidavit can not be filed until after you have made diligent inquiry and mailed your notices, if any.

In the case of In re Estate of Petrick, 635 So.2d 1389 (Miss. 1994), the untimely claim of a creditor was allowed because the administratrix published without notifying a creditor whom the court found was “reasonably ascertainable.” The court added that notice may be published only after the affidavit has been filed (at 1394).

In Houston v. Ladner, 911 So.2d 673 (Miss. App. 2005), the COA found the chancellor in error for finding a probated claim time-barred without first finding that the creditor was a reasonably ascertainable creditor. The creditor had not been sent notice by mail, and the COA pointed out that publication notice was not a substitute for mail notice; it was required in addition to mail notice.

Here are a couple of practice tips to help you comply with the statute:

  • Always question your fiduciary about bills of the decedent. It will be hard to argue that BOA Visa was not a “reasonably ascertainable” creditor when your fiduciary had been paying the bill herself for three months after the decedent died and before the estate was opened. It will be harder still to argue that the attending physician at the time of death was not “reasonably ascertainable.”
  • Why not include the required affidavit in your petition to open the estate, or in the fiduciary’s oath, whichever is the appropriate point for you? Maybe by eliminating one extra piece of paper you will be more likely to do it right.

Reminder: MCA § 93-13-38 makes the foregoing provisions applicable to guardianships and conservatorships, as well as estates.

The statutory requirements are technical and mandatory. Read the code and do what it says. Doing so can save you considerable grief down the road.

Reprise: Common Mistakes of Fiduciaries (and their Attorneys)

December 22, 2014 § Leave a comment

FIVE MISTAKES THAT FIDUCIARIES MAKE

July 18, 2012 § 4 Comments

  1. Failure to file an inventory. In every type of probate matter, it is required that an inventory be filed, usually within 90 days of appointment of the fiduciary. Often the will waives inventory, but the better attorneys I know always file an inventory, whether waived or not. Why? Because the inventory (a) sets a base line for later accountings, and (b) covers the lawyer’s rear from later claims by other heirs or beneficiaries that items are missing. Better to get those matters out up front where they can be dealt with than to let it hold up closing the estate. MCA 93-13-33 provides that an inventory must be filed within three months of appointment in a guardianship or conservatorship, and even requires an annual inventory. A guardian who fails to do so may be removed and be liable on his or her bond.
  2. Failure to publish notice to creditors. This requirement is mostly overlooked in guardianships and conservatorships. MCA 93-13-38(1) expressly states that “All the provisions of the law on the subject of executors and administrators, relating to settlement or disposition of property limitations, notice to creditors, probate and registration of claims, proceedings to insolvency and distribution of assets of insolvent estates, shall, insofar as applicable and not otherwise provided, be observed and enforced in all guardianships.” And remember that the statutory affidavit of creditors must be filed before publication of the notice to creditors. MCA 91-7-145(2) says that “Upon filing such affidavit …” it shall be the duty of the fiduciary to publish. An affidavit filed after the publication is a nullity.
  3. Failure to get authority of the court for expenditures. Perhaps the most pervasive error of fiduciaries. MCA 93-13-38 requires the conservator to improve the estate of the ward, and to “apply so much of the income, profit or body thereof as may be necessary for the comfortable maintenance and support of the ward and his family, if he have any, after obtaining an order of the court fixing the amount” [emphasis added]. Every expenditure must be approved in advance. Emergency expenditures may be ratified, but only if properly proven to be for the ward’s benefit, and properly supported by vouchers. Caution: as set out below, self-dealing expenses may be neither approved or ratified.
  4. Failure to keep the ward’s estate separate and to avoid self-dealing. It often happens that a son or daughter is appointed to serve as conservator of momma’s or daddy’s estate. The child simply adds his or her name to the parent’s account and proceeds from there. This complicates matters because that joint account belongs 100% to each person whose name is on the account, and becomes the property of the survivor on death. That is certainly not an appropriate or even legal arrangement for a guardian or conservator. The fiduciary in every kind of probate matter needs to open a separate estate, guardiandhip or conservatorship bank account, and make all financial transactions through it and through it alone. MCA 91-7-253 prohibits the fiduciary from paying herself any money from the ward’s estate without prior court approval, and loans to the fiduciary and family members are prohibited also. The statute says that the court can not ratify or approve such payments. If the fiduciary has some expense that needs to be reimbursed, make sure the fiduciary has proper documentation and petition the court for authority. Don’t expect a cash payment or check made out to cash to be approved without abundant supporting documentation.
  5. Failure to get court permission to move the ward to another county. It’s prohibited to relocate the ward to a county other than the one in which the fiduciary was appointed, unless approved in advance by the court. MCA 93-13-61.

FIVE MISTAKES THAT FIDUCIARIES MAKE

July 18, 2012 § 7 Comments

  1. Failure to file an inventory. In every type of probate matter, it is required that an inventory be filed, usually within 90 days of appointment of the fiduciary. Often the will waives inventory, but the better attorneys I know always file an inventory, whether waived or not. Why? Because the inventory (a) sets a base line for later accountings, and (b) covers the lawyer’s rear from later claims by other heirs or beneficiaries that items are missing. Better to get those matters out up front where they can be dealt with than to let it hold up closing the estate. MCA 93-13-33 provides that an inventory must be filed within three months of appointment in a guardianship or conservatorship, and even requires an annual inventory. A guardian who fails to do so may be removed and be liable on his or her bond.
  2. Failure to publish notice to creditors. This requirement is mostly overlooked in guardianships and conservatorships. MCA 93-13-38(1) expressly states that “All the provisions of the law on the subject of executors and administrators, relating to settlement or disposition of property limitations, notice to creditors, probate and registration of claims, proceedings to insolvency and distribution of assets of insolvent estates, shall, insofar as applicable and not otherwise provided, be observed and enforced in all guardianships.” And remember that the statutory affidavit of creditors must be filed before publication of the notice to creditors. MCA 91-7-145(2) says that “Upon filing such affidavit …” it shall be the duty of the fiduciary to publish. An affidavit filed after the publication is a nullity.
  3. Failure to get authority of the court for expenditures. Perhaps the most pervasive error of fiduciaries. MCA 93-13-38 requires the conservator to improve the estate of the ward, and to “apply so much of the income, profit or body thereof as may be necessary for the comfortable maintenance and support of the ward and his family, if he have any, after obtaining an order of the court fixing the amount” [emphasis added]. Every expenditure must be approved in advance. Emergency expenditures may be ratified, but only if properly proven to be for the ward’s benefit, and properly supported by vouchers. Caution: as set out below, self-dealing expenses may be neither approved or ratified.
  4. Failure to keep the ward’s estate separate and to avoid self-dealing. It often happens that a son or daughter is appointed to serve as conservator of momma’s or daddy’s estate. The child simply adds his or her name to the parent’s account and proceeds from there. This complicates matters because that joint account belongs 100% to each person whose name is on the account, and becomes the property of the survivor on death. That is certainly not an appropriate or even legal arrangement for a guardian or conservator. The fiduciary in every kind of probate matter needs to open a separate estate, guardiandhip or conservatorship bank account, and make all financial transactions through it and through it alone. MCA 91-7-253 prohibits the fiduciary from paying herself any money from the ward’s estate without prior court approval, and loans to the fiduciary and family members are prohibited also. The statute says that the court can not ratify or approve such payments. If the fiduciary has some expense that needs to be reimbursed, make sure the fiduciary has proper documentation and petition the court for authority. Don’t expect a cash payment or check made out to cash to be approved without abundant supporting documentation.
  5. Failure to get court permission to move the ward to another county. It’s prohibited to relocate the ward to a county other than the one in which the fiduciary was appointed, unless approved in advance by the court. MCA 93-13-61.

ESSENTIAL PROCEDURES IN A GUARDIANSHIP AND CONSERVATORSHIP

September 7, 2011 § 1 Comment

MCA 93-13-38 (1)  states:

All the provisions of the law on the subject of executors and administrators, relating to settlement or disposition of property limitations, notice to creditors, probate and registration of claims, proceedings to insolvency and distribution of assets of insolvent estates, shall, as far as applicable and not otherwise provided, be observed and enforced in all guardianships.

MCA 93-13-255 provides that a conservator appointed by the court shall have “the same duties, powers and responsibilities as a guardian of a minor, and all laws relative to the guardianship of a minor shall be applicable to a conservator.”

That means that in your guardianship or conservatorship you will need to file your affidavit of creditors in the proper time, publish to creditors, file an inventory, and do all the other acts and things required of fiduciaries in estates.

And keep in mind that the MSSC has made it abundantly clear that there are dire consequences for both the fiduciary and the attorney for failing to do so.

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.

Reprise: Checklist for Closing an Estate

October 20, 2017 § Leave a comment

Reprise replays posts from prior years that you may find useful today.

This one should be in every one of your estate files.

CHECKLIST FOR CLOSING AN ESTATE

September 27, 2010 § 19 Comments

  • _____ Judgment opening the estate or admitting will to probate is filed, and there is no contest.
  • _____ Oath of Executor/Administrator filed.
  • _____ The Executor/Administrator has properly filed his or her bond, or it was waived by the will or by sworn petition of all heirs with entry of a court order authorizing the waiver.
  • _____ Letters Testamentary or of Administration issued.
  • _____ The affidavit of known creditors required by MCA § 91-7-145 was properly executed by the Executor/Administrator and filed before publication to creditors.
  • _____ Publication of Notice to Creditors was made in “some newspaper in the county” that meets the criteria in MCA § 13-3-31, for three consecutive weeks, and it has been more than ninety days since the first publication.
  • _____ Inventory and appraisement were done and timely filed, or were waived by the will or by all heirs by sworn petition with order so waiving.
  • _____ All accountings were timely filed and approved by court order (other than the final accounting, which is now before the court), or waived by the will or excused by the court.
  • _____ In the case of an administration, publication for unknown heirs has been completed, and a judgment determining heirs has been presented, or will be presented in advance of presenting the final accounting.
  • _____ All interested parties to this estate have been served with the petition to close and all other closing documents, including the final account, and they have joined in the petition or have been duly served with a Rule 81 summons, and there is a proper return or properly executed waiver or joinder for each interested party.
  • _____ All probated claims have been paid, and evidence of such payment is in the court file, or the probated claims will be paid in the course of closing the estate, and a final report will be filed evidencing payment.
  • _____ The attorney’s fees and expenses, as well as those of the Executor/Administrator have been disclosed to all interested persons, and they have no objection.

Attorney’s Fees in a Related Case

March 1, 2017 § 1 Comment

In the midst of their long-running property-line feud with the McDonalds, about which we have previously posted here and here, Kenneth and Carolyn Moore filed for bankruptcy, making it necessary for the McDonalds to file adversary proceedings in bankruptcy court. After the case returned to chancery from its bankruptcy detour, the case was heard on the merits and the chancellor ruled against the Moores, assessing them $13,336.55 in actual damages, $10,000 in punitive damages, expert expenses of $1,700, and attorney’s fees of more than $65,000. The attorney’s fee award included legal work by the McDonalds’ attorneys in the bankruptcy case.

The Moores appealed, contending that it was error for the chancellor to assess bankruptcy attorney’s fees against them in the chancery contempt proceeding. The COA affirmed in Moore v. McDonald, et al., handed down February 7, 2017. Judge Wilson wrote the opinion on the point:

¶4. On May 16, 2014, the McDonalds filed a motion for summary judgment supported by exhibits and affidavits. Eleven days later, the Moores filed for bankruptcy. As a result, all proceedings in the chancery court were stayed and the impending trial was cancelled. Counsel for the McDonalds entered an appearance in the bankruptcy case and filed an adversary complaint to preserve the McDonalds’ claim against the Moores. See 11 U.S.C. § 523(a)(6) (2012) (providing that a debt for “willful and malicious injury” to the person or property of another is not dischargeable in bankruptcy). The McDonalds’ counsel also attended the meeting of creditors and filed a motion for sanctions based on the Moores’ alleged misrepresentations in the bankruptcy case. In response to hearing notices in the McDonalds’ adversary proceeding, the Moores appeared before the bankruptcy court and asked that their bankruptcy petition be dismissed. The court granted their request, which permitted the chancery case to proceed.

¶5. The chancellor found “that the Moores intentionally stalled [the chancery] action by filing [a petition for] bankruptcy which was dismissed after considerable time and effort by [counsel for the McDonalds].” The chancellor therefore found that “attorney time and expenses expended . . . in the Moore bankruptcy case were properly incurred on behalf of the McDonalds and should be awarded as part of the fees and costs awarded in this case.” On appeal, the Moores do not challenge the chancellor’s factual basis for awarding attorneys’ fees incurred in connection with the bankruptcy case. The Moores’ only argument is that “[t]he Pearl River County Chancery Court was not the appropriate forum to request attorneys’ fees for work related to the bankruptcy.” They argue that approximately $3,975 in fees that the McDonalds incurred related to the bankruptcy proceeding could only be recovered in the bankruptcy court.

¶6. The Moores’ argument is without merit. The Moores do not dispute that the McDonalds were entitled to an award of attorneys’ fees, and they cite no authority for their argument that such fees are not recoverable simply because they were incurred in a related bankruptcy proceeding. Although not directly on point, our Supreme Court recently held that a state court can award fees incurred in federal court in connection with a motion to remand the case to state court. See O.D. v. Dillard, 177 So. 3d 175, 189 (¶44) (Miss. 2015). In addition, other courts have held that a state court may award attorneys’ fees incurred in connection with a related bankruptcy proceeding. See Chinese Yellow Pages Co. v. Chinese Overseas Mktg. Serv. Corp., 170 Cal. App. 4th 868, 882 (Cal. Ct. App. 2009); Gill Sav. Ass’n v. Chair King Inc., 797 S.W.2d 31, 32 (Tex. 1990). Accordingly, we hold that the chancellor did not err by awarding attorneys’ fees related to the bankruptcy case.

In the absence of other Mississippi authority on point, then, the law in Mississippi is as stated above until the MSSC rules otherwise. On the particular facts in this case, I can’t disagree. The judge ruled that the detour “intentionally stalled” the chancery proceeding, so its connection with and direct relation to the chancery case is pretty clear. Still, I would hope we can have some parameters on how closely connected and related that other litigation needs to be to justify awarding attorney’s fees in another case.

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