When Should a Temporary Administrator be Appointed?
September 17, 2014 § 2 Comments
MCA 91-7-53 allows the court in a will contest, on filing of a petition by an interested person, to appoint a temporary administrator if necessary to protect the rights of the parties.
In the case of Parker v. Benoist, decided August 28, 2014, the MSSC was confronted with the question whether the chancellor should have appointed a temporary administrator in a will contest. We talked about this case previously in connection with in terrorem clauses.
Bronwyn Parker filed a contest in connection with the will of her father, B.D. Benoist. She also filed a motion to remove her brother, William, from his position as executor, claiming that he had appropriated most of B.D.’s assets for himself through undue influence before B.D.’s death, and that he had unduly influenced his father in the making of the will being contested. She contended that a previous will, executed in 1998, was her father’s true, valid will. Because William was defending the will from which he benefited, and which Bronwyn argued should be set aside, William should be removed as fiduciary.
The chancellor overruled Bronwyn’s motion, finding that there were factual issues which were “strongly disputed between the parties,” and that “[t]here [wa]s no uncontested evidence for the Court to remove William D. Benoist as the Executor of the Last Will and Testament of Billy Dean ‘B.D.’ Benoist.”
Bronwyn appealed, charging that it was error for the trial judge to refuse to remove William.
The MSSC affirmed on the point. Justice Kitchens wrote for the court:
¶26. “[W]henever a last will and testament shall be contested, the chancery court or chancellor in vacation, on petition of any interested person, may appoint a temporary administrator if it shall appear necessary for the protection of the rights of the parties. . . .” Miss. Code Ann. § 91-7-53 (Rev. 2013). Chancellors have wide discretion in appointing a new executor in a will contest, and this Court “should not reverse his action unless there is clear evidence of abuse of that discretion.” Sandifer v. Sandifer, 237 Miss. 464, 469, 115 So.2d 46, 48 (1959). On appeal, Bronwyn essentially reiterates the facts that she believes necessitated a finding by the chancellor that a new executor should be appointed–substantial gifts from B.D. to William before B.D.’s death and William’s mismanagement and depletion of estate assets after B.D.’s death. She argues that, because the jury found that William was in a confidential relationship with B.D., there was a presumption of undue influence.
¶27. We find that the chancellor did not abuse his discretion in denying Bronwyn’s petition to remove William as executor. The chancellor considered all of the arguments Bronwyn has made on appeal and determined that the circumstances did not warrant the appointment of a new executor. We cannot say the chancellor was manifestly wrong or that he abused his discretion. We are slightly troubled, however, by the wording of the chancellor’s order denying Bronwyn’s petition. The chancellor stated that there was no “uncontested evidence” that would justify removing William as the executor. It is not required that there be uncontested evidence to justify the removal of an executor. All that is required is that the chancellor determine, in his or her discretion, that it is necessary to remove the current executor to protect the rights of the parties to the will contest. See Miss. Code Ann. § 91-7-53 (Rev. 2013). “Nowhere does the statute say that before he may appoint a temporary administrator he must find that the executor named in the will is disqualified or has been guilty of misconduct in office.” Sandifer, 115 So. 2d at 47-48. We clarify that chancellors enjoy wide discretion in granting or denying requests to remove an executor, and that a party is not required to present “uncontested evidence” to succeed in such a petition. Bronwyn’s claim of error on this issue, however, is without merit.
To put it in simpler terms: even though the chancellor followed the wrong road map, he arrived at the right destination, so no reversal.
What jumps out from this case is that it is not enough for the executor and the contestant to be pitted against one another in the litigation. Nor is it enough that the executor have a stake in the outcome. You have to convince the chancellor that that removal is necessary to protect the interests of the parties to the litigation. Even then, it is within the chancellor’s discretion, and to reverse his decision on appeal, you must convince the appellate court that he was manifestly wrong or abused his discretion.
In Terrorem Now has an Exception
September 4, 2014 § 5 Comments
In terrorem clauses, as you will recall dimly from law school, are provisions in wills and trusts that prohibit any beneficiary who contests the instrument from taking anything through it, in effect creating a forfeiture. They are designed to be a potent deterrent to litigation among the beneficiaries.
Mississippi has long adhered to the rule that, unless a particular provision is contrary to law, a testator or settlor is allowed to make any provisions for disposition of his property that he sees fit to make, including in terrorem clauses.
Here is a specimen in terrorem clause from a will:
If any beneficiary hereunder (including, but not limited to, any beneficiary of a trust created herein) shall contest the probate or validity of this Will or any provision thereof, or shall institute or join in (except as a party defendant) any proceeding to contest the validity of this Will or to prevent any provision thereof from being carried out in accordance with its terms (regardless of whether or not such proceedings are instituted in good faith and with probable cause), then all benefits provided for such beneficiary are revoked and such benefits shall pass to the residuary beneficiaries of this Will. . . .
That language was the subject of litigation in the MSSC case of Parker v. Benoist, decided by the MSSC on August 28, 2014.
William Benoist had admitted the 2010 will of his father, B.D. Benoist, to probate. It included the in terrorem language set out above. William’s sister, Bronwyn, who was a co-fiduciary with William over some of their father’s assets, filed a will contest charging undue influence, and asking the court for an accounting, to void any benefits William received as a result of his undue influence, and for equitable relief.
Following a trial, the jury returned a verdict that, although there was evidence of a confidential relationship, there was no evidence of undue influence. The chancellor then ruled that the in terrorem clause was valid and enforceable, and that, as a result, Bronwyn took nothing under the will. Bronwyn appealed.
In a case of first impression, the MSSC reversed the chancellor’s enforcement of the in terrorem clause. This language is from ¶ 1:
In this appeal, we must determine whether Mississippi law should recognize a good faith and probable cause exception to a forfeiture in terrorem clause in a will. We hold that it should, and that Bronwyn has sufficiently shown that her suit was brought in good faith and was founded upon probable cause.
At ¶ 8, the court, in an opinion written by Justice Kitchens, said that “We hold that such a provision is unconstitutional under Mississippi’s Constitution, void as against public policy, and fundamentally inequitable, and we join the large number of jurisdictions who permit a good faith and probable cause exception to forfeiture clauses in wills.”
The opinion goes on to say that such clauses frustrate the fundamental purpose of courts, which is to detemine the truth and to decide whether or not a will is valid, contrary to the Mississippi Constitution’s guarantee of the right of access to the courts. Although forfeiture provisions may serve the useful purpose of discouraging and punishing persons from seeking unjustified enrichment and corecive settlements, they go too far when they deprive the court of its duty to determine the validity of a donative transfer. The solution is to allow a good faith and probable cause exception. This is what the court said at ¶ 14:
… The will of the testator should control, but courts exist to determine whether the testator’s will is a valid reflection of the testator’s wishes. Black’s Law Dictionary defines “probate” as a “[c]ourt procedure by which a will is proved to be valid or invalid. . . .” Black’s Law Dictionary 1081 (5th ed. 1979). By definition, probating a will is proving that it is valid. This must occur through litigation. A strict interpretation of no-contest provisions in wills would hamper courts’ goal of determining what is, once and for all, the will of the testator. A bona fide inquiry into the validity of the will should not be defeated by language contained in the will itself. We hold that, in Mississippi, forfeiture provisions in wills are enforceable unless a contest is brought in good faith and based on probable cause. “Probable cause exists when, at the time of instituting the proceeding, there was evidence that would lead a reasonable person, properly informed and advised, to conclude that there was a substantial likelihood that the challenge would be successful.” Restatement (Third) of Property: Wills and Other Donative Transfers at § 8.5 cmt. c. The determination of good faith and probable cause should be inferred from the totality of the circumstances. [Emphasis added]
The bottom line in this case is that, although in terrorem clauses can still be used in wills and trusts, they may now be overcome and adjudged unenforceable if subjected to challenges found to be made in good faith and based on probable cause. And the right to have a court scrutinize the validity of the will can not be thwarted by the language of the will. These are important points of law on which to advise your clients when drafting donative instruments.
In this case, the court found that Bronwyn did have probable cause because: she understood her parents’ previous intentions from prior wills and discussions she had had with them; the 2010 will was unknown to her and contradicted her prior understanding; her father had been in failing health complicated by alcoholism and use of pain killers around the wtime he executed the 2010 will; he was taking medication for cognition problems; large withdrawals were made from his accounts that went directly to William; and he conveyed large tracts of real estate to William around the time of making the 2010 will. The 2010 circumstances occurred while B.D. was in William’s care. There was no evidence of bad faith on Bronwyn’s part in bringing her suit.
By the way, I got a thrill out of ¶ 12 of the court’s opinion, where Justice Kitchens invokes maxims of equity and actually quotes from Griffith’s Mississippi Chancery Practice.
There are some other interesting aspects to this case, including: the award of attorney’s fees from the estate to defend the will; the denial of an award of attorney’s fees against Bronwyn; and whether William should have been disqualified and removed as executor. Each of those deserves its own, separate post. Until then, you can read the court’s opinion for yourself.
Charting Relationships
August 20, 2014 § 4 Comments
It can be devilishly difficult to figure out relationships among people in your head, especially when your client says something like, “She was my double third cousin on my momma’s side, and she married my husband’s great-uncle’s niece after her first husband died.”
But it has to be done in estate work, property (especially partition), wrongful death, and in any case where you have to compute relationships within the third degree.
One super tool is the Nolan Chart of Relationships and Degrees of Kindred, which is reproduced below:
You can access a large-size .jpg file by clicking this link.
You will also find it at 51 So.2d 542.
An Archaicism that Needs to be Fixed
August 13, 2014 § 1 Comment
If one is to follow the statutory scheme as it currently stands in estate matters, here is what one would do after opening an estate:
- Unless waived by the court, warrants of appraisal issue under seal of the court “commanding three or more discreet persons not related to the deceased or interested in the estate” to make inventory and appraisal. Any three or more of the appointees may act. The warrant commands the appraisers to set aside the exempt property and one year’s support “and tuition” for those eligible (MCA 91-7-109 and -111).
- The form of the warrant is provided in MCA 91-7-113.
- The appraisers must report to the court the personal property that is exempt, and “set it apart” to the widow and/or children of the decedent. The court may allow or disallow all or part of the report, with instructions to the appraisers (MCA 91-7-117 and -137).
- Defaulting appraisers may be fined.
- MCA 91-7-93 requires executors and administrators, within 90 days of appointment, to inventory the money of and debts due to the decedent.
I could actually go on, but let me stop here and ask: Who has ever heard of an estate being administered in that fashion in any of our lifetimes?
Most attorneys ask to waive appraisement and work with the fiduciary to arrive at an inventory for the court to approve.
The problem is that, other than the cumbersome 3-headed appraisal procedure stated above, there is no clearcut procedure to determine the exempt property that passes outside the estate. Yes, I said outside the estate. That’s because MCA 91-7-117 specifically states that title of the widow and children to the exempt property vests in them by operation of law upon death of the decedent. DeBaum v. Hulett Undertaking Co., 169 Miss. 488, 153 So. 513, 515 (1934).
I think that Title 91, Chapter 7, needs to be rewritten — NOT to import some exotic provisions from other states that would drastically change our Mississippi probate practice — but rather to eliminate some of these archaic, unused, impractical provisions that clutter and confuse our code, and replace them with simple, clear, direct statements that reflect how lawyers and judges actually do business in these matters.
These points at a minimum need to be addressed:
- The code needs to charge the fiduciary with the responsibility to identify and report to the court the exempt property, and to obtain the court’s ruling as soon as possible after opening the estate.
- The 3-appraiser procedure needs to be abolished. When it was adopted in 1848, I am sure it was quite nifty. Today, it would cost a fortune to hire three disinterested persons to investigate the belongings of an individual, determine values, and report to the court not only the items and their values, but determine what is exempt and recommend a year’s support.
A previous post dealing with exempt property and estates is at the link.
Checklists, Checklists, Checklists
August 12, 2014 § 11 Comments
You can skip over this post if you’ve been paying attention to this blog for any appreciable length of time.
For you newcomers and oblivious long-timers, you need to know and appreciate that proving many kinds of cases in chancery court is a matter of proving certain factors mandated from on high by our appellate courts. I’ve referred to it as “trial by checklist.”
If you don’t put on proof to support findings of fact by the chancellor, your case will fail, and you will have wasted your time, the court’s time, your client’s money. You will have lost your client’s case and embarrassed yourself personally, professionally, and, perhaps, financially.
I suggest you copy these checklists and have them handy at trial. Build your outline of the case around them. In your trial preparation design your discovery to make sure that you will have proof at trial to support findings on the factors applicable in your case. Subpoena the witnesses who will provide the proof you need. Present the evidence at trial that will support the judge’s findings.
If the judge fails to address the applicable factors in his or her findings of fact, file a timely R59 motion asking the judge to do that. But remember — and this is critically important — if you did not put the proof in the record at trial to support those findings, all the R59 motions in the world will not cure that defect.
Here is an updated list of links to the checklists I’ve posted:
Income tax dependency exemption.
Modification of child support.
Periodic and rehabilitative alimony.
And here are two checklists that will help you in probate matters:
Blood Money
July 30, 2014 § 6 Comments
Many years ago I represented two young children whose mother had died while on an ill-fated catfishing trip to the flooded Lost Horse Creek in northeast Lauderdale County. She had been invited on the outing by her husband, who only the week before had taken out $400,000 in life insurance policies on her life, with himself as sole beneficiary. The policies had double-indemnity provisions for accidental death.
The husband claimed that the wife had slipped in the rain-soaked mud, fell into the creek and must have hit her head on a tree limb, knocking her unconscious and either killing her by the blow, or she drowned.
The coroner disagreed, finding that she had suffered more than one heavy, crushing blow to the back of the skull with a blunt object — an injury that was inconsistent with the circumstances the husband claimed — and there was no water in her lungs, indicating that she was dead before she fell in the creek.
The husband was indicted for murder, and the proof at trial included that he had offered a local bar owner $5,000 to kill her some ten months before he himself did the deed. The husband was convicted of murder. His appeal was unsuccessful. Hammond v. State, 465 So.2d 1031 (Miss. 1985).
I filed a petition in chancery court to have the husband disqualified from recovering the insurance proceeds, which had been interpled by the insurance companies. He contested the matter, but the chancellor ruled that the proceeds were property of the woman’s estate, the only heirs of whom were the two sons. There was no appeal.
The law of Mississippi is that a life insurance beneficiary who wilfully takes the insured’s life may not recover the insurance benefits. Gholson v. Smith, 210 Miss. 28, 29, 48 So.2d 603, 604 (Miss. 1950). In the case of Dill v. Southern Farm Bureau Life Ins. Co., 797 So.2d 858, 866 (Miss. 2001), the court ruled that the standard of proof is by a preponderance.
The same rule applies in inheritance.
In the recent case of Young v. O’Beirne, adm’r of the Estate of Young, decided by the COA on June 3, 2014, the COA found that Mr. Young, who indisputably had murdered Mrs. Young, could not have any interest in her estate, based on MCA 91-1-25, which provides that “[i]f any person wilfully cause[s] or procure[s] the death of another in any way, he shall not inherit the property, real or personal, of such other; but the same shall descend as if the person so causing or procuring the death had predeceased the person whose death he perpetrated.”
A similar code section is found at MCA 91-5-33, which provides that a person who has wilfully caused or procured the death of another person shall not take any real or personal property of the decedent under any will, testament or codicil, and as to any such devise the testator is deemed to have died intestate.
Note that a plea of guilty to manslaughter, standing alone, is not sufficient to support a finding that would preclude inheritance under either statute. Hood v. VanDevender, 661 So.2d 198 (Miss. 1995). That would not preclude the chancery court, however, from finding that the act rose to the level of wilfullness that would invoke either statute, because the killing need not amount to murder, but the proof only needs to establish that it was wilful and without justification in law. Henry v. Toney, 211 Miss. 93, 50 So.2d 921 (1951).
The courtly Mr. Tom Ethridge, who taught equity and chancery practice at Ole Miss Law School years ago when such things were still worthy subjects of legal academia, used to say, “Equity means do right.” Do right. That is behind these laws. I recently told a young lawyer that if you’re uncertain about what the law might be in a given situation, figure out what the most honest, forthright thing to do might be, and you’ll probably be pretty close to what the law requires. Just do right.
Mississippi’s Uniform Trust Code
July 16, 2014 § Leave a comment
The law of trusts in in this state has undergone a major transformation, effective July 1, 2014, with adoption of the Mississippi Uniform Trust Code.
Mississippi’s law of trusts now will be more closely aligned with that of other states that have adopted the uniform law.
The bill passed by the legislature is 132 pages long, a tad much to try to expound on here, but to give you an idea of the new law’s breadth, here is merely the title of the bill:
AN ACT TO CREATE THE MISSISSIPPI UNIFORM TRUST CODE, TO BE CODIFIED IN TITLE 91, CHAPTER 8, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE CREATION, ADMINISTRATION, MODIFICATION, TERMINATION, AND VALIDITY OF TRUSTS; TO CREATE NEW SECTION 91-8-101, MISSISSIPPI CODE OF 1972, TO CREATE A SHORT TITLE; TO CREATE NEW SECTION 91-8-102, MISSISSIPPI CODE OF 1972, TO PRESCRIBE THE SCOPE OF THE ACT; TO CREATE NEW SECTION 91-8-103, MISSISSIPPI CODE OF 1972, TO ENACT DEFINITIONS; TO CREATE NEW SECTION 91-8-104, MISSISSIPPI CODE OF 1972, TO ENUMERATE THE CIRCUMSTANCES CONSTITUTING “KNOWLEDGE”; TO CREATE NEW SECTION 10 91-8-105, MISSISSIPPI CODE OF 1972, TO CREATE DEFAULT AND MANDATORY RULES; TO CREATE NEW SECTION 91-8-106, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE APPLICATION OF COMMON LAW AND PRINCIPLES OF EQUITY; TO CREATE NEW SECTION 91-8-107, MISSISSIPPI CODE OF 1972, TO PRESCRIBE GOVERNING LAW; TO CREATE NEW SECTION 15 91-8-108, MISSISSIPPI CODE OF 1972, TO DELINEATE THE PRINCIPAL PLACE OF ADMINISTRATION; TO CREATE NEW SECTION 91-8-109, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR NOTICE AND WAIVER THEREOF; TO CREATE NEW SECTION 91-8-110, MISSISSIPPI CODE OF 1972, TO SPECIFY QUALIFIED BENEFICIARIES; TO CREATE NEW SECTION 20 91-8-111, MISSISSIPPI CODE OF 1972, TO AUTHORIZE NONJUDICIAL SETTLEMENT AGREEMENTS; TO CREATE NEW SECTION 91-8-112, MISSISSIPPI 22 CODE OF 1972, TO PROVIDE RULES OF CONSTRUCTION; TO CREATE NEW SECTION 91-8-201, MISSISSIPPI CODE OF 1972, TO SPECIFY THE ROLE OF THE COURT; TO CREATE NEW SECTION 91-8-202, MISSISSIPPI CODE OF 1972, TO SPECIFY JURISDICTION; TO CREATE NEW SECTION 91-8-203, MISSISSIPPI CODE OF 1972, TO DEFINE SUBJECT-MATTER JURISDICTION; TO CREATE NEW SECTION 91-8-204, MISSISSIPPI CODE OF 1972, TO PRESCRIBE VENUE; TO CREATE NEW SECTION 91-8-205, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR JUDICIAL ACCOUNTINGS AND SETTLEMENTS; TO CREATE NEW SECTION 91-8-301, MISSISSIPPI CODE OF 1972, TO SPECIFY WHEN REPRESENTATION IS BINDING; TO CREATE NEW SECTION 91-8-302, MISSISSIPPI CODE OF 1972, TO PROVIDE WHEN THE HOLDER MAY BIND OTHERS; TO CREATE NEW SECTION 91-8-303, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR REPRESENTATION BY FIDUCIARIES AND PARENTS; TO CREATE NEW SECTION 91-8-304, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR REPRESENTATION BY PERSONS WITH SIMILAR INTERESTS; TO CREATE NEW SECTION 91-8-305, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR APPOINTMENT OF REPRESENTATIVES; TO CREATE NEW SECTION 91-8-401, MISSISSIPPI CODE OF 1972, TO PROVIDE METHODS FOR CREATING TRUSTS; TO CREATE NEW SECTION 91-8-402, MISSISSIPPI CODE OF 1972, TO SPECIFY REQUIREMENTS; TO CREATE NEW SECTION 91-8-403, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR FOREIGN TRUSTS; TO CREATE NEW SECTION 43 91-8-404, MISSISSIPPI CODE OF 1972, TO REQUIRE A LAWFUL PURPOSE; TO CREATE NEW SECTION 91-8-405, MISSISSIPPI CODE OF 1972, TO ALLOW COURT SELECTION OF A CHARITABLE PURPOSE; TO CREATE NEW SECTION 91-8-406, MISSISSIPPI CODE OF 1972, TO VOID A TRUST CREATED UNDER DURESS; TO CREATE NEW SECTION 91-8-407, MISSISSIPPI CODE OF 1972, TO ALLOW AN ORAL TRUST; TO CREATE NEW SECTION 91-8-408, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR TRUSTS FOR ANIMALS; TO CREATE NEW SECTION 91-8-409, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR NONCHARITABLE TRUSTS LACKING A DISCERNABLE BENEFICIARY; TO CREATE NEW SECTION 91-8-410, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR MODIFICATION OR TERMINATION OF TRUSTS; TO CREATE NEW SECTION 54 91-8-411, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR MODIFICATION OR TERMINATION OF NONCHARITABLE IRREVOCABLE TRUSTS BY CONSENT; TO CREATE NEW SECTION 91-8-412, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR MODIFICATION OR TERMINATION DUE TO UNFORESEEN CIRCUMSTANCES; TO CREATE NEW SECTION 91-8-413, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR INTERPRETATION ACCORDING TO THE SETTLOR’S INTENT; TO CREATE NEW SECTION 91-8-414, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR MODIFICATION OR TERMINATION OF AN UNECONOMIC TRUST; TO CREATE NEW SECTION 91-8-415, MISSISSIPPI CODE OF 1972, TO ALLOW REFORMATION TO CORRECT MISTAKES; TO CREATE NEW SECTION 91-8-416, MISSISSIPPI CODE OF 1972, TO ALLOW MODIFICATION TO OBTAIN TAX OBJECTIVES; TO CREATE NEW SECTION 91-8-417, MISSISSIPPI CODE OF1972, TO ALLOW COMBINATION AND DIVISION OF TRUSTS; TO CREATE NEW SECTION 91-8-601, MISSISSIPPI CODE OF 1972, TO SPECIFY REQUIRED CAPACITY; TO CREATE NEW SECTION 91-8-602, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR REVOCATION OR AMENDMENT OF REVOCABLE TRUST; TO CREATE NEW SECTION 91-8-603, MISSISSIPPI CODE OF 1972, TO PROVIDE SETTLOR’S POWERS; TO CREATE NEW SECTION 91-8-604, MISSISSIPPI CODE OF 1972, TO PLACE A LIMITATION ON AN ACTION TO CONTEST VALIDITY; TO CREATE NEW SECTION 91-8-701, MISSISSIPPI CODE OF 1972, TO ALLOW ACCEPTANCE OR DECLINE OF TRUSTEESHIP; TO CREATE NEW SECTION 91-8-702, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A TRUSTEE’S BOND; TO CREATE NEW SECTION 91-8-703, MISSISSIPPI CODE 77 OF 1972, TO PROVIDE FOR COTRUSTEES; TO CREATE NEW SECTION 91-8-704, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR VACANCIES AND APPOINTMENTS; TO CREATE NEW SECTION 91-8-705, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR RESIGNATION OF TRUSTEES; TO CREATE NEW SECTION 91-8-706, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR REMOVAL OF A TRUSTEE; TO CREATE NEW SECTION 91-8-707, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR DELIVERY OF PROPERTY BY A FORMER TRUSTEE; TO CREATE NEW SECTION 91-8-708, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE COMPENSATION OF TRUSTEE, TRUST ADVISORS AND TRUST PROTECTORS; TO CREATE NEW SECTION 91-8-709, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR REIMBURSEMENT; TO CREATE NEW SECTION 91-8-710, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR EXCLUDED FIDUCIARIES OF DIRECTED TRUSTS; TO CREATE NEW SECTION 91-8-711, MISSISSIPPI CODE OF 1972, TO ALLOW A FIDUCIARY TO ACCEPT OR DECLINE SERVING A DIRECTED TRUST; TO CREATE NEW SECTION 91-8-712, MISSISSIPPI CODE OF 1972, TO PROVIDE THE FIDUCIARY’S BOND FOR A DIRECTED TRUST; TO CREATE NEW SECTION 91-8-713, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A VACANCY IN A DIRECTED TRUST; TO CREATE NEW SECTION 91-8-714, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE RESIGNATION OF THE FIDUCIARY OF A DIRECTED TRUST; TO CREATE NEW SECTION 91-8-715, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE REMOVAL OF A FIDUCIARY OF A DIRECTED TRUST; TO CREATE NEW SECTION 91-8-801, MISSISSIPPI CODE OF 1972, TO SPECIFY THE DUTY OF A TRUST ADMINISTRATOR; TO CREATE NEW SECTION 91-8-802, MISSISSIPPI CODE OF 1972, TO REQUIRE THE DUTY OF LOYALTY; TO CREATE NEW SECTION 91-8-803, MISSISSIPPI CODE OF 1972, TO REQUIRE IMPARTIALITY; TO CREATE NEW SECTION 91-8-804, MISSISSIPPI CODE OF 1972, TO REQUIRE PRUDENCE; TO CREATE NEW SECTION 91-8-805, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR PAYMENT OF COSTS; TO CREATE NEW SECTION 91-8-806, MISSISSIPPI CODE OF 1972, TO REQUIRE THE TRUSTEE’S USE OF SPECIAL SKILLS; TO CREATE NEW SECTION 91-8-807, MISSISSIPPI CODE OF 1972, TO ALLOW DELEGATION BY A TRUSTEE; TO CREATE NEW SECTION 91-8-808, MISSISSIPPI CODE OF 1972, TO SPECIFY WHEN A SETTLOR HAS THE POWER TO DIRECT; TO CREATE NEW SECTION 91-8-809, MISSISSIPPI CODE OF 1972, TO REQUIRE CONTROL AND PROTECTION OF TRUST PROPERTY; TO CREATE NEW SECTION 91-8-810, MISSISSIPPI CODE OF 1972, TO REQUIRE RECORDKEEPING AND IDENTIFICATION OF TRUST PROPERTY; TO CREATE NEW SECTION 91-8-811, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR ENFORCEMENT AND DEFENSE OF CLAIMS; TO CREATE NEW SECTION 91-8-812, MISSISSIPPI CODE OF 1972, TO REQUIRE COLLECTION OF PROPERTY; TO CREATE NEW SECTION 91-8-813, MISSISSIPPI CODE OF 1972, TO IMPOSE A DUTY TO INFORM AND REPORT; TO CREATE NEW SECTION 91-8-814, MISSISSIPPI CODE OF 1972, TO IMPOSE STANDARDS ON THE EXERCISE OF DISCRETIONARY POWERS; TO CREATE NEW SECTION 91-8-815, MISSISSIPPI CODE OF 1972, TO SPECIFY THE GENERAL POWERS OF A TRUSTEE; TO CREATE NEW SECTION 91-8-816, MISSISSIPPI CODE OF 1972, TO SPECIFY THE SPECIFIC POWERS OF A TRUSTEE; TO CREATE NEW SECTION 91-8-817, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR DISTRIBUTION UPON TERMINATION; TO CREATE NEW SECTION 91-8-901, MISSISSIPPI CODE OF 1972, TO INCORPORATE THE PRUDENT INVESTOR ACT BY REFERENCE; TO CREATE NEW SECTION 91-8-1001, MISSISSIPPI CODE OF 1972, TO PROVIDE REMEDIES FOR BREACH OF TRUST; TO CREATE NEW SECTION 91-8-1002, MISSISSIPPI CODE OF 1972, TO PROVIDE DAMAGES FOR BREACH OF TRUST; TO CREATE NEW SECTION 91-8-1003, MISSISSIPPI CODE OF 1972, TO ELIMINATE DAMAGES IN ABSENCE OF BREACH; TO CREATE NEW SECTION 91-8-1004, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR ATTORNEY’S FEES AND COSTS; TO CREATE NEW SECTION 91-8-1005, MISSISSIPPI CODE OF 1972, TO ENACT A LIMITATION OF ACTION AGAINST A TRUSTEE; TO CREATE NEW SECTION 91-8-1006, MISSISSIPPI CODE OF 1972, TO CREATE IMMUNITY FOR RELIANCE ON THE TRUST INSTRUMENT; TO CREATE NEW SECTION 91-8-1007, MISSISSIPPI CODE OF 1972, TO CREATE IMMUNITY FOR CERTAIN OTHER EVENTS AFFECTING ADMINISTRATION; TO CREATE NEW SECTION 91-8-1008, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A TRUSTEE’S EXCULPATION; TO CREATE NEW SECTION 91-8-1009, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A BENEFICIARY’S CONSENT, RELEASE OR RATIFICATION; TO CREATE NEW SECTION 91-8-1010, MISSISSIPPI CODE OF 1972, TO LIMIT A TRUSTEE’S PERSONAL LIABILITY; TO CREATE NEW SECTION 91-8-1011, MISSISSIPPI CODE OF 1972, TO SPECIFY A TRUSTEE’S INTEREST AS A GENERAL PARTNER; TO CREATE NEW SECTION 91-8-1012, MISSISSIPPI CODE OF 1972, TO PROVIDE PROTECTION FOR A PERSON DEALING WITH A 148 TRUSTEE; TO CREATE NEW SECTION 91-8-1013, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR CERTIFICATION OF A TRUST; TO CREATE NEW SECTION 91-8-1014, MISSISSIPPI CODE OF 1972, TO ALLOW ENFORCEMENT OF A NO-CONTEST CLAUSE; TO CREATE NEW SECTION 91-8-1101, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR UNIFORMITY IN APPLICATION AND CONSTRUCTION; TO CREATE NEW SECTION 91-8-1102, MISSISSIPPI CODE OF 1972, TO SPECIFY THE RELATION OF THE ACT TO THE ELECTRONIC SIGNATURES ACT; TO CREATE NEW SECTION 91-8-1103, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR SEVERABILITY; TO CREATE NEW SECTION 91-8-1106, MISSISSIPPI CODE OF 1972, TO MAKE TRANSITION PROVISIONS; TO CREATE NEW SECTION 91-8-1107, MISSISSIPPI CODE OF 1972, TO PLACE LIMITATIONS ON SETTLORS OF IRREVOCABLE TRUSTS; TO CREATE NEW SECTION 91-8-1108, MISSISSIPPI CODE OF 1972, TO PROVIDE FACTORS TO BE CONSIDERED IN CERTAIN CHALLENGES; TO CREATE NEW SECTION 91-8-1109, MISSISSIPPI CODE OF 1972, TO PROVIDE SPECIAL PROTECTIONS FOR TRUSTS FOR THE DISABLED; TO CREATE NEW SECTION 91-8-1201, MISSISSIPPI CODE OF 1972, TO SPECIFY THE POWERS OF 165 TRUST ADVISORS AND TRUST PROTECTORS; TO CREATE NEW SECTION 91-8-1202, MISSISSIPPI CODE OF 1972, TO SPECIFY THE FIDUCIARY DUTY OF TRUST ADVISORS AND TRUST PROTECTORS; TO CREATE NEW SECTION 91-8-1203, MISSISSIPPI CODE OF 1972, TO SUBJECT TRUST ADVISORS AND PROTECTORS TO COURT JURISDICTION; TO CREATE NEW SECTION 91-8-1204, MISSISSIPPI CODE OF 1972, TO LIMIT THE DUTY OF REVIEW OF AN EXCLUDED FIDUCIARY; TO CREATE NEW SECTION 91-8-1205, MISSISSIPPI CODE OF 1972, TO SPECIFY THE FIDUCIARY’S LIABILITY; TO CREATE NEW SECTION 91-8-1206, MISSISSIPPI CODE OF 1972, TO CREATE A LIMITATION OF LIABILITY FOR A TRUST ADVISOR OR PROTECTOR; TO REPEAL SECTIONS 91-9-1, 91-9-2, 91-9-3, 91-9-5, 91-9-7 AND 91-9-9, MISSISSIPPI CODE OF 1972, WHICH CONSTITUTE TITLE 91, CHAPTER 9, ARTICLE 1, TRUSTS – GENERAL PROVISIONS; TO REPEAL SECTIONS 91-9-101, 91-9-103, 91-9-105, 91-9-107, 91-9-109, 91-9-111, 91-9-113, 91-9-115, 91-9-117 AND 91-9-119, MISSISSIPPI CODE OF 1972, WHICH CONSTITUTE TITLE 91, CHAPTER 9, ARTICLE 3, UNIFORM 181 TRUSTEE POWERS; TO REPEAL SECTIONS 91-9-201, 91-9-203, 91-9-205, 91-9-207, 91-2-209, 91-9-211, 91-9-213, MISSISSIPPI CODE OF 1972, WHICH CONSTITUTE TITLE 91, CHAPTER 9, ARTICLE 5, RESIGNATION AND SUCCESSION OF TRUSTEES; TO REPEAL SECTIONS 91-9-301, 91-9-303 AND 91-9-305, MISSISSIPPI CODE OF 1972, WHICH CONSTITUTE TITLE 91, CHAPTER 9, ARTICLE 7, REMOVAL OF TRUSTEES; AND FOR RELATED 187 PURPOSES.
In essence, this new law repeals our old trust code and replaces it with the uniform law, which is a change that I think is timely and necessary. Many regional and national financial institutions are trustees or trust advisors, and this law will make the law more clear and certain for them, with the positive effect that less litigation will be necessary to interpret and enforce trust provisions.
Can You Probate an Unliquidated Claim Against an Estate?
July 1, 2014 § 3 Comments
The decedent, Buchanan, is killed in an automobile accident in which he is at fault. The other driver, Powell, is seriously injured and his vehicle is destroyed.
Buchanan’s widow opens his estate, and in due course it is closed after all the statutory formalities have been observed.
Before the statute of limitations on his tort claim has run, Powell files a petition to reopen the estate so that he can pursue his personal injury claim against it. The chancellor dismisses the petition, ruling that Powell should have probated his claim within the statutory 90 days from publication, and, since he did not do so and the estate was now closed, his claim was barred.
Was the chancellor correct?
The question arose in the case of Powell v. Buchanan, 147 So.2d 110 (Miss. 1962). The court first ruled that Powell’s action was, indeed, a personal action that survived the death of the decedent, and that such a claim may not be probated, citing Bullock v. Young, 137 So.2d 777 (Miss. 1962).
So, if the claim survives the death of the decedent, but can not be probated, how does the plaintiff assert his claim? Here’s what the MSSC said (beginning at page 112):
The petitioner cannot sue until at least six months’ has expired from the appointment of an administratrix or executrix. The administratrix elects to close the estate as soon as possible after the six months. We do not believe the right of petitioner could be defeated in such manner. He had a right to present his claim in a court of law, and he had a right to present it against a representative of the estate. It was not necessary to undertake to surcharge the final account. When the petition was filed by the petitioner stating that he had an unliquidated claim against the estate and that the estate had been closed so he could not present it; and the petition showed his claim was not barred, then the chancellor should have appointed another administrator. The widow should have been appointed, or reappointed, if she desired to serve, but if she did not then the court should have appointed some other person to serve as such administrator. The petitioner was entitled to his day in court and in order that he might have it, the court, on his petition with a prayer for general relief, should have appointed another administrator. The administration had been closed with unfinished business pending, and with the petitioner under the law and our statutes yet having a right to present his cause of action in the proper court.
The case is therefore reversed and remanded with directions that an administrator be appointed in order that the unliquidated claim of the petitioner might be finally determined in the proper court. [Emphasis added]
This is one of those esoteric points that can elude even a well-travelled judge or lawyer. It’s a case worth filing away for future reference.
Thanks to Attorney Leonard B. Cobb.
Some Language to Add to your Fiduciary Orders
June 17, 2014 § 7 Comments
In this district we have had a problem with fiduciaries having been appointed and never qualified by taking the oath and posting any required bond, and consequently not having Letters issued.
A fiduciary has no authority to act unless and until that person has qualified, which requires taking the oath, posting any required bond, and having Letters issued.
In one case in my court the person appointed used the order appointing him, without Letters of Administration ever having been issued, to sell a car, and he closed a couple of bank accounts. He sold the car and pocketed the money; who knows what he did with the funds. The lawyer who opened the estate spent a considerable sum out of his own pocket trying to recover the estate’s money. Not surprisingly, the perpetrator was judgment proof and can no longer be found on this planet.
In another case, a woman (not the mother) testified that she was guardian of the child, but when I ordered the insurance attorney to get the guardianship file, it showed that only an order appointing her had been entered, and she had never taken an oath or posted a required $10,000 bond. Incidentally, she testified that her lawyer had told her that the order was adequate, and she proceeded to use that apparent authority to negotiate a settlement of the child’s claim.
We came up with some language that we now require all attorneys to include in their orders opening estates, guardianships, and conservatorships. You may find this language useful in your own district, and even if you find it superfluous, you just might conclude that there’s no harm in including it.
Here it is:
IT IS FURTHER ORDERED AND ADJUDGED that if the fiduciary has failed to qualify by posting the required bond, if any, taking the oath, and having appropriate Letters issued as required by this order and the laws of the State of Mississippi within thirty (30) days of entry of this order, then the Chancery Clerk is hereby ordered and directed to notify the court immediately of such failure, and the court shall enter an order dismissing this civil action without prejudice and without further notice to the fiduciary, or attorney of record for the fiduciary, or any other parties who have entered an appearance in this civil action.
IT IS FURTHER ORDERED AND ADJUDGED THAT THIS ORDER DOES NOT AUTHORIZE [Name] TO ACT AS THE FIDUCIARY FOR [Name of ward or decedent] UNLESS VALID LETTERS [Testamentary, or of Administration, or of Guardianship, or of Conservatorship] ARE ATTACHED HERETO.
IT IS FURTHER ORDERED AND ADJUDGED that persons who use or accept this order without the attached Letters as court authority to act or conduct the affairs of the [ward or decedent] shall be subject to sanctions by this court.
Rock, Paper, Scissors … Will, Pre-Nup, Quitclaim Deed
May 20, 2014 § 7 Comments
If I remember correctly, rock beats scissors, paper beats rock, and scissors beats paper.
But as among a will, a pre-nuptial agreement, and a quitclaim deed, which beats what? That was the question posed in Estate of Jones: Dixon v. Jones, decided by the COA on April 29, 2014.
Johnnie Lee Jones, the decedent, and his soon-to-be wife, Annie Ruth, entered into a prenuptial agreement on March 19, 1997. The agreement provided that, upon Johnnie Lee’s death, the home titled in his sole name was to go to Bonnie Jones Dixon, his daughter from a prior relationship. The home was located at 171 Vine Street in Jackson.
After their marriage, Johnnie and Annie Ruth lived together in the Vine Street residence.
On September 16, 1998, Johnnie executed a will leaving the Vine Street home to Annie Ruth for her life, at which point the property was devised to his sister, Eliza Mae Webster. The will included the customary language that it revoked ” any and all previous testaments.”
Beginning in 2001, Johnnie and Annie Ruth claimed the property as their homestead.
On December 14, 2005, Johnnie executed a quitclaim deed conveying the Vine Street property to himself and his daughter Bonnie as joint tenants with right of survivorship. Annie did not sign the deed, although she and Johnnie were still married at the time.
Johnnie died on January 22, 2011, and Annie Ruth, who continued to live in the Vine Street home, filed pleadings on November 29, 2011, to admit Johnnie’s will to probate. Before an order was entered, however, Bonnie filed suit for declaratory judgment that she was the rightful owner of the property, and for damages. Bonnie relied on both the pre-nuptial agreement and the quitclaim deed. On January 17, 2012, the chancellor admitted the will to probate.
On November 29, 2012, the chancellor denied the declaratory relief. The judge ruled that the will revoked the pre-nuptial agreement, and that the deed was statutorily void because it conveyed homestead and did not bear Annie Ruth’s signature. Bonnie appealed.
The COA rejected Bonnie’s argument that the word “testaments” as used in the revocation language of the will referred solely to instruments disposing of personal property only, and not real property. The COA held that the use of the term “testaments” was interchangeable with “will,” and that MCA 91-5-3 expressly provides that a devise may be revoked by a testator’s subsequent will. The court concluded that the will revoked the pre-nuptial agreement. Interestingly, Bonnie’s attorney cited Wikipedia in support of her argument, and the COA cited www.yourdictionary in reaching its conclusion. Modern times.
As for the quitclaim deed, the court agreed with the chancellor that the quitclaim deed was void. The court cited MCA 89-1-29: “A conveyance, mortgage, deed of trust or other incumbrance upon a homestead exempted from execution shall not be valid or binding unless signed by the spouse of the owner if the owner is married and living with the spouse or by an attorney in fact for the spouse.”
The court also cited this language from Ward v. Ward, 517 So.2d 571, 573 (Miss. 1987):
Our legislature has chosen to place a restriction on the transfer or encumbrance of homesteads[,] and therefore, homesteads in Mississippi may not be alienated except in compliance with those restrictions. There can be no operative conveyance or effectual release of the exemption unless the method pointed out by the statute is pursued with strictness[,] and no requirement of the statute may be waived by the husband and wife or by either of them. Chancery will not interfere to give relief where by express law there is a limitation on the power of alienation of the homestead[,] and the final relief sought is merely to relieve that limitation. (emphasis added)
Our statutes and the case law applying them are quite protective of spouses’ homestead rights. This case is one in a long line of cases that lean in that protective direction.
The other lesson to be learned here is that a subsequently-executed will that includes appropriate revocation language will revoke any and all previous testamentary documents, including a pre-nuptial agreement.
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