DOING MUNIMENT OF TITLE RIGHT

January 11, 2012 § 18 Comments

MCA § 91-5-35 allows you to admit a will to probate as a muniment of title only (muniment = evidence or writing that enables one to defend title to an estate or a claim to rights or privileges, according to Webster). It’s an effective procedure where the decdent owned only real property in Mississippi, and especially where the decedent was a resident in another state and owned nothing but realty here.  

The statute enables the beneficiaries to dispense with the formalities of probate and have a judgment recorded that preserves the chain of title.

Your client can take advantage of the statute if the decedent died testate owning real property in Mississippi at the time of death, and the will purports to devise the real property.  

But you have to do it right. Here’s what the statute requires:

  • The petition must be signed and sworn to by all beneficiaries named in the will, and by the spouse if not named in the will.
  • The petition must recite that the value of the decedent’s personal estate in Mississippi at the time of death, exclusive of any interest in real property, was less than $10,000, not including exempt property.
  • The petition must recite that all of the known debts of the decedent and estate have been paid, if any, including any estate and income taxes.
  • Any beneficiary under a legal disability must sign the petition by legal guardian or parent. 
  • Since the petition is sworn, and since the statute lays down specific requirements, it is a good idea to include all of the statutory prerequisites (e.g., that the decedent died owning real property in the state of Mississippi, that no estate or income taxes are due, etc.), and to track the language of the statute verbatim. If I were doing it, I would simply draft my petition tracking the statute phrase for phrase.

I have seen lawyers come to grief over their petitions simply because they got creative. One tried to argue with me that this sentence was enough to qualify under the statute: “The only property the decedent owned at the time of death is the real property described herein.” That’s not good enough, in my opinion, because there must be shown in the petition that “The value of the decedent’s personal estate in the state of Mississippi at the time of his or her death, exclusive of any interest in real property, did not exceed … etc.”). Again: I suggest that you simply track verbatim the language of the statute as far as you can.

I have never had to present live testimony beyond the sworn petition to obtain a judgment under the statute, and I do not require it; however, I have heard that some chancellors do require testimony, so you need to find out how your chancellor does it before you set aside time to present your petition.

The statute specifically provides that the procedure does not deprive any interested party of the right to a formal administration of the estate, or to file a will contest. Thus, probate as a muniment is not an effective, shorthand substitute for actual probate of a will. 

Where to file? That should be governed by MCA § 91-7-3.

Caveat: Do not include language in your judgment that adjudicates ownership, heirship or anything of the sort. An adjudication that the petitioners are all of the named beneficiaries in the will, and that the property is admitted to probate as a muniment of title only is all that the statute contemplates.

“A PERILOUS MISTAKE” IN HANDLING FIDUCIARY MATTERS

July 11, 2011 § 8 Comments

Lawyers in my district are aware that I have begun cracking down on the handling of estates, guardianships and conservatorships.  Delinquent and inadequate accountings, lack of inventories, absence of vouchers and other deficiencies are no longer tolerated.

My motivation in part has been the fact that there are lawsuits pending against local lawyers claiming mishandling of fiduciary matters.  On the coast only last year, it was discovered that a lawyer serving as county administrator until his death may have misappropriated funds in excess of a million dollars.

If you’re going to handle probate matters, understand that as the lawyer you have a grave responsibility for which you may be held liable by judgment for the proper handling of the estate by the fiduciary.  Let me repeat that you may be held liable by judgment.

My responsibility as chancellor is not only to ensure that the assets and rights of the ward or estate are protected, but also to see that the attorney does not err.

To get an idea of the gravity, you need to read and take to heart the Mississippi Supreme Court’s decision in Matthews v. Williams, 633 So.2d 1038 (Miss. 1994).  In that case, the conservator failed to file an inventory and, when he finally did, omitted financial assets.  He failed to file accountings, and when he finally did reported expenditures made without any prior approval of the court.  He made investments without approval of the court, and was unable to account properly for them.  The chancellor approved his actions, but when that chancellor left office, the next chancellor granted a petition to remove the conservator.  Here are some key excerpts from the court’s opinion (beginning at page 1039):

A chancery court-appointed conservator has 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.” Miss.Code Ann. § 93-13-259 (1972).  [NOTE:  And MCA § 93-13-38 states that “All the provisions of 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.”
I. INVENTORY
Miss.Code Ann. § 93-13-33 (1972) states:

Every guardian shall, within three months after his appointment, return to the court, under oath, a true and perfect inventory of the estate, real and personal, and of all money or other things which he may have received as the property of his ward; and he shall return additional inventories of whatever he may subsequently receive. And he shall annually return an inventory, under oath, of the increase of the estate, if there be any. A guardian who shall fail to return inventories may be removed and his bond put in suit, unless he can show cause for the default. (Emphasis added)

The first inventory was not filed until February 23, 1988, a year and two months following Dan’s appointment. It did not mention bonds owned by the estate. The third inventory filed May 13, 1990, purporting to show the inventory of the estate as of December 31, 1989, lists “Series E. Bonds $2,063.22.”

The bonds were first identified by serial number and date of purchase in the fourth inventory showing assets as of December 18, 1990, and filed January 7, 1991, which states: “Series E Bonds (all $25.00/7 year Bonds),” and then lists twenty-seven bonds by serial number and showing dates of purchase from July 1966 through July 1969. Subsequent inventories were not timely filed, and no reason was given therefor. There is no explanation for failure to include the bonds.

II. ANNUAL ACCOUNTS

The annual accounts required by Miss.Code Ann. § 93-13-67 (1974) were not timely filed, and no reason was offered therefor.  [NOTE: MCA § 93-13-67 states: “Except as herein provided, and as provided in section 93-13-7, every guardian shall, at least once in each year, and oftener if required, exhibit his account, showing the receipts of money on account of his ward, and showing the annual product of the estate under his management, and the sale or other disposition thereof, and showing also each item of his expenditure in the maintenance and education of his ward and in the preservation and management of his estate, supported by legal vouchers…. And such accounts shall be examined, approved, and allowed by the court in the same way that the accounts of executors and administrators are examined, approved, and allowed. Compliance with the duties required, in this section, of guardian shall be enforced by the same means and in the same manner as is provided in respect to the accounts of executors and administrators. (Emphasis added)
III. EXPENDITURES WITHOUT COURT APPROVAL
Much more serious is the failure of Dan to seek court approval prior to making expenditures. Section 93-13-38 (1993) provides:

It shall be the duty of the guardian … to improve the estate committed to his charge, 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 of his family, if he have any, after obtaining an order of the court fixing the amount…. The guardian is empowered to collect and sue for and recover all debts due his said ward … (Emphasis added)

This statute requires that a court order fixing the amount to be spent for the care and maintenance of the ward be obtained prior to making such expenditures. Dan simply made the expenditures as he saw fit. When this Court addressed such action in Welch v. Childers, 195 Miss. 415, 420, 15 So.2d 690, 691 (1943), we held:

A minor under guardianship is a ward of the Chancery Court. All receipts and disbursements of his estate are required to be under the authority and direction of the Chancery Court or the Chancellor in vacation. The expenses for the maintenance and support of the ward cannot be proved in any other way. The object of the law is to guard against dishonesty and mismanagement of the estate by the guardian…. The law does not leave the amount of the expenditures by the guardian for the maintenance, support and education to (the guardian’s) discretion. The sum must be fixed by the court. If the guardian contracts therefor without the sanction of the Chancery Court or Chancellor, the liability therefor is personal to him, and he cannot be allowed for it in his accounts for the ward. The guardian has no power to bind the estate of his ward without the sanction of the Chancery Court or the Chancellor.

That prior court approval is absolutely required by statute before a conservator makes expenditures seems never to have occurred to counsel representing Dan or the chancellor who then examined and approved them. Expenditures for the care and maintenance of Mrs. Mathews and her property were made by Dan as though he had some blanket power of attorney to spend as he thought best, and only then report it to a chancellor. No explanation was offered to the chancellor for all these expenditures having been made without court approval, nor did the chancellor require one. This is of profound concern to this Court. We again remind attorneys for estates of wards and decedents and the chancellors who examine accounts and inventories that they, too, have special and far-reaching fiduciary duties. It was the obligation of the attorney to advise the conservator as to his statutory duties, responsibilities, and limitations on expenditures. As for chancellors, a chancellor who must approve accounts and inventories has a duty beyond deciding lawsuits. He is under an obligation first to see that accounts and inventories filed comply with the statutes before he approves them. He is also the “superior guardian” of the ward. This Court long ago in Union Chevrolet Co. v. Arrington, 162 Miss. 816, 826, 827, 138 So. 593, 595 (1932), held:

Infants and persons of unsound mind are disabled under the law to act for themselves. Long ago it became the established rule for the court of chancery to act as the superior guardian for all persons under such disability. This inherent and traditional power and protective duty is made complete and irrefragable by the provisions of our present state constitution. It is not competent for the Legislature to abate the said powers and duties or for the said court to omit or neglect them. It is the inescapable duty of the said court and or the chancellor to act with constant care and solicitude towards the preservation and protection of the rights of infants and persons non compos mentis. The court will take nothing as confessed against them; will make for them every valuable election; will rescue them from faithless guardians, designing strangers, and even from unnatural parents, and in general will and must take all necessary steps to conserve and protect the best interest of these wards of the court. The court will not and cannot permit the rights of an infant to be prejudiced by an waiver, or omission or neglect or design of a guardian, or of any other person, so far as within the power of the court to prevent or correct. Grif.Chan.Prac. §§ 45, 360, 530, 533. All persons who deal with guardians or with courts in respect to the rights of infants are charged with the knowledge of the above principles, and act to the contrary thereof at their peril. (Emphasis added)  Also, Mississippi State Bar Association v. Moyo, 525 So.2d 1289, 1293 (Miss.1988).

Solicitors for guardians and conservators and chancellors who must approve their accounts and inventories who ignore these fiduciary responsibilities make a perilous mistake.  [Note from the opinion:  We are not comforted by the May 18, 1990, decree approving the third annual account in which the chancellor first authorized the conservator to “pay all future medical, personal, and other expenses for the creature comforts of Frances Mathews.” With no representation from Dan as to why any of these expenses might be, the chancellor gave him blanket authorization to expend his estate’s funds.

IV. INVESTMENTS WITHOUT COURT APPROVAL

Section 93-13-57 Miss.Code Ann. (1972) deals with the method the guardian is to utilize in disposing of surplus money not necessary for the current expenditures for the ward. This section provides in part:

Whenever the guardian shall have money of his ward not needed for current expenditures, or directed to be invested for the ward, he shall apply to the court, or chancellor in vacation, for direction as to the disposition he shall make of it. The court or chancellor shall determine whether he shall lend it at interest, and upon what security, or how he shall dispose of it. If the court or chancellor designate the person to whom the loan shall be made, or the security on which it shall be made, and the loan to be so made, responsibility shall not attach thereafter to the guardian; but if the court or chancellor shall entrust him with discretion in the matter, he shall be bound for the exercise of sound judgment…. Any guardian who fails to report to the court the fact that he has money of his ward not needed or allowed to be used for current expenditures, and to ask the order of the court as to the disposition of such money, may be chargeable with interest on the same at the rate of eight per centum (8%) per annum during the time of failure. (Emphasis added)

Dan, on behalf of Mrs. Mathews, purchased certificates of deposit, invested in stock, and sold stock, all without prior court approval.

Moreover, we have been unable to trace the certificates of deposit from one accounting period to the next because the numbers identifying them differed. Interest proceeds appear to have been treated inconsistently, some deposited in the ward’s checking account, other reinvested. Interest deposited in the checking account identified by certificate of deposit numbers differed from the numbers identifying the certificates in the inventory for that period.

On January 23, 1987, Dan petitioned and on January 26, 1987, received court approval to commence legal action to recover money fraudulently obtained from her. No report was ever made to the court of the outcome of this action.

V. QUESTIONABLE EXPENDITURES

In deciding whether Dan should be removed as conservator, the chancellor also had authority to consider his expenditure, and without prior court approval, of more than $1,800 in repairs on a pickup truck valued at $800, and in an 18-month period following the ward’s admittance to the nursing home, $498 for oil, gas and service for the truck. Utilities and household expenses, including a telephone, were kept active after Mrs. Mathews went to a nursing home, and expenditures made, all without court approval. Some vouchers were made to “cash.”

We do not have before us and do not address the justification for any expenditures made by Dan as conservator, or their reasonableness or necessity. These may be proper inquiries upon remand. Neville v. Kelso, 247 So.2d 828, 834-835 (Miss.1971).

The chancellor should also upon remand see that inventories reflect and accurately trace the investment of all funds.

Our sole inquiry on this appeal is whether the chancellor abused his discretion in removing Dan as conservator, and for the reasons set forth she clearly did not. Harris v. King, 480 So.2d 1131, 1132 (Miss.1985); Conner v. Polk, 161 Miss. 24, 29, 133 So. 604, 605 (1931).

I don’t know how it could be any clearer.  You deal lackadaisically with probate matters at your peril.  Your law license, your reputation as an attorney, your malpractice coverage, and even your own assets are on the line.  I am not being melodramatic when I say this; I am being completely truthful and trying to wave a huge caution flag.  Matthews v. Williams makes it abundantly clear that the approval of the chancellor will not shield you or your fiduciary.

A COMPENDIUM OF ESTATE POSTS

July 5, 2011 § 6 Comments

UPDATED CHECKLIST OF CHECKLISTS

May 27, 2011 § 5 Comments

Proving your case by proving certain factors is a fact of legal life in Mississippi.  I’ve referred to it as trial by checklist.  If you’re not putting on proof of the factors when they apply in your case, 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 have told me that they print out these checklists and use them at trial.  I encourage you to copy these checklists and use them in your trial notebooks.  And while you’re at it, 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 an updated list of links to the checklists I’ve posted:

Attorney’s fees.

Attorney’s fees in an estate.

Adverse possession.

Child custody.

Closing an estate.

Doing an accounting in a probate matter.

Grandparent visitation.

Equitable distribution.

Income tax dependency exemption.

Modification of child support.

Periodic and rehabilitative alimony.

Lump sum alimony.

Separate maintenance.

A FEW RANDOM PROBATE MATTERS

September 17, 2010 § 4 Comments

[This information comes from the outline of a presentation made by Bob Williford to the Chancery Judges Spring Conference earlier this year.  Used with  his permission.]

Necessity to join specific or general legatees in petition to close the estate:

If a beneficiaries who have received specific or general bequests under the will have signed receipts, or the personal representative has produced cancelled checks showing the bequests have been satidfied, it is not necessary to have the beneficiaries join in the petition to close the estate; only the approval of the residuary beneficiaries would be essential.

Timely probate of will:

An extended period of time after the death of the testator does not prevent a will from being probated.  Harrison v. Gatewood, 51 So.2d 59 (Miss. 1951).  

Statement of compliance:

When closing the estate, the court order authorizes payment of final expenses and distribution of the remaining assets of the estate.  It is a common practice that, once the order is signe the assets are distributed and the estate is accepted as being closed.  A Statement of Compliance, however, may be appropriate.  It would state that the final expenses have been paid and the final distributions made, and it should be filed with the court.   

PROBATE IN SOLEMN FORM

August 30, 2010 § Leave a comment

[This outline is based on the 15th Chancery Court District Newsletter published by Chancellor Ed Patten]

Petition filed to probate will in solemn form.

  • Notice to all interested persons.  § 91-7-19, MCA.
  • Process is issued under Rule 81, MRCP.
  • At the petition of either party, the issue of devisavit vel non — whether the will is the valid last will and testament of the decedent — may be tried.

Hearing.

  • Either party may request a jury trial.  § 91-7-19, MCA.
  • Burden of proof is by a preponderance of the evidence.
  • If the will has already been admitted to probate in common form, the prima facie burden of proof has been met, and the burden of proof shifts to the contestants to overcome thr proponent’s prima facie proof as to the will’s validity.  § 91-7-27, MCA.
  • Tactical advantage if the will has already been admitted to probate in common form.  § 91-7-29, MCA.

Adjudication.

  • Binding on those made parties to the proceeding. 

ADMINISTRATION OF AN INTESTATE ESTATE

August 18, 2010 § 9 Comments

[This outline is based on the 15th Chancery Court District Newsletter published by Chancellor Ed Patten]

Statutory order of preference for appointment of Administrator.  § 91-7-63, MCA.

  • Surviving spouse.
  • Next of kin, if not otherwise disqualified.
  • Other third party, bank or trust company.
  • If no application is made within 30 days of the decedent’s death, administration may be granted to a creditor or other suitable person.
  • If no application is made and the decedent left property in Mississippi, county administrator or sheriff may be appointed.  § 91-7-79 and -83, MCA.

Oath and Bond.

  • At the time that Letters of Administration are granted, the Administrator must take and subscribe the oath set out in § 91-7-41, MCA.
  • At the same time the Administrator must also post a bond in the full value of the personal estate unless al heirs are competent and consent to waive or reduce bond, or unless the Administrator is the sole heir.  § 91-7-67, MCA.

Notice to Creditors.

Administrator has the responsibility to provide notice to creditors in the order and form prescribed in § 91-7-145, MCA:

  • Adminisrator must make a reasonably diligent effort to identify creditors having a claim against the estate, and to mail them actual notice of the 90-day time period within which to file a claim.  
  • Administrator must file affidavit of known creditors and attest to having served actual notice on them. 
  • After the affidavit of known creditors has been filed, Administrator publishes notice to creditors in a local newspaper notifying them that they have 90 days within which to file a claim against the estate.  The notice must run three times, once per week for three consecutive weeks, and must include the name of the estate and the court file number.
  • Administrator must file proof of the newspaper publication with the court.
  • Publication may be waived by the court in small estates with a value not more than $500.

Inventory and Appraisal.

  • Unless excused by the court, the Administrator must complete and file inventory and appraisal within 90 days from the grant of Letters of Administration.  § 91-7-145, MCA.

Determination of Heirs.

  • An action to determine heirs must be brought before the estate may be closed.
  • Publication process to the unknown heirs of the decedent must be made.
  • Determination of heirship requires 30 days’ process and should be to a day certain so tha the unknown heirs may be called.

Interim Hearings.

  • Held as necessary to meet needs of the estate or to resolve interlocutory conflicts among the parties.
  • A hearing to determine heirs may be necessary if any previously-unknown heir appears and claims heirship and the claim is disputed by the other heirs.
  • A hearing to adjudicate whether to pay probated claims may be necessary if there is any dispute as to the validity or timeliness of the claims.

Petition to Close Estate and Discharge Administrator.

  • The attorney must file a cerificate that there are no probated claims, or that the probated claims have been satisfied.
  • Final account is filed with petition, unless excused by the court.
  • All parties in interest are summoned to a hearing on the final account and petition to close.  § 91-7-295, MCA.
  • If approved, the court enters judgment for final distribution of any property in the Administrator’s care.  § 91-7-297, MCA.
  • Upon court’s approval, the Administrator is allowed a reasonable fee for services and reimbursement of attorney’s fees.  § 91-7-299, MCA.  

PROBATE OF WILL IN COMMON FORM

June 30, 2010 § 2 Comments

[This outline is based on the 15th Chancery Court District Newsletter published by Chancellor Ed Patten]

Admission of will to probate:

  • Original will must be presented and filed, if available.
  • Petition must have copy of the will attached.  Uniform Chancery Court Rule 6.15.
  • Will must be proven by at least one subscribing witness, usually through affidavit attached to self-proving will, or by proof of will executed later.  §91-7-7, MCA.

Caveat:

  • Will may not be probated in common form if there is a previously-filed written objection to probate.  §91-7-21, MCA.

Executor appointed and Letters Testamentary Granted:

  • Court appoints executor named in the will, if appropriate.
  • Executor must be over 18 years of age, of sound mind, and not a convict of felony.
  • If no person qualifies or agrees to act as executor, court may appoint one.  §§91-7-35 and 91-7-39.

Oath and Bond:

  • At the time that Letters Testamentary are granted, executor must take and subscribe the oath set out in §91-7-41, MCA.
  • At the time that the executor takes the oath, the executor must also post bond equal to the full value of the estate, unless bond is waived by the terms of the will.  Even so, the court has authority to require a bond.  §91-7-41, MCA.

Notice to Creditors:

Executor has the responsibility to give notice to creditors in the prescribed form and in the proper order set out in §91-7-145, MCA, as follows:

  • Executor to make reasonable effort to identify creditors having a claim against the estate and to mail them actual notice of the 90-day time period in which to file a claim.
  • Executor must file an affidavit of known creditors and attest to having served actual notice on them.
  • Executor must publish notice in newspaper publsihed in the county informing creditors that they have 90 days in which to file a claim against the estate; publication to run 3 times, once per week for 3 consecutive weeks.
  • Executor is required to file proof of newspaper publication in the court file.
  • Publication may be waived by the court in very small estates having value not more than $500.

Inventory and Appraisal:

  • If not specifically waived in the will, the executor is required to complete and file inventory and appraisal within 90 days from the grant of Letters Testamentary.  §91-7-45, MCA.
  • The court may require inventory and appraisal eben if waived in the will.

Interim Hearings:

  • Held as necessary to resolve interlocutory conflicts between the parties.

Accountings:

  • Accountings are required annually and upon closing the estate. 
  • All parties may agree to waive final accounting, and by custom also annual accountings.

Petition to Close Estate and Discharge Executor:

  •  Final account must be filed with petition to close unless excused by the court.
  • All parties in interest must be summoned to hearing on final account and petition to close.  §91-7-295, MCA.
  • Any party may enter an appearance by consent and waiver.
  • If approved, the court enters its final judgment for final distribution of any property remaining in the executor’s care.  §91-7-297, MCA.

WAIVING ACCOUNTING IN ESTATES

June 28, 2010 § 2 Comments

[This information comes from the outline of a presentation made by Bob Williford to the Chancery Judges Spring Conference earlier this year.  Used with  his permission.]

Intestate Estates:

  • An Administrator is required to file an annual account and a final account.  §§ 91-7-277 and 291, MCA. 
  • Although the statute does not provide an exception to the filing of a final account, a final accounting may be waived “on good cause shown.”  § 91-7-291, MCA.
  • The Administrator may be relieved of the duty of accounting by waiver of all parties interested in the estate of their right to an accounting.  34 C.J.S. Executors and Administrators, § 834.
  • If all of the heirs of the estate join in a request to waive annual account, the court would seem to have discretion to do so, but the court does have statutory authority to waive the final account. 

Testate Estates:

  • An Executor is required to file annual accounts and a final account.  §§ 91-7-277 and 291, MCA.   
  • case law, however, recognizes that a testator may waive the requirement of both annual and final accounts.  Harper v. Harper, 491 So.2d 189 (Miss. 1986);  Will of McCaffrey v. Fortenberry, 592 So.2d 52 (Miss. 1991); Matter of Holt v. Scott, 806 So.2d 296 (Miss. App. 2001).  BUT consider the following case:  Where accounting was waived in the Will, it was held that administration of the esatte was removed from jurisdiction of the court.  Bryan v. Bryan, 167 So.2d 56 (Miss. 1936). 
  • It is customary to waive accounting even if the Will does not expressly so provde, assuming all of the residuary beneficiaries join in the rtequest.
  • The court may require an account even if waived in the Will.  In re Estate of Carter, 912 So.2d 138 (Miss. 2005).  

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