Bhavik R. Patel, Esquire
Mara Lahnar, Esquire
Erin Kolb, Esquire

Grandparents of minor child do not have standing to remove the minor child’s guardian where they did not have a vested financial interest in their grandson’s estate and thus are not considered an “interested person” under the Missouri probate code. In the Interest of: R.C.H, No. 99700 (Mo. App. E.D., November 19, 2013),  Quigless, J.

M.H. and D.H., the paternal grandparents of minor R.C.H. appealed the judgment of the probate division of the Circuit Court of the City of St. Louis dismissing their petition for removal of the child’s guardian appointed pursuant to the probate code for lack of standing.

Held: Affirmed.
The court of appeals agreed with the trial court finding that Appellants were not “interested persons” for the purposes set forth in the guardianship statute. Under the probate code, aggrieved “interested persons” are entitled to appeal final order or judgments of the probate court. Section 472.010(15) of the probate code defines “interested persons” in relevant part as, “Heirs, devisees, spouses, creditors, or any others having a property right or claim against the estate....”  The courts have been reluctant to extend this statutory definition, and this court has limited the definition to only include those with a “financial interest in an estate.”  Even more, the Missouri Supreme Court has refused to extend standing to a party with a ‘purely sentimental or filial interest’ in the ward or protectee. Here, M.H. and D.H. were not parties to the original guardianship petition, and they did not qualify as “interested persons” as they lack a vested financial interest in the ward or protectee’s estate.

A person’s testamentary capacity may be proven by a reasonable inference, and proof of testamentary incapacity at the very moment of execution by an eyewitness is not required; and the nonprobate transfers law did not do away with the fundamental foundational requirement that the owner/grantor must have the testamentary capacity to make a gift effective on the death of the owner/grantor. Ivie, et al. v. Smith, et al., No. 32222 (Mo. App. S.D., November 20, 2013), Sheffield, J.

Widow of the deceased appealed the trial court’s finding that amendments to the deceased’s trust and beneficiary designation changes were void due to a finding of undue influence.

Held: Affirmed.
The court of appeals agreed with the trial court that there was substantial evidence demonstrating that the deceased lacked testamentary capacity at all times after July 1, 2007, where she was unable to handle her financial affairs and exhibited a continually declining mental state after 2005, the medical records showed a continually worsening mental state from 2005 onwards, the deceased was diagnosed with dementia in 2005, and the treating physician confirmed a diagnosis of Alzheimer’s in November 2006. The evidence supported the finding that the deceased did not know the persons who were the natural objects of her bounty. The capacity required to create, amend, revoke, or add property to a revocable trust is the same as that required to make a will, and a person’s testamentary capacity may be proven by reasonable inference. It is not required that that proof of testamentary incapacity at the very moment be made by an eyewitness. Further, this court found, with respect to beneficiary designations and pay on death designations the nonprobate transfers law did not do away with the requirement that owner/grantor must have the testamentary capacity to make a gift effective on the death of the owner/grantor. Accordingly, because the deceased lacked testamentary capacity here, the purported changes to the beneficiary designations on the various bank accounts and CALSTRS retirement benefit made after July 1, 2007, were void.

A person shall not be excluded from the definition of “owner” in real property for the purpose of executing a beneficiary deed merely because he or she holds a life estate in the property at the time of execution of the beneficiary deed, and nonprobate transfers law does not preclude the execution of such a beneficiary deed. Bohr, et al. v. Nodaway Valley Bank, No. 76033 (Mo. App. W.D., October 15, 2013), Martin, J.

Bank appealed the trial court’s grant of summary judgment in favor of Andrea and Franklin Bohr on their petition for quiet title to real property owned by their grandmother, Dorothy Bohr, prior to her death. The Bank argued that Ms. Bohr owned a life estate only at the time of her death and was therefore not an “owner” authorized to execute a beneficiary deed under Nonprobate Transfers Law.

Held: Affirmed.
The court of appeals rejected the Bank’s argument that Dorothy Bohr was not an “owner.”  Section 461.005(8), RSMo. defines “owner” as “A person or persons having a right, exercisable alone or with others, regardless of the terminology used to refer to the owner in any written beneficiary designations, to designate the beneficiary of a nonprobate transfer, and includes joint owners.”  Section 461.005(7) sets forth the definition of “nonprobate transfer” and states that it does not include “…a transfer to a remainderman on termination of a life tenancy.”  The court reasoned that this section simply states that “nonprobate transfer” does not include transfers to remaindermen. Further, § 461.025.2 provides “This section does not preclude other methods of conveying that are permitted by law and that have the effect of postponing enjoyment of an interest in real property until the death of the owner…” 

A third party claiming undue influence as the reason for a non-probate transfer being made to another person has standing to seek the imposition of a constructive trust if there is a possibility that the funds transferred through non-probate methods will revert back to Decedent’s estate upon the showing of undue influence. Williams v. Hubbard, et al., No. 76023 (Mo. App. W.D., October 15, 2013), Ellis, J.

Eric Williams, second cousin of the Decedent, appealed the circuit court’s grant of summary judgment to the Nelsons for lack of standing on Mr. Williams’ claims of undue influence as it related to Decedent transferring assets to her lawyer’s wife, Ms. Nelson, through non-probate transfers. The circuit court found that Appellant suffered no harm and had no right to decedent’s Estate that had been transferred outside of probate to Sandra Nelson.

Affirmed in part, reversed and remanded in part. The court of appeals disagreed with the trial court’s conclusion that appellant lacked standing to seek the imposition of a constructive trust on CD accounts because upon a finding of undue influence, the possibility existed that the funds from such accounts would revert back to decedent’s estate. The court agreed with the trial court’s decision that appellant lacked standing with regard to the IRA, checking and brokerage accounts because decedent’s estate would not be entitled to these assets upon a finding of undue influence since the IRA and checking accounts had previous POD beneficiary designations at the time of the alleged undue influence and the brokerage accounts are governed by the language of the deposit documents, not Missouri’s nonprobate transfers law. Further, this court found, that the circuit court erred in granting summary judgment with respect to appellant’s breach of fiduciary duty and malpractice claim, and in light of their determination that appellant could be entitled to some of decedent’s funds, these claims must be revisited upon remand. 

To prevail on a breach of fiduciary claim brought against the trustees or a trust protector, the plaintiff must present specific evidence of damage or harm done as a result of the alleged breach. A mere depletion of trust assets will not in and of itself constitute a breach. McLean, et al. v. Ponder, No. 31767 (Mo. App. S.D., October 24, 2013), Francis, Jr., C.J.

The Robert T. McLean Irrevocable Trust appealed the circuit court’s decision for a directed verdict as it relates to suit brought by the trust against all persons who had served either as a successor trustee or as trust protector, alleging “bad faith” and a breach of fiduciary duties.

Affirmed. The court of appeals agreed with the trial court that the trust failed to present substantial evidence of harm or damage to the trust and that a mere depletion of trust assets does not necessarily give rise to a breach of fiduciary duty. The trust failed to point to any evidence of damage and harm to the trust due to the alleged breach and did not specifically identify evidence showing which expenditures would not have happened but for the alleged negligence. Further, the court declined to entertain appellant’s assertion of error in entering judgment during trial, finding that appellant presented no factual and legal basis for the claimed error.