Mortality, True Love, Free Will Can Affect Assets Disposition

Mortality, True Love, Free Will Can Affect Assets Disposition

Can shared difficulties bring couples together in love? Apparently so. A recent Mississippi court case revealed how the combining of finances in marriage – even a short-term, end of life marriage – can create controversy among family members.  However, the opinion also shows what elements must be part of those asset transfers to support their validity.

Robert Cobb and Daphne Cobb worked at the same hospital, began dating in 2004, and lived together most of the time.  In early 2011, Daphne was diagnosed with skin cancer that had traveled through her nervous system to her facial bones. She underwent several surgeries and radiation treatments. Shortly thereafter, in June 2011, Robert was diagnosed with cancer of the small bowel that had spread to his lungs and pancreas. At this point, they decided to marry, and they married on July 25, 2011. They had no prenuptial agreement, and they added each other to their bank accounts and life insurance policies.  Robert had two sons from his previous marriage: Bruce and Zach.  After his cancer diagnosis, Robert took medical leave. But in 2012, he decided to retire.  He requested the lump-sum payment retirement option.  At the time, Robert owned four investment accounts with The Variable Annuity Life Insurance Company valued at $472,034.34. Bruce and Zach were originally the named beneficiaries to share equally in the investment accounts.  Four days before his death, Robert signed a new beneficiary form, adding Daphne. Daphne assisted by delivering the beneficiary forms to Robert from the financial representative, and she was present when he discussed those with the representative and when he signed them.  Robert died on February 12, 2012. 

Bruce and Zach challenged the validity of the beneficiary change adding Daphne as an equal beneficiary with them on the investment accounts.  They alleged that Daphne was in a “confidential relationship” with Robert and that she misused that relationship to exert “undue influence” on him to add her to the accounts.  The chancery court found that Bruce and Zach had failed to prove by clear and convincing evidence that at the time Robert signed the change-of-beneficiary form, he did so because of Daphne’s undue influence or that Robert lacked mental capacity to make the change.  The Court of Appeals agreed.

The burden of proof was on Bruce and Zach to present sufficient proof that Daphne misused that confidential relationship to influence Robert to change the beneficiaries of his investment accounts.  It is undoubtedly true that a husband or a wife may exercise undue influence upon the other spouse. However, a confidential relationship between spouses does not create a presumption that one spouse used undue influence over the other to obtain a lifetime gift. Rather, it is the contestant’s burden to show that the surviving spouse used undue influence.  With regard to both testamentary and lifetime gifts, undue influence will be found where a spouse has used undue methods for the purpose of overcoming the free and unrestrained will of the other spouse, so as to control his or her acts and to prevent him or her from being a free agent.  In this case, there was no evidence that Robert had been medically diagnosed with any mental deterioration. His last two medical records show that he was alert and oriented and capable of understanding what the medical doctors told him. No medical doctor testified to the contrary. Moreover, from the observations of disinterested parties, his mind was as sharp as usual. He understood and participated in conversations.  And the testimony is clear that Robert initiated the changes in his beneficiaries, not Daphne.  That Daphne “participated” in having the papers executed does not present any proof of participation in suggesting that the beneficiaries be changed.

Moreover, the papers were not signed by Robert in secrecy; Bruce was present and failed to be concerned about his father’s capacity to sign the papers or care to know what was in them.  Thus, sufficient evidence supported the chancery court’s conclusion that Bruce and Zach had failed to prove Daphne’s undue influence. 

Bruce and Zach repeatedly argue that Robert and Daphne’s “short term marriage” constitutes some proof of undue influence. However, even though the marriage was short, the relationship between Robert and Daphne dates back to 2004 when they started dating. Every family member who testified said that Robert loved Daphne and that she loved him.  It must be shown that the devisee spouse used undue methods for the purpose of overcoming the free and unrestrained will of the testator so as to control his acts and to prevent him from being a free agent. All witnesses in this case testified that Robert was a strong-willed, determined individual who was not easily swayed when he made up his mind. There was no testimony of any instances where Daphne had forced or manipulated Robert to do something he did not want to do. 

COBB v. COBB, NO. 2018-CA-01725-COA

https://courts.ms.gov/Images/Opinions/CO143593.pdf

CONCUR IN PART AND IN RESULT WITHOUT SEPARATE OPINION Chief Judge Barnes and Presiding Judge Wilson

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