Taylor-Mcdonald v. Taylor

Decision Date10 January 2008
Docket NumberNo. 28088.,28088.
Citation245 S.W.3d 867
PartiesDarryl TAYLOR-McDONALD, and Nancy Kester, Plaintiffs-Respondents, v. Phillip Gary TAYLOR, and Sheila Taylor, Individually, and Phillip G. Taylor and Sheila Taylor, as Co-Trustees of Revocable Living Trust, dated February 22, 1999, Defendants-Appellants.
CourtMissouri Court of Appeals

Richard L. Schnake and J. Richard Owensby, of Neale & Newman, L.L.P., Springfield, and Scott B. Stinson, of Mountain Grove, MO, for Appellants.

David R. Adair, Grant Q. Haden, and Randy R. Cowherd, of Haden, Cowherd & Bullock, L.L.C., of Springfield, MO, for Respondents.

GARY W. LYNCH, Chief Judge.

This appeal arises from an action in the Circuit Court of Wright County, wherein Respondents Darryl Taylor-McDonald and Nancy Kester ("Daughters"), the daughters of decedent Philip Taylor ("Father"),1 sued their brother and sister-in-law, Gary and Sheila Taylor ("the Taylors"), both individually and as trustees of their own trust, to recover property and funds that Daughters claimed should have been theirs through inheritance from their father. The trial court entered an accounting judgment against the Taylors; impressed a constructive trust on some of the Taylors' property, including a cattle herd and the farm that their trust owns; and awarded prejudgment interest and attorneys' fees to Daughters. The Taylors assert eight" points of error on appeal from the trial court's judgment. Finding merit in only one of those points, we affirm the judgment in part, reverse it in part, and remand the case with directions.

(1) Factual and Procedural Background

The facts which led to the underlying lawsuit, as found by the trial court in its Findings of Fact included in its judgment,2 are as follows:

Father was a lifelong resident of Pennsylvania. Gary3 and Daughters are Father's three children by his first wife. When the children were still young, Father and his first wife ended their marriage, and Father married his second wife. The children, particularly Daughters, came to dislike the second wife as they grew older. After leaving the home in Pennsylvania, Daughters rarely ever saw Father. Darryl last visited Father in 1981, and Nancy visited in 1987 and 1998 during Father's hospitalization. Gary and Sheila customarily visited Father and his second wife for a week each year.

In November of 1997, Father's second wife became seriously ill. Sheila came to Pennsylvania to assist Father with travel to' and from the hospital and other matters attending the situation. Gary was not able to come because of his employment. Later that month Father's wife died, and Gary came to Pennsylvania to be with Father and attend the funeral. Daughters did not attend the funeral nor come to see Father after his wife's death. Father had always relied on his second wife to handle the couple's personal and financial transactions, and after her death he needed help with such matters. Sheila remained in Pennsylvania to help Father with his affairs, and Gary returned home, again because he had to work.

Father executed a Power of Attorney appointing Sheila as his attorney-in-fact. The goal was to enable Sheila to more effectively assist him in dealing with his affairs. On the same day, Father had Sheila's name added to two of his bank accounts with National City Bank in Pennsylvania so that she could sign checks and assist him with paying his bills. Gary, Sheila, and Father all decided it would be in Father's best interest for him to move to Belton, Missouri to live with them, so that they could more easily take care of him. Father moved in with them on December 13, 1997, and lived with them until the last few months of his life.

At the time of his second wife's death, Father's assets included his house and a garage in Pennsylvania, insurance policies, bank accounts, and stocks. In addition, he received pension benefits and social security benefits totaling approximately $1100 per month. Father also had a will, which was executed in 1964 and bequeathed all of his assets to his second wife, and if she predeceased him, to all three of his children in equal shares.

In February of 1998, Father and Gary sent Daughters each a letter which read in part, "this was done to reduce the amount of your father's assets that would have to enter probate court after his death where an estate and your inheritance could be tied up for several years." With each letter, they sent a gift of a check for $10,000.

Around that same time, Father opened two bank accounts with Community American Credit Union in Kansas City, Missouri, and two accounts with the Bank of Belton in Belton, Missouri, all in the joint names of Gary, Sheila, and Father.

In March, Father's sister died. Gary and Sheila traveled with Father to Pennsylvania to attend the funeral and wind up his affairs in Pennsylvania, including settling the sister's estate for which Father and Gary were co-executors. Father, Gary, and Sheila visited National City Bank in Pennsylvania and transferred money in excess of $198,000 from that bank to the joint accounts in the Bank of Belton.

In April, Father met with an attorney in Kansas City and executed a will and a revocable living trust. The will divided Father's property equally among his three children. The trust named Father and Sheila as co-trustees and provided that on his death the remainder of the trust assets should be divided equally among the three children.

Two days later, Father suffered a stroke. He was rendered unconscious for several days. His condition required weeks of hospitalization and two months in a rehabilitation facility near Belton. Nancy came to visit Father while he was in the hospital, but Darryl did not visit him.

The day after Father's stroke, while he was unconscious in the hospital, Sheila wrote a check from the joint Belton account for $7,100 to pay off a Wachovia Visa credit card bill owed by her and Gary. The next day, while Father was still mentally and physically incapacitated, Sheila used money from the joint Belton account to purchase three $30,000 certificates of deposit One was titled to Darryl and Father jointly, one to Nancy and Father jointly, and one to Gary and Father jointly.

About two weeks later, while Father was in the hospital recovering, Sheila and Gary agreed to purchase some property in Wright County, Missouri, nicknamed the "Lakey Farm," for $150,000. That same day Sheila wrote a check for $120,000 from the joint Belton account. The purchase was completed three months later when Sheila wrote a check from the joint Belton account for $30,000. The purchase price came entirely from money derived originally from Father's accounts in Pennsylvania.

One week after agreeing to purchase the "Lakey Farm," Sheila used her Power of Attorney to sign the Warranty Deed by which Father's residence in Pennsylvania was sold. The $37,000-sale proceeds were deposited into the joint Belton account. Shortly thereafter Sheila and Gary redeemed the three $30,000 certificates of deposit purchased earlier and also deposited those proceeds into the joint Belton account.

In May, while Father was recovering in the rehabilitation facility, the Taylors closed on the sale of the "Lakey Farm." It was titled in Gary and Sheila, as husband and wife. They did not include Father in the ownership of the property. The Taylors spent $39,000 from the joint accounts with Father on making improvements to the farm, including building a new house. They also used money from the joint accounts to purchase a tractor for $14,250 and a utility vehicle for $7,999. In preparation for Father's return home, they designed the new house with Father's care in mind. Father's stroke had left him partially paralyzed, so it was necessary for the new house to be wheelchair-accessible and otherwise' appropriate for the care of an elderly incapacitated person.

On July 1, Gary, Sheila, and Father all moved into the new house. Father required constant care, including cooking, cleaning, bathing, and many other daily needs. Gary and Sheila provided for these, and took good care of Father. Some third-party in-home services were also used to assist them with Father's daily needs. Father's day-to-day expenses — and many of Gary and Sheila's as well — were paid for with money from the joint bank accounts.

In August, Gary sold off Father's 240 shares of Pfizer, Inc., which were titled in Father's name and the name of his second wife. The check for the sale proceeds was made payable to Father's revocable trust and was deposited in the joint Belton account.

In February of 1999, Sheila and Gary, by quit claim deed, transferred the "Lakey Farm" to themselves as co-trustees of their revocable living trust dated February 22, 1999.

In November, Father began receiving distributions from the $99,470.46 he inherited from his sister. The first distribution was deposited in the joint account in Kansas City. The remaining distributions were deposited in the joint Belton account.

In February of 2000, Gary and Sheila closed the joint account in Kansas City and deposited the balance, $53,090.96, into their personal checking account.

On January 1, 2001, Father fell and broke his hip. While in the hospital he suffered a stroke disabling him such that Gary and Sheila were unable to provide the daily care he needed. His doctors arranged for Father's transfer to a nursing home. Despite significant assets remaining in Father's original estate, the Taylors did not explore alternatives to the nursing home, including paying for nursing care at the farm. Father moved into the nursing home in late January. By that time Father had no assets of his own, Gary and Sheila having transferred all of his remaining assets to themselves. They intentionally divested Father of any interest in the various joint bank accounts for two reasons:...

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    • Missouri Court of Appeals
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    ...testimony is for the probate court, which is free to believe none, part, or all of the testimony of any witness. Taylor-McDonald v. Taylor, 245 S.W.3d 867, 875 (Mo.App.2008). "As in the case of deeds and wills where it is sought to have a trust declared invalid because the settlor lacked th......
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    • The Missouri Bar Estate Administration Deskbook Chapter 23 Duties and Liability of Estate Fiduciaries
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