Man’s Attempt to Give Money to Minister Challenged in Court

A Missouri court ruled on the matter.

Church Law and Tax 1991-09-01 Recent Developments

Wills, Trusts, and Estates

A husband’s attempt to give more than half of his estate to his minister was challenged in court. A Missouri couple was married in 1967, and they signed wills and a “postnuptial agreement” specifying that they would not “give away any of their property during their marriage.” Shortly before his death from kidney failure in 1987, the husband withdrew $26,000 from an investment account and gave it to the minister of his church. This transaction was never revealed to his wife. Following the husband’s death, his widow began investigating his affairs, and discovered the $26,000 gift to the minister. When she asked the minister about the gift, he replied “that is between him and God. If you knew about the money, it would only hurt you, and you don’t need to be hurt any more.” The widow continued to investigate her husband’s affairs, and later discovered that her husband had given the $26,000 to the minister, and that the minister used the money to buy 10 acres of land and a house. In exchange for the $26,000, the minister had agreed to pay the husband a monthly income “for life” of $266, and to “say some good words” about the husband at his funeral. When asked why the husband gave him the money, the minister later explained, “Because he wanted to, I feel. He wanted to help me out. He wanted me to go into full-time ministry, and he thought I had a message. And he said I need to be preaching it.” The widow filed a lawsuit seeking to recover the $26,000 on the ground that the transfer was a “fraudulent conveyance” in violation of her marital rights under state law. A jury agreed with her, and ordered the land and home sold and the proceeds returned to the widow. The minister appealed this verdict. A state appeals court agreed with the trial court’s decision. The court noted that a court can revoke a gift made by a husband to a third party with an intent to deprive his widow of her full legal rights in his estate. Factors indicating an intent to defraud a spouse include (1) a transfer of property for less than market value, (2) a reservation of some control by the husband over the property that is transferred, (3) the property transferred is a substantial portion of the estate, (4) a lack of open and frank disclosure by the husband to the surviving spouse about the transfer, and (5) the property is transferred by the spouse “in contemplation of death.” While not all of these factors are necessary for a fraudulent intent to be established, the court concluded that they all were present in this case. The property was conveyed to the minister for little if any value; the husband retained control over the property by requiring a monthly income of $266; the $26,000 transferred to the minister represented more than one-half of the estate; the husband purposely concealed the transfer from his wife; and, the husband made the gift at a time when he was dying of kidney failure. Accordingly, the appeals court agreed with the trial court, and ordered the home and 10 acres sold and the proceeds paid to the widow. In the Matter of the Estate of Froman, 803 S.W.2d 176 (Mo. App. 1991).

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