Opinion ID: 2776052
Heading Depth: 2
Heading Rank: 2

Heading: UMB CD #1 and UMB CD #2

Text: In 2008, Reynolds obtained UMB CD #1 and UMB CD #2 and gave Sandra joint ownership (with the right of survivorship) in both assets. Like UMB CD #3, there was no prior joint owner of, or POD beneficiary designation on, either of these assets. But, unlike UMB CD #3, Reynolds’ transfer of joint ownership interest in UMB CD #1 and UMB CD #2 to Sandra is not a “nonprobate transfer” and, therefore, it is not governed by the NTL. Even though section 461.054 does not apply to Reynolds’ transfer of joint ownership interests in UMB CD #1 and UMB CD #2 to Sandra because they were not “nonprobate transfers” under section 461.005(7), such transfers, nevertheless, are void if procured by fraud or undue influence. Designations of joint ownership in deposit records are controlled by section 362.470. This statute provides that the designations Reynolds made concerning Sandra’s joint ownership of these two CDs are conclusive evidence of the joint owner’s title only “in the absence of fraud of undue influence.” This is because the creation of the joint owner’s interest by such instructions is considered a gift, and “all of the common-law elements [must] be present in order for the account to constitute a valid gift inter vivos.” In re LaGarce’s Estate, 487 S.W.2d 493, 500 (Mo. banc 1972). Fraud or undue influence negates the elements of intent and capacity and render the title instructions (i.e., the purported gift) void. Though LaGarce’s Estate involved a different 15 statute, this Court noted specifically that the legislature “amended § 362.470 to incorporate the LaGarce holding.” Fix v. Fix, 847 S.W.2d 762, 768 (Mo. banc 1993). If Reynolds’ gifts to Sandra of joint ownership interests in UMB CD #1 and UMB CD #2 are void, they must be disregarded entirely. Thus, like a designation of a POD beneficiary that is void under 461.054, a transfer of joint ownership that is void under section 362.470 has no effect on the status quo ante. In this case, that means that UMB CD #1 and UMB CD #2 would have become part of Reynolds’ estate upon her death because Reynolds made no prior transfer of joint ownership (and no prior valid POD beneficiary designation) for these assets. Because these CDs would have become part of Reynolds’ probate estate and been distributed (in part) to Williams, he has standing to challenge Sandra’s ownership of, and the Nelsons’ alleged undue influence regarding, these assets. As with UMB CD #3, the Nelsons argue that Williams cannot challenge Reynolds’ transfers to Sandra of joint ownership interest in UMB CD #1 and UMB CD #2 without also challenging Reynolds’ decision to purchase these CDs. For that reason, the Nelsons argue that – to determine who has standing to challenge their actions – the Court must look only to those who would have had standing to challenge Reynolds’ decision to purchase these CDs. Because the money Reynolds used to purchase these assets came from an (unidentified) account(s) on which either Lamp or Baughman was designated the POD beneficiary, the Nelsons conclude only one of these two ladies has standing because only she was injured directly by the Nelsons’ alleged undue influence causing Reynolds to withdraw the money used to buy UMB CD #1 and UMB CD #2. 16 Again, the Nelsons’ argument rests on unproven facts and an unjustified assumption. Reynolds made two separate decisions. The first was whether to withdraw funds from the existing account(s) to purchase these CDs. The second was whether to transfer joint ownership of those deposits to someone and, if so, whether to give it to Sandra. The Nelsons insist this is one indivisible decision and Williams cannot challenge any part of it unless he challenges the whole. But Williams distinguishes these decisions even if the Nelsons do not. He alleges only that the Nelsons exerted undue influence over Reynolds’ estate planning decisions. This allegation encompasses Reynolds’ second decision, but it does not encompass the first. The decision whether to purchase the CDs was an investment decision, not an estate planning decision. If Reynolds’ every act and thought was under the control of the Nelsons from 2006 on, as the Nelsons unjustly characterize Williams’ claim, they did not have to go through this complex process to steal these funds; they simply could have had Reynolds replace Lamp and/or Baughman as the joint owner of the original account(s). In fact, they did this for other accounts, but they did not do so here. One reasonable explanation is that the Nelsons did not exert undue influence over all of Reynolds’ actions, only her estate planning decisions. Whether this is true is not a question for summary judgment. What matters in this context is that this is all that Williams alleges and it is all that he has to prove. His ability to do so is not challenged in these summary judgment motions. If the Nelsons seek summary judgment because Reynolds’ decision to withdraw funds from other accounts and purchase these CDs was inextricably bound to the decision to give joint ownership of them to Sandra, and because their undue influence over 17 Reynolds would not have allowed Reynolds to do the former without the latter, then the Nelsons must support that motion with evidence of undisputed facts. They fail to do so. They do not prove anything about Reynolds’ decisions to buy these CDs. They do not prove the accounts from which Reynolds withdrew the money or whether the withdrawal of the funds and purchase of the CDs were contemporaneous or separated by hours, days or weeks. More importantly, they do not prove that Reynolds’ decision to buy these CDs was the result of undue influence so pervasive that it controlled both this decision and the decision to name Sandra as the joint owner of the assets as a single decision. Again, the burden at trial will be on Williams to prove his claims, but he has no burden – there, or in response to the Nelsons’ motions for summary judgment – to disprove every hypothetical alternative the Nelsons can assert. To prove his allegations – including his standing – regarding Counts I to III, Williams need only prove that the Nelsons unduly influenced Reynolds’ decisions: (1) to designate Sandra as the POD beneficiary of UMB CD #3; and (2) to give Sandra joint ownership with the right of survivorship of UMB CD #1 and UMB CD #2. If so, they are void and must be disregarded. Then, Williams must prove that there was no prior valid joint ownership of, or POD beneficiary designation on, any of these three CDs which would take effect upon Reynolds’ death and prevent the asset from becoming a part of her probate estate. The Nelsons have not shown that Williams cannot make a submissible case on any of these issues and, therefore, failed to carry their initial burden under Rule 74.04(c). 18