Estate of Baumgardner v. Ready

82 So. 3d 592, 2012 WL 661497, 2012 Miss. LEXIS 103
CourtMississippi Supreme Court
DecidedMarch 1, 2012
DocketNo. 2010-CA-01608-SCT
StatusPublished
Cited by22 cases

This text of 82 So. 3d 592 (Estate of Baumgardner v. Ready) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Estate of Baumgardner v. Ready, 82 So. 3d 592, 2012 WL 661497, 2012 Miss. LEXIS 103 (Mich. 2012).

Opinions

CARLSON, Presiding Justice,

for the Court:

¶ 1. This case involves fifteen years of litigation relating to two testamentary trusts. The plaintiff, Veronica Baumgard-ner McKee Arrington (Arrington), claims that the trustee of both trusts, William Ready (Ready), mismanaged the trusts’ property, improperly allocated the trusts’ funds, and wrongfully refused to render an accounting of the trusts’ assets. The Chancery Court of Lauderdale County found that the trustee had acted properly and within his discretion in managing the trusts and that the trustee should not be required to render an accounting. Aggrieved, Arrington appealed to this Court. For the reasons discussed below, we affirm in part and reverse in part the judgment of the Chancery Court of Lauderdale County and remand for actions consistent with this opinion.

FACTS AND PROCEEDINGS IN THE TRIAL COURT

¶ 2. Harold Baumgardner (Harold) died on January 12, 1979. Before he died, Harold drafted a will and a codicil. Each instrument will be discussed in detail below.

A. Harold’s Will and Codicil

¶ 3. Harold’s will included a specific bequest of all his personal property to his wife, Emogene Baumgardner (Emogene). The will also included two general bequests of $1,000 to each of his two children, Veronica Arrington and Charlie Baumgardner (Charlie). The residue of Harold’s estate passed to two testamentary trusts: a marital deduction trust and a family trust. The trustee of both trusts, William Ready, was authorized to distribute the residue of Harold’s estate between the two trusts.

1. Marital Deduction Trust

¶ 4.' Harold’s will instructed Ready to distribute the maximum amount available under federal estate-tax law to the marital deduction trust. The majority of the trusts’ property was timberland. Emogene was the life beneficiary of the marital deduction trust income. Ready was instructed to “pay the income annually or at more frequent intervals, if said trustee so elect” to Emogene. If the income from both the marital deduction trust and the family trust was insufficient to care for Emogene, Ready was instructed to distribute the corpus of the marital deduction trust for Em-ogene’s maintenance, care, and support. After Emogene’s. death, the marital deduction trust was to terminate, and the corpus of the trust, as well as any income not distributed, was to be distributed according to Emogene’s will. Emogene’s will devised one half of the corpus and income from the marital deduction trust to Arring-ton, and the other half to Arrington as trustee for Charlie.

2. Family Trust

¶ 5. Almost two weeks before he died, Harold revoked the provision of his will relating to the family trust in a codicil. The family trust included two parcels of land — the “home place,” and other land that was allocated to the family trust. The family trust in Harold’s will directed that Ready divide the family trust into two equal parts, and that one share should benefit Charlie and Arrington and the oth[596]*596er should benefit Emogene.1 The family-trust provision in the will also directed that any income not distributed should be added to the corpus of the trust. Upon Emogene’s death, the corpus of the trust was to be distributed to Arrington and Charlie equally. All of these provisions were revoked in Harold’s codicil.

¶ 6. The codicil directs that the corpus and income of the family trust should be distributed to Emogene.2 Any income not distributed to Emogene was to be added to the corpus of the trust. Upon Emogene’s death, the corpus of the trust was to be distributed as follows: the home place (Harold and Emogene’s home and approximately 600 acres surrounding it) to Ar-rington and Charlie equally; and the balance of the corpus to five named charities.3

B. Procedural History

¶ 7. In 1996, Arrington was named conservator of Emogene’s estate and person. The judgment appointing Arrington as conservator stated that two physicians had determined that Emogene was unable to handle her own affairs because of her advanced age and physical incapacity. In 1998, Arrington filed a motion for authority to institute litigation on behalf of Emo-gene in the Chancery Court of Lauderdale County. The motion alleged that, despite Emogene’s requests, Ready had never provided Emogene with an accounting of the trusts. The motion also alleged that Ready had breached his fiduciary duty by failing to properly manage the timberland, entering into an agreement for the purchase of timber with the same party who managed the timberland, not paying all of the income from the marital deduction trust to Emogene, borrowing money from Emogene, and obtaining a revocation of power of attorney from Emogene without the knowledge of her attorney. The chancellor entered a judgment authorizing litigation in 1998.

¶ 8. Arrington then filed a complaint for accounting and removal of trustee, claiming that Ready had refused to provide an accounting of the trusts and had failed to pay Emogene funds required by the trusts. Arrington requested that the chancellor require Ready to provide an accounting, remove Ready as trustee, ap[597]*597point a successor trustee, and require Ready to reimburse the trusts for the costs associated with the litigation.

¶ 9. Ready filed a response to Arring-ton’s complaint, contending, inter alia, that the chancery court did not have jurisdiction over the matter and denying most of the allegations in the complaint. Ready also filed a motion to remove Arrington as conservator of Emogene’s estate, essentially arguing that Arrington had a conflict of interest. He also filed a motion for summary judgment, contending that provisions of Harold’s will relieved him of any liability for errors of judgment, other than those committed in bad faith. Ready also contended that Harold’s will allowed him to refuse to provide an accounting. Harold’s will states that Ready was to “serve without bond, inventory or accounting.”

¶ 10. On his own motion, the chancellor appointed Edward Kramer as Emogene’s guardian ad litem. After he was appointed as guardian ad litem, Kramer filed a report and recommendation with the chancery court. In the report, Kramer stated that he had examined the trusts’ records and found them to be financially sound. After receiving Kramer’s report, the chancellor, sua sponte, ordered an appraisal (forester’s report) of the timberland in the marital deduction trust and the family trust. The chancellor also appointed Kramer as conservator of Emogene’s estate. Arrington remained as conservator of Emogene’s person.

¶ 11. In May 2002, the chancellor entered an Order for Sale of Timber. In his order, the chancellor stated that the forester’s report demonstrated that timber in both trusts was subject to insect infestation and was not being “managed in a manner maximizing monetary return and growth potential.” The order also stated that the timber should be sold to “preserve the capital value of each trust,” and that Ready and Kramer both agreed with his conclusion. The forester, Charlie Jones, was appointed by the chancellor to solicit bids and submit them to Ready and Kramer.

¶ 12. Seven bids were made.

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Cite This Page — Counsel Stack

Bluebook (online)
82 So. 3d 592, 2012 WL 661497, 2012 Miss. LEXIS 103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/estate-of-baumgardner-v-ready-miss-2012.