Ashley v. Ashley
405 S.W.3d 419
Ark. Ct. App.2012Background
- Companion case to Ashley v. Ashley; estate of J.D. Ashley, Sr.; decedent’s widow Charlotte Ashley appeals; personal representatives Richard Ashley and J.D. Ashley, Jr. administer estate.
- Estate planning documents executed 4/4/1997: will, family limited partnership (FLP) agreement, and revocable trust; will is pour-over with no-contest clause.
- FLP originally 1% general partners (decedent, Richard Ashley, J.D. Ashley Jr.); decedent held 89% as limited partner; other children held 2% each; 1998 amendment reallocated interests.
- September 2004 amendment to FLP provided appellant would receive decedent’s interest upon death for $5 million; no purchase obligation if opinion of value differed.
- Revocable trust created by decedent as settlor and first trustee; settlor retained power to add/remove property, amend, revoke; upon death, trust estate divided into five shares including a marital-deduction trust for appellant.
- First amendment to trust (2003) allocated one-half to appellant and rest to children; 2004 amendment gave appellant $5 million interest in the limited partnership and eliminated the marital-deduction trust; Baughman became a beneficiary.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the decedent transferred his FLP interest to the revocable trust. | Glover argues no transfer occurred; schedule left blank; parol evidence inadmissible. | Personal representatives contend clear and convincing evidence of transfer; testifies and records show intentional transfer. | Transfer evidenced; clear and convincing standard met. |
| Whether res judicata/collateral estoppel bars relitigation of ownership in the FLP. | McGowan ruling on standing foreclosed ownership issue via collateral estoppel. | Estoppel inapplicable; standing decision not on ownership merits. | Collateral estoppel does not apply; standing not decided ownership. |
| Admissibility and effect of parol/hearsay evidence about transfer to trust. | Evidence should be inadmissible to vary written trust instruments; schedule blank misleads. | Parol evidence proper to show decedent’s intent; trust reserved amendment power. | Parol evidence properly admitted; supports transfer finding. |
| Removal of personal representatives due to animosity between parties. | Animosity shows unsuitability under 28-48-105. | Mortgage supervision and fiduciary duties ensure suitability; no grounds show mismanagement. | No removal; circuit court’s decision affirmed. |
Key Cases Cited
- McAdams v. McAdams, 353 Ark. 494 (2003) (probate review standard of review; credibility deference)
- Morton v. Patterson, 75 Ark.App. 62 (2001) (probate findings de novo review; clearly erroneous standard)
- Beaver v. John Q. Hammons Hotels, L.P., 355 Ark. 359 (2003) (collateral estoppel elements; threshold judgments)
- Zinger v. Terrell, 336 Ark. 423 (1999) (collateral estoppel applicability in probate context)
- Farm Bureau Ins. Co. v. Running M Farms, Inc., 366 Ark. 480 (2006) (standing as threshold to sue; lack of standing prevents merits)
- Davis v. Adams, 231 Ark. 197 (1959) (removal of personal representatives; unsuitability standard)
- Quincy Trust Co. v. Taylor, 317 Mass. 195 (1944) (unsuitable standard guiding removal authority)
- Gall v. Union Nat’l Bank, 203 Ark. 1000 (1942) (trust modification/revocation method; trust powers)
- Haught v. Estate Planning (summary reference), — (—) (discussion of contemporaneous estate-planning summaries (citation not provided in text))