Williams v. Hubbard, 455 S.W.3d 426

Background

Betty Reynolds engaged attorney Kenneth Nelson for estate planning in 2000; she executed a beneficiary deed and a will naming Eric Williams among beneficiaries.
In 2006 Reynolds executed a durable power of attorney naming Sandra Nelson as attorney-in-fact and revised her will to replace two prior beneficiaries with Sandra; Reynolds made additional account ownership changes through 2008–2009.
By her death in 2010 most of Reynolds’ assets passed outside probate: several bank/CD/brokerage accounts were held jointly with Sandra or had Sandra as POD beneficiary.
Williams sued Kenneth and Sandra Nelson alleging they unduly influenced Reynolds to make Sandra joint owner or POD beneficiary of most of Reynolds’ nonprobate assets, seeking to void those transfers, impose constructive trust, and recover for breaches by Kenneth.
The trial court granted summary judgment for the Nelsons for lack of standing; the Supreme Court affirmed dismissal as to accounts where a prior valid joint/POD interest existed but vacated dismissal as to three UMB CDs that had no prior valid transfer when the contested transfers were made, holding Williams has standing as to those CDs.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to challenge transfers of nonprobate assets	Williams: but for undue influence Sandra would not have become sole owner; assets would have entered probate and benefitted him under the will	Nelsons: only original joint owners/POD beneficiaries (Lamp or Baughman) were injured; Williams had no direct interest and thus no standing	Williams has standing to challenge transfers for assets that had no prior valid joint or POD interest at the time of the challenged transfer (the three UMB CDs) but not for assets where a prior valid joint/POD interest existed
Effect of void beneficiary or joint-owner designation	Williams: a designation procured by undue influence is void and the asset becomes probate estate when there is no prior valid designation	Nelsons: if the designation is void, tracing/backing out the purchase requires returning funds to predecessor accounts and only those predecessors’ beneficial owners have standing	Court: statutory NTL and §362.470 treat void beneficiary/joint designations as ineffective; when no prior valid designation exists the asset becomes probate property, so Williams can show he would have benefited
Burden on movant at summary judgment	Williams: Nelsons failed to prove Williams cannot make a submissible case on harm/causation	Nelsons: Williams must show direct harm; movants argued lack of standing sufficed	Court: movants must show plaintiff cannot make a submissible case; Nelsons failed to meet that burden for the three CDs
Effect of prior valid transfers on subsequent void transfers	Williams: void subsequent transfers should return asset to probate	Nelsons: prior valid joint/POD interests survive; thus others (Baughman/Lamp) — not Williams — would have been harmed	Court: where a prior valid joint/POD existed, that prior interest survives a subsequent void transfer; Williams lacks standing for those assets (affirmed)

Key Cases Cited

ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371 (Mo. banc 1993) (standard and burdens for summary judgment)
In re LaGarce’s Estate, 487 S.W.2d 493 (Mo. banc 1972) (gift inter vivos elements for bank accounts)
Fix v. Fix, 847 S.W.2d 762 (Mo. banc 1993) (legislative amendment incorporating LaGarce principle into §362.470)
Burkholder ex rel. Burkholder v. Burkholder, 48 S.W.3d 596 (Mo. banc 2001) (effects of subsequent valid instrument on prior interests under §362.470)
Crocker v. Crocker, 261 S.W.3d 724 (Mo. Ct. App. 2008) (void subsequent beneficiary designation does not revoke prior valid designation)
In re Estate of Mapes, 738 S.W.2d 853 (Mo. banc 1987) (presumption/analysis of undue influence in gifts to lawyers)
Davis v. Pitti, 472 S.W.2d 382 (Mo. 1971) (undue influence principles regarding fiduciaries)
Smith v. Brown & Williamson Tobacco Corp., 410 S.W.3d 623 (Mo. banc 2013) (preservation of issues by points relied on on appeal)