In re Estate of Parsley
864 S.W.2d 36, 1988 Tenn. App. LEXIS 358 (1988)
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Rule of Law:
A conveyance of property made with the intent to defeat a surviving spouse's elective share is voidable at the spouse's election under T.C.A. § 31-1-105. Fraudulent intent may be presumed from the circumstances, particularly when the transfer involves the bulk of the decedent's estate, lacks meaningful consideration, and is made by an elderly and unwell individual, thereby substantially depriving the surviving spouse of their statutory share.
Facts:
- Solon Jackson Parsley married Ann Parsley in 1975. By 1981, at age 77, his mental and physical health began to significantly decline.
- On February 1, 1982, Solon's daughter, Trudie Hayes, took him from the home he shared with his wife, Ann, to live with her.
- The next day, February 2, 1982, Solon transferred a joint checking account with Ann and a savings account solely in his name into new joint accounts with Trudie Hayes.
- On April 21, 1982, Solon conveyed his 105-acre farm, valued at over $89,000, to Trudie Hayes in exchange for her promise to care for him.
- On August 21, 1982, Solon executed a will naming Trudie Hayes as his sole beneficiary.
- On November 21, 1983, Trudie Hayes cashed a $15,000 certificate of deposit from the joint account to pay off her personal debts and also conveyed the 105-acre farm to her friend, Bruce Pack.
- Solon Parsley died on December 8, 1983, at the age of 80.
Procedural Posture:
- After Solon Parsley's death, his widow, Ann Parsley, dissented from his will.
- Ann Parsley filed suit in the Chancery Court of Warren County (a trial court) to set aside the transfers of the farm and money to Trudie Hayes.
- The Chancellor found the conveyances were fraudulent and made to defeat the widow's elective share, setting them aside and entering a $15,000 judgment against Trudie Hayes.
- Trudie Hayes, the appellant, appealed the Chancellor's judgment to this court, an intermediate appellate court. Bruce Pack, the farm's recipient, did not appeal.
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Issue:
Does a spouse's conveyance of the substantial majority of his assets to his daughter, made while in declining health and without meaningful consideration, constitute a fraudulent transfer intended to defeat the surviving spouse's elective share under T.C.A. § 31-1-105?
Opinions:
Majority - F. Lloyd Tatum, Special Judge.
Yes. A spouse's conveyance of the bulk of his estate to his daughter is a fraudulent transfer intended to defeat the surviving spouse's elective share when the circumstances indicate such intent. The court found that the transfers of the farm and money constituted the vast majority of Solon Parsley's estate, effectively depriving his widow, Ann Parsley, of the share she was entitled to by law. The court applied a multi-factor test, noting the size of the transfers relative to the total estate, the lack of true consideration (as Trudie also received funds from a conservator for Solon's care), Solon's advanced age and poor health, the strained spousal relationship following his move, and his failure to provide for his wife in his will. These circumstances, taken together, created a presumption of fraud sufficient to void the transfers.
Analysis:
This case clarifies and reinforces the application of T.C.A. § 31-1-105, which protects a surviving spouse's elective share from being defeated by fraudulent inter vivos transfers. It demonstrates that courts will look beyond the stated purpose of a transfer and infer fraudulent intent from the totality of the circumstances, particularly the effect of the transfer on the surviving spouse's inheritance. The decision solidifies the use of the multi-factor test from Sherrill v. Mallicote, making it difficult for an individual to disinherit a spouse through pre-death gifts of a substantial portion of their assets. This precedent serves as a strong deterrent against using such transfers to circumvent spousal inheritance rights.
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