The Supreme Judicial Court has denied the arguments of another disappointed heir in the recent case of Skye v. Hession. The underlying message for children expecting a lucrative inheritance from their parents: what your parents giveth they may taketh away.
The facts are as follows: In 2005, Margaret Hession deeded a certain property to her three daughters in equal shares, reserving to herself a “life estate” in the property. In other words, Margaret retained ownership of the property for the duration of her life. Upon her death, ownership would transfer immediately to the daughters. However, in that same deed, Margaret also reserved a “special power of appointment” whereby Margaret retained the right to designate a new owner of property through her Will or a new deed.
Margaret died and her Will was admitted into probate. In her Will, Margaret exercised her power of appointment to essentially give the interest of one daughter, Deavan, to the other two daughters, effectively cutting Deavan out of the property. Deavan filed suit contending that Margaret’s original grant of an interest to the daughters was irreconcilable with Margaret’s retention of a power of appointment over that same interest. Margaret should not have been able to simultaneously give and keep the same interest. Consequently, according to Deavan, the power of appointment must be void and Deavan should be able to keep her one-third interest in the property.
The other daughters and the SJC disagreed. Rather, the SJC found that Margaret had properly retained a power to dispose of the property even though, following her death, her estate had no legal interest in the property (i.e. because her life estate terminated at death). The Court reasoned that the deed into the three daughters essentially conveyed a remainder interest subject to the possibility of divestment. That is, the deed conveyed the three daughters an interest that could have been taken from them at any time by Margaret during her life or by her Will. Moreover, because a power of appointment is not an interest in real estate, Margaret did not simultaneously give and keep the same interest in the property. Rather, she retained the right to alter the ownership she had, in fact, already conveyed. Since these two provisions were thus not irreconcilable, the SJC upheld Deavan’s disinheritance.
This case is a unique example of what can be accomplished with a power of appointment and, as we approach Mother’s Day, it reminds us all to be respectful of the wishes of our mothers.
Do you or your mother have questions about an existing estate plan or creating a new one? If so, please feel free to contact us for a free initial consultation.