A Strong Offense
A Stronger Defense
We like when families can work out their estate disputes outside of the courtroom. Georgia, for one, embraces the “family settlement doctrine,” where heirs at law can agree to distribute or divide property devised under a will, in lieu of that manner provided by the will. So, too, families often want to ‘avoid probate’ and ‘informally’ distribute the estate. As the Georgia Court of Appeals reminded us in Maxey v. Sapp, that’s all well and good until someone doesn’t get what they want or what they thought they were getting.
The Sapps executed a joint will providing that when one of them died the survivor would inherit the other’s property. After the survivor’s death, the remainder of the estate was to be devised and bequeathed to their five children, share and share alike. After the husband died, the wife grew concerned that the remaining property might be lost through a lawsuit filed against one of her children and the family business. The wife transferred five tracts of land that she inherited from her husband to one of her children, Buddy, and his wife.
When one of the Sapps’ daughters found out about the property transfer, Buddy told her it was transferred to protect it from litigation and once the lawsuit was over, the property would be divided as intended. The siblings then agreed on how to divide the property and even identified which sibling would get which tract.
After the lawsuit ended, all of the siblings got the tracts they selected except for that sister who had originally raised the question about the property transfer. Her tract stayed in Buddy’s name. According to Buddy, that sister was causing trouble and he wasn’t going to convey property under threats. The sister sued Buddy claiming he held the property in constructive trust. The trial court found, at the close of evidence, that the sister failed to prove her constructive trust theory, but the Georgia Court of Appeals disagreed and sent it back to continue the trial.
In Georgia, generally, a constructive trust cannot be imposed on real property based solely on a broken verbal promise to hold or transfer the land for the benefit of another. However, a broken verbal promise may give rise to a constructive trust if it was fraudulently made and for the purpose of obtaining title. The trial court concluded that the sister had not established the fraud necessary based on a broken promise by Buddy and his wife to hold the property for the siblings’ benefit.
The appellate court, however, said that there was more evidence that warranted the trial to go on: there was evidence the siblings’ mother intended for the property to go to her children and the only reason Buddy had it was to protect it from legal judgment and the siblings agreed on a distribution plan after the mother’s death which Buddy followed for all the siblings except for the ‘troublesome’ sister. Given the circumstances of the transfer, the mother’s desire that the property be divided among the siblings, and the distributions to the other siblings, the evidence was sufficient to support resuming the trial on the sister’s constructive trust theory.