NOVEMBER 4, 2013 VOLUME 20 NUMBER 42
Most of us are fascinated by the lives and deaths of famous people. Their legal and financial affairs tend to be complicated, and they are sometimes messy. They may also provide some constructive information, useful to illustrate broader points applicable to many of us. One such illustration: the death and estate of the late, great country singer/songwriter James Travis Reeves — better known as Jim Reeves to his legions of fans.
The recently-decided Tennessee case isn’t actually about Jim Reeves’ estate at all. The singer died in a tragic airplane crash in 1964, leaving behind his wife Mary and a considerable collection of then-unreleased records. In the years since his death a number of “new” releases have helped maintain his legacy. In fact, two of his most famous recordings (Don Gibson’s “I Can’t Stop Loving You” and Cindy Walker’s “Distant Drums”) were released in the two years after his death.
In 1969 Reeves’ widow Mary remarried — to a former Baptist minister named Terry Davis. Mary Reeves Davis lived thirty more years, and during that time she helped maintain the public’s interest in the velvet voice of “Gentleman Jim” Reeves. In fact, in the last few years of her life the annual income from Jim Reeves’ songs and legacy was estimated at several hundreds of thousands of dollars.
When Mary Reeves Davis died in 1999, her will left $100,000 to her husband Terry Davis, and the bulk of the rest of her estate to a niece and nephew of Jim Reeves. That sets up the legal question involved, indirectly, in Jim Reeves’ “estate.” Since all of his assets, and his rights and recordings, had passed to his widow, it was his legacy that was subjected to her new husband’s challenge.
Here’s the legal question involved: can you disinherit your spouse, or significantly reduce their share of your estate? Assume (you will have to assume, because the information is not public enough for us to figure it out) that Mary Reeves Davis’ estate was substantial, and that the future rights to her late husband’s recordings will continue to produce income for decades. Could Mary Reeves Davis leave her husband of thirty years $100,000 and discharge any legal obligation she had to him?
The answer, as you might suspect, will vary significantly from state to state. In some states (not including Arizona, incidentally) a surviving spouse has the right to a minimum inheritance — if the deceased spouse’s will does not leave a sufficient amount, the surviving spouse may “elect against the will.” That means that they are entitled to a minimum share of the estate, with that minimum varying from state to state.
That’s the law in Tennessee, where Mary Reeves Davis lived and died. So did Terry Davis have the right to elect against her will, and receive a share of her estate exceeding the $100,000 bequest?
If you were reading this complicated story carefully, you will note that Mary Reeves Davis died in 1999 (on Veteran’s Day, in fact — almost exactly fourteen years ago). How could the legal question in her probate estate just be getting resolved?
Trial of the probate dispute actually was concluded two years ago, though that doesn’t help explain the long delay. Over the twelve years of litigation Terry Davis retained and discharged six sets of attorneys, with the final firing taking place just days before the long-delayed trial had been set to begin. The judge in the case allowed Mr. Davis to fire his lawyers, but refused to continue the trial any longer for him to secure new counsel. He represented himself in the 2012 trial. After losing in the probate court, he filed an appeal with the Tennessee Court of Appeals; that court’s ruling was finalized last week.
So what was the final issue, and what can we learn from it? It turns out (as it so often does) that the primary legal question was very narrow: could Terry Davis elect against his wife’s will when he had already accepted the $100,000 she bequeathed to him? The answer: no. Under Tennessee law, at least, in order to elect against the will, the surviving spouse must refuse any specific bequest in order to elect the statutory minimum to which he or she would be entitled. Oh, and Terry Davis had no legal right to be represented by a lawyer at the trial, so the judge’s refusal to grant him a continuance as his last law firm withdrew was not a legal error. Estate of Davis, October 28, 2013.
What does a Tennessee case, applying Tennessee’s very-different law, tell us about Arizona court proceedings, estate planning, or inheritance issues? Although Arizona law is very different (there is no “right of election” against a will in Arizona), there are still some valid points to take away, and the Jim Reeves music in the background of this case helps make those points more memorable.
Yes, you can disinherit a spouse. Under Arizona law, regardless of what the will says there is a minimum amount to which the spouse is entitled, however. That amount, though it varies slightly depending on other circumstances, is usually $37,000 (a figure, by the way, that has been unchanged for decades). Even that magnanimity is limited, however. If the spouse receives any other property — by operation of joint tenancy titling, or by a trust, or by beneficiary designations — that can reduce the amount to which the spouse is entitled.
Tennessee law is more protective of spouses, though it turned out that Mary Reeves Davis’ surviving husband did not get more of her probate estate than her will provided. There was testimony, however (and the probate court found), that Terry Davis had transferred more than $250,000 from Mary Reeves Davis’ accounts just before her death. That did not help his claim of entitlement to maintenance from her estate under Tennessee law. But the bottom line is clear: if you want to disinherit your spouse, you will have an easier time doing so under Arizona law.
Why is that so? Are Arizona legislators anti-family? Hardly. Arizona, as you may recall, is a “community property” state. That means that there is an assumption that half of the assets owned by a couple already belong to the surviving spouse, and so the minimum protection provided by probate laws makes more sense. It doesn’t, however, help figure out how to deal with the division when the deceased spouse had substantial separate property (like an inheritance, or separate property brought into Arizona and maintained as separate property) and the surviving spouse has few resources. That complicated problem is material for another day — and an Arizona case as illustration.