In Kentucky, a surviving spouse has an absolute dower right to one-half of the personalty of her deceased widow’s estate. In Simpson v. Wethington, a February 24, 2022 opinion, the Kentucky Supreme Court held that a gift to Decedent’s son was presumptively fraudulent as a deprivation of the surviving spouse’s dower right.
The Facts Of Simpson v. Wethington
James Wethington and Nannie Wethington married in 1990 and remained married until James passed away in 2017. James was survived by his wife, and his four children, including his son, Kerry Wethington. Nannie passed away intestate later in 2017, and was survived by three heirs at law – Karen, Mitzi, and Travis.
Kerry testified that in November 2016, while James was hospitalized, James handed Kerry a blank, signed check and told him to “fill it out and take every dime he had.” Kerry deposited the check on January 3, 2017, believing that his dad was near death, and received $38,500.
The circuit court found that Kerry had not forged James’ signature and that James had made a valid inter vivos gift to Kerry. According to the estate inventory and appraisement filed by Nannie, $38,500 represents more than half of the total cash value of James’ estate at the time of his death.
On appeal, the Court of Appeals affirmed the trial court’s conclusion that Kerry had not forged James’ signature on the check, and that the legal elements of an inter vivos gift were satisfied. The Court of appeals stated: “Lastly and significantly, [James] told Kerry, as he gave him the check, that this was ‘the only way you will ever get anything.’ The reasonable inference to be drawn is that [James], having made no will, feared Kerry would receive nothing upon his death.”
Kentucky Law Against Fraudulent Deprivation of Dower
A Kentucky widow has an absolute estate to one-half of the personalty of her deceased husband’s estate. KRS 392.020. To protect that right, the rule against fraudulent deprivation of dower developed under Kentucky Law. In Murray v. Murray, a leading case on the subject, the Kentucky Supreme Court stated:
If the advancements or gifts be reasonable, when considered with reference to the amount of property owned by the husband, and his purpose be to provide for the children, and not to defraud the wife, then she cannot complain, although they in fact diminish the property to which her inchoate rights have attached by the marriage. It is a question of intention upon the part of the grantor. If the property given away constitute all, or the principal part, of the husband’s estate, and be such an advancement as is unreasonable, when compared with his entire property, then, while it should not be conclusively presumed to have been made in fraud of the wife’s marital rights, yet prima facie it should be so regarded, and the onus of showing otherwise be cast upon the donee. Each case must depend upon its own circumstances.
In determining the fraudulent deprivation of dower, Kentucky courts must consider “the amount of the husband’s estate, the value of the advancements, the time within which they are made, and all other indicia which will serve to determine the intention accompanying the transaction.” Murray.
In Manikee’s Adm’x v. Beard, the court stated:
The right of the father to give to his children money, choses in action, as well as goods and chattels, during the life of the wife, or the existence of the marital relation, cannot be questioned; but, when such a gift is made with and for the purpose of defrauding the wife, it will be set aside to the extent it may affect her rights as widow.
while the wife cannot complain of reasonable gifts or advancements by a husband to his children by a former marriage, yet, if the gifts constitute the principal part of the husband’s estate and be made without the wife’s knowledge, a presumption of fraud arises, and it rests upon the beneficiaries to explain away that presumption; and in judging of the good faith of the transaction the court must look to the condition of the parties and all the attending circumstances.
Payne v. Tatem. In sum, when a spouse attempts to defeat dower rights through inter vivos gifts, “rather than constituting bona fide gifts, [they] are deemed fraudulent.” Bays v. Kiphart.
Presumptively Fraudulent Gifts Violating Kentucky Dower Rights
The appraisement of James’ Estate was $35,000. Combined with the $38,500 from the bank account, the latter constitutes 52% of James’ estate. The Kentucky Supreme Court stated that on this fact alone, the trial court should have presumed the gift was fraudulent and obliged Kerry to overcome the presumption with evidence:
The circumstances of the gift, as well as Kerry’s own testimony, do not overcome the presumption; in fact, they support it. The gift itself was completed on January 3, 2017, a mere two days prior to James’ death. The check was first handed to Kerry on November 30, 2016, and his testimony is clear his father instructed him not to cash the check until something happened to him and the rest of the family began “stealing” the money. This instruction does not make sense except in reference to James’ eventual demise, and Kerry’s actions confirm that inference. He waited to cash the check for five weeks until his father was in the hospital, on life support, and he believed he would soon die. The gift therefore was made in causa mortis. Martin v. Martin, 138 S.W.2d 509, 514 (Ky. 1940) (noting “a gift causa mortis by a husband to a third person is a fraud on the wife’s marital rights, where the gift is made to prevent her sharing in the property, since the gift does not take effect until the death of the donor.”) Moreover, although James clearly expressed his desire that Kerry should have the money, Kerry also testified James’ desire was no one else in the family should have it—they would “steal” or “take” it. The evidence shows that Nannie was the only other person drawing on the account. James’ other children could not possibly have accessed the money except through distribution in probate. Thus, James either intended to prevent Nannie from continuing to use the funds after his death or intended to prevent her and his other children from receiving a share of the money in probate. In either case, the gift cannot be said to be purely beneficent but was also calculated to deprive his wife and other children of any share.
In addition, Nannie was unaware that the gift had been made. It is irrelevant that the recipient (Kerry) testified that he did not intend to deprive Nannie of her dower right. The question of intent pertains to the donor, not the donee.
What Is the Remedy For Fraudulent Deprivation of Dower?
To determine the remedy, Kentucky law dictates that the courts look to the amount of personalty fraudulently conveyed at the time of the gift. The amount may be unwound, at least to the extent needed to fund the surviving spouse’s share:
We, therefore, conclude Nannie’s estate is entitled to recoup from the gift only that portion which would make her whole up to the 50% of the personal estate she is entitled to (excluding her $15,000 statutory set-off). We remand to the trial court for further fact finding to determine what this amount should be, as we have no fact-finding as to the distribution of the rest of James’ estate in probate. We note, however, if the probate court is waiting for resolution of this case, then the circuit court should order the Marion Circuit Clerk to distribute $19,250 from the amount held in escrow. The probate court would then be responsible for ensuring the distribution of the rest of James’ personal estate to Nannie’s estate would not exceed her 50% share.
Kentucky law commands a widow is entitled to one half the personalty of her husband’s estate. Here, because the $38,500 constituted 52% of decedent’s estate, and the gift was made without the wife’s knowledge, the Kentucky trial court should have presumed the gift was fraudulent and put the burden on the recipient to show it was a reasonable and bona fide gift. The Kentucky Supreme Court reversed the Court of Appeals and remanded to the Circuit Court to distribute to Nannie’s estate the amount of the gift held in escrow which would satisfy her 50% statutory share.