In the Estate of William J. McKenna, Karen L. McKenna v. Karen Lynne Hilgert McKenna, Kevin J. McKenna, Paul Sheridan, S.J., Trustees of the William J. McKenna 1993 Trust , 2016 Mo. App. LEXIS 669 ( 2016 )

In the Missouri Court of Appeals
Eastern District
DIVISION THREE
In the Estate of )
)
WILLIAM J. McKENNA, ) No. ED103054
)
Deceased. )
__________________________________ )
)
KAREN L. McKENNA, )
)
Appellant, ) Appeal from the Circuit Court of
) St. Louis County
vs. ) 11SL-PR03332-01
)
KAREN LYNNE HILGERT McKENNA, )
KEVIN J. McKENNA, PAUL ) Honorable Carolyn C. Whittington
SHERIDAN, S.J., Trustees of the William )
J. McKenna 1993 Trust, et al., )
) Filed: June 30, 2016
Respondents. )
OPINION
Karen L. McKenna (“Widow”) appeals that part of the trial court’s judgment which denied
her petition to set aside transfers by her spouse, William J. McKenna (“Decedent”), of various
assets into his trust (the “McKenna Trust”) that she claims were made in fraud of her marital rights,
and that part of the judgment which ordered that she receive no elective share of Decedent’s estate
under section 474.160.1(1) 1 because despite the challenged transfers, she received from Decedent
upon his death an amount of money and property that under section 474.163 2 completely offset
1
All statutory references are to RSMo (Supp. 2012) unless otherwise indicated. As relevant here,
section 474.160.1 provides:
When a married person dies testate as to any part of his estate, a right of election is
given to the surviving spouse solely under the limitations and conditions herein
stated: (1) The surviving spouse, upon election to take against the will, shall . . . if
there are lineal descendants of the testator . . . receive one-third of the estate subject
to the payment of claims.
2
Section 474.163 provides in relevant part:
1. For the purposes of section 474.160, the estate consists of all money and property
owned by the decedent at his death, reduced by funeral and administration
expenses, exempt property, family allowance and enforceable claims, and increased
by the aggregate value of all money and property derived by the surviving spouse
from the decedent by any means other than testate or intestate succession, exempt
property or family allowance without a full consideration in money or money's
worth. The aggregate value of money and property so derived by the surviving
spouse from the decedent shall be offset against the elective share given by section
474.160.
2. Property derived from the decedent includes, but is not limited to:
(1) Any beneficial interest of the surviving spouse in a trust created by the decedent
during his lifetime;
(2) Any property appointed to the spouse by the decedent's exercise of a general or
special power of appointment also exercisable in favor of persons other than the
spouse;
(3) Any proceeds of insurance, including accidental death benefits, on the life of
the decedent attributable to premiums paid by him;
(4) Any lump sum immediately payable, and the commuted value of the proceeds
of annuity contracts under which the decedent was the primary annuitant,
attributable to premiums paid by him;
(5) The commuted value of amounts payable after the decedent's death under any
public or private pension, disability compensation, death benefit or retirement plan,
exclusive of the Federal Social Security system, by reason of service performed or
disabilities incurred by the decedent[.]
2
the share of the estate Widow would otherwise have received under section 474.160 as a result of
her election to take against Decedent’s will.
Widow contends that the trial court erred (1) by giving effect to the unenforceable
prenuptial agreement she and Decedent had entered into just before their wedding; (2) by
misapplying the law when it ruled that Decedent satisfied his marital duty of candor in connection
with the transfer of his Goldman Sachs accounts into the McKenna Trust; (3) by failing to apply
the equitable principle of undue influence in connection with Widow’s challenge to Decedent’s
transfers of their home and condominium into the McKenna Trust; and (4) by calculating Widow’s
beneficial interest in the “Marital Trust,” a trust funded by the McKenna Trust, to be equivalent to
the total value of its assets.
We deny Widow’s claims of error and affirm.
Factual and Procedural Background
Decedent and Widow were married on August 6, 1988. They remained married until
Decedent’s death on October 23, 2011. Widow met Decedent while they worked at Kellwood
Corporation in St. Louis, Missouri. Decedent was President of Kellwood and Widow worked in
Kellwood’s accounting department.
Widow was aware that Decedent was a widower and that he had four children from his
prior marriage to Jean McKenna, who died in 1985. When Decedent and Widow became engaged
to be married in March 1988, Decedent advised Widow that he wanted her to sign a prenuptial
agreement to protect the interests in his estate of his four children from his prior marriage. Thus,
on July 7, 1988, Decedent and Widow executed a prenuptial agreement.
3
The Prenuptial Agreement
At the time the prenuptial agreement was executed, Decedent’s net worth was
approximately $9 million. The prenuptial agreement provided, inter alia, that in exchange for
Widow’s waiver of “all rights which, by reason of the marriage, she may acquire in [Decedent’s]
property or estate,” she would receive $1 million in consideration from his estate if he predeceased
her. Widow testified that she felt pressured to sign the agreement because Decedent refused to
keep their wedding date if she did not sign, and she did not want to face the shame and
embarrassment of a cancelled wedding. Widow also testified that both before and at the time of
signing the agreement, she did not receive any independent legal advice regarding the prenuptial
agreement; she did not understand or receive an explanation of her marital rights under Missouri
law; and she did not have the opportunity to fully and carefully read the agreement. In light of this
testimony and the circumstances of the prenuptial agreement’s execution, the trial court found the
agreement to be unenforceable because the court was “unable to make . . . a finding” that the
agreement was “not unconscionable.”
Nevertheless, from the time the prenuptial agreement was executed until Decedent’s death,
both Widow and Decedent considered the agreement—under which Widow waived her marital
right to an elective share of Decedent’s estate upon his death—to be enforceable. Thus, when
Decedent made the asset transfers Widow challenges here, he did not believe that he was depriving
her of any interest in such property, since the prenuptial agreement provided that she would not
acquire any interest in those assets as a result of their marriage, but would instead receive $1
million as consideration for waiving her marital rights to any interest in such property.
4
The McKenna Trust, the Marital Trust, and the Challenged Transfers
On December 20, 1993, as part of his estate plan, Decedent created the McKenna Trust.
The McKenna Trust designated Widow and one of Decedent’s sons, Kevin McKenna, as successor
trustees upon Decedent’s death. The McKenna Trust directed that upon Decedent’s death, Widow
would receive from the trust $1 million outright, representing the consideration under the
prenuptial agreement; “all interests” in the real estate used by Decedent and Widow as their
primary residence at or shortly before Decedent’s death; and a beneficial interest in a “Marital
Trust” worth $3 million and funded by the McKenna Trust. The McKenna Trust named Widow
as the sole trustee and primary beneficiary of the Marital Trust upon Decedent’s death, with their
two children as residuary beneficiaries. The McKenna Trust provided that “the trustee” of the
Marital Trust, Widow, “shall pay to [Widow] the income of the [Marital Trust] and in addition
shall pay to [Widow] such amounts of the principal of the [Marital Trust] as from time to time
shall be reasonably necessary for the support, maintenance and health of [Widow].”
Over the course of the following two decades, Decedent transferred various assets into the
McKenna Trust. Between 1993 and 2007, Decedent transferred his Goldman Sachs accounts into
the trust. And on February 8, 1995, after obtaining Widow’s signature on the deeds of transfer,
Decedent transferred their jointly-owned Chesterfield, Missouri home and Innsbrook, Missouri
condominium into the McKenna Trust.
On July 24, 2007, Decedent executed a restatement of the McKenna Trust. The restatement
named Paul Sheridan, S.J., Decedent’s friend, as the third successor trustee upon Decedent’s death.
Further, the restatement altered some of the distributions Widow would receive from the McKenna
Trust upon Decedent’s death. Under the restatement, Widow would receive “all interests” in her
and Decedent’s primary residence at or near his death as part of the Marital Trust. She would also
5
receive “all interests” in the Innsbrook condominium as part of the Marital Trust, in addition to a
beneficial interest in a separate $5 million in the Marital Trust reduced by the value of any life
insurance benefits, retirement accounts, or employee benefit plans payable to Widow or the Marital
Trust upon Decedent’s death.
Widow’s Knowledge of Decedent’s Estate Planning and the Challenged Transfers
Widow knew, at least since 1993, that Decedent had a trust as part of his estate plan. As
early as 1994, she attended meetings with Decedent’s estate planning attorneys during which the
provisions of the McKenna Trust were discussed, and she was present for the July 24, 2007,
signing and explanation of the provisions of the restatement of the McKenna Trust.
From July 2007 onward, Widow had access to a copy of the restatement of the McKenna
Trust. Moreover, Widow received and reviewed copies of Decedent’s Goldman Sachs account
statements, which subsequent to Decedent’s transfer of the accounts into the McKenna Trust
reflected that the title of the owner of the accounts had switched from him to the trust. And Widow
was aware before Decedent transferred their home and condominium into the McKenna Trust that
he was going to do so; she does not dispute that she signed the deeds of transfer prior to the
conveyance.
There is no indication in the record that during Decedent’s life, Widow objected—or,
accordingly, that Decedent was aware of any objection by her—to his creation of the McKenna
Trust; to its terms; to its restatement; or specifically to any of the transfers Decedent made into the
McKenna Trust of his interests in the various assets he conveyed, on the grounds that the
conveyance in any way infringed upon or defrauded Widow of her marital rights.
6
Widow’s Inheritance from Decedent Upon His Death
Widow received the following distributions from the McKenna Trust upon Decedent’s
death: $1 million outright as consideration under the prenuptial agreement; the Marital Trust worth
more than $4.5 million, which includes the home and the condominium; Decedent’s $1.7 million
Goldman Sachs IRA; life insurance benefits worth over $30,000; Decedent and Widow’s $.5
million Goldman Sachs joint account; over $55,000 in their UMB Bank joint account; and
automobiles, furniture, and furnishings worth over $64,000.
Widow’s expert opined that her beneficial interest in the income of the Marital Trust—
which he valued at $1,180,000—was so great that she would never need to invade the principal of
the trust. Nevertheless, following Decedent’s death on October 23, 2011, and Widow’s
assumption of her duties as trustee, Widow invaded the principal of the trust in 2013 and 2014.
The remainder of the assets of the McKenna Trust—which were valued at around $27
million—were, in accordance with the trust’s terms, set aside for the benefit of Decedent’s
descendants living at the time of his death, including his children from his prior marriage. Upon
Decedent’s death, Widow sought to reach these assets as well. Together with her election to take
against Decedent’s will, she filed a petition to set aside the transfers into the McKenna Trust that
she claims were made in fraud of her marital rights. With the petition, Widow requested that
Decedent’s assets conveyed into the McKenna Trust as a result of the challenged transfers—which
assets include the Goldman Sachs accounts that make up the bulk of the trust’s $27-million
remainder not provided for Widow—be considered part of Decedent’s estate for purposes of
calculating her elective share.
The court denied her petition. The court also ordered that she receive no elective share of
Decedent’s estate under section 474.160.1(1) because, despite the challenged transfers, she derived
7
from Decedent by other means upon his death money and property in the amount of $7.9 million.
The trial court found under section 474.163 that the aggregate value of the money and property
she received completely offset the $3.3 million share of Decedent’s estate Widow would otherwise
have received under section 474.160 as a result of her election to take against Decedent’s will.
This appeal follows.
Standard of Review
In a court-tried case, we affirm the judgment below if it is supported by substantial
evidence, is not against the weight of the evidence, and does not erroneously declare or apply the
law. In the Matter of S.J.M., 453 S.W.3d 340, 342 (Mo.App.E.D. 2015) (citing Murphy v. Carron,
536 S.W.2d 30, 32 (Mo.banc 1976)). Moreover, in this context we affirm the trial court’s judgment
if it is sustainable for any reason supported by the record. Reagan v. Cty. of St. Louis, 211 S.W.3d
104, 107 (Mo.App.E.D. 2006) (citing Preferred Laser Servs., Inc., v. Abate, 117 S.W.3d 678, 681
(Mo.App.E.D. 2003)). We view the evidence in the light most favorable to the trial court’s
judgment, disregarding all contrary inferences and evidence. Id. at 342-43 (citing Woods ex rel.
Woods v. Cory, 192 S.W.3d 450, 458 (Mo.App.S.D. 2006)).
The Failure of Widow’s Claims of Transfer in Fraud of Marital Rights
The common law of Missouri has long been that a spouse may not give away his property
without consideration and with the intent and purpose of defeating the marital rights of the other
spouse. Nelson v. Nelson, 512 S.W.2d 455, 459 (Mo.App. 1974). Section 474.150.1 codifies the
common law action of fraud of marital rights by providing that “[a]ny gift made by a person . . .
in fraud of the marital rights of his surviving spouse to share in his estate, shall, at the election of
the surviving spouse, be treated as a testamentary disposition and may be recovered.” In re Estate
of Brown, 800 S.W.2d 137, 138 (Mo.App.E.D. 1990); see also Reinheimer v. Rhedans, 327 S.W.2d
8
823, 828 (Mo.banc 1959) (finding that the phrase “in fraud of marital rights” in section 474.150.1
was intended to adopt the meaning of that term as it existed at common law). Whether a transfer
was made in fraud of the surviving spouse’s marital rights is determined by the facts and
circumstances that existed at the time of the transfer. McDonald v. McDonald, 814 S.W.2d 939,
946 (Mo.App.S.D. 1991).
Where, as here, there is no direct evidence of the decedent’s intent to defraud, we look to
certain “badges of fraud” to determine whether Decedent made the challenged transfers with
fraudulent intent. See Nelson, 512 S.W.2d at 459-60. The badges of fraud that have been
recognized as relevant to determining whether one spouse had the intent to defraud the other
include: (1) the lack of consideration for the transfer; (2) the retention of control by the transferring
spouse of the transferred property; (3) the disproportionate value of the transfer compared to the
total value of the estate; and (4) the failure to make the transfer openly and with frank disclosure.
Estate of Fleischmann v. Fleischmann, 723 S.W.2d 605, 610 (Mo.App.E.D. 1987) (citing Matter
of Estate of LaGarce, 532 S.W.2d 511, 515-16 (Mo.App. 1975)).
However, in determining the decedent’s intent courts may consider and weigh all the facts
and circumstances in evidence. LaGarce, 532 S.W.2d at 515 (citing Potter v. Winter, 280 S.W.2d
27, 36 (Mo.banc 1955)). Accordingly, Missouri courts have considered other relevant factors in
addition to the above four badges of fraud. See, e.g., id. at 516-17 (considering, in addition to the
four most commonly listed factors, whether the decedent made the challenged transfers in
contemplation of death; the timing of the transfers in relation to the decedent’s separation from his
surviving spouse; whether, around the time of the transfers, the decedent placed jointly-held assets
beyond her control; and the effects of the transfers on the reasonable expectations of the surviving
spouse).
9
Turning to the circumstances of this case, we first address the impact on the badges-of-
fraud analysis of Decedent’s and Widow’s mistaken but shared belief at the time of the challenged
transfers that their unenforceable prenuptial agreement purportedly waiving Widow’s marital
rights was actually enforceable. We find that their belief that the prenuptial agreement was
enforceable—shared for 23 years, from the date of execution of the prenuptial agreement until
Decedent’s death—is highly relevant to the fundamental question whether Decedent had the intent
to defeat Widow’s marital rights when he made the challenged transfers of assets subsequent to
the agreement’s execution. Further, because both Decedent and Widow thus believed Widow’s
marital rights had effectively already been “defeated” by the prenuptial agreement in exchange for
$1 million in consideration from his estate if he predeceased her, we find, as the trial court did,
that their shared belief affirmatively demonstrates that Decedent did not make the challenged
transfers with fraudulent intent.
Decedent and Widow’s 23-year belief that Widow had given up her marital rights in the
assets in question also undermines Widow’s argument that Decedent had the “objective intent” to
defraud Widow because, she argues, the necessary consequence of his transfers of assets into the
McKenna Trust was to defraud her. Widow relies on the quote from Citizens National Bank of
Maryville v. Cook, 857 S.W.2d 502, 506 (Mo.App.W.D. 1993) (quoting Citizens’ Bank of Hayti v
McElvain, 219 S.W. 75, 77 (Mo. 1920)), that “if the necessary consequence of a conceded
transaction was defrauding another, then, as a party must be presumed to have foreseen and
intended the necessary consequences of his own act, the transaction itself is conclusive evidence
of a fraudulent intent.” We find this to be inapplicable to this case. Although defeat of Widow’s
marital rights was the necessary consequence of Decedent’s transfers of various assets into the
McKenna trust, fraud of her marital rights was not a necessary consequence. Again, because
10
Decedent believed the prenuptial agreement was enforceable, Widow failed to carry her burden of
proving that he made the challenged transfers with the intent to defeat Widow’s marital rights—
Decedent believed Widow had already waived them. Therefore, the trial court did not err in
denying Widow’s petition to set aside Decedent’s transfers.
For the reasons provided below, we reach this conclusion despite Widow’s claims that the
trial court, in denying her petition, erred (1) by giving effect to the unenforceable prenuptial
agreement; (2) by ruling that Decedent satisfied his marital duty of candor in transferring his
Goldman Sachs accounts into the McKenna Trust; and (3) by failing to apply the equitable
principle of undue influence in connection with Widow’s challenge to the transfers of the home
and condominium into the McKenna Trust. Turning to these specific claims of error, we reject
each in turn, beginning with Widow’s argument that the court erred by giving effect to the
prenuptial agreement.
The Unenforceable Prenuptial Agreement
To be clear, Widow does not claim that the trial court explicitly or directly enforced against
her the prenuptial agreement after finding it to be unenforceable. Instead, Widow claims that by
virtue of denying her petition to set aside Decedent’s transfers as in fraud of her marital rights, the
court effectively or indirectly enforced the unenforceable agreement.
We disagree because the trial court’s judgment did not enforce or give any effect to the
prenuptial agreement. The court denied Widow’s petition not because the court enforced to any
extent the prenuptial agreement but because Decedent believed at the time of the challenged
transfers that the agreement was enforceable. The court found merely that, considered as a factual
matter, his belief in the enforceability of the agreement, correct or not, demonstrated that he did
not transfer assets to the McKenna Trust with the intent to defeat Widow’s marital rights.
11
Despite these facts, Widow asserts error because she believes that the trial court’s
determination that Decedent did not make the challenged transfers with the intent to defeat her
marital rights rests necessarily on its conclusions—which she faults—that Widow reasonably
expected to receive from Decedent’s estate only the consideration provided in the agreement for
her waiver of her marital rights, and that “it was reasonable for . . . [Decedent] to subjectively
believe that the prenuptial agreement was enforceable.” (emphasis added). Because Missouri law,
e.g., Potts v. Potts, 303 S.W.3d 177, 187 (Mo.App.W.D. 2010), provides that a person of common
sense would see the “strong, gross, and manifest” inequality in an unconscionable and
unenforceable prenuptial agreement, Widow concludes that Decedent’s belief in the enforceability
of the agreement was unreasonable as a matter of law, and that the court should not have considered
Decedent’s belief in determining whether he made the challenged transfers in this case in fraud of
Widow’s marital rights.
We find, however, that regardless of the reasonableness or correctness of Decedent’s belief
(wholly shared by Widow) that the prenuptial agreement was enforceable, the trial court did not
err in finding that belief to be relevant to the fundamental question whether Decedent had a
fraudulent intent to defeat Widow’s marital rights when he made the transfers at issue in this case.
The evidence of Decedent’s belief was relevant and represented substantial evidence upon which
the trial court properly found that he did not make the challenged transfers with the intent to defeat
Widow’s marital rights. Point I is denied.
Decedent’s Marital Duty of Candor in Transferring His Goldman Sachs Accounts
Widow argues that Decedent breached his marital duty of candor in connection with the
transfers of his Goldman Sachs accounts into the McKenna Trust and thus displayed one of the
12
badges of fraud. We disagree and find that the trial court did not err in finding that Decedent
complied with his marital duty of candor.
Widow rests her argument that Decedent failed to satisfy his marital duty of candor
primarily on the principle from Nelson, 512 S.W.2d at 461, that because “[t]he marital relation
involves the most unlimited trust and confidence[,] . . . [t]he lack of courage to submit a matter
involving mutual interest to mutual consideration is an index to the state of mind of the [spouse
transferring assets] to which the maxim that secrecy is a badge of fraud has peculiar application.”
Widow claims—it turns out correctly, in light of the trial court’s finding that the prenuptial
agreement was unenforceable—that the transfer of Decedent’s Goldman Sachs accounts was a
matter of mutual interest that should have been submitted to mutual consideration. However, the
record viewed in the light most favorable to the trial court’s judgment in this case refutes any claim
that Decedent “lacked the courage” to submit the transfer of the accounts to Widow’s
consideration.
The record shows that Decedent always believed that the prenuptial agreement Widow
signed purportedly waiving her marital rights was enforceable. The record establishes that
Decedent did not lack the courage—but simply never saw any need—to submit to mutual
consideration the matter of conveying what, according to the unenforceable prenuptial agreement’s
terms, remained his distinctly individual interest in the Goldman Sachs accounts.
Widow also cites for support Estate of Bernskoetter, 693 S.W.2d 249, 253-54
(Mo.App.W.D. 1985), but that case does not buttress her claim of error here. In Bernskoetter, the
surviving spouse had no idea until his wife died that she had been keeping secret from him
information about the amount and location of a savings account in her and their daughter’s name
13
precisely because she intended to transfer the savings to their daughter—and thus, the court found,
defeat his marital rights—upon her death.
Widow suggests that she is like the surviving spouse in Bernskoetter in that she, too, could
not have stopped her spouse from transferring assets without filing suit to stop the transfer, to
recover the assets, or to dissolve her marriage, and thus that she likewise should not—as the
Bernskoetter court held the surviving spouse in that case should not—have been forced to file suit
to stop her spouse’s transfer before she could otherwise have known that it was secretly intended
to defeat her marital rights. But that gets the facts wrong in this case and ignores a major distinction
from the facts in Bernskoetter.
Here, both Decedent and Widow believed until Decedent’s death that Widow had waived
her marital rights by signing their prenuptial agreement that was later found to be unenforceable.
Widow did not, like the surviving spouse in Bernskoetter, discover upon her spouse’s death that
her spouse’s transfers defeating her marital rights were secretly intended to accomplish that result.
The record in this case shows that instead—as a result not of uncovering upon Decedent’s death
in 2011 any particular secret, but solely of reading the trial court’s judgment in this case in 2015—
she cannot have discovered anything more than that because the prenuptial agreement was actually
unenforceable, Decedent’s challenged transfers, including that of his Goldman Sachs accounts,
had the mere unintended effect of defeating part of her marital rights. As stated above, the record
in this case shows that Decedent believed Widow had waived such rights by agreement long before
the transfer, precluding a finding that Decedent transferred the accounts with the intent to defeat
her rights.
Finally, Widow faults one last aspect of the trial court’s determination that Decedent
satisfied his marital duty of candor. Widow claims the trial court misapplied the law by
14
considering the effects of the transfer of the Goldman Sachs accounts on her reasonable
expectations in light of her belief in the enforceability of the actually unenforceable prenuptial
agreement. Widow argues that because she did not actually or constructively acquiesce or consent
to the transfer, the effects on her reasonable expectations were irrelevant, and the trial court erred
in considering them. But Widow is mistaken. We reject her contention that Bernskoetter
established that considering such expectations is relevant only for purposes of supporting a defense
of actual or constructive acquiescence or consent to a challenged transfer. There is no such
statement in Bernskoetter, and in LaGarce, 532 S.W.2d at 517, the surviving spouse did not
acquiesce or consent to the transfer to another couple, by her husband and in fraud of her marital
rights, of the value of several savings certificates of which she was the joint owner, but the court
still properly considered, in determining whether the husband defrauded the surviving spouse, the
effect of the transfer on her reasonable expectations. Point II is denied.
The Issue of Undue Influence
Widow last contends that the trial court erred by failing to apply the equitable principle of
undue influence in connection with Widow’s challenge to Decedent’s transfers of their home and
condominium into the McKenna Trust. Undue influence is that influence which by force, coercion,
or overpersuasion destroys a person’s free agency. See Watermann v. Eleanor E. Fitzpatrick
Revocable Living Trust, 369 S.W.3d 69, 75 (Mo.App.E.D. 2012). The burden to prove undue
influence lies with the party asserting it. See id. A presumption of undue influence arises when
substantial evidence shows: (1) a confidential or fiduciary relationship; (2) that the fiduciary
obtained a benefit; and (3) some additional evidence supporting an inference of undue influence.
Id.
15
Widow claims that Decedent, with whom she shared a confidential, marriage relationship,
unduly influenced her by using his power over her, and by threatening her that he would take her
out of his will and take away her children, in order to destroy her free agency and obtain her
signature on the deeds of transfer for their home and condominium. Widow argues that as a result
of being thus unduly influenced by Decedent, she did not freely join in his conveyances of their
home and condominium into the McKenna Trust, even though she knowingly signed the deeds of
transfer effectuating the conveyances. Therefore, she concludes that under Missouri law the
transfers are deemed to be fraudulent, McDonald v. McDonald, 814 S.W.2d 939, 945
(Mo.App.S.D. 1991) (citing section 474.150.2) (holding that conveyances of real property by a
married person are deemed to be fraudulent unless the surviving spouse joined in or provided her
express written assent to them), and that the trial court erred in failing to set them aside as in fraud
of her marital rights based on the equitable principle of undue influence.
We find, however, that the court did not err in failing to consider undue influence, since
Widow waived the issue by failing to raise it until after the trial was over, and the issue was not
tried by consent. “Even in a court-tried case, where no post-trial motion is required to preserve
substantive issues for appellate review . . . we cannot address arguments that the appellant failed
to raise at trial.” Arnold v. Minger, 334 S.W.3d 650, 654 (Mo.App.S.D. 2011) (quoting Pickering
v. Pickering, 314 S.W.3d 822, 835 (Mo.App.W.D. 2010)). Accordingly, Widow’s reference solely
in post-trial briefing to the issue of undue influence came too late—after the trial was over—to
preserve the issue for appeal. The issue was preserved only if it was tried by consent, and upon
review of the record, we find that Widow’s post-trial brief reference to undue influence did not
constitute trial of the issue by express or implied consent. Cf. Bateman v. Platte Cty., 363 S.W.3d
39, 43 (Mo.banc 2012) (holding that the plaintiffs’ reference solely in a post-trial brief to an issue
16
did not constitute trial of the issue by express or implied consent, since asserting an issue only after
the trial is over cannot constitute trial by consent).
Widow argues that even though she did not specifically assert undue influence until she
raised the issue in her post-trial briefing, she did not waive the issue because at trial she introduced
facts into evidence supporting a finding that she was unduly influenced by Decedent when she
signed the deeds to transfer the home and the condominium into the McKenna Trust. We are not
persuaded. At trial, Widow introduced evidence that Decedent threatened to divorce her, leave
her penniless, and seek custody of their children if she did not sign the deeds of transfer, but she
presented these facts to support her argument rejected by the trial court that she signed the deeds
when placed under duress by Decedent, not undue influence.
While the equitable principles of duress and undue influence are frequently pled together,
they are not the same, and a party may have legitimate strategic reasons, based on facts or law, to
plead and prove one but not the other. To claim duress, a person must be so oppressed from the
wrongful conduct of another as to deprive him of free will. Schmalz v. Hardy Salt Co., 739 S.W.2d
765, 768 (Mo.App.E.D. 1987). Thus, although it may be undue influence, it is never duress to do
what a party has a legal right to do. See, e.g., Gott v. First Midwest Bank of Dexter, 963 S.W.2d
432, 440 (Mo.App.S.D. 1998). For example, it is not duress to institute or threaten to institute
civil suits based on what one views to be his or her legal rights. Security Savings Bank v. Kellems,
274 S.W. 112, 114 (Mo.App. 1925). Widow did not effectively claim undue influence by claiming
duress.
And although, as Widow claims, the evidence of duress in the record could also have served
as evidence of undue influence, under Missouri law that does not matter here. “To fairly say a
party implicitly consented to try a new issue, such evidence should warn that a new issue is being
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injected. Thus, the evidence in question cannot be relevant to any other issue before the trial court;
it must bear solely on the new issue.” Allen Quarries, Inc. v. Auge, 244 S.W.3d 781, 784
(Mo.App.S.D. 2008) (citing City of St. Joseph v. St. Joseph Riverboat Partners, 141 S.W.3d 513,
516 (Mo.App.W.D. 2004)). Accordingly, because Widow did not assert undue influence until
after the trial was over, we find that she waived the issue. Point III is denied.
The Complete Offset of Widow’s Elective Share of Decedent’s Estate
In her fourth point on appeal, Widow argues that the trial court erred in ordering that she
receive no elective share of Decedent’s estate. Widow contends that the court erred in finding that
her elective share was completely offset by the aggregate value of the money and property she
received from Decedent’s estate by other means upon his death; specifically, she claims that the
court incorrectly calculated the value of one such property, her beneficial interest in the Marital
Trust, to be equivalent to the total value of that trust’s assets.
In Widow’s view, her beneficial interest in the trust is actually rather limited. She
acknowledges that the McKenna Trust provides that she is entitled to all the income of the Marital
Trust, but she asserts that the terms of the McKenna Trust relating to the principal of the Marital
Trust—which provide that she may invade such principal as “shall be reasonably necessary for
[her] support, maintenance, and health”—limit her access to the trust principal to when she has
depleted all her other available resources. We disagree.
Missouri statutes provide no specific guidance for valuing the “beneficial interest” of the
surviving spouse in a trust for purposes of calculating her elective share, and Missouri courts have
not provided a specific interpretation of the term “beneficial interest.” Nevertheless, Widow
argues that the only reasonable conclusion from the record in this case is that her beneficial interest
in the Marital Trust is less than the total value of its assets because, she asserts, she can encroach
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on its principal only when her other resources are insufficient to cover her expenses. We disagree
with Widow’s interpretation of the record and with her undervaluation of her interest in the Marital
Trust.
In Winkel v. Streicher, 295 S.W.2d 56, 61-62 (Mo.banc 1956), the Missouri Supreme Court
held that “when [language directing a trustee to pay to a beneficiary so much as is necessary for
his or her support] is used the inference (in the absence of some indication to the contrary) is that
the intent was for the beneficiary to receive his full support from the trust estate”—i.e., an
“absolute gift of support and maintenance.” (emphasis added). And where intent to make such a
gift is present, “the private income of the beneficiary cannot be considered” in determining how
much he or she may invade the principal of the estate. Id. at 61.
Here, the McKenna Trust provides specifically that “the trustee[, Widow,] shall pay
[herself] the income of the Marital Trust and shall pay [herself] such amounts of the principal of
the Marital Trust as from time to time shall be reasonably necessary for [her] support, maintenance
and health.” (emphasis added). Accordingly, in the absence of some indication to the contrary,
we find that the trial court could reasonably have concluded that Decedent must have intended for
Widow to receive her full support from the Marital Trust, and thus that her ability to invade the
principal of the trust is not limited to when her other available resources are insufficient to cover
her expenses.
Widow rejects this conclusion primarily because she claims that the McKenna Trust’s
provisions applicable to the Marital Trust are much like those of the testamentary trust in
Nationsbank, N.A. v. Tegethoff, 18 S.W.3d 22, 26 (Mo.App.E.D. 2000), which did not make an
absolute gift of support. However, there are critical differences between the provisions of the
McKenna Trust applicable to the Marital Trust and the provisions of the Tegethoff trust.
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In Tegethoff, this Court concluded that the testator did not intend to make an absolute gift
of support to his children of the trust’s assets precisely because the children’s ability to invade the
trust’s principal was limited to when the trustees, in their discretion, found it necessary to make
distributions of the principal to support the children. Id. The testamentary trust in Tegethoff merely
“authorize[d] the Trustees to encroach upon the principal of the trust estate for the . . . education,
maintenance, and support of [the] children[,] . . . if [it became] necessary in the opinion of the
Trustees.” Id. at 24 (emphasis added). Thus, the most critical difference between the provisions
of the McKenna Trust applicable to the Marital Trust and those of the Tegethoff trust is
immediately apparent—the McKenna Trust provides that Widow, as the trustee, “shall” (i.e., it
requires that she) make payments to herself of the Marital Trust principal as shall be reasonably
necessary for her support as a beneficiary, whereas the Tegethoff trust did not require a single
distribution of trust principal to the children.
Further, unlike the Tegethoff trust, the McKenna Trust does not contain additional language
authorizing “reasonable and necessary” encroachments “to provide against any emergency which
may arise afflicting [the relevant beneficiary], . . . occasioned by sickness, accident, ill health,
affliction, misfortune or otherwise.” Id. In Tegethoff, 18 S.W.3d at 26, this Court concluded that
“[i]f [the] testator had intended an absolute gift of support to [the children], the above referenced
language would have to be completely ignored and considered surplusage, which would thwart
testator's intention therein.” Indeed, that may essentially be why Decedent did not include such
language in the McKenna Trust; he may have understood that it would be redundant to authorize
encroachments on the trust’s principal to provide against emergencies affecting Widow when he
had already required that the principal be distributed to her whenever reasonably necessary to
provide for her support, maintenance, and health. At the least, we find that the provisions of the
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McKenna Trust applicable to the Marital Trust and the provisions of the Tegethoff trust are
critically different, and that comparing them does not convince us that the trial court could not
reasonably have found that Decedent intended for Widow to receive her full support from the
Marital Trust.
But that is not the end of Widow’s objections. Widow also denies that Decedent intended
for her to receive her full support from the Marital Trust because, separately from the gift of the
Marital Trust, Decedent provided her with a “gift” of $1 million and named her the beneficiary of
his $1.7 million Goldman Sachs IRA, in her view thus demonstrating a lack of intent for her to
receive her full support from the trust. The record, however, shows that Decedent intended the $1
million not to be a gift of support but actually to be his payment of consideration to satisfy the
obligation he believed he owed Widow under the terms of the unenforceable prenuptial agreement.
And to the extent that Decedent believed the IRA would provide income to Widow
immediately after his death, the trial court could reasonably have concluded—especially in light
of Decedent’s dictate as settlor of the Marital Trust that Widow as trustee distribute to herself that
part of the trust’s principal that, from time to time, becomes reasonably necessary for her support—
that his desire to grant Widow money and property separate from the Marital Trust did not conflict
with his intent for Widow to receive her full support from the trust. It is manifest that not every
disposition of property upon death to a surviving spouse is for support in times of need, since such
dispositions may be made simply to reward or enrich, or even to indirectly provide for persons
other than the beneficiary. And, more important, there is nothing in the record indicating that
Decedent named Widow the beneficiary of his IRA specifically to support her in times of need.
Consequently, we reject Widow’s claims that the trial court could not reasonably have
found that Decedent intended for her to receive her full support from the Marital Trust, and that
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she can encroach on the principal of the Marital Trust as reasonably necessary for her support
without first depleting all her other available resources. There is substantial evidence in the record
that Decedent intended for Widow to receive her full support from the Marital Trust. Widow is
mistaken in claiming that the only reasonable conclusion from the record in this case is that her
beneficial interest in the Marital Trust is less than the total value of its assets. Rather, the trial
court had a reasonable basis in the record—the evidence of Decedent’s intent to make an absolute
gift of support to Widow—for calculating her interest in the Marital Trust to be equivalent to the
total value of the trust assets. 3 Point IV is denied.
Conclusion
For the reasons stated above, we affirm the judgment of the trial court.
James M. Dowd, Judge
Robert M. Clayton III, P.J., and
Roy L. Richter, J., concur.
3
We note that as trustee of the Marital Trust, Widow must carry out her fiduciary duties to the
trust’s residuary beneficiaries, and in doing so she may not treat as mere surplusage the language
of the McKenna Trust directing her to distribute to herself only as much of the Marital Trust’s
principal as shall be “reasonably necessary” for her support—i.e., she may not invade the trust
principal whenever she so desires, but only when it would not constitute a breach of her fiduciary
duties to conclude that invading the principal is “reasonably necessary” for her support. That
Widow is constrained by fiduciary duties to abide by the terms of the McKenna Trust does not
mean, however, that Decedent did not intend for her to receive her full support from the Marital
Trust. Instead, such constraints mean only that Widow may not turn Decedent’s absolute gift of
support into an absolute gift of assets to be distributed and dissipated for purposes and in amounts
determined solely by Widow’s whim.
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