Also known as: exempt personal properties · personal property exemption · exempt property
Written by attorneys — see sources below.
A statutory allowance of personal property that passes to a surviving spouse or minor children free from most creditor claims against the decedent's estate. The allowance operates independently of the elective share and is not charged against it. A surviving spouse may waive the allowance only by a signed written agreement that meets standards of voluntariness.
Elliot presents Dana with a written waiver of elective share, homestead, and exempt property rights while hospitalized before surgery. Dana signs under pressure from threats about creditors seizing their home. After Elliot's death, Dana seeks the exempt personal property allowance. The court refuses to enforce the waiver because Dana's consent was involuntary and the product of duress.
Catherine tampers with the plane controls before a flight with Dorothy and is later convicted of felonious conduct tied to the crash that kills Dorothy. Catherine claims exempt personal property from Dorothy's estate. The court holds that Catherine forfeits the allowance because she feloniously and intentionally killed the decedent.
A federal tax lien attaches to a taxpayer's interest in personal property that state law classifies as exempt. The surviving spouse claims the property as exempt personal property in probate. The court determines that the state exemption prevents the lien from reaching the allowance amount.
In 1988, the Internal Revenue Service assessed $482,446 in unpaid income tax liabilities against Don Craft for his failure to file federal income tax returns for the years 1979 through 1986. At that time, Don Craft and his wife, respondent Sandra L. Craft, owned a piece of real property in Grand Rapids, Michigan, as tenants by the entirety. After notice of the federal tax lien was filed, the Crafts jointly executed a quitclaim deed purporting to transfer Don Craft's interest in the property to Sandra Craft for one dollar. When Sandra Craft later attempted to sell the property, a title search revealed the lien. The IRS agreed to release the lien to allow the sale on the condition that half of the net proceeds be held in escrow pending determination of the Government's interest. Sandra Craft then brought an action in the United States District Court for the Western District of Michigan to quiet title to the escrowed proceeds. The District Court granted summary judgment to the Government. On appeal, the United States Court of Appeals for the Sixth Circuit held that the tax lien did not attach to the property under Michigan law and remanded for consideration of the Government's fraudulent conveyance claim. On remand, the District Court found that the conveyance itself was not fraudulent but that the use of nonexempt funds to pay the mortgage constituted a fraudulent act, and it awarded the IRS a share of the proceeds. The Sixth Circuit affirmed that determination on the lien issue as law of the case. The Supreme Court granted certiorari to consider whether Don Craft had a separate interest in the entireties property to which the federal tax lien attached.
View caseIda attempts to have Joseph killed to end her maintenance obligation. After Joseph's death, Ida claims exempt personal property from the estate. The court rejects any implied waiver of the allowance because her conduct does not clearly relinquish the statutory right.
Joseph A. Richardson and Ida Richardson divorced in December 1997. They executed a separation agreement providing that Joseph would pay Ida maintenance of $2,425.00 per month, terminating upon Ida’s remarriage or the death of either party. The agreement stated that its terms would not be subject to modification or change, regardless of the relative circumstances of the parties. The trial court incorporated the agreement into the Judgment and Decree of Dissolution and stated that maintenance was non-modifiable. In 2004 Joseph filed a motion to modify the judgment. In Count II he alleged that Ida sought out persons to burglarize his home, sought out persons to murder him, and attempted to hire a person to murder him. He further alleged that these acts breached the separation agreement, violated public policy, committed criminal acts, and waived any claim to maintenance. The trial court dismissed Count II with prejudice for failure to state a claim upon which relief can be granted. The dismissal order was certified as a final judgment and order under Rule 74.01(b). Joseph appealed the dismissal. The Eastern District Court of Appeals transferred the matter to the Supreme Court of Missouri.
View caseYes. The allowances are independent entitlements and are not charged against the elective-share amount. A surviving spouse may therefore obtain both the fractional share of the augmented estate and the fixed exempt property allowance without reduction of one by the other.
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Yes. An individual who feloniously and intentionally kills the decedent forfeits all benefits under the probate article, including exempt property. The estate then passes as if the killer had disclaimed the interest.
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The waiver is unenforceable. A surviving spouse may avoid a signed agreement by proving that consent was involuntary or the product of duress, even though the agreement requires no consideration to be valid.
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Rights to exempt property for a decedent who dies not domiciled in the state are governed by the law of the decedent's domicile at death.
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Yes. Unless the agreement provides otherwise, a complete property settlement entered into after or in anticipation of separation or divorce waives all rights to exempt property.
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…played in "creating and defining" property interests. By erasing the careful line between state laws that purport to disclaim or exempt property interests after the fact, which the federal tax lien does not respect, and state laws' definition of property and property rights, which the federal tax lien does respect, the Court does…