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Factual Background:

Beneficiaries, who were awarded real property under testator’s will and who were in physical possession of property during administration of estate, filed claim against estate to recover insurance proceeds and cost of repairs.

Mrs. Shaw owned 320 acres in Clinton County on which the McKowns ran a cattle operation. Mrs. Shaw died in July 2003 and devised all 320 acres, the two houses, and various farm buildings to the McKowns. The remaining estate assets, including real estate in Holt County, as well as stocks and bonds inventoried at $1,400,000, were bequeathed to the Shriner’s Hospital for Children and the St. Jude Children’s Research Hospital.  Two days after Mrs. Shaw died, the independent personal representative of her estate, Wesley Troutt (“the Independent Personal Representative” or “IPR”), contacted the McKowns and informed them of the devise. He told them that the Clinton property “was theirs to do with as they saw fit,” and they “could move in or remodel the [main] house.” A potential claim arising from the Holt County real estate, and unrelated to the Clinton property, required that the estate remain open indefinitely. The Clinton property, or some part thereof, might have been required to defray the costs of estate administration, to pay for federal or state estate tax liabilities, or to pay possible estate obligations arising from the pending litigation in Holt County.

Although not required under the will or by law, the Independent Personal Representative agreed to maintain insurance and pay property and personal taxes and utilities on the Clinton property during probate of Mrs. Shaw’s will. At the date of Mrs. Shaw’s death, the McKowns were already in possession of the keys to the main house as well as the home and buildings they had been renting. At all times during the estate administration, the McKowns lived and operated their business on the property.

Shortly after the decedent’s death, the McKowns requested that the IPR make repairs to the main residence and other parts of the farm.  The IPR declined.  In September 2004, the IPR informed the McKowns by letter that the property was transferred to them from the estate of Pauline Shaw and that the estate would no longer pay the utilities, taxes, or insurance on the property. In January 2005, the McKowns made the present claims for reimbursement against the estate totaling $44,458 for repairs to the property. They also demanded the insurance proceeds arising from damage to the property after a storm in 2004. The McKowns received a deed to the property in February 2005.

Held:

Following a bench trial, the Circuit Court, Clinton County, Paul T. Luckenbill, Jr., J., denied claim. Beneficiaries appealed.

On Appeal:

The Court of Appeals, Harold L. Lowenstein, J., held that:

(1) independent personal representative (IPR) did not take possession of real property devised to beneficiaries, and (2) beneficiaries’ repairs and improvements were not necessary to preserve or protect estate assets.  Affirmed. To hold testator’s estate responsible for cost of repairs that beneficiaries undertook regarding real property devised to beneficiaries, beneficiaries were required to show both that independent personal representative was in possession of property and that repairs were reasonably necessary to preserve property. Independent personal representative (IPR) did not take possession of real property devised to beneficiaries under testator’s will and thus could not be charged with preservation and maintenance of property; beneficiaries had physical possession of property during entire estate administration, IPR never requested keys to main house or blocked beneficiaries’ access to property, and beneficiaries never consulted with IPR about repairs and improvements after inquiring whether estate would pay for repairs to main house’s roof. V.A.M.S. § 473.803.

Upon death of a property owner, both title and power of control of real property goes directly to the heirs or devisees, and the executors have no concern with it. Under statute governing independent personal representative’s right to decedent’s property, a devisee holds the property subject to possession by the personal representative if the personalty proves insufficient and the devised real property is required to defray administration expenses, claims, or taxes. V.A.M.S. § 473.260.

Under a supervised administration, the personal representative of an estate cannot obtain possession of real property in the hands of a devisee for estate administration purposes without a court order. V.A.M.S. § 473.263. Personal representative of an independently administered estate does not require a court order to take possession of the real property if the property is required for estate administration. V.A.M.S. § 473.263. If the independent personal representative does not act to take possession of real property from devisee or communicate that he is taking possession, then possession remains in the hands of the devisee. V.A.M.S. § 473.263.

Even if the McKowns could establish that the IPR had taken possession, or even constructive possession, of the real property, the record was replete with sufficient evidence from which the probate court could conclude that the repairs, and proposed repairs, were never necessary to preserve or protect the estate’s assets.