Friday, August 15, 2014
Valid beneficiary designations require contractual capacity. In Ivie v. Smith, No. SC 93872, 2014 WL 3107448 (Mo. July 8, 2014), the Supreme Court of Missouri en banc held that Missouri’s Non Probate Transfer Law, which invalidates a beneficiary designation procured “by fraud, duress or undue influence,” does not abrogate the common law of contracts requiring contractual capacity to make a beneficiary designation. This consequently affirmed the holding that the beneficiary designations in question were invalid. The holding abrogates In re Estate of Goldschmidt, 215 S.W.3d 215 (Mo. Ct. App. 2006), which held that the statute excluded incapacity as a means of voiding a beneficiary designation.
Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.