Employment Contracts and Minors

 On Thursday, the Mississippi Supreme Court decided Watercolor Salon, LLC v. Nealie Hixon located here.  Here, the Court found that the exceptions allowing minors age eighteen to twenty to enter into contracts for certain personal property did not apply to a noncompete agreement.  This was a very close case with four judges dissenting.    

Child Testimony in Custody Cases

 The Mississippi Supreme Court decided Denham vs. Denham on Thursday located here.  The Court reversed a custody case because the trial court excluded the testimony of the minor children.   The Court did an extremely detailed analysis of what is required for testimony of minor children to be admitted that is worth filing away.    

App of Interest

 Recently, I found a helpful app.    Google Lens is a free app that translates typed documents in other languages to English using your phone's camera.    It is useful if you are trying to go over documents that are in another language.   It is also useful if you happen to have a book in another language you are interested in.  

Divorce Planning

 I just wanted to throw this out there.    If someone is going through a divorce, the case should be approached from a divorce planning perspective.  What that means is how are the client's expenses going to change after the divorce is complete.    It is a whole new situation for both parties with income, new expenses, new living arrangements, etc.    This can make a huge difference in how a case for either side is portrayed by the trial court.

Cash Bonds vs. Bail Bonds in Mississippi

In Mississippi, you have the option to post a cash bond to get out of jail.   This means you will have to post the entire amount of the bond to the court. This means that if your bail is $10,000 then you pay the court, $10,000. If you (or the defendant you signed for) goes to all court appearances and abides by the rules the judge sets forth while on bail (no drinking, drugs, committing more crimes etc), then the full amount is returned. The pros of posting the entire cash bond is that you will get all your money back after trial. The cons is that you will have to wait months, maybe even a year or more to get your money back if the trial drags on.

If you cannot afford a cash bond, you may have to do a bail bond.  In Mississippi, the Department of Insurance regulates the bail bond premium at 10% of the bond or $100 whichever is greater. But, if the defendant lives outside the state or the felony is deemed to be serious (murder, rape,) then the premium is $15% plus a $50 processing fee.  The fees are set by Mississippi Code 83-39-25.   

Transfer on Death Deeds

The Mississippi legislature created statutory guidelines for “Transfer on Death Deeds” in Mississippi. SB 2851 was signed into law on June 29, 2020, by Governor Reeves and became effective July 1, 2020. The “Mississippi Real Property Transfer on Death Act” provides the requirements for using a transfer on death deed (“TODD”) in Mississippi.

What is a TODD?

A TODD is a legal document that transfers an individual’s interest in real property to one or more designated beneficiaries effective at the transferor’s death. The TODD requires the property owner (the “transferor”) to name a person (the “beneficiary”) to whom the property will automatically transfer at the death of the transferor. The creation and filing of a TODD does not impact the rights of the transferor while living. In other words, the transferor retains all rights and control over the property, including the right to sell, transfer, encumber, and use the property. A TODD does not change ownership of or rights to the property until the death of the transferor.

Who can execute a TODD? 

In order to execute a valid TODD, the transferor must have the capacity to make a contract. A TODD cannot be created through the use of a power of attorney, unless the power of attorney expressly authorizes it.

What can be transferred by a TODD?

Any real property in Mississippi may be transferred by a TODD.

What must be included in a TODD? 

A TODD must contain the essential elements of a recordable deed and must also state the transfer of real property to a designated beneficiary (or beneficiaries) is to take place at the death of the transferor. Unlike other deeds, there is no requirement that a deed be delivered to or accepted by the beneficiary. A TODD is effective if executed by the grantor and filed, without any action by or even knowledge of a beneficiary.

What must be done with a TODD?

In order to be effective, a TODD must be executed and recorded before the transferor’s death in the land records in the official records of the chancery clerk of the county where the property is located.  If the TODD is not recorded prior to death, it is not effective. 

Can a TODD be revoked? 

Unlike other deeds, a TODD is revocable. In order for a transferor to revoke a TODD, the transferor must file an instrument of revocation expressly revoking the TODD, or may execute and file a subsequent TODD that revokes all or part of the prior TODD either by expressly revoking or by inconsistency between the two TODDs. Any subsequent revocation must be recorded prior to the transferor’s death in order to be effective. A will does not revoke or supersede a transfer-on-death deed. If a transferor and a designated beneficiary were married when a TODD was created and subsequently divorce, the TODD is revoked only if the final judgment of divorce is recorded in the land records where the TODD is recorded prior to the death of the transferor.  The mere fact that a divorce occurred would not revoke the TODD.

What other rights are affected by a TODD? 

Certain property transfers can impact rights of a transferor.  Here is how a TODD may or may not impact the most common of these rights:

• A TODD does not affect the transferor’s right to claim the property as their homestead.
• A TODD does not affect any property tax exemptions afforded to the transferor (i.e. over 65 years old exemption).
• A TODD does not affect the rights of creditors of the transferor.
• A TODD does not trigger a “due on sale” or similar clause in a mortgage or other type of loan document.
• A TODD does not subject the property to claims of a creditor of the beneficiary.

Because a TODD does not transfer ownership of the property until the death of the transferor, the property receives a step-up in basis adjustment at the transferor’s death.

Since the TODD is not a completed gift until the death of the transferor, it is not considered a taxable event for the purposes of gift taxes.

What action must the beneficiary take at the transferor’s death?

At the death of the transferor, a beneficiary must record an affidavit of death in the deed records in order to become the legal owner of the property. 

What are the pros of a TODD? 

A TODD can be attractive as a means to transfer ownership of real property quickly and affordably without going through the probate process. A TODD allows the transferor to keep control over the property during his or her lifetime and allows the transferor to revoke the TODD at any time.

What are the cons of a TODD?

Because TODDs are so new, there is simply not very much law related to these instruments, which may lead to uncertainty for lawyers and clients alike. One potential downside of a TODD is the recording requirement for both the TODD itself and any revocation of the TODD. If a transferor fails to properly record the document prior to his or her death, it is ineffective and that could lead to unintended consequences at the transferor’s death. Another potential downside is that people may not understand the concept that a TODD trumps a will if both address the same property, which again could lead to unintended consequences is a TODD was executed in addition to a will. Finally, and probably most importantly, is that a TODD is subject to claims of creditors and estate taxes. Thus, before the designated beneficiary may rely on the deed, they must either probate the transferor’s estate or wait, in the case of claims of unsecured creditors, 3 years and 90 days, or in the case of federal estate taxes, 10 years.

Attorney's Fees for Contempt

On Tuesday, the Mississippi Court of Appeals decided Hunter v. Hunter located here.  I am not going to make many comments on it since it is my case and we are still debating a rehearing motion.   This is the first case I am aware of though that says the Chancellor has the discretion to deny attorney's fees when a party is found in contempt.