Law School Case Brief
Warren v. Compton - 626 S.W.2d 12 (Tenn. Ct. App. 1981)
The following factors are to be considered in determining the fraudulent intent of the donor-spouse: 1) whether the transfer made without consideration, 2) the size of the transfer in relation to the total assets of the donor-spouse, 3) the time between the transfer and the death of the donor-spouse, 4) the relation which existed between the husband and wife at the time of the transfer, and 5) the source from which the property came. However, a court does not limit its considerations to those factors alone. All facts and circumstances surrounding the transfer must be considered.
A widow sought to set aside transfers of personalty made by the decedent to his girlfriend and to his daughter before his death. The chancery court held that the decedent's transfer of personalty to defendant girlfriend of the decedent (girlfriend) was valid, and ordered the decedent's transfer to the daughter be set aside as an illusory transaction.
Were the two transfers valid?
The court affirmed the chancellor's judgment upholding the decedent's transfer to his girlfriend and reversed the chancellor's holding that the decedent's transfer to his daughter was illusory. The court held that his transfer of two notes to the daughter which she had given him in exchange for a loan he advanced to her for her husband's business was a completed gift aimed at settling family affairs, not an illusory transfer. Furthermore, the court affirmed the judgment as to the transfer to the girlfriend, holding that in consideration of all surrounding circumstances, the widow's strained relationship with the decedent did not establish a fraudulent intent on the part of the decedent where the decedent left to the widow in his will the exact interest she would have been entitled to under the law had he made no provision for her. The court also held that the transfer to the girlfriend was out of love and gratitude for her caring for him during his extended illness, rather than out of an attempt to deplete his estate to the detriment of the widow.
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