9 www.loubar.org March 2026 William F. McMurry is Board Certified as a Legal Malpractice Trial Specialists by the American Board of Professional Liability Attorneys (ABPLA.org). The ABPLA is accredited by the ABA to certify specialist in the field of Legal Malpractice – SCR 3.130(7.40). William F. McMurry will personally handle each case while some services may be provided by others. Email [email protected] Call 502-326-9000 Talk to us about LEGAL MALPRACTICE And learn why lawyers throughout Kentucky refer their legal malpractice cases to William F. McMurry & Associates, PLLC Building referral relationships based on confidence and trust. Elizabeth Monarch MBA, CAI, CRI Auctioneer/Realtor 2023 KYR Realtor State President Lonnie Gann GRI, CAI Auctioneer/Realtor 502.551.1286 auctionsolutionsllc.com Real Estate & Auction Specialist Providing Real Estate & Auction Services: • Estate Liquidation • Senior Living Transitions • Divorce Property Settlements • Business Liquidation • Real and Personal Property Evaluation Serving all of Kentucky and Indiana Court Applies Constructive Trust Doctrine to Pass Family Farm to Sole On-Farm Heir John R. Cummins and Garret B. Stone The Kentucky Court of Appeals recently ruled that a family farm in Marion County, Kentucky would pass to the one child of the family who had stayed on the farm, farmed it jointly with his father for many years, and then worked the farm by himself and paid all the farm expenses after the father retired in 2005 and until both parents died. This rul- ing was made even though the parents had deeded the farm to the five children equally with a retained life estate for their joint lives. Peterson v. Peterson (Ky. Ct. App. 12/5/25) (opinion not final). The parents, Eugene and Barbara Peterson, had acquired the farm in 1968, taking title as joint tenants with right of survivorship. They lived on the farm and ran it. Of their five children, only son Doug stayed on the farm after high school and helped his father run the farm. Eugene retired from farming in 2005, and Doug began running the farm by himself and paying all farm expenses, including taxes and insurance. In 2012, the parents decided to transfer the farm. The whole family acknowledged that the conveyance was made “for the sole, over-arching and expressed purposed to protect the family farm from being sold, divided or otherwise en- cumbered” due to the parents’ medical debt. The parents transferred the farm equally to all five of their children, while retaining ownership of the farm for their joint lives. The children paid nothing for this transfer; it was a gift from the parents. Evidence also was introduced that the whole family understood and agreed that the parents remained the equitable owners of the farm, so that the children were obligated to return ownership of the farm to the parents at any time on the parents’ request, or to transfer the farm to any of the children if the parents so chose. Eugene died in 2015, and son Joey began expressing reluc- tance to honor his parents’ plan to transfer the entire farm to Doug at Barbara’s death. To ensure that Doug would receive the farm upon her death, in 2016 Barbara wrote a codicil to her will directing that each of her four off-farm children convey his or her one-fifth interest in the farm to Doug for $50,000 apiece upon Barbara’s death. Later, four of the five children testified to their understanding that the conveyance of the off-farm children’s farm interests to Doug was already required without any payment by Doug. After Barbara’s death in 2021, Joey sued to force the sale of the farm and receive his one-fifth of the sale proceeds. Joey asserted that his monetary interest in the farm, if sold, would far exceed $50,000, and that his siblings, none of whom joined him in the suit, were “stupid” for agreeing to sell the farm to Doug for far less than it was worth. Doug countersued to impose a constructive trust on Joey’s one- fifth share of the farm, in order to comply with his parents’ intent that Doug receive the farm. Given the confidential relationship between the parents and their children and the lack of any consideration paid by the children for the remainder interest in the farm their parents gave them, the court found that imposing a constructive trust on the farm was the appropriate equitable remedy here. Under this legal doctrine, grantees who are in a confidential relationship with the grantors and who have paid nothing for the transfer must comply with the wishes of the grantors. After Joey’s initial agreement to convey his farm interest as his parents requested, his refusal to do so later rendered his initial promise fraudulent. As a result, the court imposed a constructive trust on the entire farm in favor of Doug, while requiring him to make the remaining $50,000 purchase pay- ments to each of his siblings for their one-fifth farm interests. The Court of Appeals ordered the opinion to be published, to further support the application of the constructive trust doctrine as had been announced in at least two prior opin- ions of the Kentucky Supreme Court. From the planning standpoint, the parents might better have conveyed the remainder interest in the farm to Doug alone upon the surviving parent’s death. They could have com- pensated the other children with cash bequests in the surviving parent’s will. Partner John R. Cummins and Managing Associate Garret B. Stone are based in Den- tons’ Louisville office. John is a member of the firm’s Trusts, Estates, and Wealth Pres- ervation group, and Garret is a member of the firm’s Commercial Litigation group. n
