Missouri couple's $895,000 trust dispute ends as court backs medical trust

A Missouri couple who had been married for 47 years divided their nearly $895,000 joint trust equally in September 2021, after the husband promised that his separate $505,000 retirement account would cover his wife's extraordinary medical expenses if he died first. But when he was killed in a car accident barely two months later, the widow discovered that she was not named as a beneficiary of the account.

A subsequent legal battle over the unwritten promise reached the Missouri Court of Appeals, which on November 10, 2026, upheld a court-created medical trust funded with $505,000 from the husband's estate. In its ruling in 'In the Matter of Ray Bergfeld, Deceased' (ED113884), the Missouri Court of Appeals affirmed the lower court's decision to protect Mary Alice Bergfeld's access to money for major and traumatic medical expenses, while rejecting her request for broader access to the retirement funds.Couple divided nearly $895,000 joint trustMary Alice and Ray "Buzz" Bergfeld had been married for 47 years and had children from previous marriages.

They maintained separate individual retirement accounts (IRAs) and revocable living trusts to ensure their respective estates would eventually pass to their own children. However, they also established a joint trust in 2006 to provide financial security for both spouses during their lifetimes. By September 1, 2021, the trust held $894,638.75 in a Morgan Stanley account.Buzz wanted to divide the money so he could pass his share to his children while he was still alive.

He initially proposed that he receive 60% and Mary Alice 40%, but she rejected the arrangement. After several rounds of negotiations, he eventually offered an equal division.As part of the agreement, Buzz told his wife that if he died first, his son Bob would manage his approximately $505,000 IRA and use it to pay for her extraordinary medical expenses. Any money left in the account after her death would go to his children.Mary Alice agreed to the 50:50 division.

On or around September 10, 2021, the couple withdrew the assets from the joint account, divided them and terminated the trust.Husband died before IRA arrangement was implementedUnknown to Mary Alice, Buzz had begun consulting an attorney in April 2021 about dividing the joint trust. His financial adviser had referred him to the lawyer, and some of Buzz's children attended meetings.

The judgment noted that Buzz asked his attorney to send legal bills to his daughter Mona's home rather than the marital residence so that Mary Alice would not know he had hired legal counsel. He also took his wife's individual estate-planning documents from a safety deposit box without her knowledge and gave them to his attorney.His lawyer reportedly suggested preparing a postnuptial agreement to document the arrangement, but Buzz instructed him not to proceed because he believed Mary Alice would not accept its terms.On November 22, 2021, Buzz died in a car accident.

When Mary Alice subsequently asked his son Bob about the IRA, she was told she was not listed as its beneficiary. She later filed a lawsuit against her husband's estate, alleging fraudulent and negligent misrepresentation over the promise concerning the retirement account.Court limits access to major medical expensesIn May 2025, the trial court ruled that Buzz had negligently misrepresented the arrangement because he failed to exercise reasonable care in making the promise without putting a plan in place to fulfil it.

However, it did not find sufficient evidence that he knowingly made a false promise, which was necessary to establish fraud.The court created an equitable trust funded with $505,000 from Buzz's estate. It restricted the money to major and traumatic medical expenses, including hospital treatment, prescription medicines, rehabilitation, medically necessary equipment and long-term care.

Mary Alice appealed, arguing that the money should also cover her general support and that the trust should have taken effect from the date of Buzz's death rather than the 2025 judgment.The appellate court rejected both arguments. It noted that Mary Alice's own income and assets were sufficient to meet her living expenses, even after several hospitalisations and her move to assisted living.

At the time of trial, she was 91 years old, earned approximately $100,000 annually and had assets exceeding $1.5 million.The court also rejected her claim of fraudulent misrepresentation, noting that testimony from her daughter supported the finding that Buzz had promised to speak to his son about managing the IRA in the future, rather than claiming that he had already done so.The estate also challenged the negligent misrepresentation finding, arguing that the couple's private financial discussions did not constitute a business transaction.

However, the appellate court held that the management and division of their joint trust, involving financial advisers and legal professionals, qualified as a transaction in which Buzz had a financial interest.The Missouri Court of Appeals ultimately affirmed the lower court's judgment, preserving the $505,000 medical trust for Mary Alice while ensuring that any remaining funds after her death would pass to Buzz's children.You use AI every day.

Now get your AI Quotient. Take the AIQ test.