AUGUST 2, 1994 VOLUME 2, NUMBER 8
Some recent court cases of note to those caring for or working with elders:
Trust Not Changed by Divorce
Horace and Victoria Collins were married when Horace prepared his living trust. He left half of his separate property to his wife and most of the rest to his grandchildren. Later, the couple divorced. Horace died without changing his living trust.
Arizona’s statutes provide that, when a person divorces, his will is automatically modified to disinherit his former spouse. He may choose to change his will after the divorce, and may even leave property to his “ex”, but until he makes a change or renews his will, the law will effectively rewrite his will.
Horace’s grandsons argued that the same provision should apply to living trusts. By their logic, Victoria would be “written out” of Horace’s trust, on the assumption that Horace would have done the same thing himself if he had gotten around to it.
The Pima County Superior Court Judge disagreed. He ruled that the statute on revising wills applies only to wills, and not to living trusts. Some evidence existed that Horace intended to leave Victoria in his trust, even after the divorce, but the judge ruled that Horace’s intentions need not be demonstrated. In re: Horace Collins Revocable Trust, August, 1994.
[Effective January 1, 1995, a new Arizona law will change this rule. In addition, life insurance benefits and other beneficiary designations will be automatically changed by divorce–Ed.]
Trust Invalidated Despite Attorney’s Involvement
Agnes Rick was already suffering from dementia when her husband of fifty years died in 1990. Afterwards, neighbors helped her with meals, transportation and bill-paying. One of those helpful neighbors was stockbroker John Sailer, Jr.
In 1992, Ms. Rick conveyed a large parcel of land to a corporation owned by Sailer. He also took her to an attorney who, at his suggestion, prepared a living trust and power of attorney naming Sailer as fiduciary and giving him an option on her home at a below-market price.
Ms. Rick’s niece brought a conservatorship proceeding, alleging that Mr. Sailer was taking advantage of her. The attorney who prepared the documents, along with his associate and his secretary, testified that Ms. Rick knew what she was doing. The Delaware trial judge rejected their testimony, while indicating that he did not doubt that the witnesses genuinely believed they had carried out Ms. Rick’s wishes at the time.
The judge noted that the drafting attorney was not Ms. Rick’s regular attorney, but was selected by Mr. Sailer, and that he did not know about her medical history, family background, failing memory or dependence on others. Had the lawyer known, the judge said, he surely would have asked more detailed questions. In the Matter of Rick, 1994.