FEBRUARY 20, 2012 VOLUME 19 NUMBER 7
OK — you’ve signed your will and paid the big lawyer’s fee. Now you want to make a change. Do you know how to modify your will? Can you do it without incurring another fee? Shouldn’t it be easy to make the change?
All that might have been going through Donald Wolf’s mind when he made changes back in 2005. You see, he had written a clearly valid will in 1995. In it, he left half of his estate to a married couple who had been long-time friends. A quarter of his estate was to go to another friend, and the final quarter to a fund to assist AIDS patients. He named the wife of the married couple as his personal representative. Then he gave an unsigned copy of the will to the woman named as personal representative.
In 2005, when he was thinking about making a change, Mr. Wolf talked with the couple to whom he was leaving half of his estate. Then he took THEIR copy of his will, crossed out the bequest for AIDS patients and wrote that instead that quarter of his estate would be divided between two other friends. He dated and initialed the changes, but no one signed as witnesses. At some point — perhaps during that same meeting, but his friends could not clearly recall — he did the same thing on the signed original will, as well.
Was Mr. Wolf’s will amendment effective? We’ll give you a minute to think about it, and try to decide what you think. Wait — we’ll give you one more clue: the probate court decided that the attempt to amend his will was ineffective, and ordered that the AIDS fund was still a one-quarter beneficiary.
One of the two friends named in the hand-written amendment appealed the probate court’s decision, and the Arizona Court of Appeals reversed the finding. Arizona permits “holographic” wills and amendments; if the material provisions of a will are in the decedent’s handwriting, they do not need to be witnessed. The appellate court decided that Mr. Wolf’s amendment was a holograph, and that it should be given effect. Estate of Wolf, February 7, 2012.
Back to our original questions: assuming you want to change your will, does the Wolf case stand for the proposition that it is as easy as taking your original will out, scribbling the changes, initialing and dating (which Mr. Wolf did) and putting it back away? Emphatically, NO. Here are some reasons why you should NOT use Mr. Wolf’s method for changing your will:
You might live in, or move to, a state where holographic wills are not permitted. Not every state in the U.S. allows holographic wills and codicils, and they are disfavored in other jurisdictions — even in English-speaking countries, where the idea was once embedded in English law. Even where they are permitted the rules vary. It is never a good idea to rely on a holographic will, codicil or amendment.
Even if the handwritten notes are admitted as part of the will, the intent and meaning is usually subject to interpretation and confusion. Is it possible that Mr. Wolf was making notes about possible changes that he meant to discuss with his lawyer — but never got around to completing? Apparently not, but very slight differences in testimony can lead to significant differences in result.
Holographic documents are much more likely to result in litigation — and in delay and additional cost.
The cost of making changes in your will is usually surprising slight. Go ahead — ask the lawyer who prepared your will how much he or she will charge for making changes. You are likely to be surprised at the answer. Why would it be inexpensive? Because a significant part of the cost of preparing your estate plan comes from the time it takes to understand your assets, family situation, goals and intentions. Much of that has already been done, and so amending your will is likely to cost quite a bit less than the original cost of preparing the will. That is true even though most lawyers would rather simply write a new will than prepare an amendment or codicil.
There is a side benefit to meeting with your lawyer to amend your will. Laws change, your situation changes, the world changes — and your lawyer can point out things you ought to be thinking about in addition to the changes you want to make. In fact, you should be visiting with your lawyer once every five years or so — more if your situation is more fluid, or your assets are significant — just to see if you need to update documents.
NOVEMBER 21, 2011 VOLUME 18 NUMBER 40
Paternity testing has come a long way in the last few decades. You might reasonably think that it is now so easy to establish parentage that probate court disputes about the subject would be largely a thing of the past. If you thought that, you’d be wrong. Just ask Thomas Powell.
Mr. Powell’s experience in probate court began with the death of Oklahoma resident Valatus Merral Dicksion. Mr. Dicksion had been married, but his wife had died before him. He and his wife had two adult daughters. Mr. Dicksion left a four-page handwritten will, which originally had named one of his daughters as administrator of his estate. Someone had crossed out that portion of the will.
Mr. Dicksion’s brother filed the handwritten will with the probate court. He listed the two daughters as heirs, and described the will as being in his brother’s handwriting and signed by him. The court appointed him as personal representative.
A few months after the probate proceeding was initiated, Mr. Powell filed a petition seeking recognition of his status as a son of the decedent. He argued that the decedent had a relationship with Mr. Powell’s mother, and that his mother put him up for adoption shortly after his 1952 birth.
Mr. Powell and the decedent’s brother both agreed to DNA testing to see if paternity could be confirmed. The paternity testing results were conclusive: Mr. Powell was in fact the decedent’s biological son. The probate court then entered an order determining that he was an “unintentionally omitted” heir, and awarded him the same share of the decedent’s estate that he would have received if Mr. Dicksion had died without signing a will at all.
As the probate estate was wrapping up, Mr. Powell joined his half-sister in objecting to the validity of the handwritten will and sought removal of the decedent’s brother as personal representative. The probate court denied his objections and approved the final accounting of the estate. The probate judge also denied the personal representative’s request that Mr. Powell be ordered to pay the estate’s additional attorney’s fees incurred in responding to his requests.
Mr. Powell appealed to the Oklahoma Court of Appeals, which ruled (among other things) that the DNA testing should not have been used to determine paternity after Mr. Dicksion’s death — that paternity must be established before an alleged father’s death. Mr. Powell then appealed that result to the Oklahoma Supreme Court.
The state high court rewrote the outcome substantially in Mr. Powell’s favor. First, the justices decided that post-death paternity testing CAN be used to determine heirship, at least in Oklahoma. Then they ruled that an Oklahoma law preventing a decedent’s business partner from being appointed to administer an estate should have been applied to Mr. Dicksion’s brother. Finally, they ruled that the contest of Mr. Dicksion’s alleged will should have been formally resolved before the estate could be closed. In Matter of the Estate of Dicksion, November 15, 2011.
The decision was not unanimous. Of the nine members of the Oklahoma Supreme Court, five voted to uphold Mr. Powell’s paternity determination and four argued that prior Oklahoma court decisions should have been followed (which would have prevented the DNA tests from being used). The four dissenting justices did not address questions about the appointment of Mr. Dicksion’s brother as personal representative, or the status of the unresolved will contest.
Mr. Dicksion’s family situation and probate proceeding make for an interesting story. They also cast a little light on how probate contests can sometimes arise, and how resolution of disputes can be difficult and unclear (witness the 5-4 decision of the Oklahoma Supreme Court). It would be a mistake, however, to generalize too much from the result in this case.
All three parts of the Oklahoma Supreme Court holding are dependent on the peculiarities of Oklahoma law. The statute for determining paternity (and its effect on a will not mentioning a previously unknown child) is unusual in Oklahoma, and unlike that in Arizona. The prohibition on business partners being appointed as personal representative (unless mentioned in a will) is also unique to Oklahoma, and does not have an Arizona counterpart. Finally, Oklahoma is one of the minority of states which permits a “holographic” will to be valid (Wikipedia reports that 19 of the 50 U.S. states permit holographic wills — we haven’t checked that assertion, but it sounds about right to us). Arizona, like Oklahoma, does recognize holographic wills; in Arizona, a valid holographic will must have the signature and “material provisions” in the testator’s handwriting.
So what useful information is in the appellate decision in Mr. Dicksion’s probate case? Well, we might generalize a handful of principles:
Know the local law, and update your estate planning if you move. While we might not be too concerned about the possibility of unknown descendants in Arizona, Oklahoma law appears to be significantly different. Whenever a client moves to another state, we urge them to meet with a lawyer in their new state to see if there are differences in state law that they should be aware of. This is the sort of difference we sometimes see and always caution about.
Deal with contingencies in the planning documents, even if it seems unnecessary. If Mr. Dicksion’s will had included a provision that said “I intentionally omit any person not specifically named herein” (or similar language) would the result have been different? Perhaps not — but it might have strengthened the argument that an unknown child should not share in the estate. Of course, this is exactly why lawyers’ documents tend to be much longer and more complicated than non-lawyers think is absolutely necessary.
NOVEMBER 7, 2011 VOLUME 18 NUMBER 38
A woman has been diagnosed as suffering from dementia of the Alzheimer’s type, and she resides in an assisted living facility. She has short-term memory loss, is frequently forgetful and has difficulty with tasks like playing cards and operating her television set. Can she sign a new will?
That is the legal question posed by Clara Marsh’s will, which she wrote out in longhand and signed in 2006. Ms. Marsh died two years later, and her son and daughter ended up in a legal battle over whether the will was valid.
To be more precise, Ms. Marsh’s will actually presents two related but independent legal questions. First: was she competent to sign the will on the day she did? Second: if she was competent, did her son and daughter-in-law exert undue influence on her in connection with the new will?
A brief background is in order. Ms. Marsh had a 1996 will that left everything equally to her two children. When she moved into a condominium in 2003, she wrote to the children telling them that she intended to leave her new home to her son Richard. He had helped her with the purchase, and she explained to the children that she had placed her new home in joint tenancy (with right of survivorship) with Richard. She did not, however, sign a new will at that time.
In 2006 Ms. Marsh moved to an assisted living facility, and the condominium was sold. The proceeds from that sale then became a bone of contention between her son Richard and her daughter Elaine Grayson. Richard thought the proceeds should be put into an account in his and his mother’s names as joint tenants; Elaine insisted that the proceeds be placed in an account in Ms. Marsh’s name alone.
As the two siblings (and their respective spouses) debated how to handle the sale proceeds, Elaine’s husband John filed a guardianship petition. He alleged that Ms. Marsh had Alzheimer’s disease and dementia. Richard opposed the guardianship petition, and the relationship between the two couples deteriorated.
A month after the guardianship was filed Ms. Marsh prepared a one-paragraph will in her own handwriting. It said:
Because of all the legal problems Elaine and John are causing, I am afraid my final wishes will be ignored. To prevent this from happening, this is my new will: I leave everything to my son Richard and his wife Sam. I love you all very much.
This new will was witnessed by Ms. Marsh’s priest and the church secretary. She apparently did show it to Richard shortly after she signed it (he says he told her to “hide this someplace” and think it over), but she did not share it with Elaine or her husband John.
After Ms. Marsh’s death in 2008, Richard filed the handwritten will with the Ohio probate court. Elaine objected, arguing that (a) Ms. Marsh had been incompetent at the time of the will’s signing, and (b) Richard and his wife had exerted undue influence over Ms. Marsh to get her to disinherit Elaine. The probate court granted summary judgment to Richard, thereby dismissing the objections raised by Elaine.
The Ohio Court of Appeals agreed with the probate court on the first issue, but sent the dispute back to probate court for further proceedings regarding the undue influence count. Despite a diagnosis of dementia, and despite forgetfulness and confusion, the appellate court agreed that Ms. Marsh appeared to understand the things needed to make a valid will. She knew who her children (and in-laws) were, and even though she may not have known the precise nature of her assets she did understand what was involved with her estate. She knew she was making a will, and the effect of doing so. Summary judgment was appropriate on the question of her legal capacity to sign a will. Despite her limitations, despite her diagnosis and despite her living situation, she was able to make her new will.
But it still might be possible to show that she was subjected to undue influence, and the appellate court took pains to distinguish the two concepts. Undue influence, the court noted, is not the same as general influence — even “strong and controlling” influence. To be “undue,” influence must be so pervasive and effective as to result in the document reflecting the wishes of the influencer and not those of the signer. That is a high barrier for a will challenger to cross, but Elaine should be given a chance to introduce evidence to support her claim, ruled the Court of Appeals. In Re Estate of Marsh, October 28, 2011.
Other than the obvious (“don’t exercise undue influence over seniors”), what lessons can we take from Ms. Marsh’s story to guide our actions when working with seniors like her? We might submit a couple for your consideration:
Don’t forget that, while you and other family members dispute how best to handle the senior’s finances (or life), he or she may have some strong opinions and may actually feel affected by your decisions, arguments and tactics.
“Winning” may not be as important in family disputes as figuring out a way to get along. The cost of this particular dispute: thousands of dollars in legal fees, irreparable damage to family relationships and (and not least) psychic injury to the individual everyone was trying to protect.
Family disputes are sometimes about the best interests of a vulnerable family member, sometimes about dollars, sometimes about pride, and sometimes about control. In our professional experience, those last are often the most difficult ones to resolve.
SEPTEMBER 20, 2010 VOLUME 17 NUMBER 29
There is a lot of mythology, misunderstanding and just plain confusion about wills and probate. Sometimes the reported cases don’t help clarify what makes a will valid, when it is subject to challenge or even what might be a will.
The general rule is clear, and ancient. The Parliament of England adopted the Statute of Wills in 1540, and a version of its requirements can still be found in every U.S. state. One of the most important principles from the Statute of Wills: a valid will must be in writing, and must be signed by two witnesses. That is still the law in most common law jurisdictions, and it is certainly the law in Arizona.
But wait. Perhaps you have heard about “holographic” wills; they do not have to be witnessed at all. The basic rule in states which permit holographic wills (Arizona is one) is that the material provisions must be in the handwriting of the person, and signed. You can see those rules might amount to a lawyer’s field day — what are “material provisions,” and how are courts supposed to interpret the incomplete or even contradictory provisions of a handwritten document?
Then there are “nuncupative” wills. They are not permitted in Arizona at all, but some states allow them. They are oral statements of the wishes of someone on their deathbed. In states recognizing nuncupative wills, they may be limited to items of personal property like jewelry, small amounts of cash or even items with no economic value. You might (depending on which state you are living — and dying — in) be able to say “I want my dad’s pocket watch to go to Harry” but not “I want Harry to have my $100,000 T-Bill.”
The Uniform Probate Code, promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL) and adopted in 19 states (including Arizona) provides some new ways to let people express their wishes — and, arguably, to increase legal fees in some cases. Under recent amendments to the Uniform act, a will that is unsigned or not signed properly could still be a valid document if it can be shown by clear and convincing evidence that the individual intended it to be treated as a will. We should stop a moment to point out that although Arizona adopted the Uniform Probate Code back in 1973, the more recent revisions have not been adopted. Arizona still requires all wills (except holographic wills) to be witnessed by two people.
When might the new section of the Uniform Probate Code be useful? How about the sad case of Louise Macool, who died in New Jersey in 2008?
Mrs. Macool’s husband of forty years had died just a month before she made an appointment to see her long-time lawyer. She brought along a handwritten note to tell the lawyer what she wanted. Her old will left everything to her late husband’s seven children equally (she had no children of her own, but had helped raise his children). Her note said, cryptically, “get the same as the family Macool gets — Niece — Mary Rescigno” and some other changes she wanted to discuss.
Mrs. Macool explained the note to her lawyer. She wanted to add her niece, Mary Rescigno, to her will, along with another niece. While she was still in his office, the lawyer picked up his dictation equipment and dictated a will for her review and signature. Then she left the office to go to lunch; she would make an appointment to review the will after her attorney’s staff had transcribed it and he had a chance to review it for accuracy.
Sadly, Mrs. Macool never saw the draft will. Within the hour after she left her lawyer’s office she died.
The lawyer’s staff prepared the draft will, apparently not knowing of Mrs. Macool’s death. Relying on the Uniform Probate Code language, Ms. Rescigno then asked the probate court to admit the unsigned document as Mrs. Macool’s last will.
The probate court heard a day of testimony and argument, then declined to admit the draft document as a will. The probate judge agreed that Mrs. Macool’s intent in meeting with the lawyer was to change her will to include Ms. Rescigno, but decided that some sort of signature was required on the document.
The New Jersey appellate court agreed with the result, but not the reasoning. Requiring a signature on the document would make it essentially a duplication of the holographic will provisions, ruled the appellate judges. Mrs. Macool’s draft will could be admitted to probate if she had had a chance to review it and indicate that it reflected her wishes. Her handwritten notes, meanwhile, did not amount to a holographic will — they would need her signature.
The trial judge had declined to admit the draft document to probate as Mrs. Macool’s will, but he had agreed that Ms. Rescigno’s lawyer should be paid from Mrs. Macool’s estate. New Jersey’s probate rules expressly authorize payment of attorney’s fees for someone who “had reasonable cause” for even a failed contest. Ms. Rescigno’s lawyers had submitted bills totaling $34,433; the probate judge had cited his personal “policy reasons” in reducing the fee by about 15%.
Even though her lawyers had been unsuccessful the appellate court approved of the payment to Ms. Rescigno’s counsel. In fact, they reversed the probate judge’s reduction of the claimed fees. According to the appellate court, there was no indication that the hourly rates were unreasonable our out of line with prevailing rates, or that the claimed hours were not actually worked. In Re Probate of Alleged Will of Macool, September 16, 2010.
In 1978, shortly after his mother’s death, Donald Gilbert wrote this note on a three-by-five note card:
“Dear Lillian, 11-27-78. I’ve been very depressed—I can’t stop crying for Mom—in my death I’ve left everything to you and the children. Don’t be angry with me. Love, Don.
Mr. Gilbert died seventeen years later. His cousin Lillian Miller claimed that the note was a will, and that she and her children should inherit his estate.
California, like Arizona, recognizes “holographic” wills. A holographic will is one substantially (or, as in the case here, entirely) in the individual’s handwriting and signed by the individual. While wills usually must be witnessed by at least two persons, holographic wills do not require any witnesses. If Mr. Gilbert’s note card was a will at all, it would be valid under California law.
As is usually the case, of course, the facts were more complicated than that. After Mr. Gilbert’s death Ms. Miller had secured appointment as administrator (what in Arizona and many other states would be called “personal representative”) and had handled the estate for two years. During that time she had misused Mr. Gilbert’s funds; the probate court ultimately ordered her to repay $837,525. If she and her children were the sole devisees, however, her misuse of funds probably would not cause her any problems.
The probate court determined that the note was in Mr. Gilbert’s handwriting. One friend testified that Mr. Gilbert had said he had prepared a will; another friend swore that Mr. Gilbert had said the exact opposite. Considering all the evidence, the probate court decided that the note card was Mr. Gilbert’s last will and that Ms. Miller and her children should inherit the entire estate.
The California Court of Appeals disagreed. For the appellate court, the key question was whether Mr. Gilbert intended the note card to be a will. It would not be enough, said the court, just to determine that the note reflected what Mr. Gilbert intended to do. The note referred to a past act when it said “I’ve left everything to you….” In that case, the note was not itself a will, even though it was in Mr. Gilbert’s handwriting and signed by him.
Since no other will could be found, and there were no children or spouse surviving, Mr. Gilbert’s estate went to his cousins—including Ms. Miller, but also including several others. It is unclear how much money remains in the estate, or how much Ms. Miller will have to repay. Estate of Gilbert, October 16, 2003.
Christel McPeak thought she had done her estate planning properly. She had hired an attorney, reviewed drafts of a will, durable power of attorney for financial purposes and health care directive, and she had approved the drafts. Then she went to her lawyer’s office and signed the final documents, just like she was supposed to do. Trouble was, the lawyer forgot to have her sign the will.
Part of the problem may have been that Ms. McPeak’s lawyer was in the habit of having his clients sign multiple original documents. In fact, Ms. McPeak signed four original living wills and designations of her health care agent, and three original financial powers of attorney. Each of those documents was witnessed and notarized, and even the will itself (though unsigned) had witness and notary signatures. All of that signing, and the shuffling of paper to Ms. McPeak, the witnesses and the notary, appeared to have been the only reason that she did not sign her will.
Ms. McPeak’s unsigned will would have left her estate to her niece, Bonnie Allen, and others. If she died without a will, her estate would pass according the Florida’s law of “intestate succession,” and her half-sister Margarete Dalke would receive a share. That set up a will contest between Ms. Allen and Ms. Dalk, and required the probate court to determine whether Ms. McPeak had a properly executed will.
English and American law has for centuries required that wills be properly signed and witnessed by the appropriate number (usually two) of witnesses. Ms. McPeak’s will, even though witnessed, did not meet that basic requirement. Ms. Allen argued, however, that by attesting to her “signature” Ms. McPeak approved the will, and it was clear that her oversight was just that. Even if the her name typed on the will form was not an adequate signature, Ms. Allen argued, it was clear that the will reflected Ms. McPeak’s wishes, and the court could order that its terms be carried out by imposing a “constructive trust” on the assets and ordering that they be distributed in accordance with the will.
The probate court agreed with Ms. Allen’s arguments and ordered that the estate be distributed in accordance with Ms. McPeak’s “will.” Her half-sister appealed, and the Florida Supreme Court reversed the probate court’s determination and ordered that Ms. McPeak had died without leaving any will. Even though her intentions may have been clear, Ms. McPeak did not properly sign her will. Allen v. Dalk, August 29, 2002.
Arizona also requires strict compliance with the requirements for execution of a will. Except for “holographic” wills (those in the testator’s handwriting and signed by the testator), all wills must be witnessed by two individuals. Failure to comply, even accidentally, makes a will invalid.
Question: How do Arizona laws differ from other states with regard to durable powers of attorney, health care powers, living wills and trusts?
Answer: In most respects, Arizona law is comparable to other states. A will or trust written in Arizona will usually be valid in every other state, as well. A will or trust valid in the state in which it was executed will be honored in Arizona.
The most important technical requirement for wills is that they be witnessed by two persons. Those witnesses must actually see the testator sign, or at least be present when he or she confirms the signature. That technical requirement is inherited from English law predating colonization of America, and so the requirements are very similar in most states.
One area of concern: Arizona recognizes “holographic” wills and some other states do not. A holographic will is one substantially in the handwriting of the testator and signed by him or her, but without the usual witnesses. Even though another state may not recognize holographic wills, a valid Arizona holographic will might be admissible in that other state.
Durable powers of attorney (and health care powers) are a more diverse issue. Every state now has some version of the Uniform Durable Power of Attorney Act, but specific requirements vary. Arizona, for example, has recently adopted a requirement that such powers be witnessed andnotarized; most other states do not require the extra step. Consequently, an out-of-state power of attorney is likely to be insufficient under Arizona’s new law.
Health care powers of attorney are specifically recognized in most, but not all, states. Specific requirements vary from state to state, as do questions about the duration of the powers, when they become effective and how they may be revoked. Anyone with an out-of-state health care power of attorney should be encouraged to execute an Arizona-specific version.
Send your legal questions to us for future discussion in Elder Law Issues.
Divorce Changes Beneficiary Status
Previous Elder Law Issues have discussed the various changes made to laws governing wills and inheritances by the Arizona legislature last year. Now securities, insurance and banking industry representatives are beginning to take note of some of the more subtle changes.
One example: effective January 1, 1995, any life insurance beneficiary designation naming a spouse or some relatives of a spouse will be revoked by divorce. This makes good sense in an orderly world, but most people refuse to live according to anyone else’s sense of order.
A recent letter to all Arizona agents for Northwestern Mutual Life points out the pitfalls inherent in this legislative change. According to Northwestern’s analysis, failure to make the necessary changes after divorce might even result in gift tax consequences or income taxation of proceeds (which are ordinarily exempt from income taxation). The moral: review all the effects of divorce while the legal issues are still fresh.
