Posts Tagged ‘notary public’

Notarized Will Fails for Lack of Witnesses

MAY 16, 2016 VOLUME 23 NUMBER 19

Frankly, we are surprised by the number of cases we see in which wills are improperly prepared or signed. The rules governing wills are not really that complicated, and it should be pretty straightforward to comply with them. The cases we see mostly involve people who want to save a couple bucks, and so do their estate planning themselves — who needs legal help to handle those simple rules, right? Except that they keep making mistakes.

One basic rule (there are exceptions, but let’s get the rule straight first): a will needs to be in writing, signed by the person whose will it is (the testator), and witnessed by two people who see the testator signing the will. Ideally, the witnesses should both be in the room together with the testator and sign the will immediately.

So-called “holographic” wills can also be valid in Arizona, so long as they are actually in the handwriting of the testator (and signed). No witnesses are required on a holographic will. Still, we wonder why anyone would rely on this type of will, when it is probably not very difficult to rustle up two witnesses.

Does a will need to be notarized? No. In fact, notarization does not help with the witness requirement, so a will with one witness and a notary is not valid (in Arizona — other states may be different). The notion that the notary makes a will “official” in some way is a misguided one.

Arizona has a case that many might consider surprising, in which a witness signed the will after the testator’s death. Understand that the witness was present when the will was signed, and when another witness signed, but simply did not put pen to paper until the problem was pointed out in probate proceedings. The Arizona courts ruled that the delayed signature was permissible, and the will was valid.

That Arizona case is the background for a Washington will contest concluded last week — with a different outcome. It involved a Washington resident (we’ll call him Ben Hamilton) who spent his winters in Arizona. He had a valid will, signed in Washington in 1988, and a valid codicil, signed (again in Washington) in 1999. They left everything to his brother.

In 2011, when Ben was 77, he had heart surgery in Washington. After the surgery he went to live with his brother, but soon was eager to leave. He contacted friends in Arizona, and two of them drove to Washington, picked Ben up, and took him to Arizona.

While in Arizona, Ben prepared a new will. He and one of his friends went to the office of a local notary public, and Ben signed the will in front of the notary and his friend. The notary signed and applied her notary stamp; the friend did not sign.

Five days later, Ben committed suicide. Back in Washington, his brother filed the 1988 will and 1999 codicil with the probate court. Ben’s Arizona friends tried to figure out what to do with the new will Ben had signed. They sent it to a lawyer in Washington, asking for advice about whether it could be filed with the probate court there.

After the Washington lawyer found the Arizona case on late witnessing, the friend who had actually been present for the signing went to Washington, signed the document as a witness and left it for submission to the Washington court. The lawyer filed it, arguing that it revoked the 1988 will and 1999 codicil.

Ben’s brother moved for summary judgment, arguing that the purported will would be invalid under Arizona law because a notary is not a “witness” in the context of will signing. Although that is a correct statement of Arizona law, the Washington probate judge at first denied the motion. Then Ben’s brother argued that the will should be evaluated under Washington law, and the probate court agreed. The challenge to Ben’s 1988 will and 1999 codicil was dismissed.

The Washington Court of Appeals agreed with the probate court. Since Ben’s friend was actually in Washington when she signed as a witness, ruled the appellate court, and since that was the final step necessary to make it a valid will, it had been executed in Washington. Under Washington law, the late witnessing would be ineffective, and the “will” was not valid. Estate of Hook, May 9, 2016.

Although the Washington court might not have been familiar enough with Arizona law to be comfortable ruling on the validity of the document in Arizona, the outcome would have been the same. Even though Arizona has permitted witnesses to sign even after the death of the testator, Arizona has also ruled that a notary is not a witness, or at least not when they sign using their notarial authority and seal. The notarial act, according to the Arizona courts, is different from witnessing — it is just a determination that the signer is who they claim to be, not an affirmation that they intend the effect flowing from signing the document. So Ben’s will would have been invalid even if Arizona law had been applied.

But that begs the question: why didn’t Ben just get some competent legal advice? Just because a notary public signs legal documents it does not follow that they know the rules for preparing or witnessing a will. Presumably Ben had some specific things he wanted to accomplish when he prepared and signed his new document. Was it not important enough to get some legal advice about how to make it work?

Obviously Ben was under a lot of pressure and, probably, preoccupied. Still, he did not accomplish what he seems to have wanted, and it would have been easy to do so. His story is cautionary — on a number of levels.

Disinheritance of Adult Child With Disabilities Leads to Lawsuit

OCTOBER 21, 2013 VOLUME 20 NUMBER 40

Suppose you have two children. Your daughter is very capable, very mature, very responsible. Your son has a developmental disability, or a drinking problem, or just problems handling money. What should you do with any inheritance you leave to your son? Put it in a trust? Make your daughter trustee?

Again and again clients tell us that they don’t want to do that. It seems like a lot of fuss, and probably the son whose inheritance goes into a trust will feel injured, like maybe his parents have said they don’t trust him, or don’t value him. Can’t you just leave everything to your daughter, and tell her to be sure to take care of her brother? Won’t that work?

No.

That’s essentially what Howard Kaufman (not his real name) decided to do. By all reports Howard was very strong-willed and domineering. He had a living trust, written in 2002, which divided most of his estate equally between his two daughters. He named his daughters as successor co-trustees.

Howard’s older daughter, Diane, was blind, diabetic and receiving Social Security Disability benefits. His younger daughter, Jackie, was a successful business woman.

In 2009, Howard decided to change his trust’s terms. He called a meeting with Jackie and his long-time girlfriend (Diane was not included); he arranged for a notary to be present. He told the three of them that he had changed his mind, and that he was going to disinherit Diane. He told Jackie that it would be her duty to see that Diane was “taken care of” with the inheritance she was to receive. Then he had the notary prepare amendments to his trust removing Diane as a beneficiary.

When Howard died, Diane was surprised to learn that she had been left out of his estate plan. Nonetheless, she turned to her sister to continue the pattern Howard had set of helping out so that she could live on her Social Security and disability insurance payments. Jackie declined to continue his pattern of gifts; she insisted that her father had left her his estate (of approximately $4 million) to “do with as I will.”

Diane ended up suing her sister. The theory of her lawsuit, though, was unusual. Rather than arguing that the trust change was invalid, or that Jackie had unduly influenced their father, she sued for a breach of contract. Her theory: Jackie had promised to take care of her, and it would take about $2 million over her lifetime to do that. She also claimed that Jackie had taken advantage of both their father (a vulnerable adult) and Diane (a dependent adult).

The jury in Diane’s case found that Jackie had broken her promise, and had taken advantage of Diane. The jury awarded actual damages of $1.4 million, plus punitive damages of $260,000 and attorneys fees of another $700,000. The jury also ruled against Diane with regard to the vulnerable adult claim — it found that Jackie had not taken advantage of their father. Jackie appealed the judgments against her.

The California Court of Appeals upheld the verdict. It ruled that Diane’s lawsuit was not a disguised trust contest, and that it was not inconsistent that they found Jackie had exploited Diane but not their father. One of the main issues: whether Diane was entitled to a jury trial on her claim. The appellate court ruled that she had, and that Jackie’s promise to take care of her sister was an enforceable contract. Kalfin v. Kalfin, October 15, 2013.

What is the lesson to be learned from Howard’s trust case and his daughter’s lawsuit? There are several, but two key ones jump out:

  1. Disinheriting your child with disabilities and relying on another child to “take care of” them is not a reliable way to handle division of your estate. It might work, but there are real risks — and the cost and family disharmony resulting from litigation is almost certainly worse than what would be involved in simply setting up a trust for te child with a disability.
  2. Do you have a child with a disability? A complicated estate? Uncommon wishes? Talk to a lawyer. A notary public is not going to be the best choice for drafting your estate plan. The cost of doing it right will be way, way less than the cost of dealing with the aftermath.

 

Will Rejected in Illinois but Approved by Indiana Courts

JANUARY 30, 2012 VOLUME 19 NUMBER 4
We are frequently surprised by how much trouble people cause for their families and heirs by not taking simple steps to properly plan for their estates. One thread that often recurs involves a fear (or perhaps disapproval) of lawyers, leading to failure to get good legal advice about planning, or about the execution of documents. This week we read about a different reaction, but with the same result. Florian T. Latek didn’t trust notaries.

Mr. Latek owned a small family farm in Indiana, but he lived (and owned real property) in Illinois. In 2009, with the help of a non-lawyer friend, he wrote a letter to the lawyer for a local charity he favored. The letter began “This is my will” and it proceeded to direct distribution of his entire estate to that charity and other recipients. Then he prepared four identical copies of the document, and signed each one.

Apparently Mr. Latek realized he should have the documents notarized, but he wrote that he did not trust notaries; instead, he included his Army serial number with the note that he hoped it would “be good for any legal matters.” Then he had some — but not all — of the copies witnessed by friends, and he secreted one copy (one that had no witnesses’ signatures) behind (not in) a small safe at the Indiana farm. Less than two months later, Mr. Latek died.

Probate proceedings were begun first in Illinois. The Illinois courts initially determined that Mr. Latek had no will; later, when the friend who had helped prepare the document got in touch with the charity named in the letters, the unwitnessed version was found at the farmhouse. When the charity’s lawyer attempted to introduce that will in the Illinois courts, it was initially rejected because it did not meet the Illinois requirements for a will to be valid. Later a copy with witnesses’ signatures was located, but the lawyer could not produce the witnesses to testify about the signing of the letter in the time given by the Illinois court to prove the validity of the will. The result: the Illinois property would pass according to the law of intestate succession, to Mr. Latek’s cousins (he had no children).

Meanwhile, the charity’s lawyer filed one of the letters with the Indiana courts for admission as Mr. Latek’s last will. If admitted, it would control the distribution of the family farm. The personal representative appointed in Illinois objected, arguing that Illinois had already decided that the will was invalid and the Indiana courts were bound by that finding.

The Indiana probate judge disagreed. The will was admitted to probate in Indiana, and the lawyer for the charity was appointed to administer Mr. Latek’s Indiana estate.

The personal representative appointed in Illinois appealed in Indiana. He argued that the U.S. Constitution requires each state to give “full faith and credit” to the rulings of sister states; once the Illinois courts had rejected Mr. Latek’s letter as a will, according to this argument, the Indiana courts were required to adopt the same ruling. The Indiana Court of Appeals, however, disagreed with that argument, and upheld the Indiana probate court’s admission of Mr. Latek’s letter as his last will. Matter of Latek, January 4, 2012.

What does Mr. Latek’s estate tell the rest of us? A number of things jump out:

  • It just makes sense to get help with setting up one’s estate plan. Assuming that it will all work out, that one’s Army serial number ought to prove one’s wishes, or that notaries are unreliable are not good ideas when dealing with the legal effect of documents. It is touching to note that Mr. Latek also told the charity’s lawyer that he should “tell the judge that we were classmates and do the very best you can,” but that just makes it harder to understand why he did not consult with a lawyer he obviously knew and trusted. Would the lawyer have charged him? Of course. But his wishes might have actually been carried out, rather than two different proceedings with two different results.
  • Mr. Latek looks like a classic example of the kind of person who ought to be considering a living trust. Rather than relying on two different probate courts to come to the same conclusion, he could have transferred both his Illinois real estate and his Indiana real estate — along with all his personal property — to a trust that would have been governed by the law of one state or the other. Would that have cost him something to set up? Yes. It would also have permitted his estate to be managed and distributed in a coherent and effective way, at (ultimately) lower cost than two separate probate proceedings in Illinois and Indiana. That would especially have proven to be true when the cost of one appellate case is factored in. If you own real property in two different states, you should particularly pay attention to the outcome for Mr. Latek’s estate.
  • State laws vary with regard to the formalities of wills. Some states require notarization OR two witnesses. Some states permit unwitnessed wills to be effective, provided that they are signed and in the signer’s handwriting. But here’s a piece of news for do-it-yourself fans: ALL U.S. states would treat a will as effective if it has both two witnesses and a notary. Yes, some states require the signer, the witnesses and the notary to all have been together at the signing — so it just makes sense to do it that way at a minimum.

 

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