Posts Tagged ‘will contest’

Challenge to Will Leads to Further Problems for Stepson

OCTOBER 24, 2016 VOLUME 23 NUMBER 40
We often tell clients that they should think twice (or perhaps thrice) before challenging a will. It is difficult to prevail in a will contest, but there are also other problems. The will in question might have a provision that completely disinherits anyone challenging their reduced share. There may also be other repercussions, as evidenced by a story we read recently arising from a Wisconsin court case.

Bruce and Jenny (as we usually do, we’ve changed their names) married later in life, but lived together for over thirty years before Bruce’s death. Bruce had five children from his first marriage; Jenny was childless. They had identical wills, written about a decade after they married. Each left their entire estate to the other, and on the second death everything would go to Bruce’s son Larry.

Their wills also contained a routine provision, requiring the surviving spouse to live at least four months after the first spouse’s death; if the survivor did not live that long, they would be treated as having predeceased the first spouse. Why include such a provision? To avoid having to conduct two probate proceedings (or, for that matter, figure out who died first) if both spouses died in a common accident or close in time.

In March of 2014, Bruce died. Jenny filed a probate proceeding and submitted Bruce’s will to the court. Because she filed just two months after Bruce’s death, Larry objected. He argued that she had no authority to take over Bruce’s estate because she had failed to survive him by four months.

Jenny apparently became angry, and revoked her own will. The later evidence was uncontroverted; she personally took her original will and destroyed it, intending to revoke it and to make sure that Larry did not receive any share of her estate.

After consulting with her attorney, Jenny signed a new will (and trust) a few months later (well after she had reached the four-month survivorship requirement). She left her entire estate to her late husband’s grandson — bypassing Larry altogether. She died less than a month after signing the new documents.

Larry contested her new will and trust, arguing that she had been subjected to undue influence in preparing her new documents. The probate court dismissed his complaint, finding that the revocation of her first will was not the product of undue influence. Larry appealed.

The Wisconsin Court of Appeals affirmed the probate court finding, expanding somewhat on the effect of Larry’s first will contest. It was clear, ruled the appellate court, that Jenny was angry with Larry, and that no one influenced her in her decision to revoke the earlier will. Once she destroyed it, she was intestate — that is, she had no will at all — and since Larry was not her child, he would have no right to any share of her estate.

Why would that make a difference? Because if she had no will prior to signing the new documents, Larry had no standing to even challenge those documents. According to the appellate court, his objection to probate of her later will (and trust) would have to be dismissed. Estate of Born, October 6, 2016.

What might Larry have done differently? It seems easy to suggest that the original objection in his father’s estate was probably ill-advised — if his step-mother had actually died in the two months after he raised his objection, he could probably have still made his legal point. In the meantime, he clearly offended her to the point that she changed her estate plan.

This is a balance that potential contestants need to consider in most, if not all, legal proceedings. There are legal victories (and losses) and there are practical losses (and victories). A good lawyer will earnestly discuss the trade-offs with clients and potential clients. Will contests are rare — and they are also expensive, and they often lead to unintended consequences.

Can a Copy of a Missing Will be Admitted to Probate?

AUGUST 15, 2016 VOLUME 23 NUMBER 30
You’ve signed your will. We’ve given you the original in a fancy envelope, and a copy showing your signatures. What should you do with it?

For most people, most of the time, it is sufficient to just keep the original will in a convenient place at home. What to do with the copy? Put it in a different, but also safe, place. Include a note telling your family where to look for the original.

What happens if we can’t find your will after you die? It may not mean that your estate plan is frustrated, but consider what happened to estate planning documents signed by Irene Wilson (not her real name).

Irene was a librarian and an author of children’s books, and she lived in Maryland. She never married, and had no children. She did have a niece and a nephew — her closest relatives — but she was not particularly close to them.

After her retirement, Irene moved to rural Pennsylvania. By age 87 she was still living at home but unable to easily get up her stairs; she set up a first-floor bedroom for herself. She also had a cousin who lived upstairs and helped take care of her.

In 2007 Irene contacted a local Pennsylvania lawyer about updating her will. She named a long-time friend as executrix (what we in Arizona would call personal representative) and left most of her estate to her church back in Maryland. Three years later she updated the will with a new codicil, naming her live-in caretaker as execturix; at the same time she transferred her home to the church she attended in Pennsylvania, reserving a life estate for herself.

Both the original will and the original codicil were carefully placed in an unlocked metal box near her bedroom on the first floor; “conformed” copies of both were in a locked safe in an upstairs bedroom. The attorney who prepared both documents also kept a “conformed” copy.

Pause a moment for explanation: what is a “conformed” copy? In modern usage, it is a photocopy of the original, unsigned document, with a notation like “/s/” placed on the signature blocks. Sometimes a stamped representation of the signer’s name is placed on the signature block. In either case, it indicates that the original was signed — though the signature itself is not usually copied.

Six months after Irene signed her will and placed her conformed copies near her downstairs bedroom, her niece came for a visit. It did not go well. The niece told Irene that there were important family documents and heirlooms that she wanted to receive on Irene’s death. She also told Irene that she should move out of her house and into a nursing home. Irene was upset by the visit, and by the follow-up phone calls from her niece.

A few months after the niece’s visit, Irene’s lawyer called on her at home. She did not say anything about wanting to change or revoke her will, or about any changes in her plans.

Irene died a week after the lawyer’s home visit. When her caretaker went to the house to retrieve the original will, she found an empty envelope in the downstairs box, and all of the papers missing from the safe upstairs. Oddly, the original codicil and some other papers were still in the downstairs box; the copies of those documents were missing from the safe.

Let’s stop here for a moment for reflection. Did Irene have a valid will? Can the copy of her will from her lawyer’s file be admitted to probate?

Ready to proceed? Do you have your answer?

There is a presumption under Pennsylvania law (which governed Irene’s probate case, since she lived and died in that state) that when an original will was in the decedent’s possession before death but can’t be found. The presumption makes sense: it is that the decedent must have destroyed the original with the intent to revoke it. The same presumption, by the way, exists under Arizona law (and, probably, under the probate laws of most or all of the U.S. states).

The Pennsylvania probate court (it’s actually called orphan’s court, but no matter) ruled that the evidence suggested that Irene had not intended to revoke her will, and the lawyer’s conformed copy was admitted to probate. The next level of review, however, resulted in the opposite outcome: the Pennsylvania Superior court reversed, ruling that two witnesses would have had to testify that they actually saw Irene sign the original document. That meant the will was invalid, though the codicil (which was still intact in the metal box) would be effective. Irene’s caretaker would be in charge of her estate, but her niece and nephew would inherit most of her wealth.

Was that your prediction? If not, then you might take comfort in the next step. The Pennsylvania Supreme Court reversed the intermediate ruling, returning the outcome to the probate court’s finding: the copy of Irene’s will was, after all, admitted to probate. The Supreme Court found that the lawyer’s testimony about witnesses to the original will was sufficient — there was no need to produce the actual witnesses to testify about the signing. In re Estate of Wilner, July 24, 2016.

Would the same thing happen in Arizona? Yes, almost certainly. Given how easy it is to make photocopies, most lawyers today would have copied the will after signature rather than making conforming marks on a copy, but the outcome would not be different in most cases. The key is whether there is a legitimate explanation about why the original might be missing, more than whether specific technical requirements have been met.

So what should people do with their original wills? Put them in a safe place. Tell someone — the person named as personal representative, close family members, or someone — where the originals are located. Keep track of originals over the years (do you know where your original will is right now?). But what happened to Irene is unlikely to happen if you are leaving your entire estate to your children in equal shares (or to your only niece and nephew).

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.

“No-Contest” Clause in Trust Can Be As Effective As Will Provision

JANUARY 19, 2015 VOLUME 22 NUMBER 3

When we prepare wills and/or trusts for our clients, they often ask if they should include a “no-contest” provision. Typically, they want us to add language that would penalize anyone who challenges the validity of their estate planning documents.

Are such provisions effective, or even permitted? We explain to our clients that no-contest clauses can be effective — but they presume that the possible contestant has something to lose. There is no point in writing a will or trust that says something like “I hereby leave nothing to my son Barry, and if he contests this he will be disinherited.”

That aside, no-contest provisions can be a way of avoiding legal complications among beneficiaries and the person in charge of handling an estate. We have written before about the difficulty in interpreting and applying such provisions, but there is no doubt that there are circumstances in which such a clause (also sometimes called an “in terrorem” provision) can be beneficial.

A no-contest provision can sometimes be worded more broadly, and become a much more powerful, if blunt, instrument. Take, for instance, the circumstances behind a recent Arizona Court of Appeals decision.

Details of the family relationships are sketchy in the reported court decision, but they involve a 1994 trust, apparently signed by Terry Simmons (not her real name) and her then-living husband, that included this language:

“If any beneficiary under this Trust, in any manner, directly or indirectly, contests or attacks the validity of … this Trust or any disposition … by filing suit against … Trustee … then any share or interest given to that beneficiary under the provisions of this Trust is hereby revoked and shall be disposed of in the same manner as if that contesting beneficiary and all descendants of that beneficiary had predeceased the Surviving Settlor.”

Fifteen years later, two of the remainder beneficiaries did file suit against Terry, who was serving as the trustee of the trust. They alleged that she had violated her fiduciary duty in a number of ways. The court ultimately distilled their objections down to nine different challenges to Terry’s administration of the trust.

Terry responded, and litigation ensued. The probate judge denied all of the objections to the administration of the trust. That left one question: had the remainder beneficiaries been disinherited by their trust contest?

Arizona has a statute governing the validity of no-contest provisions in wills, but there is no statute expressly covering similar provisions in trusts. The statute governing wills says that a no-contest provision is “unenforceable if probable cause exists” for the contestant to have filed their action. In other words, if the case had involved a will rather than a trust, the test would have been whether the contesting beneficiaries had “probable cause” to file their objections.

The probate judge applied the same standard to determine the validity of the no-contest provision in Terry’s trust. The judge found that, though the contestants were not successful, they had at least probable cause to file their contest and therefore would not be disinherited.

The Court of Appeals agreed that the same standard should apply (though they got there by a slightly different route), but disagreed on the outcome. Because the beneficiaries had made nine different complaints about the trust’s administration, ruled the appellate court, they had to have probable cause for every one of the nine challenges. It was as if, the appellate judges reasoned, the beneficiaries had filed nine separate lawsuits; each one would have to have been based on probable cause, and the mere fact that they combined all nine into a single complaint made no difference.

With that different reading of the requirement, the appellate court reversed the holding of the probate judge and ordered that the beneficiaries had been disinherited by their filing. One of the complaints they made had insisted that Terry, though she was entitled to the annual income of the trust, should have distributed it to herself only once per year, and not on a monthly basis. That was simply not the law and not required by the trust document, said the appellate court; because there was no basis for that single allegation, the no-contest provision was triggered. The court did not even have to review the other eight allegations to determine whether there was any basis for filing a contest. In Re Shaheen Trust, January 16, 2015.

What does Terry’s trust tell us about writing trusts, administering them or challenging the administration? Several things, at a minimum:

  1. In Arizona, at least, no-contest provisions are as effective in trusts as they are in wills, and clients may want to consider including them — especially in contentious families, second marriages, or other cases where everyone might not be (or stay) on the same page about what should happen.
  2. People who genuinely think that they should file a challenge need to be very cautious, and first look for any no-contest provision. If there is such a provision, any contest should start small, with only the most flagrant misbehavior included — rather than a scatter-shot challenge to a variety of actions.
  3. It may also be appropriate to include alternative dispute resolution provisions in one’s will or trust — mandating, for example, that contestants first submit to arbitration, or perhaps mediation, before filing formal challenges. This might help reduce the cost and the antagonism that occasionally appears in inheritance contests.
  4. If one beneficiary is intended to be given more latitude than others (if, for example, a surviving spouse is to be given more deference than the children — or the reverse), the trust ought to say so, and make clear that the trustee is to favor that beneficiary, and include provisions giving the other beneficiaries only those powers to inquire or object that the trust settlor wants to give them. That would help the legal system analyze the purpose and meaning of no-contest provisions if and when contests do arise.
  5. Another idea we have written about before, the concept of a “trust protector“, might be a way to allow the trust to be modified to deal with changing circumstances — like deteriorating relationships among the beneficiaries and trustees.

Even Lawyers Can Have Trouble Recognizing Undue Influence

OCTOBER 20, 2014 VOLUME 21 NUMBER 38

We often say that experienced lawyers can be pretty good at judging the competence of a client to make a will, sign a power of attorney or execute other documents. We (collectively) probably make better witnesses on those questions than even the doctors and medical staff attending to their patient (our client). Why? Not because we have better medical training — we obviously don’t. What we are better at is applying the legal tests of capacity to the person we meet with. “Can you name your family members?” and “What do you think a will is designed to do?” are questions that just don’t come up in most medical interviews.

What we are less good at, though, is recognizing undue influence. Of course we know the markers (social isolation, big changes in estate plans, active involvement by the person benefiting from the change, etc.), but we don’t see the daily interaction between our clients and their family members. That can make it easy for us to miss the significance of the influence brought to bear on our clients, even if we are vigilant and familiar with the circumstances and possibilities.

That concept was brought home this week while reviewing a recent California Court of Appeals case. Two brothers disputed the validity of a series of documents their mother had signed, and all were prepared by lawyers after close questioning by each. The two lawyers heard very different stories, and within days or weeks of one another. How could this have happened, and was there a way to avoid it in other cases?

The California case, Bellows v. Bellows (October 9, 2014), is an “unreported” decision. That means that it can’t be cited as a precedent in other, similar cases — but it doesn’t change the validity of the appellate court’s holding. That holding: the most recent documents signed by the mother were valid, at least partly because the contesting brother could not meet his burden of proving otherwise. But the story of battling lawyer visits was more poignant than the ultimate court holding was significant.

The saga began in 2002, when Ms. Bellows’ brother became ill. Her son Fred helped her deal with her brother’s illness, need for care, and ultimate death — and even the probate of his estate. After she inherited about $400,000 from her late brother, she and Fred visited her attorney about estate planning, and her stockbroker about setting up an account to hold the inherited money.

Ms. Bellows’ will and trust had previously provided for an equal division between her two sons, Fred and Donald. The upshot of the meetings with lawyers and stockbrokers was that Fred would inherit all of the money that Ms. Bellows had received from her late brother, and the balance of her estate would be divided equally between Fred and Donald.

It is worth noting that Fred went with his mother to most or all of her meetings with her stockbroker and her lawyer, though her lawyer took care to discuss her wishes in a separate session without Fred in the room. Her lawyer was certain that the changes she requested were her wishes, and that she was not being unduly influenced by her son.

About six months after those changes were completed, Ms. Bellows visited another lawyer — this time in the company of her other son, Donald. The new lawyer began the process of reviewing her existing estate planning documents, and considered her request for a change in the disposition she had planned. That new lawyer wrote to the lawyer who had prepared Ms. Bellows’ earlier documents, requesting a copy and more information.

The day after that meeting, Ms. Bellows was back in the original lawyer’s office with her son Fred. She told the first lawyer that she did not want to make any changes, and that she did not want to deal with the new lawyer any further. The first lawyer wrote to the new lawyer to tell her not to take any further action.

Nonetheless, Ms. Bellows was once again in the second lawyer’s office two days later. She signed a new power of attorney naming Donald as her agent rather than Fred, and she amended her trust to provide for equal distribution of all of her assets, including the inheritance she had previously earmarked for Fred. The second lawyer later testified that she was clear about her wishes, not being directed by Donald and could express her own wishes without any hesitation.

Shortly after those changes were made, the first lawyer visited Ms. Bellows at her apartment. She told him that she wanted Fred, not Donald, as her agent, and the lawyer prepared yet another power of attorney for her to sign. Since the beneficiary designation on the account holding her inheritance had never actually been changed, the first lawyer made no further changes.

When Ms. Bellows died three years after that sequence of events, the two brothers fought about whether there had been undue influence. Each pointed to the interviews their mother had had with the lawyers as evidence that the other had acted inappropriately. As the Court of Appeals noted, each of those two lawyers “apparently thought they were helping [her] resist improper pressure from the other brother.”

As noted in the introduction, the upshot was that the beneficiary designation favoring Fred was upheld, though mostly on the basis that Donald had not met his burden of proving undue influence in order to set it aside. But the real lesson, it seems to us, is that two lawyers — who we will assume (as the Court of Appeals did) were both well-meaning — could hear such different stories within days of one another.

What might either of those lawyers have done differently, in order to help make Ms. Bellows’ wishes clear? It is a challenge, but we have some ideas we follow:

  1. Never start a client meeting with the family — meet first and alone with the client. If either lawyer could have said that they took no direction from either of Ms. Bellows’ sons, it would have been more powerful defense of their position. Who knows what she might have said if there was no opportunity for prompting or direction? A visit without either son present is good, but perhaps it should be clearer that neither son should have been actively involved at all.
  2. Outside information might have been helpful to judge the effect on the client. The record is not clear as to whether either attorney asked for information from doctors, social service workers, psychologists, caretakers or others about Ms. Bellows’ daily life, and how susceptible she might have been to direction from others (including either or both of her sons).
  3. Once such clear conflicts have been exposed, it’s time to step up the efforts to eliminate inappropriate influence. If, as the Court of Appeals suggested, the two lawyers each thought they were protecting Ms. Bellows from the other lawyer and the brother who was seen as the “real” motive force, perhaps they would both have served Ms. Bellows better if they had discussed their different views, figured out a way to reconcile them, and give Ms. Bellows the peace of mind that her wishes were in place and would not be changed at the insistence of either son. After all, Ms. Bellows’ peace of mind should have been a primary goal of her representation.

DIY Wills — Another Example Showing Why You Should Hire a Lawyer

OCTOBER 6, 2014 VOLUME 21 NUMBER 36

We occasionally relate stories about people who have prepared their own wills without the help of competent professional advisers (like, for a primary example, a qualified attorney). When we do, we intend to make several points:

  1. The cost of getting a lawyer to prepare your will (and trust, and powers of attorney) is probably quite a bit less than the contest after your death might cost. Of course, disgruntled heirs can file contests of lawyer-prepared wills, too — but the odds are lower, the likelihood of success much lower, and the family friction lessened when a lawyer is involved in preparing the will.
  2. Do-it-yourself wills might accomplish exactly what the signer intended, but it’s often hard to tell — the likelihood of ambiguity or miscommunication is much higher when no professional is involved.
  3. Even though a self-prepared will might ultimately be successful, it can take years, costs tens of thousands of dollars (occasionally more) and destroy family relationships — all bad results that you can mitigate by getting your estate plan prepared by someone who knows what she or he is doing.

All of this should be considered against a reality: will contests are rare. They are much rarer, in fact, than people usually suspect. Despite popular literature, even wills that are arguably defective are more likely to be honored than challenged.

That is all by way of background to this week’s story. We are going to ask you to play Probate Judge, so pay attention. Let’s start, as the Judge often does, with the document itself. Here is the entire text of Bruce Morrison’s will (we’ve changed only the names):

On this date 7-18-2011 – I am here with my neighbor of over 30 years – [Bruce Morrison] – I am here to write down his last “will” – He is in good spirits, alert and sound of mind. On this date Bruce has asked me to write down the desires he has in regards to his earthly possessions. “I Bruce Morrison do will all my earthly possessions to my daughter Betty Harrison that lives in California, she can do with them what she likes.”

[signed] Toni Robertson 7/18/2011

[signed] Richard Robertson 7/18/2011

[signed] Bruce Morrison 7/18/2011

Bruce died two months later. He left two daughters — Betty (the daughter mentioned in the will) and Randi (who is not mentioned at all). Randi filed a probate petition for a determination of intestacy — arguing that Bruce died without a valid will. Betty countered that his will was valid, that she had been left his entire estate, and that Randi should receive nothing.

As the will contest developed, a number of additional facts were laid out:

  1. The night the will was signed, Bruce had just been released from the hospital after a series of tests. At the time he signed he may not have known it yet, but he was terminally ill with (as yet) undiagnosed cancer. He had been prescribed — and was taking — the painkiller hydrocodone, which can also affect competence, attention and understanding.
  2. Bruce’s hand was shaking too much to write out the will himself. He asked his friend Toni to write out the will for him, and she later testified that he dictated the part that begins “I Bruce Morrison do will…”. The entire document, however, is in her handwriting, not his.
  3. The sequence of signatures was that Bruce signed first, then Toni. Then Toni suggested that her husband should also witness the will — he had been in another room during the writing and signing. Richard came into the room with Bruce and Toni, and asked “So, Toni wrote your will; did she sign it too?” Bruce responded “no, that’s my shaky handwriting.” Richard then signed above Bruce’s signature, next to his wife’s.
  4. Although both Randi and Betty agreed that Betty was indeed Bruce’s daughter, he was not listed as her father on Betty’s birth certificate.

Both Randi and Betty asked the Montana probate judge hearing the case to grant summary judgment on the basis of the evidence they had collected. In such a ruling, no actual trial is conducted — the parties simply argue that there is no interpretation of the available evidence under which the other side could prevail.

Betty argued that the will was properly executed and reflected Bruce’s wishes. She pointed out that she was not involved in its execution, and that there was no real dispute about Bruce being her father.

Randi, on the other hand, pointed out that Bruce was taking heavy medications that would make him susceptible to undue influence. The fact that he had not been listed on Betty’s birth certificate made it unclear who would be “the natural objects of his bounty,” according to Randi. She also argued that the fact that Bruce signed when one of his witnesses was out of the room made the will invalid — and that his statement (“no, that’s my shaky handwriting”) should not be admitted to prove the validity of the will because it would be hearsay.

OK, acting Probate Judge — it’s time for your ruling. Is the purported will of Bruce Morrison valid? Does his daughter Randi receive any share of his estate?

The Montana probate judge’s ruling: the will was valid and effective. The possibility of undue influence is not the same thing as evidence that there really was such influence, and Randi had produced no affirmative evidence in that regard. And the statement of Bruce confirming his signature was not hearsay, but acknowledgment that he was adopting the will as his own.

Randi appealed, and the Montana Supreme Court affirmed the probate judge’s ruling. The state’s high court agreed that Bruce’s declaration that he had signed the will was not hearsay, since it was not being introduced to prove the truth of what he said but instead to show that he had declared the will to be his. Randi’s arguments about undue influence would not suffice to create a dispute in the absence of real evidence. In Re Mead, September 30, 2014.

In this case Bruce’s real wishes seem to have been carried out, but that doesn’t change our main point: there was unnecessary cost, delay and friction occasioned by having a friend write out a one-sentence will and signing under challenging circumstances. Maybe Bruce simply didn’t have time to get his will prepared by a professional, but his estate — and his favored daughter Betty — would have been better served if he had found the time. Maybe he felt like it was an emergency and he needed to get something done that July evening, but the next day he could have — and should have — called a lawyer’s office to make an appointment on the first available date to get the job done right.

Will Contests Must Be Based on Actual Evidence

APRIL 28, 2014 VOLUME 21 NUMBER 16

We have written before about the fact that, despite popular notions, will contests are actually quite rare. We have explained to our readers that mounting a will contest can be an expensive proposition, and that the likelihood of success is usually slight. Those observations remain true today, but that doesn’t stop family members (and even non-family claimants) from insisting that a loved one’s will is invalid because, well, it just is.

A recent Arizona appellate decision highlights the kind of objections we sometimes see. The case involves the estate of a man we’re going to call Ralph Dobson, who died in 2013.

Ralph had signed a will in 2010, naming his caretaker Margie as personal representative of his estate and his primary beneficiary. He did not name any of his children; an earlier, 2002 will had named his son Barney as personal representative and provided for the division of his estate into equal shares among his children. Margie, in addition to being Ralph’s caretaker, was also Barney’s ex-wife.

Barney objected to the admission of the 2010 will to probate. He argued that it was the product of undue influence, that Ralph had obviously not understood what he was signing (the will even made an error in Ralph’s full legal name), and that the witnesses could not even identify a photo of his father. He represented himself in the probate proceeding, challenged his ex-wife’s witnesses and exhibits, and explained his objections to the probate judge. He did not call any witnesses (other than giving his own testimony).

At the end of the trial in probate court, the judge found the 2010 will was valid and that it revoked the 2002 will. That meant Margie would be personal representative of the estate, and that the estate would go to her under the later will.

Barney appealed. He still represented himself, and he clearly did not understand how the appellate process worked. He attached exhibits to his appeal, apparently thinking the appellate judges would decide for themselves whether Ralph knew what he was doing. His appeals brief did not comply with the rule requirements. Ultimately, the Court of Appeals gave up, ruled that Barney had waived all his arguments and simply affirmed the probate judge’s determination that the 2010 will was Ralph’s final will. Estate of Demaree, April 18, 2014.

As we said, this new case does not break up any unplowed ground. There is nothing profound in the court’s holding, and no greater truth immediately apparent. What it does do, though, is to give us a chance to repeat this notion: will contests are difficult to sustain, they are infrequently filed, and they seldom succeed.

Would Barney have done better if he had hired a lawyer? Probably. We simply don’t have enough information to know whether there were facts to support his position, or whether a lawyer would have been able to ferret them out and produce the evidence the court would need to rule in his favor. We do know, though, that Barney was poorly equipped to see what information was truly relevant and even persuasive, and he did not do a great job of getting the important parts before the probate judge (and, later, the Court of Appeals).

Would a lawyer have been interested in Barney’s case? It’s impossible to be sure based on the record available, but it would not be too surprising if the answer turned out to be “no”.

Here are some of the notions that we often see among family members (which are, we might immediately note, not correct, at least in Arizona):

  • A will has to leave something to family members. Not true. You are completely free to disinherit your spouse, your children, even your minor children (caution: this principle is not the same in every state — we are talking here about Arizona). If you do, they might be entitled to a very small portion of your estate anyway — but that does not mean your disinheritance is invalid. You do not even need to name your children, and you certainly do not need to leave them even a nominal amount.
  • A will leaving everything to a non-family member is automatically suspect. Not true. While caretakers are often situated so that they are able to exercise undue influence, they are also often in a position to enjoy the genuine gratitude and affection of the person they were caring for. A good lawyer will insist on more information about the relationship before making any assumptions about a will challenge.
  • If a family member challenges the will, they will be entitled to receive something. This one is really hard for people to grasp sometimes. If you die without a will, your estate will usually pass to your children and your surviving spouse, in some proportions (it depends, in Arizona, on whether the children are all also your spouse’s children). If your will is invalid, and there is not an earlier will, then you died without a will. So there is simply no reason for your second cousin to want to challenge your will — even if it is completely invalid he will not receive anything from your estate (assuming you have any descendants or closer relatives).
  • Lawyers love to challenge wills. Nope, we don’t. It’s hard to do, and success rates are not high. Few lawyers will take on will contests on a contingency fee basis (though some might, depending on the facts) — so that means you’ll be writing checks every month to maintain any will contest, too.
  • When it’s obvious to everyone in the family that undue influence was exerted, that will be enough to challenge the will. Nope. The burden of proving undue influence is usually on the person challenging the will, and they have to show clear and convincing evidence of the undue influence. There is a rule that reverses the burden of proof in some cases, but it is not automatically triggered, and it’s not all that clear that it changes much about the requirements for challenging a will.
  • If the family can show that mom (or dad) was confused and disoriented, that will be all that it takes to defeat the will. Not at all. People with marginal capacity (or even largely incapacitated adults) may well be able to sign a will. All they have to have is the ability to identify at least some family members, to recognize that they have assets, and to understand that a will operates to pass assets at death. That’s not a very high barrier. And there’s something in the law called the “lucid moment” concept: people are presumed to be able to have a lucid moment even in a heavily foggy patch.

The lesson here: if you believe a spouse or parent was unduly influenced, you need to get good legal advice right away. Expect to pay for it — but if you don’t get counsel, you are much more likely to end up in the same position as Barney.

 

 

“In Terrorem” Provision Does Not Violate Public Policy

OCTOBER 1, 2012 VOLUME 19 NUMBER 36
From time to time we have written about what lawyers usually call “in terrorem” provisions in wills and trusts. They are perhaps better known as “no-contest” clauses, and they are intended to prevent will (or trust) contests after the death of the signer. Typically, they say something like: “if anyone contests this will, he or she will be treated as having predeceased me.” In other words, if your father’s will leaves you half as much as your brother receives, and you file a court petition saying you think he was incompetent when he signed that will, you will get nothing at all. It can be a strong incentive not to challenge the will.

A recent Arizona Court of Appeals decision raised a new wrinkle on challenges to in terrorem provisions. Partly, that is because the actual provision was so much broader than the short and simple language we spell out above.

Thomas J. Stewart’s will and trust disinherited one of his adult children. It also contained a detailed in terrorem provision. That provision said that if anyone challenged his will or trust in any of a number of listed ways, they would be treated as having died before him — in other words, they would be disinherited. It also penalized anyone who “cooperates or aids in any action described in the preceding provisions of this paragraph with any other person, regardless of whether that person is himself or herself subject to this article.”

The disinherited son filed a contest of both the will and trust. Why would he do that in face of the in terrorem provision? Because he had nothing to lose — he had already been disinherited. But his challenge to the provisions of the two documents was a little different. He argued that they penalized any other family member who might tell him that they thought his father was incapacitated or subject to undue influence. That would be the case even if they genuinely thought Mr. Stewart’s will or trust was questionable.

The probate court agreed with the disinherited son’s argument, and ruled that the broad in terrorem provision violated Arizona’s public policy in favor of court review when there is a question of improper procurement of a will or trust. Consequently, the trial judge invalidated Mr. Stewart’s in terrorem provision.

The disinherited son later settled his claim with the estate (the terms are not described in the Court’s opinion), and an order was presented to the probate judge for signing. Since it was no longer relevant to the determination, the estate’s personal representative and trustee argued that the judge should strike the language invalidating thein terrorem provisions. The probate judge declined, and the estate appealed.

The Arizona Court of Appeals ruled that the probate court was wrong to invalidate the provision in the first place. Yes, there is a public policy consideration in favor of reasonable access to the legal system, said the appellate court. But there is also a public policy in favor of discouraging will or trust contests, and avoiding waste of estate resources on contested proceedings. The key, said the appellate court, is that Arizona’s in terrorem statute already invalidates such provisions if the contestant has probable cause to initiate the proceeding. Matter of Estate of Stewart, September 27, 2012.

But what does that mean in the real world of will and trust contests? Are Mr. Stewart’s other heirs at risk of losing their inheritance if they talk to the disinherited son? Wouldn’t it be too ironic if he settled his claim (and got some share of his potential inheritance returned) and then a brother, sister or other heir lost their share because they had sympathized with him? Would the mere fact that the estate settled with the disinherited son provide enough “probable cause” to deter any attempted disinheritance of a cooperating heir? These are all questions left unanswered by the appellate court’s decision.

On the other side of the coin, suppose you want to sign a bullet-proof will or trust (that is, one that simply will not be challenged — regardless of the circumstances). Does Mr. Stewart’s example provide any guidance on how to do that? Perhaps, but we might make a few observations:

  1. Obviously, the in terrorem clauses in his will and trust were not completely effective. We don’t know how much his son received, but he was not completely disinherited.
  2. Mr. Stewart did not follow one common tactic: leave a lesser share to the disfavored child and couple that with an in terrorem provision. In other words, leave that son, say, $10,000, or half the share he would otherwise get, or some other amount — and provide that he will lose that if he challenges the documents. Maybe that would have deterred the contesting son in this case, but if the estate was large it might not have worked any better. Perhaps the settlement amount he actually received turned out to be less than such an arrangement might provided.
  3. If you want to really discourage any family member’s involvement in a contest, the broad language in Mr. Stewart’s will and trust might be a model. If you want to encourage family harmony among those who will receive a share of your estate, it might not be — the result in this case now potentially pits the heirs who do inherit money against the estate (if they gave any comfort to the disinherited son, that is).
  4. The fact that this case — with very strong language and careful planning — resulted in a contested probate proceeding and an appellate court opinion indicates that it can be pretty difficult to prevent contests in every circumstance.

Claimant Must Prove Undue Influence, Lack of Capacity

AUGUST 27, 2012 VOLUME 19 NUMBER 33
It has been some time since we wrote about the concepts of undue influence and lack of testamentary capacity — and the differences between these two legal concepts. A recent Minnesota appellate case strikes us as a good opportunity to revisit challenges to wills and trusts based on allegations of mental shortcomings.

Linda Samson (not her real name) was a widow, living in her own home in Minnesota. She had two children, a son and a daughter. She and her late husband had created a living trust several years before her husband’s death; it provided that after the second spouse died, the remaining estate would be divided into three shares. One share would go to the couple’s daughter, another to their son, and the third to their son’s wife.

In 2003 Linda was diagnosed with “early-state Alzheimer’s disease.” In 2006 she signed an amendment to her trust deleting both her daughter and daughter-in-law (and leaving everything to her son). In 2008 she signed two deeds to her home — one transferred her home out of the trust and into her name alone, and the second one transferred her home from her name into her son’s name (but reserving a life estate for herself).

Between her initial Alzheimer’s diagnosis and 2008 Linda’s medical records periodically referred to her memory loss but indicated that she was stable. She continued to live at home, though with some assistance. She had a sharp mental decline in the summer of 2008, and by fall of that year a home health agency was recommending 24-hour care. She moved into a nursing home in the spring of 2009, was enrolled in a hospice program and died in June of that year.

Linda’s daughter objected to the 2006 amendment to Linda’s trust and to the 2008 transfer of her home. She argued that her mother lacked the capacity to sign either of those sets of documents, and/or that her brother must have unduly influenced their mother to his own benefit (and her detriment).

The probate judge heard testimony from several people who knew and/or treated Linda. Two expert witnesses hired by her daughter, both doctors, had reviewed Linda’s medical records but had never met her. They testified that her capacity was obviously diminished, and that it would have been possible to unduly influence her.

On the other side, the lawyer who prepared the trust amendment and the deeds to her house testified that, though he had not met his client before, she seemed to be able to explain her reasoning for the changes and she knew who her children were and what she was doing. He testified that she had told him that it saddened her that her daughter was not very involved in her life, but that she was pleased at the extra care and attention she received from her son and his son, her grandson.

Both the initial and the follow-up sets of appointments with the lawyer had been arranged by Linda’s son, but in both cases (he testified) it was at her request. Although the lawyer had met with both Linda and her son initially, further discussions were with Linda alone; the transfer of the house had actually been initiated by the lawyer rather than either Linda or her son. The lawyer pointed out that it didn’t really change the disposition of her estate at all, since Linda’s son was already the sole beneficiary of her trust estate.

There was one odd moment, according to the lawyer’s testimony. During one of the interviews with Linda he sought to establish that she knew her family members and the relationships (a key part of the standard for determining testamentary capacity). When he asked Linda about her daughter, she said that she was sorry that they were not closer, that the daughter was on her third husband (in fact, her husband had just died), and that her daughter had suspected that she, Linda, had had an affair with the husband. When the lawyer expressed surprise and asked follow-up questions, Linda dismissed the idea and said she had gotten confused; that had been the plot of a biblical story she had read.

After trial, the probate judge ruled that Linda’s daughter had not proven that her mother lacked testamentary capacity OR that her brother exercised undue influence. The judge noted that the supporter of questioned documents has the burden of proof that the documents were executed properly. After that, though, the contestant of a will or trust has the burden of proving allegations of undue influence or lack of testamentary capacity. Linda’s daughter introduced testimony that there could have been undue influence, and that Linda’s capacity might be suspect — but her burden had been to prove that there was undue influence, or that Linda actually did not understand what she was signing.

The Minnesota Court of Appeals agreed, upholding the probate judge’s ruling. The appellate judges had the same understanding of the burden of proof, and saw no reason to set aside the probate judge’s findings. Linda’s last trust changes, and the transfer of her home to her son, were both upheld. In the Matter of the Smith Living Trust, August 20, 2012.

This Minnesota case is not the most eloquent on the subject, and of course it would have little or no precedential value in Arizona. The opinion is also “unpublished,” which means that the Minnesota Court of Appeals decided that it should not be cited as precedent even in Minnesota itself. Still, there are several reasons we like the decision and call attention to it here:

  • It is a nice exposition of the “burden of proof” issue, pointing out that many will and trust contests lose not because the proponent of the document prevails but because the contestant fails. Generally speaking, the person who challenges a will, trust, deed or other estate planning document has to overcome the presumption that the signer was competent and knew what he or she was doing.
  • It describes the sorts of things a good lawyer should do to protect the validity of documents he or she prepares. The lawyer met with Linda alone (we would have liked it even better if he had never met with Linda and her son together, but at least he dealt primarily with Linda directly), the deed change was prompted not by Linda’s son but by the lawyer himself, the lawyer could testify that he routinely took steps to assure that his clients are competent and aware of what they are doing.
  • On the other hand, the contestant had to rely, as is often the case, on inference and reconstruction. The contestant’s two expert witnesses had never met Linda, and their opinions were consequently guarded (they said that she was susceptible to undue influence, but they could not testify to the extent of any influence they might suspect).
  • Perhaps most importantly, the opinion makes clear that even someone with a long-standing diagnosis of dementia might still be able to sign estate planning documents. Testamentary capacity (the ability to sign a will) is not immediately compromised by virtue of a dementia diagnosis; Linda had carried her diagnosis for several years but still had the capacity to understand the nature of her trust change, to identify her family members and to describe what assets she wanted to pass to her son. The fact that she had one episode of fairly serious confusion did not prevent her from signing her new trust.

Guardianship May Suggest Lack of Testamentary Capacity

MARCH 19, 2012 VOLUME 19 NUMBER 11
Can a person under guardianship sign a new will? After all, in order to have a guardian appointed (in Arizona, at least), the court must first have found that the person is impaired by a mental disorder (or some other cause) and that he or she “lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person.”

This is a question we have addressed before, in discussing a 1996 Mississippi case. It comes up from time to time and in different circumstances. The Mississippi case described earlier, for instance, involved a conservatorship rather than a guardianship proceeding, though the principles are the same in either circumstance. The bottom line, as described in our earlier article, is that a person may be able to sign a new will in Arizona — even if they have been determined to be incapacitated, or in need of (financial) protection.

A recent Arizona Court of Appeals decision revisited the question, with a slight twist. John Bartlett (not his real name) had been the subject of both a guardianship and a conservatorship order since 2004. On May 28, 2008, the probate court held a hearing on his request to terminate his guardianship. He maintained that he no longer needed a guardian, but the probate judge decided that he continued to be incapacitated — that is, that he was still unable to make responsible decisions regarding his own care.

That very same day John signed a new will. In it, he disinherited his daughter (his only child) and left his entire estate to his grandson. The document also revoked an earlier will, signed before the guardianship proceedings were begun, which had named his daughter as his personal representative and left his entire estate to her.

When John died a few months after signing his new will, a probate court dispute ensued regarding which document was valid. Did John have the capacity to revoke his old will, and to disinherit his daughter? Both wills were submitted for consideration, and the probate court found the new will to be valid and admitted it to probate.

When the personal representative of the estate filed a final report with the court, John’s daughter objected that her challenge to the new will (and to a trust signed the same day) had not been resolved. The estate’s personal representative disagreed, and filed motions to strike the daughter’s pleadings, enter summary judgment in favor of the later will, and close the estate. In a series of hearings, the probate court granted all of those requests.

The Arizona Court of Appeals disagreed. Although John’s daughter had not put on any evidence — indeed, she had not even filed any pleadings expressly objecting to the summary judgment request — the probate court should have been on notice that there was substantial evidence of John’s incapacity. The fact of a guardianship proceeding was enough to raise doubts about his ability to sign a new will, and summary judgment — entered without taking any evidence — was improper, according to the appellate judges.

The Court of Appeals takes pains to make clear that it is not holding that John’s will is invalid, or that people under guardianship can not sign new wills. In fact, the mere existence of a guardianship does not (in Arizona, at least) even create a presumption of incapacity to sign a will. But the existence of the guardianship proceeding, and especially the guardianship finding on the very day John signed his new will, should have alerted the probate court that there was some evidence in support of a challenge to that will. Estate of Blackford, March 13, 2012.

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