You Are Challenging My Will … But Wait – I’m Not Dead Yet!

People have been contesting wills and challenging estate plans for a long time, but until recently, they have had to wait until after the testator has died. Now, instead of waiting until Dad dies, a family’s emotional and financial drama can take center stage in court – while he is still alive. Pre-death litigation is on the rise and guardianship litigation is a forum in which the traditional post-death challenges to estate planning documents are now litigated while the testator is alive.

Alaska, Arkansas, Delaware, Nevada, North Dakota, and Ohio now allow lawsuits that directly contest the validity of a will and/or trust prior to the death of a testator. In those states, the court proceeding will involve notifying the named beneficiaries of the will and/or trust and any disinherited heirs of the existence of the will and/or trust and their contents. The court will set a time frame (typically 30 days) by which any of those persons (known as the interested persons) can mount a challenge.  If no challenge is made within a set amount of time, then those persons are barred from mounting a challenge after the testator’s death. A goal of these laws is to provide certainty as to the estate plan.

Drawbacks include:

1)     The provisions of the testator’s will/trust is revealed to all interested parties as part of the court proceeding

2)     Any subsequent changes to the plan would have to occur through the court system and the ability to attack would arise with each revision

3)     The testator may have real estate in jurisdictions that do not allow pre-death will contests and therefore, certainty on those assets may not be foreclosed

4)     It is an open question as to whether or not future challenges could be foreclosed if the testator moved during his or her lifetime from a jurisdiction that allows pre-death will contests to a state that does not

In most other states, direct pre-death will contests are not permitted based on the concept that the will speaks only upon the testator’s death, and that a testator can change the will at any time during his or her lifetime. Florida, Indiana, and New York have generally enacted statutes that specifically preclude pre-death will contests.

Even in those states, however, indirect challenges to a will pre-death are not precluded, and may occur through guardianship or conservatorship proceedings. The theory here is based on the concept of “substituted judgment.” When a person is put under guardianship or conservatorship, a judge can determine (after medical testimony) that the incapacitated person is no longer capable of judgment, and the judgment of the court-appointed guardian or conservator is substituted for the incompetent ward.

A California case (Murphy v. Murphy) involved a family feud. The parents, William and Elaine, were married in 1949 and had two children, William Jr. and Maureen. Elaine became ill and Maureen moved into her parents’ home to help care for her mother. Her mother died and her father suffered a major stroke. William Jr. began a court proceeding asking the court to appoint a professional conservator to make decisions pertaining to his father.

In the papers he filed in court, the son alleged that his sister was imposing her influence on their father. Four days after the court appointed a professional conservator, the father, upset that his son had taken the family’s dirty laundry public, and upset about the underlying allegations, handwrote a will and trust that omitted his son and gave all of his assets to his daughter. A year and a half later, the conservator asked the court to approve the estate plan through a petition of substituted judgment.

The conservator had notified both the son and daughter of the substituted judgment petition and the court proceeding, and the son did not challenge his father’s estate plan. After his father’s death, the son tried to challenge the estate plan, but the California court held that he no longer had the ability to challenge on the legal theory of “collateral estoppel.” In other words, the son was not permitted to relitigate matters that had been already litigated. The issues that the son raised in the post-death challenge (undue influence, fraud, and the existence of an oral agreement), were issues put forward in the substituted judgment case even though those issues were not litigated in that proceeding.

In essence, the court determined that when a conservator obtains the court’s approval for a living ward’s estate plan, any challenge to the will must be made at that time and not after death.

There are several lessons to be learned from states that allow pre-death direct will contests, and from states that allow indirect pre-death will contests through guardianship or conservatorship proceedings:

  1. Weigh the costs and benefits of a pre-death vs. post death challenge. Witnesses, evidence, and testimony that are available now may not be available after death.
  2. Depending on the testator’s capacity, he or she may be a powerful witness. Without his or her testimony, the testator’s wishes may not be given the proper weight – the judge would have to rely on indirect evidence to determine intent.
  3. Understand the possible damage to the testator’s reputation by bringing this type of a proceeding forward while he or she is still alive. This type of lawsuit can be very embarrassing.
  4. If a guardian or conservator wants to bring the fight forward now and preclude future litigation he or she could seek court approval to revise the estate plan, notify all heirs at law and interested parties, and preclude further objections under the collateral estoppel.
  5. If your client receives notice of such a proceeding, the Scarlett O’Hara plan of waiting until tomorrow will not work; action must be taken in that proceeding while the testator is alive.
  6. If a court proceeding ensues, financial discovery will begin and may include the following documents: copies of all current and prior estate planning documents, a statement of who is designated beneficiary of all retirement planning assets, annuities and life insurance policies (primary and secondary), financial statements, tax returns, bank account statements, a complete listing of disbursements and back-up invoices, credit card statements, credit reports, insurance policies, deeds, promissory notes, safe deposit boxes, storage facilities, partnership documents, corporate documents, documentation of all gifting (including gifts not reflected on any return), and philanthropic transfers.

If it appears that your client will be involved in this type of litigation it is prudent to be aware of the scope of the financial discovery.

In summary, forewarned is forearmed. If you have a client whose estate plan will be challenged, or you have a client who will be challenging an estate plan and they believe it’s inevitable that the matter will end up in court, it is important to consider pre-death challenges as a possible avenue.

 

 

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit, http://www.patriciaannino.com.

Comments

  1. This is a new one on me! Unfortunately, I guess I can see both sides and certainly war stories can be told in favor and against. It appears to me this will cause an increase in family litigation and enhance hard feelings in already disfunctional families while Dad is still alive and must absorb the hate rhetoric coming from his children. On the other hand, like you said, if one reasonably anticipates that all will happen post death, why not get a final determination while Dad is still around to testify. It will be interesting to see what others think of this. Steve Gammill, stevegammill.com

    • Steve- thanks for your comments- I agree and am on the fence about it myself. I am sure more cases will focus on this issue and it will be very interesting to see what happens next. Patricia

  2. Pat, really great article. Your readers should be duly impressed.
    Anyway, PA does not follow the minority view; at least not yet. But boy, this kind of trend is very unsettling but at the same time can be beneficial in certain circumstances.
    I guess we have to see how this evolves over time to see the limits of court intervention over client’s donative schemes and related documentation.
    This is just a really thought provoking article. Great job.

  3. Patrick A. Reagan says:

    Thank you Patricia for the interesting, alarming, I guess, now timely, discussion of the few State Courts that allow the “future whinners” to mount there “whines” pre-death.

    In Oregon, a conservator appointed by the Circuit Court can review the Gantor’s Trust or Testator’s/Testatrix’s Testamentary (Last Will) Estate Plan. if that Plan is in the form of a Living Trust, the COnservator can effect actions “necessary during life” and, if in the form of a Last Will, at least have knowledge of the contents, terms, and provision thereof.

    It would be very unwise and possibly a breach of the Conservator’s fiduciary duties to make KNOWN TO THIRD PERSONS the terms and provisions of any Trust or Last Will. That is my personal legal opinion and I woould so advise a Client Trustee and/or future Personal Representative nominee.

    An Estate Plan is a PERSONAL CHOICE documents or series of related documents and not something that should be taped to the reefer door or used as a placemat on the Grantor’s or TOR/TRIX’s coffee table – and I so advise each and every one, as a 35 year practice.

    The assumed fact that the dispositional terms of a person Trust or Will are made known prior to death, in any manner or by any person, is appalling and reprehensible, in my opinion. I would hope that any of my Will/Trust Clients would call me BEFORE opening up that area to the scutiny of of the not yet ripe beneficiaries or dis-inherited grumblers.

    But, as the Courts can attest, “experience is the life of the law”. And, so it goes.

    Pat

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