PROBATE LITIGATION LESSONS FOR THE ESTATE PLANNER
© Ralph F. Holmes
Updated January 2016
Introduction
Due to a variety of demographic changes (we live longer, get divorced more, and have more wealth), the incidence of estate plan challenges has been on the rise. The most common litigation scenarios involve a child opposing a plan preferentially benefiting another child, a subsequent spouse, or a caregiver of the decedent. Before death, litigation may include guardianship proceedings, constructive trust claims, and accounting actions against an attorney-in-fact. After death, the proceedings may include will and trust contests, a contract to make a will claim, and constructive trust and accounting claims. An estate planner hoping to minimize the risk of a successful challenge to a will or trust may wish to consider the comments below.
A Few Practical Tips for the Estate Planner
If Your Plan is Challenged, You Will Be A Key Witness
Generally, the last thing an estate planner wants is to take the stand to explain why a will drafted years, perhaps decades ago, should be upheld. Memories have faded. Paralegals or secretaries who met with the testator and attested to his signature likely have little to no memory or worse have died, retired, or moved to parts unknown. As the estate planner, you may well be the sole witness who can speak to the testator’s affect, his knowledge of his wealth and relatives, and his intent to carry out the dispositional scheme when the will was signed.
Family Pathology Is A Key Predictor Of Litigation
Although perhaps obvious, this most important lesson is often unheeded. Certain family dynamics recur in these cases. The children vs. stepmother scenario commonly plays itself out in court. This is not a sexist slur: men are more likely to have wealth; women tend to outlive men; and some men re-marry late in life younger women. The next most common dynamic is the fight among adult children who do not get along where one child is disproportionately favored. If one of these scenarios is present, the risk of a later challenge rises.
Know Who Your Client Is
Sounds simple, but in the estate planning area, this can be tricky. Lawyers who are not clear about whom they represent can get in trouble. A request by a child that a lawyer prepare an instrument to control the financial affairs of a parent can lead to exploitation. Counsel should always treat the principal (the parent), not the agent (the child), as the client and meet with the parent alone to make sure he or she is competent and truly desires what has been requested.
Not All Dementias Are Equal
Some dementias are static; others are progressive. Counsel should be especially careful if a client has been diagnosed with an Alzheimer’s type dementia because it is a question of when, not if, she will become incompetent. If the estate plan is later challenged, it will be viewed in the context of a relentless mental decline. Retrospectively placing the will execution in this continuum might be difficult, especially if there is scant evidence in counsel’s file as to the client’s functioning that day.
Meet With The Client Without Other Family Members
This is basic, good practice, but is not always followed. An elderly client may be highly dependent on a child, including for food, shelter, transportation, and other assistance. Insulate communications with the client from this dependent relationship by meeting alone with and sending any mail to the client marked “Personal and Confidential.”
Assess For Capacity Again On The Day The Plan Is Signed
Too often, will and trust executions are treated like a closing, an administrative event. For a client with dementia, capacity can fluctuate. The fact that the client did well in a prior conference is no guaranty that he will be capacitated when signing. Consider asking the client to state (without prompting or cuing) what the estate plan provides and why he chose this scheme.
Counsel’s Notes and/or File Memorandum Will Be Important Evidence
When taking the stand, often years after the plan was prepared, counsel may have little memory of interactions with the client. Notes in the file might, not only help refresh recollections, but serve as important evidence in their own right as contemporaneous documentation of the client’s capacity and independence. Take the time to document interactions with the client carefully and thoroughly, particularly the client’s knowledge of: the nature and extent of her wealth; the identity of her family members and the roles they play in her life; and the dispositional scheme of her estate plan and her rationale.
Consider Asking The Client To Write A “Letter of Reasons”
If the client is treating her heirs unequally, consider asking her to write in her own handwriting a letter explaining her reasons to be kept in counsel’s file in the event of a challenge. Counsel can explain that the unequal treatment of heirs creates an increased risk of a challenge and her letter might help prevent such a challenge from occurring or succeeding. If the client is able to express coherently and articulately in writing her reasons, the estate plan will have a significant bulwark from challenge. Of course, if the letter is incoherent or inarticulate, it may contribute to the invalidation of the plan.
Consider Video Recording or a Medical Evaluation
If the risks and stakes are high, counsel may consider conducting a videotape interview of the client or engaging a physician or psychologist to evaluate capacity. Such contemporaneous evidence can play an important role if a challenge is filed.
(Note: Ralph Holmes is currently retired from McLane Middleton. For information on this or other probate litigation issues, please contact Alexandra Cote at alexandra.cote@mclane.com.)