Maryland Estate Litigation

Trying to Prevent Estate Litigation through In Terrorem Clauses is Often an Empty Gesture

Sometimes an estate client will anticipate that there will be a challenge to her estate after she dies –  and frankly if there is a house, then in this area its generally worth at least a couple hundred thousand dollars, thus, it’s worth fighting over.  Perhaps her children do not get along. Or there is a family business in which one relative has spent many years alongside to build and grow, and the client wishes to leave that relative a larger share of the business.  In an effort to prevent challenges to her will, a client may ask her estate planning attorney to utilize an in terrorem clause.  These can also be known as “no-contest” clauses.  An in terrorem clause essentially states that when someone objects or attacks the will (through the appropriate legal process), then the challenger will no longer receive a legacy or residual distribution that they otherwise would have received through the will.

Under Maryland law, an in terrorem clause in a will is void where there exists probable cause for instituting law suit.  Md. Code, Est. & Trusts Art. § 4-413.  Someone considering whether or not to challenge a will should consult with an experienced estates and trusts attorney to determine whether there exists probable cause to challenge a will.

An in terrorem clause is ineffective from preventing a challenge by someone who is disinherited as there is no stick (or carrot) to make the challenger think twice prior to challenging.  If they have nothing to lose, then there is nothing to prevent them from hiring an estate litigation attorney to challenge the will.

A no-contest or in terrorem clause may still be a good idea to include in your estate planning documents depending on your particular family dynamics.  While no clause can prevent all estate litigation, these clauses may be useful in preventing meritless litigation, i.e., a baseless challenge designed to extract a monetary settlement.  In addition, it may be a useful tool for your personal representative to use when negotiating a settlement with a will challenger as it can make estate litigation an all-or-nothing proposition.

No one wants to think about their family fighting over their estate.  Having a thorough and frank conversation with your estate planning attorney can help identify red flags and allow the planning attorney to attempt to draft around those challenges.  One such solution is appointing a third party as personal representative because the disinterested person can help prevent the estate administration from becoming a battle ground for long simmering family disputes.  Avoiding estate and trust litigation before it starts can save your family many tens of thousands of dollars in costs.

David A. (Andy) Hall, Esq.
Elville & Associates, P.C.
9192 Red Branch Road, Suite 300
Columbia, MD 21045

Removing the Personal Representative of an Estate

Here is the scenario: You are a legatee under a will, which means that you are entitled to “receive any property disposed of by will, including property disposed of in a residuary clause and assets passing by the exercise by the decedent of a testamentary power of appointment”.  See Maryland Code, Estates and Trusts Art., § 1-101(l)-(m).  The personal representative (the “PR”) (or what’s known as an executor in other states) is behaving in a way that you do not agree with.  Your question is whether or not you can have that PR removed.

The Maryland Code in Estates and Trusts Article, §6-306 states that there are six causes for the removal of a PR:

  1. Misrepresenting facts leading to her appointment
  2. Willfully disregarding the order of the court
  3. Incapable or unable to discharge her duties
  4. Mismanagement of property
  5. Failing to maintain an effective designation of a local agent (this is when the PR is not a resident of the State of Maryland)
  6. Failing to perform a material duty of the office

Whether or not a PR’s conduct rises to the level of a court removing that person requires an intensive factual analysis to be performed by your estate litigation lawyer.  Some examples of conduct that could lead to the removal of the PR include: attempting to admit the wrong (or a prior) will to probate, which could arise in a situation where one sibling is in one will and then subsequently left out of the estate in a subsequent will.  They would have a strong desire to gloss over the existence of the subsequent will.

The willful disregard of an order of the court is easier than some people may assume.  If the PR has failed to file an accounting within the proper time, then the court will likely issue a show cause order requiring the PR to either file the accounting or to demonstrate why the accounting has not been filed.  Perhaps the PR did not enlist the help of an estate administration attorney, then they could easily misunderstand these deadlines and what they mean.  Thus, innocently missing a deadline could lead to disregarding an order of the court and be grounds for removal.

If you believe that the PR of the estate is mishandling her duties, then you should contact an estate litigation attorney to have them evaluate the facts of your case.  The last thing that you want is to have bad acting PR wasting away assets that your family member worked hard to accumulate, spent time and money to effectively plan for the disposition of those assets after their passing, and then not be distributed in accordance with their estate plan.

By David A. (Andy) Hall, Esq.
Elville & Associates, P.C.
9192 Red Branch Road, Suite 300
Columbia, MD 21045


Appointing co-personal representatives is a recipe for trouble

Ask your estate planning attorney whether you it is advisable to appoint co-personal representatives.  Co-personal representatives are two (or more) people named as personal representative simultaneously.   Successor personal representatives are named as backups in case your first choice is unable to serve whether by reason of death, incapacity or unwillingness to serve. You should always name at least one successor personal representative, but two is preferable.

In a co-personal representative situation, Maryland law by default requires the concurrence of all personal representatives in order to act on behalf of the estate.  This can lead to issues with the practical aspects of managing the estate, or it can create a friction point in an already tense family situation.

You should consider the motivations for wanting co-personal representatives. If you think that one person might not be able to handle the job alone, you are probably better off appointing someone else altogether. In general, one person will end up doing the majority of the work, but will be hampered by seeking the concurrence/assent of the other personal representative.

If there is a family issue, you can always appoint someone outside of the family. When there is a family dynamic where there is distrust, estrangement, or other issues, then the appointment of co-personal representatives may only serve to exacerbate the situation.

In short, appointing co-personal representatives can lead to unnecessary delay, arguments, or even litigation. It is best to name one trusted individual to serve as personal representative, and name at least one trusted successor.  Help avoid estate and trust litigation before it ever happens by contacting your estate planning attorney.  Make sure your attorney can competently guide you through not only proper tax planning and asset protection, but also provide counsel to avoid litigation before it starts.

By David A. (Andy) Hall, Esq.
Elville & Associates, P.C.
9192 Red Branch Road, Suite 300
Columbia, MD 21045


Understanding Undue Influence

The sad reality that even with the best prepared estate plan there can be instances where a family member, or some other individual challenges your will after your death.  Often times, if you have enough resources to carefully prepare your estate plan, then you have enough resources for descendants to fight over.  When a person decides to undertake the process to challenge the validity of a will, they are called a Caveator and the process by which they challenge the will is called a Caveat.  These proceedings generally start with the Orphan’s Court for the county where the Decedent (the person who died) was domiciled (where they lived).  There are a variety of bases to caveat a will, but one that comes up again and again is undue influence.

 The Maryland Court of Appeals identified seven factors to undue influence in Moore v. Smith, 321 Md. 347, 353 (1990):

  1. The benefactor and beneficiary are involved in a relationship of confidence and trust;
  2. The will contains a substantial benefit to the beneficiary;
  3. The beneficiary caused or assisted in the effecting the execution of the will;
  4. There was an opportunity to exert influence;
  5. The will contains an unnatural disposition;
  6. The bequests constitute a change from a former will; and
  7. The testator was highly susceptible to undue influence.

Factor three, which is the beneficiary caused or assisted in effecting the execution of the will, is the reason that we ask your friend, relative, or caregiver to leave the room when you are signing your Last Will and Testament.  We know from experience that if there is a challenge to your will, then Caveator will ask who was present at the signing of the will.  They will point to the presence of so and so as to why the will should not be admitted to probate.  Why have your family suffer through expensive legal proceedings and potentially derail your carefully chosen estate plans when we can take proactive steps during your planning to prevent these problems many years before they arise?

By David A. (Andy) Hall, Esq.
Elville & Associates, P.C.
9192 Red Branch Road, Suite 300
Columbia, MD 21045


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