Maryland Estate Litigation

Tag: estate litigation lawyer

“For reasons which are known to them” – Disinheriting a Child

by David A. (Andy) Hall

The decision to disinherit a child is generally not made lightly and neither should be the approach to planning.  Careful consideration as to why a parent wishes to exclude a child from her estate planning is necessary prior to preparing the documents.  There may be ways to arrive at alternative solutions that achieve many of the client’s goals without risk of litigation that disinheriting can bring (which I will cover in part 2 of disinheriting a child).

Some may want to disinherit because they want to create incentives for their children to develop a strong work ethic. This is the approach that Sting intends to take with his children.[1]  A number of celebrities, like Bill Gates and Warren Buffet, have similar ideas to Sting.[2]  Celebrities have also disinherited children for reasons that were (allegedly) known only to the children.[3]  Leona Helmsley famously left $12 million for the care of her dog Trouble while also disinheriting two of her grandchildren “for reasons which are known to them.”[4]

Whatever the reason or reasons for choosing to disinherit, a diligent approach to the estate planning and the documentation of the estate planning is necessary.  It is relatively easy to challenge a will.  In Maryland, a Petition to Caveat a Will (a will contest) is a notice pleading.[5]  The Petition needs to contain “an allegation that the instrument challenged is not a valid will . . . and the grounds for challenging its validity.”[6]  In simpler terms, one challenging a will (the “Caveator”) needs to say that the will is not valid and offer a laundry of reasons that it may not be valid.  The list of reasons does not need to be supported by facts.  Many practitioners describe the grounds for challenging a will as including the “kitchen sink” because due to the six-month statute of limitations it is necessary to plead every single possible cause of action or it will be barred despite further evidence that may be generated.

“For reasons which are known to them” is a common refrain in estate plans that disinherit.  This language, however, does no favors for litigation counsel who ultimately defend the will against a disgruntled heir.  The disgruntled heir inevitably has nary a clue as to what the cryptic language is referring to; indeed, they will describe their relationship with the disinheriting parent in glowing terms.

Litigation counsel will then turn to the drafting attorney’s file and look for clues as to the testator/testatrix’s intent for disinheriting a child or grandchild.  In a will contest, the drafting attorney’s file is no longer privileged upon the death of the testator.[7]  Experience has shown that drafting attorneys do not always have the best habits of taking notes when meeting with their estate planning clients.  Even when they did take copious notes, the estate planning file has a tendency to winnow down through the years where the only remaining documents are usually only the final draft or executed version of a will.  The attrition of an estate planning file can seem suspicious to an outsider, but it also makes sense from a logical perspective.  Successful attorneys have thousands of clients that they represent over the course of a career, which generates reams of paper.  As the files build up, a game of survivor begins to take place.  Documents may be destroyed in accordance with a firm’s file retention policy or those documents may be returned to the client upon the conclusion of the representation or the drafting attorney’s retirement from practice.  Absent explanation in the drafting attorney’s notes, litigation counsel is forced to rely on other contemporaneous documents and the testimony of those that knew the testator/testatrix – namely their children or grandchildren – those who stand to lose out on a portion of their inheritance.

The attorney representing the Caveator can attack the lack of evidence and cryptic words of the testator/testatrix in an attempt to extract a settlement from the estate.  Many times a settlement will make sense because of the risk involved in litigating any case and also the attorney’s fees that will be expended by the estate in defending against the caveat.  A little additional care by the planning attorney in maintaining their file or documenting the reasons for the caveat in the first place can go a long way in protecting the client’s ultimate wishes for the disposition of their assets.

We will discuss some other approaches to estate planning where the client wishes to disinherit a child in our next blog in this series.  Should you wish to discuss your estate plan with an attorney who has not only drafted, but also litigated a will or trust, then do not hesitate to call.

David A. (Andy) Hall, Esq.
King|Hall LLC
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
410-696-2045

andy@kh.legal

 

[1] http://time.com/money/2922231/sting-disinherit-will-kids-heirs-inheritance/

[2] http://time.com/money/2913542/10-other-celebs-besides-sting-whove-cut-their-kids-out-of-their-wills/

[3] https://www.theguardian.com/film/2008/may/25/biography.film

[4] https://static01.nyt.com/packages/pdf/nyregion/city_room/20070829_helmsleywill.pdf

[5] See Md. Rule 6-431.

[6] Id.

[7] See Benzinger v. Hemler, 134 Md. 581, 107 A. 355 (1919).

A Primer on Guardianships – Part Three – Guardianship of the Property

by David A. (Andy) Hall

From one broad perspective, a person can be understood to have control over two sets of decisions in their lives: decisions affecting their person and decisions affecting their property. These are commonly reduced to healthcare and personal decisions (e.g., what medical treatment I receive or where I live), or financial decisions (e.g., what bank holds my money).  For a person who lacks capacity to make these decisions, there is a need to have the proper incapacity planning in place.

For financial decisions to be made by another person, there needs to be a financial power of attorney (“POA”) in place.  These POAs can come in many varieties.  Most financial institutions will have their own forms.  The Maryland Legislature and the Attorney General for the State of Maryland have created a specific form, which must be accepted by banks and financial institutions in the State of Maryland – with some limited exceptions.  Many attorneys will also have their clients sign a separate durable power of attorney which is tailored to their clients’ wishes.  When a person becomes incapacitated and does not have the planning in place, then their loved ones may be left with little alternative to filing for guardianship of the property.

An incapacitated person may not need a guardian of the person if there is an advance medical directive in place, or their loved one is experiencing little issue serving as a health care surrogate.  The management of their property may pose a more difficult challenge.  Banks are reticent to deal with someone who is not named in a POA.  Legal advisors will not release documents.  Simply getting information about assets is difficult without a POA.

The Petition for Appointment of a Guardian of the Property must be filed where the “alleged disabled person resides, even if the person is temporarily absent.” Md. Rule 10-301(c); Estates & Trusts § 13-202.  (Note that temporarily absent is not defined in the statute, but an often seen context is where a person is incapacitated by an injury and is receiving medical treatment in a different county.)  The rule is somewhat different for someone who is not a resident of the State of Maryland.  The practitioner should look at the situs (location) of any property or file where a guardianship of the person would be properly filed.

The Petition for Appointment of a Guardian of the Property must also include two certificates signed by medical doctors (or one can be signed be a licensed psychologist or licensed clinical social worker) attesting to the alleged disabled person’s need for a guardianship.  The rules are different for somone who is a beneficiary of the United States Department of Veterans Affairs (the “VA”).  The VA can supply a certificate in lieu of the two certificates previously noted though for practical purposes it may be easier to get the two physicians’ certificates.

The Petitioner (the one filing for guardianship) has to meet the burden of proving that the alleged disabled person (“ADP”):

  • Is unable to manage his property and affairs effectively because of physical or mental disability, disease, habitual drunkenness, addiction to drugs, imprisonment, compulsory hospitalization, confinement, detention by a foreign power, or disappearance; and
  • Has or may be entitled to property or benefits which require proper management.

Estates & Trusts § 13-201(c).  After a bench trial and a finding of the need for a guardian of the property by a preponderance of the evidence (which means that it is substantially more likely than not that it is true, and is a less rigorous standard than clear and convincing evidence standard necessary for guardian of the person), the judge will appoint a guardian of the property.  There is no right to a jury trial for a guardianship of the property.

Filing for guardianship may be a difficult process with unique challenges for those who do not handle these on a regular basis.  If you believe that you need to file for guardianship, then call for a free consultation.

David A. (Andy) Hall, Esq.
King|Hall LLC
410-696-2045
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
andy@kh.legal

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

by David A. (Andy) Hall

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.
King|Hall LLC
410-696-2045
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
andy@kh.legal

457526bfb82f4540ba08c7cce8e707dd

Removing the Personal Representative of an Estate

by David A. (Andy) Hall

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.

David A. (Andy) Hall, Esq.
King|Hall LLC
410-696-2045
5300 Dorsey Hall Drive
Suite 107
Ellicott City, Maryland 21042
andy@kh.legal

457526bfb82f4540ba08c7cce8e707dd