Maryland Estate Litigation

Tag: Estate Litigation

“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).

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A Primer on Guardianships – Part Two – Guardianship of the Person

by David A. (Andy) Hall

Many times clients will come for an appointment with an elder law attorney because their spouse or parent is no longer able to communicate decisions about their health or person.  This can be the result of a progressive condition such as Alzheimer’s disease, or from a sudden onset, such as a fall resulting in a traumatic brain injury (“TBI”).  The consequence can be the same if the alleged disabled person (“ADP”) does not have a healthcare power of attorney (“POA”) or advance medical directive (“AMD”) in place.  Many Americans do not have incapacity planning documents.

A healthcare POA or AMD allows the person nominated to serve as the agent for the ADP.  This means that the agent can make healthcare and other personal decisions for the person that is no longer able to communicate those decisions.  The most common context is making decisions about healthcare matters, i.e., whether to select a certain course or treatment, or whether to decline treatment because the ADP has made their wishes known regarding when they no longer want treatment.

Without this document, then a loved one can make decisions for the ADP pursuant to the Maryland Health Care Decisions Act as codified in Md. Code, Health Gen. Art. §5–605.  Where the ADP has not nominated a person, then after two physicians determine that the person can no longer make decisions for himself, then the following people may serve as surrogate (in priority of the order listed):

  • A guardian for the patient, if one has been appointed;
  • The patient’s spouse or domestic partner;
  • An adult child of the patient;
  • A parent of the patient;
  • An adult brother or sister of the patient; or
  • A friend or other relative of the patient who meets the requirements

Id. While this statutory recognition is great for ad hoc or crisis situations, it may not be a viable long term solution for clients.  Sometimes the ADP’s illness will drive them to fight against decisions which are objectively being made in their best interests.  Then the loved one in that situation will want the imprimatur of a court order.

The Circuit Court in the Maryland County where the ADP resides or is admitted to receive medical treatment is the proper venue for filing for a guardianship and it has the authority to appoint a guardian.  Md. Rule 10-201; Estates & Trusts § 13-704(a)(2).  The Petition is the document whereby a client (through her attorney) requests that the court appoint someone as guardian.  Among other basic informational items, the Petition will need to include: a description of less restrictive alternatives to guardianship that have been attempted and failed; facts as to the need for a guardianship; and two certificates signed by medical doctors (or one can be signed be an licensed psychologist or licensed clinical social worker) attesting to the ADP’s need for a guardianship.  The timing of the certificates is important as one needs to be completed within 21 days of filing the petition.  A seasoned guardianship attorney will give you a checklist of the required documents and information in order for the Petition to be accepted by the Court.

The Petitioner (the one filing for guardianship) has to meet the burden of proving that the ADP:

  • Lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person
  • Because of any mental disability, disease, habitual drunkenness, or addiction to drugs,and
  • That no less restrictive form of intervention is available which is consistent with the person’s welfare and safety

Estates & Trusts § 13-705.

The Court will appoint an attorney for the ADP, and it is very likely that the court appointed attorney will be paid out of the ADP’s assets.  For a married couple, this can mean that the two parties will be paying for both sets of attorney’s fees.  It can seem counter-intuitive to have to pay for an attorney to fight against you, but a guardianship seeks to take away the inalienable right of self-determination regarding one’s person.  A court will not do so lightly.

Consult with your fiduciary litigation attorney to go over the options regarding a loved one who can no longer make decisions for themselves and has not executed incapacity planning documents.  If you have not already done so, then consult with an estate planning attorney to prepare for incapacity.  It is truly a case where, as Benjamin Franklin said, “An ounce of prevention is worth a pound of cure.”

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

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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

Appointing co-personal representatives is a recipe for trouble

by David A. (Andy) Hall

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.

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

WHY WE ASK YOUR SON OR DAUGHTER TO LEAVE THE ROOM WHEN YOU ARE SIGNING YOUR WILL

by David A. (Andy) Hall

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?

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