Probate & Trust Litigation
There are numerous situations in probate and trust law which give rise to litigation. It usually involves one party accusing another of some type of wrongdoing regarding the making of a will, or the mishandling of assets. Perhaps a decedent changed his or her a will or trust leaving a substantial sum to just one person, excluding close family members. Perhaps someone used a power of attorney to access the decedent’s bank accounts, for their own use. Perhaps the decedent was incompetent when he wrote his will, due to dementia. Perhaps beneficiaries of a trust believe the trustee is wrongfully withholding trust income from them. The specific factual and legal situations are endless. However, there are several recognized types of legal actions upon which probate litigation is based:
A will contest or trust contest is a type of probate litigation where someone claims that a will is not valid. This type of action is usually filed by someone who was left out of a will, and believe that this can only have been the result of some type of wrongful action on the part of the person(s) who benefitted from the will. There are several grounds to attack the validity of a will:
A will may be found invalid because someone in a “confidential relationship” with the decedent “actively procured” them to write a will which does not reflect the true intention of the decedent. Usually the person accused of being the undue influencer is someone who spent a lot of time with the decedent and may have taken care of the decedent when he or she was physically or mentally weak. It is often a close relative, or a health aide. Dementia or Alzheimer’s disease make the elderly an easy target. Even without those conditions, a person in pain, or on medication, or bedridden can be a target of undue influence. Every case involving undue influence has its unique facts. However, all undue cases involve someone accusing someone else of manipulating the decedent into making a will or other testamentary disposition that favors them, to the exclusion of others who were close to the decedent.
Even without a showing of undue influence, a will may be challenged on the basis that the testator was mentally incompetent when the will was written and therefore “lacked testamentary capacity”.
In order to be legally competent to write a will, a person must have the “ability … to mentally understand in a general way the nature and extent of the property to be disposed of, and the testator’s relation to those who would naturally claim a substantial benefit from the will, as well as a general understanding of the practical effect of the will as executed.” Even if a person has been declared mentally incompetent, it could still be shown that he or she made their will during a “lucid interval”.
Defects in Will Execution:
A will may be found invalid because something is physically wrong with the document, or the way it was executed. A will is required to be executed in a very specific way. A will is required under Florida law to be signed by the testator at the end, and signed by two witnesses who observed the testator sign it. A will with no witnesses, or one witness is invalid. A will where the witnesses did not actually see the testator signing, but added their signatures later, is invalid. A will with pages missing is invalid. A will which appears to have pages removed and different pages inserted is invalid.
Lost Or Destroyed Will
Sometimes when the decedent dies, the original will cannot be found, but only a copy of the will. A lost or destroyed will can be challenged as invalid. In Florida there is a legal presumption that the original will was intentionally destroyed by the testator prior to his death, as an act of revocation, if it was last known to be in the testator’s possession. A copy of a will can be entered in probate, if nobody objects. However, sometimes there is not agreement that the copy of the will should be entered into probate. In those cases, there can be litigation as to whether the decedent intentionally destroyed the will, or whether it was inadvertently lost.
Sometimes a will has a provision that turns out to be vague or ambiguous. For example if a will states that ‘I leave all of my General Electric stock to my son, Jim”, and before his death Jim’s father sells the General Electric stock, and uses the money to buy ATT&T stock. Does Jim get the ATT&T stock, or does he get nothing? This is a question of will interpretation.
Another example: if a will states “to my daughter Sara I leave my condominium and all of its contents”, does that include stock certificates and the bank accounts represented by savings passbooks within the condominium? Does it include cash found in a drawer in the condominium? Or does it just include typical contents of a home, such as furniture, furnishings, and décor?
In both of these examples, it is necessary to determine the intent of the testator when he put these provisions in the will. Generally other provisions of the will are examined, along with the Florida statutes regarding will interpretation.
Misappropriation of Assets -Lifetime Transfers
Sometimes after a decedent dies, it is discovered that substantial assets have been misappropriated by a family member or caretaker. The person may have been elderly or infirm and placed their trust in the person who transferred their assets. This is similar to undue influence, but it does not involve a will or trust, but actively taking the decedent’s money while the decedent is still alive.
Abuse of Power of Attorney:
Often times an elderly or infirm person signs a power of attorney, which authorizes another person to write checks, handle finances, and sign documents on behalf of the elderly person. A person who holds a power of attorney is a fiduciary, having the highest duty of good faith and honesty in dealing with the elderly person. A person holding a power of attorney is only supposed to take actions that are in the best interest of the principal. However, sometimes a holder of a power of attorney uses the power to misappropriate the principals money or other property to themselves. Often times this is not discovered until after the principal dies. In those situations, the personal representative of the estate may sue the person who held the power of attorney.
Some probate litigation originates with claims that the Personal Representative has mismanaged the probate estate. They may have misappropriated funds or engage in self-dealing. Or perhaps the Personal Representative has mismanaged real property or stocks, allowing them to lose their value. Perhaps the personal representative has decided to live rent-free in property belonging to the decedent, where their duty is to sell the property and divide it between the heirs. Perhaps the personal representative is simply doing nothing, and allowing estate assets to languish. An adversary proceeding can be filed to remove the personal representative; The personal representative can be made to put money back that has been wrongfully taken; The personal representative can have his any losses charged against his or her share of the estate.
Probate is not only for the benefit of a decedent’s heirs, but also for the benefit of the decedent’s creditors. If a decedent dies with unpaid medical bills, credit card bills, or any other obligations, the personal representative must provide each of them a Notice to Creditors, by certified mail. The personal representative must also publish a Notice to Creditors in the legal notices section of a local newspaper. Creditors are given 90 days in which to file a claim in the court probate file. The personal representative can agree that the claims are legitimate and should be paid, or can object to them. If an objection is filed, the creditor must file an independent action against the estate within 30 days.
When a person creates a trust, they transfer their assets to a trust. They may be the trustee during their lifetime, but when they die a successor trustee takes over. Upon their death, the trustee is obligated to send trust accountings to all beneficiaries, and provide them with a list of trust assets upon request. Sometimes beneficiaries do not receive the accountings, and the trustee will not communicate with them or even give them a copy of the trust. If the trustee continues to refuse to cooperate, a legal action can be filed against the trustee to demand an accounting.
Sometimes beneficiaries believe that a trustee is not paying them funds that they are entitled to, or misappropriating funds. As with a personal representative, a trustee is a fiduciary, with the highest level of trust to act for the benefit of the beneficiaries. If a trustee is removing funds, or failing to pay income to beneficiaries, or otherwise mismanaging the trust, a beneficiary can file a lawsuit against the trustee. The lawsuit may be to compel the trustee to make payments, or it could be to remove the trustee, or both.
Reformation of trust: Sometimes a trust has become ineffectual. That might be the case if the trust has gotten so low on funds that it can no longer effectively operate, or if the all trustees have died or become incompetent. The beneficiaries may have ceased receiving income. At that point, the beneficiary can file an action to reform the trust; to appoint a new trustee, or change the payment terms, or even to terminate the trust.
Trust interpretation is similar to will interpretation. There may parts of a trust that are vague or ambiguous, and there are differing interpretations as to what it can mean. Perhaps there is a conflict between a beneficiary and the trustee, or between beneficiaries. an action can be filed for the court to interpret certain terms of a trust.