Another legal debauchee caused by EZ Wills: Aldrich v. Basile

PicardDoubleFacepalm-1Another legal debacle caused by EZ Wills.  Why would you hang all your property and your final wishes on the cheapest form you can find?  More to the point, these documents often don’t work, and cause unintended, possibly even undesired, results.

In Aldrich, the court was asked whether a will that only contained specific bequests, and did not contain either general or residuary bequests, could dispose of the testator’s whole estate, even property not specifically named, i.e. an implied residuary.  The court said no.

The testator had purchased and filled out an EZ Will, a mass-market form will that didn’t have a residuary designation.  The testator filled in blanks, making a long list of specific bequests to X.  At the time of execution this specific bequests covered substantially all of her property.  But just before her death, Testator came into substially more property (a bequest from her sister).

Upon probate of Testator’s will, X contended that the extensive, even comprehensive list of the testator’s assets at the time of execution, bequeathed to him in the form of specific bequests, evidenced an intent to leave all her property to him, i.e. an implied residuary.  He therefore argued that he was entitled to the after-acquired property.  The court disagreed, saying that the will had to be read according to the four corners of the will, and that the testator in fact had no residuary beneficiary.  Thus the after-acquired property fell through intestacy to beneficiaries that Testator never intended and possibly never desired.  The case is Aldrich v. Basile (opinion).

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Oregon Attorneys Must Now Report Elder Abuse

happy-elder-couple-roundedOn June 11, 2013, the Oregon Legislature has expanded the list of professions who must report suspected elder abuse to include attorneys. House Bill 2205 (HB 2205).  An elder is elsewhere defined as anyone 65 years or older and abuse includes neglect, physical and financial abuse.

However, the bill is really without many teeth because in many cases attorneys will not be required to, and will even be prohibited from, reporting.  An attorney is not required to breach a client confidence in order to meet this reporting requirement, nor is an attorney required to report if disclosure of this information will be detrimental to his or her client.

Finally, the Bill has a CLE component too, but luckily obligations won’t take effect until January 1, 2015. The bill can be found at: http://www.leg.state.or.us/13reg/measpdf/hb2200.dir/hb2205.en.pdf

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A Comprehensive Will

laffSometimes clients, who aren’t initiated in the law, say the darndest things.  Like this woman, who thought her will was anticipating the contingency that she may become possessed by Satan.

We had a client meeting yesterday and we asked whether our client understood her will, and whether she had questions.  “No questions,” she said, “except one thing…  See this sentence, I really don’t believe in that kind of thing.”  At first we were confused.

She pointed us to the sentence in her will: “I give to Janie all the rest, residue and remainder of my property, of which I may die seized or possessed.”  She said, “I really don’t believe in things like that.”

She understood the sentence to mean: “If I should become ‘possessed’ by Satan and it should kill me, then I give my earthy possessions to Janie.”

We had to explain that the language “seized as possessed,” is simply an archaic way of saying “all the property that you own.”  Actually, here’s a bit of trivia: the word “seized,” comes from “seizing,” an old English word relating to ownership of land.

Who says the law isn’t funny?

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Temporary Injunctions in Probate Litigation

floridaOnce it’s gone, it’s gone.  That’s certainly true in estate litigation because if a personal representative or trustee wastes the estate or trust, the assets are usually not recoverable.  True, the personal representative may be personally liable, but they’re not usually worth much, and the assets are usually just gone.

So what to do during the pendency of litigation?  The personal representative has control of the estate until told otherwise, so how does a plaintiff keep them from wasting the estate?  Injunction.

A recent case addressed temporary injunctions in the case of trust administration.  In Grasso v. Grasso, Grandmother, a trust beneficiary, believed that her Daughter-in-Law and Granddaughter, acting as trustees, were wasting trust corpus.  So, instead of waiting for the much longer case on breach of fiduciary duty, she filed for a temporary restraining order preventing either from selling or transferring any more trust property.

The trustees appealed, but the appellate court dismissed, stating that the TRO was allowable, and the appeal had failed to address the merits of the restraining order under (Florida) state law, which are: (1) irreparable harm; (2) no adequate legal remedy; (3) clear right to relief; and (4) public interest.

Since Grandmother had presumably shown the above four elements, she prevented further alleged waste of the trust corpus.  Because once it’s gone, it’s gone.

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An In Terrorem Clause is Effective to Vitiate an Heir’s Specific or Residuary Interest

The_ScreamThe Georgia Supreme Court recently ruled that an in terrorem clause is effective to vitiate an heir’s specific or residuary interest.  See Norton v. Norton.

In Norton, testator died leaving behind two daughters and two sons.  His will left specific bequests to Daughters, and contained an in terrorem clause which read:

Should any taker under this will… become an adverse party… such takers shall forfeit his or her entire interest hereunder and such interest shall pass as part of the residue of my estate, provided, however, that if such taker is one of the takers of the residue, his or her interest shall be divided proportionately among the takers of the residue.

Daughters brought an unsuccessful will contest and the court invoked the in terrorem clause, taking from them any interest in the estate.  The daughters appealed, but the Supreme Court affirmed.

The daughters conceded that their specific interests was forfeit, but that their interest in the residuary could not be eliminated by the in terrorem clause.  They argued that such an interpretation (eliminating their residuary interests) would be too broad of a construction of the in terrorem clause.  The Supreme Court disagreed.  It said that in terrorem clauses are interpreted by their plain meaning, and this one was dispositive on its face: the clause eliminated specific and residuary interests.  Therefore the court ruled than an in terrorem clause is effective to vitiate an heir’s specific or residuary interest.

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How to Get Oregon to Recognize a Holographic Will: Foreign Wills

last_will_and_testamentI’ve previously discussed how Oregon doesn’t recognize holographic wills, i.e. wills that are handwritten and signed by the testator, but not witnessed.  And that’s true, but there’s also an important exception for some “foreign” wills, i.e. where either the testator or the will is or were outside of Oregon.

ORS 112.255, titled “Validity of Execution of a Will,” states that a will is valid in Oregon if it is in writing, signed, and otherwise executed in accordance with, “the law of… (b) The domicile of the testator at the time of execution or at the time of the testators death; or (c) The place of execution at the time of execution.”

Let’s break that down.  Under (c), a will is valid in Oregon if it was valid at the time and place it was executed.  Wow!  If it was valid when and when it was written, it’s valid in Oregon.

Further, under (b), a will is valid in Oregon if it would have been valid in the testator’s domicile either at the time of execution, or at his death (even if it wasn’t valid at the time and place it was executed)!  If a will would have been valid in the testator’s domicile when he wrote the will, or in his domicile when he died, it’s valid in Oregon.

Getting back to holographs.  Oregon doesn’t recognize them generally.  See ORS 112.235  (will formalities).  However, if the will can be characterized as a “foreign” will (either the testator or the will is or were outside of Oregon), the proponent may stand a chance.

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Being Named Executor Can Be An Honor, But Think Twice Before Taking the Job

office_7aBeing named executor can be an honor, but one should think twice before taking the job, notes Matt Crider.  (More later on whether being named the executor is actually an honor.)  First I’d like to discuss whether one should accept the job.

Acting as executor is hard work.  Some even describe those duties as tantamount to a full-time job.  Crider gives these five questions to ask before accepting the nomination:

1. Do you have the time? Sometimes it take years to close an estate. Even if the probate takes only a few months, marshaling the life-time possessions of another can be a full-time job.

2. Do you have the organizational skills? The job of the executor is to marshal the decedent’s assets.  One should consider whether they have the organizational acumen to catalog a lifetime’s worth of possessions.

3. Can you stand the heat? Dividing an estate between contentious heirs can be tricky.  As the final decider, the executor may come under considerable heat from a dissatisfied heir.  Consider whether you can take the heat.

4. Do you know the rules? Each state has its own laws on the responsibilities of an executor. Chances are these may be so daunting you will need to hire an attorney to help you or to manage the entire process.

5. Can you afford it? There may be travel involved, lots of it. And your time is valuable too. The estate will technically pay those expenses, but heirs may not like using their inheritance for the costs of administration.  See #3.

I would also like to add my own consideration:

#6. How do you feel?  Sometimes the emotional connection between the decedent and the nominated executor makes an otherwise-good candidate into bad choice.  Consider whether you were too close to the decedent properly administer his/her estate.

Last, what if you should fail?  You’ll be liable, either financially or emotionally.  Probate laws impose personal financial liability on executors who mismanage an estate (i.e. break one of the laws).  Or mismanagement could estrange an executor from the heirs who may be family.  So, being named executor can be an honor, but one should think twice before taking the job.

Finally, I want to discuss whether being named executor really is an honor, both from the testator’s, and nominee’s perspective.  Testators should name as executor one who meets the above criteria.  Often, though, the nomination is mistakenly seen as a badge of honor, a sort of who-did-I-love-most.  Testators should name someone they trust and who can withstand the aforementioned rigors.  Nominees should not merely consider the position as mere honoraria, but as work fraught with real duties.

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