Frank W. Streng, White Plains lawyer, Strategies for Avoiding Will Contests

NOTES

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  • Attorney’s Assignment: Representing One or More member of "Dysfunctional" Families – assume that your client’s family is dysfunctional

   

   

  • Dysfunctional – Webster defines it as "impaired or abnormal functioning"

   

   

  • Examples of Dysfunctional Families (after death scenarios)

   

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  • "Bad families with No Parental Control": No one likes each other, including the parents

   

   

  • "Bad families with Parental Control": No one likes each other, but the parents are able to require members of the family to act with propriety and respect

   

   

  • Good Family with Bad Marriage: Children seem to respect each other, but parents hate each other

   

   

  • "Good Families that are Broken through Divorce"

   

   

  • "Good Families that are Broken through Remarriage (with children from second marriage)

   

   

  • "Good Families that are Broken through Remarriage (without children from second marriage)

   

   

  • "Good/Bad Families" on the Death of the Survivor Parent: Throw out the Family Rule Book and Become Super Dysfunctional

   

   

  • "’Good Families" that have Very Good Actors in which One or More members Hate Each other

   

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  • Client’s Goal: Hiring you to protecting integrity of client’s decisions in estate plan (e.g., preparing will where client cuts out distributees or makes so-called unequal distributions)

   

 

 

 

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  • Your engagement as counsel

     

    • Separation between Mom and #1 child

     

     

    • Attorney-client privilege

     

     

    • Joint representation issues

     

   

   

  • Diligence in legal work

     

    • Detailed interview with memoranda

     

     

    • Detailed description of assets and liabilities

     

     

    • Discussion with client as to nonprobate assets, including joint assets and intentions of client as to whether #1 child is the intended beneficiary of joint account

       

      • Note: POA account v. joint account; joint account v. Totten trust account

       

     

     

    • Obtaining copies of existing and prior wills/trust agreements/power of attorney forms/health care proxies

     

     

    • Satisfying yourself that client has capacity and is not subject to undue influence

     

     

    • Sending drafts of instruments with letters of explanation

     

     

    • Dealing with Mom, and Mom alone, as to drafts and redrafts

     

     

    • Supervision of execution

     

     

    • No shortcuts

     

     

    • Exclusion of #1 child from room for will execution

     

     

    • Other estate planning

     

     

    • Living will/health care proxy

     

     

    • Durable power of attorney

     

     

    • Revocable trusts

       

      • Attorney’s Perceived Resistance of Revocable Trusts

       

       

      • Client’s perspective: attorneys have self-interest in assuring probate through earning a huge percentage fee in estate

       

       

      • Client’s Misperceptions

         

        • Revocable trusts always avoid probate

         

         

        • Assets cannot pass through revocable trust unless asset is transferred to trust

         

         

        • Revocable trusts avoid estate and other taxes

         

         

        • Tax neutrality of revocable trusts

         

       

       

      • Advantages of revocable trust re procedural and substantive obstacles to "will contest"

       

       

      • Revocable trusts as "continuing" will

         

        • Effect of client managing financial matters through all-inclusive features of brokerage account for trust

         

       

       

      • Mechanics of Creation of Trusts – EPTL 7-1.17

       

     

   

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  • To be effective lifetime trust must be in

     

    • Writing

     

     

    • Executed by the creator and at least one trustee

     

     

    • Acknowledged or executed in the presence of two witnesses

     

   

   

  • Grantor can be sole trustee

   

   

  • Oral trusts not recognized in statute

   

   

  • Amendment/Revocation is effective if in

     

    • Writing

     

     

    • Executed by the person authorized to amend or revoke

     

     

    • Acknowledged or executed in the presence of two witnesses

     

     

    • Notice of amendment or revocation shall be delivered to at least one other trustee

       

      • Effective date the date of execution

       

       

      • Failure to give notice does not make invalid

       

       

      • No liabilities for actions of trustee prior to actual notice

       

     

   

   

  • Funding of Lifetime Trust

     

    • Valid as to assets transferred to trust

     

     

    • Transfer is not accomplished by "recital of assignment, holding or receipt in the trust instrument:

     

     

    • Transfer is accomplished through "written assignment describing the assets with particularity" or, in the case of "real estate, stocks, bonds, bank and brokerage accounts and the like" a recording of deed or "completion of registration of the asset"

     

   

 

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  • Additional procedural obstacles for challenging validity of revocable trusts, or transfers to trusts

     

    • Contrasts of Will Contests v. Trust Contests

     

     

    • Lack of identified procedural remedies in trust contests

     

     

    • Challenging client’s capacity in execution of documents that results in transfer to revocable trusts

     

   

 

1.  

    

   1. Scenario #2.

    

   Same facts as 1 above. But now, after you have engaged in initial work for Mom on Will, Power of Attorney, Health Care Proxy, Mom may be mentally incompetent and #1 child retains you for "Medicaid Planning" and related services

 

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  • What is Medicaid planning

     

    • Planning to assure that Mom becomes eligible for Medicaid and that part or all of Mom’s assets is sheltered from payment to health care providers/nursing home

     

   

   

  • Planning Options

     

    • Conventional (if Mom competent to act on her own):

     

     

    • Rule of halves: making outright gifts through use of prescribed monthly rate – Westchester rate for 2002 is currently $7,138 per month

     

     

    • Possible transfer of residence with retained life estate

     

     

    • Tax consequences for planning recommendations

     

     

    • Options on "gifting" to #1 child

       

      • Outright v. trust

       

       

      • Nonprobate: Joint v. Totten trust

       

     

     

    • If Mom not competent to act on her own

     

     

    • Does the durable power of attorney form have gift powers beyond statutory form (i.e., gift tax exclusions)?

       

      • If gift powers exist, can #1 child, as agent, make gifts to herself

       

       

      • Consider cases and the effect of self-dealing (they don’t work)

       

       

      • If gift powers do not exist, "extra legal" options for family unit acting together

       

     

     

     

    • Medicaid planning under Article 81

     

     

    • Interrelationship with Will Contest, Medicaid Planning and Article 81

     

     

    • Medicaid Planning

       

      • Did Mom transfer assets to #1 child with the intention of gifting assets to child?

       

       

      • Was #1 child acting as a type of agent, thereby encouraging other children to commence proceeding against child?

       

     

     

    • Preparing Will/Revocable Trust Agreement for Client with Diminished Capacity and/or Client who is the subject of Article 81 proceeding

       

      • Same considerations as above for estate plan

       

     

   

•  

   

  • Detailed interview with memoranda

   

   

  • Detailed description of assets and liabilities

   

   

  • Discussion with client as to nonprobate assets, including joint assets and intentions of client as to whether #1 child is the intended beneficiary of joint account

     

    • Note: POA account v. joint account; joint account v. Totten trust account

     

   

   

  • Obtaining copies of existing and prior wills/trust agreements/power of attorney forms/health care proxies

   

   

  • Satisfying yourself that client has capacity and is not subject to undue influence

   

   

  • Sending drafts of instruments with letters of explanation

   

   

  • Dealing with Mom, and Mom alone, as to drafts and redrafts

   

   

  • Supervision of execution

   

   

  • No shortcuts

   

   

  • Exclusion of beneficiary from room for will/trust execution

   

   

  • Other estate planning

   

   

  • Living will/health care proxy

   

   

  • Durable power of attorney

   

   

  • Revocable trusts

   

 

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  • Video type Will/Trust Executions

   

   

  • Admissibility is assured, subject to proper evidentiary submission, but should you use them

   

   

  • Possible Use of Psychologists/Psychiatrists/Other Medical Providers to Establish Client’s Capacity

   

   

  • Be careful

   

 

 

1. How to Win a Will Contest: Perspectives of Petitioner, Objectant and Court

 

 

 

 

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  • Marshalling of assets and other matters incident to estate

   

   

  • Administer the estate irrespective of litigation

   

 

 

• Objectant’s Perspective

 

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• Petition for temporary letters (SCPA 901)

 

 

• If preliminary letters granted, consider a petition to revoke

   

  • if Will is facially (arguably) improper

   

   

  • if proper grounds under SCPA 711 or 719

   

 

 

• If preliminary letters not sought, then possibly seek temporary letters

 

 

 

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  • Petition to compel production of Will (SCPA 1401) for prior instruments

   

 

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  • Pursuant to SCPA 1412(4)(b), take whatever actions necessary to make sure that "papers and records of the decedent" are properly preserved by the preliminary executor

   

 

 

• Options on Return date of Probate Citation

 

 

 

• Objectant’s Perspective

 

 

 

 

 

 

 

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  • Consider options as to status of parties, e.g., is the spouse a distributee or not?

   

 

 

• Petitioner’s Perspective

 

 

 

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  • If you have not yet gotten preliminary letters, seek them

   

   

  • Make sure that your client is doing his/her/its job as fiduciary, i.e., ignore Will contest and administer the estate

   

   

  • Make sure records of the decedent are preserved

   

 

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  • If a beneficiary under contested Will is also a petitioner, make sure that, at all times, your client is acting properly

   

 

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  • Court’s Perspective

   

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    • Notice of Objections Filed: Before discovery can begin, a citation for notice of objections filed must be obtained from the Court and served upon all beneficiaries under Will whose interest are adversely affected by objections (SCPA 1411; Rule 207.27); conduct discovery after return date of citation

     

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    • Document production

       

      • Pursuant to local rule, duces tecum subpoenas for medical records are returnable at Surrogate's Court

       

     

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    • Depositions

       

      • 3 and 2 rule – Unless there are "special circumstances", discovery limited to the period of three years before and two years after the execution of Will (Rule 207.27)

       

       

      • Attesting witnesses out of state: Pursuant to SCPA 508 and Rule 207.22, the Court may direct testimony to be taken outside of the state by a commission

       

     

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    • Bills of Particulars

       

      • Generally, the petitioner is entitled to bill as to those objections in which the objectant has the burden of proof

       

       

      • See Rule 207.23 for further details

       

     

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    • Summary Judgment Motions

     

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    • Place burden on objectant to flesh out objectant’s case, if one exists

     

     

    • With volume of cases, summary judgment motions are getting greater sympathy from Surrogates

     

     

    • CPLR 4519 (death man statute) problems do not help movant on summary judgment motion

     

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    • Objections on lack of due execution

       

      • Submit transcripts of 1404s and other examinations

       

     

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    • Objections on lack of testamentary capacity, undue influence and fraud

     

     

    • Make motion after the end of discovery

     

     

    • More difficult motion: do not make unless your case is compelling

     

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    • Settlement Options

     

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    • Factors:

       

      • Non probate and gifted assets

       

       

      • Estate tax apportionment

       

       

      • Distributions under the intestacy statute

       

       

      • Distributions under the elective share statute

       

       

      • Interest of beneficiaries under prior Wills

       

       

      • Appointment of executors and trustees

       

       

      • Interest of persons under a disability and working with GAL

       

       

      • Outright share or trust share for spouse

       

     

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    • Types of Settlements:

     

     

    • Admit propounded Will to probate, subject to lump sum payment to objectant

     

     

    • Deny probate to propounded Will, admit prior Will to probate, subject to lump sum payment to petitioner

     

     

    • Revise testamentary scheme to accommodate interests of petitioner and objectant

     

     

    • Pursuant to SCPA 1411(6), settlement is binding on all persons under propounded Will who has not appeared upon service of the citation upon the filing of objections

     

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    • Trial

     

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    • In jury trial, case is not scheduled for trial until the filing of a note of issue and statement of readiness and an order framing issues

     

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    • In court trial, you need to file a note of issue and statement of readiness and statement of issues

     

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    • Consider possible withdrawal of jury demand to compel court trial if you are the objectant and have asked for a jury trial (SCPA 503(b))

     

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    • Critically evaluate your case

     

     

    • Withdraw objections that you cannot support, such as due execution on a lawyer supervised execution

     

     

    • Consider CPLR 4519 and how it impacts on petitioner or objectant

     

     

    • Consider expert witnesses and whether your expert knew the decedent

     

     

    • Consider relevancy of financial transactions with decedent on objections and effect of such evidence

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
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• Make sure probate proceeding is aggressively prosecuted

 

 

• Interview attesting witnesses and make sure they are available for SCPA 1404 examinations

 

 

• If you want to expedite the proceeding, seek a discovery order

 

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• If there is a person under a disability adversely protected by the Will and represented by a Guardian ad Litem (GAL), work closely with GAL

 

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• Objections to issuance of letters

   

  • Grounds generally under SCPA 711 and 719

   

   

  • For Attorney-fiduciaries, see SCPA 2307-a

   

 

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• Permits immediate use of CPLR discovery devices

   

  • Objectant generally pays for transcripts of depositions, including examinations of attesting witnesses

   

 

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• File objections to probate and to the issuance of letters

 

 

• Grounds for objections to probate of will

   

  • Due execution

   

   

  • Consider not filing objection if it cannot be arguably supported based upon 1404 examinations

   

   

  • Testamentary Capacity

   

   

  • Fraud

   

   

  • Undue Influence

   

 

 

• Demand for jury trial

 

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• Conduct examination of attesting witnesses pursuant to SCPA 1404

 

 

• Defer date for objections to probate until conclusion of examination of witnesses

   

  • Permits attorney and client to make studied decision as to whether to object to probate

   

   

  • If there is an in terrorem clause (EPTL 3-3.5), puts off decision as to possible forfeiture of client’s interest that may be caused by unsuccessful objections to probate

   

 

 

• Pursuant to local rule of Surrogate's Court, Westchester County, expense of transcripts of examinations of witnesses are paid by estate

 

 

• Defers other CPLR discovery devices until after objections are filed and issue is joined

 

 

• 1404 examinations are to take place at Surrogate's Court pursuant to Rule 207.28, unless the Court otherwise provides; and usually cannot be conducted until personal jurisdiction is complete

 

 

• Petitioner’s Perspective

 

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• Petition for probate and for Preliminary letters

 

 

• Requirements for Attorney-Fiduciary under SCPA 2307-a

 

 

• Issuance of citation

   

  • Do not delay on account of missing waivers and consents if you sense a problem; have citation issue and file waiver when you get it

   

 

 

• Need for appointment of Guardian ad Litem for persons under a disability

 

 

• Preliminary letters

   

  • Assured under SCPA 1412

   

   

  • Control the estate as part of your strategy in will contest

   

   

  • If you delay and end up with an actual or potential application for temporary letters, you may be involved with "haggling" a less than satisfactory solution to obtain preliminary letters, including a bond or other restrictions

   

 

 

• Representation of Client in Different Factual Scenarios and Options for Counsel

 

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  Dad is deceased and Mom, age 78, is in poor health and has 4 children. #1 child, who is 1 of 4 children, is closest to Mom, both physically and emotionally. Mom wishes to give all of her property to #1 child, and you are engaged by Mom but #1 child arranges for the initial meeting.
• Scenario #1.