Will Contests and Trust Contests
It is an unfortunate fact that very serious disputes frequently arise in connection with the disposition of property upon a person’s death. The problems begin before the death, when a previously active and independent family member begins to suffer age related or disease related decline and becomes more dependent and less able to manage his or her own affairs. When family members or other persons step in to help, it is in most cases, a kind and supportive effort done in good faith and often essential to the continuing well-being of the dependent person. However, in some instances, the persons providing the assistance may deliberately exploit their rendering of assistance for their own personal gain. In aggressive cases, this may take the form of outright misappropriation of assets from the dependent person while still living, or the manipulation of the dependent person, causing the dependent person to leave all of their assets, or a disproportionate share of the assets, to the aggressive person. Shocking instances of ruthless and shameless greed are not uncommon.
Other times, initially well-intended persons, who have provided assistance to the dependent person for an extended period of time, may feel a sense of entitlement for their efforts and they may feel morally justified in seeking to acquire most or all of the dependent person’s assets. This can be a more ambiguous situation. A competent decedent certainly has a right to provide for a person who has been devoted to them and such a person may be well-deserving. But, sometimes for an aging and declining person, the personal closeness and familiarity established from a daily relationship with a child who lives in and provides companionship and care may overshadow a lifetime of love and devotion by other children who are busy making a living and supporting their families and not able to provide that attention and care. In these situations, it may be difficult to determine whether a decedent is making competent and independent decisions or whether the care provider has crossed the line and is directing the outcome.
In these situations, the person providing assistance may work to convince the dependent person that rewarding them is the only fair thing to do, or they may demand benefits as a condition for continuing assistance, or apply a variety of other psychological manipulations. Aggressive persons will commonly try to isolate the dependent person by limiting contact with friends and other family members. They will poison the dependent person’s mind against others they deem a threat to their schemes. They will arrange for the dependent person to make a new will or trust or a change of life insurance beneficiary, in their favor. If the weaknesses of the dependent person have been unfairly exploited, by what the law calls “undue influence,” the result is improper and does not represent the true intentions of the dependent person.
In these cases, other heirs or intended beneficiaries of the dependent person may have to bring a will contest or trust contest, to correct the wrong that has been done. As long as they have sufficient mental capacity and are not unduly influenced, people have a perfect right to leave property to whoever they chose. For this reason, judges are very reluctant to change a person’s designated beneficiaries without very strong evidence. This is where the battle lies, providing sufficient evidence to convince the court that the decedent either lacked sufficient mental capacity for the execution of a new will or trust, or that the decedent was caused to act through undue influence. These cases require well-planned discovery efforts and independent investigations to develop the necessary facts.
Another takeaway from experience in litigating will and trust contests is that it is important for individuals to establish an estate plan at a time in their lives when they are independent and enjoy vitality. A claim that a decedent lacked sufficient mental capacity to execute a will or trust is normally held to a high standard of proof and usually cannot be proven by anecdotal evidence alone. Without proof of a lack of capacity, a person will be presumed to have the right to change the beneficiaries under a will or trust or other instrument at any time, even when death is imminent. A challenger will then have the burden of proof that there was undue influence. Whether the burden has been met is a judgment call by the court, with significant risks for a contestant. When combined with other evidence presented to challenge a late-in-life change of a will or trust, the fact that a decedent maintained a clearly stated plan for distributing property to chosen beneficiaries for many years, may provide persuasive evidence to the court in deciding a will or trust contest. Evidence of a long-standing estate plan may be a strong factor in successfully proving that an end of life change of beneficiary is the result of undue influence rather than the true act of the decedent. There are good reasons that estate planning should be done by mid-life, and not put off to later years.
In circumstances in which it is suspected that a dependent person is being subjected to manipulation and undue influence by another, a conservatorship may provide a way to rescue a dependent person from the abuser. However, the normally routine process of petitioning for the appointment of a conservator may turn into a difficult and costly battle in which the abuser files a competing petition to have themselves appointed conservator, and in which the abuser makes counter-accusations against the well-intended relative or friend who is first seeking appointment as conservator. These battles can be won, but they can be very difficult at times, especially when there are limited available resources to support the legal efforts required. But, in most cases, significant advantage over the situation is still gained, even when the suspected abuser is appointed conservator, due to the on-going oversight and accounting requirements of the conservatorship.
A trust can provide a very efficient way to distribute assets on death. But, a trust requires a faithful and competent successor trustee. Because most trusts are intended to operate without court supervision, successor trustees are normally not required to post a bond or to account to the court for their handling of trust funds. In the majority of cases, family members acting as successor trustees faithfully carry out the directions of a trust for distribution of the trust assets.
However, there are commonly instances where an appointed successor trustee, due to a lack of understanding, neglect or outright dishonesty, fails to properly administer and distribute a trust to the beneficiaries according to the terms of the trust. In these circumstances it may be necessary to file a petition in the probate court to compel some action by the trustee or to seek the removal and replacement of the trustee. These situations can also result in a difficult legal battle in which the trustee uses trust assets to hire attorneys to defend the trustee’s actions. But, the fact that such a petition has been filed and is pending, may be a deterrent to on-going improper conduct by the trustee. In any trust with an unreliable trustee, the affected beneficiaries should take prompt action to protect their interests.
Life Insurance Beneficiary Disputes
A change of beneficiary of a life insurance policy may also be challenged on the grounds that the decedent lacked sufficient mental capacity to make the change of beneficiary or that the change was the result of undue influence. These cases, however, are not normally litigated in the probate court. The great risk in these cases is that the “new” beneficiary will claim the policy benefits from the insurance company and receive the funds before the originally intended beneficiary learns that there was a change. Unless the new beneficiary has substantial exposed assets in California, there may be no way to recoup the insurance funds once they have been paid over to the new beneficiary. For this reason, prompt action must be taken to inform the insurance company of the challenge to the change of beneficiary, prior to the payment of the policy proceeds. If this is done, the insurance company will normally interplead the funds to the court, meaning that the funds will be deposited with the court pending a determination of the challenge and a court decision as to who is the proper beneficiary. If this is done, the challenger to the change of beneficiary can be assured that the funds will not be hidden or dissipated and can be recovered if the challenge is successful. Furthermore, because interpleader cases are filed as regular civil actions and not as probate cases, there is a right to a jury trial. Evidence of abuse and overreaching by the new beneficiary can be very persuasive with a jury.