As part of her duties, the executor of a will may be required to resolve a variety of disputes involving the estate, the executor, the beneficiaries, or the deceased person. Some of the disputed matters an executor will be responsible for resolving may include:
– Will contests
– Spousal elections against the estate
– Contested creditor claims
– Other litigated matters, such as wrongful death, taxes and lifetime litigations
Will Contests
A will contest is a formal objection, filed with the probate court, questioning a will’s validity. Will contests can arise in many forms, including questions about the authenticity of the will or the testator’s capacity to make the will; disputes alleging undue influence, coercion or fraud in the inducement or procurement of the will; and disagreements about dispositions of property covered by the will.
Most will contests are begun with complaints filed with the probate court,[1] often in response to notice that a petition has been filed to admit the will to probate. To have standing to contest a will’s validity, the person challenging the will must have some interest in the will or the proceedings. For example, an interested person may be any of the following: heirs, estate beneficiaries, children, spouses, creditors or others having property rights or claims against the trust estate or the estate of the decedent which may be affected by the proceeding.[2]
To challenge the will, the contestant or her representative – such as an attorney or legal guardian – must file a petition with the probate court stating the basis for the objection.[3] Generally, a challenge to a will’s validity must occur within the time set by the statute of limitations, which is the time frame allowed by state law for filing the contest. In some states, the statute of limitations provides that a challenge to the will must occur within four or six months of the date the order is entered admitting the will to probate.[4] Other states allow as long as two years from the date of the order.[5] If the challenge involves fraud, the limitations period may be longer, or may begin to run from the date the fraud is discovered.[6]
The person disputing the will – also called a contestant – may challenge a portion of the will or the whole document. Contestants need to prove their claim or objection, either through direct evidence, such as written or witness testimony, or circumstantial evidence, from which the court can deduce the complained-of circumstances. The initial burden of proving facts that support a challenge to the will is on the contestant.[7]
For example, a challenge to testamentary capacity may be proved by medical testimony of a treating physician at the time of the will’s procurement and by witnesses to the will signing.[8] A will that is self-proved is deemed to be valid – and the testator deemed to have capacity – unless it is proven otherwise.[9]
Undue influence is difficult to prove, and the evidence surrounding it is often circumstantial. However, a confidential relationship between the testator and another person, where that person is actively involved in the preparation of the will and the will’s ultimate provisions aren’t what might naturally be expected, may create a “rebuttable” presumption of undue influence.[10] This presumption can be overcome by a showing that the testator was independent and capable in her personal life and signed of her own free will, through testimony of witnesses, the attorney or other evidence.[11]
Finally, under some states’ rules, gifts to a drafter of a will are invalid or violate rules of professional conduct,[12] although proof that the gift was not procured through undue influence may, in some cases, validate the gift. Gifts to care custodians or guardians of a dependent adult may also be deemed invalid unless proved otherwise.[13]
The probate court ultimately decides whether an objection has merit and the challenge is successful, and whether part or all of the will is to be declared invalid.
An in terrorem or no contest clause in a will is one that purports to prevent beneficiaries from bringing will contests by disinheriting those who challenge the will’s legitimacy.[14]
For example, a contest attempting to set aside a will or a provision of a will may trigger a forfeiture under a no-contest clause. By contrast, a suit to construe the will, to evaluate a fiduciary’s actions or to determine whether a particular challenge would violate the no-contest clause, does not usually result in a forfeiture. Most states will enforce a no-contest clause in the will; no-contest clauses are specifically unenforceable in only two states, Florida and Indiana. Still, many states will not enforce the clause or cause a forfeiture if the contestant had probable cause to bring the suit or brought the suit in good faith.[15]
Community Property and Spousal Elective Share
Testators naturally expect that creating a will enables them to dictate who gets their property after death. However, state laws provide parameters about who gets property after death and why. For example, a child unintentionally omitted from the will can be judicially recognized and share in the distribution of probate property.[16]
In addition, spouses cannot generally be fully disinherited and may be entitled to either community property or to an elective share of the estate. [17] Under the laws of community property states, such as Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, a disinherited spouse is entitled to receive a share (typically half) of the marital community property regardless of the terms of the deceased spouse’s will. The deceased spouse is only free to dispose of his or her half of the community property and any “separate” property.[18]
Community property is property acquired by either spouse during the marriage, except property that one spouse acquires as a gift or inheritance or after service of a petition for divorce, legal separation or annulment. Separate property also includes property owned by one spouse prior to marriage and any rent, profit or increase in value of separate property is also classified as separate property.[19]
In non-community property states, property is distributable by will, subject to the spouse’s right to “elect” to receive a specified portion of the deceased’s estate in lieu of the inheritance provided in the will or trust (if any). This spousal elective share varies by state but is typically about one-third of the estate. Some laws protect the surviving spouse based on how long the parties were married, some laws consider children born of the marriage and some laws depend on whether the deceased spouse leaves any assets that need to be probated.
Under Georgia law, for example, no right to elective share exists. A disinherited spouse can, though, receive a financial stipend from the deceased spouse’s estate during the year following the deceased spouse’s death.[20] This support has no set amount, but is decided by the court based on the spouse’s standard of living.[21]
Under the Uniform Probate Code and states that follow it, a disinherited spouse can elect to take a portion of the deceased spouse’s augmented estate, which includes the probate estate, non-probate assets and property titled in either spouse’s name. Minnesota, a UPC state, provides the spouse with a share of the augmented estate determined by the length of time the spouse and the decedent were married to each other, from a low supplemental amount if they were married less than one year, to 50% of the estate if married 15 years or more.[22]
By contrast, Kansas, also a UPC state, allows a surviving spouse to take an elective share of 1/3 of the augmented estate.[23] While Alaska also provides a right to an elective share of 1/3 of the augmented estate,[24] spouses can choose, before death, to create a community property arrangement by written agreement.[25]
In some states, a disinherited spouse can elect to take a portion of the deceased spouse’s probate estate and some, but not all non-probate assets, and no separate assets.[26] Other states only allow a disinherited spouse to take a portion of the deceased spouse’s probate estate and do not include assets passing outside of probate. As a result, in those states, the deceased spouse can completely disinherit the surviving spouse by leaving assets in a revocable trust or retirement account.[27]
A spouse electing to take a share of the estate must give notice to the executor within the time allowed by law, often no later than 9 months after death, though extensions may be allowed in some cases.[28]
Creditor Claims
The executor of an estate is required to evaluate the claims of creditors and, with the approval of the probate court, either allow or disallow those claims. Allowed claims against a solvent estate typically present no issues for the estate; they are paid according to the priority set by state law. However, allowed claims against an insolvent estate, or disallowed claims, may never be paid.
There are several ways a dispute with a creditor can arise during administration of an estate. Examples include:
– A creditor disputing whole or partial disallowance of a claim;
– A creditor claiming lack of required notice;
– A creditor disputing the priority of payment;
– A creditor whose claim is disallowed contesting allowance of other creditors’ claims;
– An executor asking the court to disallow or allow a claim; and
-An action by a creditor or beneficiary seeking to hold an executor liable for improperly handling a claim.
Disputes regarding creditors’ claims are handled differently by state. Some states handle disputed claims in probate court, while others require a creditor to file a separate civil suit for payment once a claim has been disallowed. As with the filing of the claim and any objections, statutes of limitation usually exist for these lawsuits as well, whether filed in civil or probate court.
Under the UPC, if a creditor disagrees with the executor’s handling of a claim, the creditor has 60 days from the date the claim was allowed or disallowed to file a civil lawsuit contesting the executor’s actions and seeking allowance and payment of the claim.[29] A judgment for the claimant in another civil proceeding is an allowance of the claim;[30] claims allowed by virtue of a judgment in a separate civil proceeding are payable in the same manner as other allowed claims.[31]
California has not enacted the UPC, but has a complex system of its own for handling disputed creditors’ claims. Under California law, a creditor who disagrees with the allowance or disallowance of a claim has 90 days from the date of rejection to file a lawsuit against the personal representative to liquidate the claim.[32] If the claim is neither allowed nor rejected, the creditor may treat the failure as a rejection and file suit in civil court to litigate its claim.[33] As under the UPC, California treats allowed claims and those allowed as a result of litigation the same way.[34]
Under Florida law, a claimant has 30 days from the date of service of an objection to its claim within which to bring an independent, civil action upon the claim.[35] Florida law does not specifically address the failure to allow or reject claims, but it does provide that a claim allowed as a result of litigation receives no higher priority than any other claim in its class.[36] All Florida claims must be electronically filed with the clerk of court in order to be valid and allowed. Failure to timely file electronically (even if a paper claim is timely received by the court) will cause a claim to be disallowed.[37]
Other Litigation Matters
In addition to will contests, spousal election proceedings and creditor claim disputes, executors may be called on to litigate other matters related to the deceased person or her property. These may include matters initiated by or against the estate, including wrongful death, tax matters and lawsuits filed by or against the deceased person during her lifetime. Nearly all of these matters are litigated in a court other than the probate court, and resolution of the matter in civil court may be necessary before the estate can be closed.
- Wrongful Death
It is not unusual for a person’s death to result in an action for wrongful death. Wrongful death actions are filed by the executor of the person’s estate, requiring that an estate be opened before suit is filed. The appointed executor acts on behalf of the estate in recovering damages for the testator’s death. These claims commonly arise as a result of auto accidents, personal injury accidents, professional malpractice, workplace accidents, mesothelioma, dangerous or defective products or other negligence.
While this type of claim is not tried in the probate court where the estate is opened, the probate court may be involved in parts of the litigation process. The probate court may hold hearings and be required to approve any proposed settlement or allocate and distribute the proceeds of the claim or litigation. Beneficiaries of the estate may be required to sign off on any matters requiring their approval.[38]
- Tax Matters
Tax disputes can arise due to misfiled (or unfiled) income tax returns or valuation controversies between the estate and the federal or state taxing authorities. While the executor of an estate is responsible for filing the deceased person’s final income tax return and any estate returns, the executor is also responsible for managing tax disputes on behalf of the estate. Tax matters affect the estate and its beneficiaries financially and claims for taxes are generally high priority under most states’ laws. In Utah, for example, debts and taxes due under federal law are third level priority, after payment of funeral expenses and expenses of probate, while debts and other taxes due are fifth level priority, still higher than most other creditors.[39] A personal representative who fails to file required returns or who fails to pay taxes when due may incur personal liability to taxing authorities for the unpaid tax, penalties, and interest.[40]
- Lifetime Lawsuits
When a deceased person is involved in litigation prior to death, the executor may be responsible for resolving the litigated matter if the action is one that survives death, such as a contract or personal injury matter. In such cases, the executor of the estate becomes the successor in interest and will be responsible for litigating the claim. For the executor to continue an action on behalf of a decedent, she must notify the court in which the action is proceeding of the person’s death and request to be allowed to continue the matter in the decedent’s stead. [41]
[1] Me. Rev. Stat. tit. 18-A, §3-102, § 3-105. See, Plimpton v. Gerraro, 668 A.2d 882 (Me. 1995). (Probate court has “exclusive jurisdiction of informal and formal proceedings to determine how decedent’s estates are to be administered, expended and distributed.”).
[2] Cal. Prob. Code § 48.
[3] See e.g., Have you Ran out of Time? How Long Do I have to Contest a Will or Trust In California?, Albertson & Davidson, LLP (March 14, 2018), https://www.aldavlaw.com/blog/ran-time-long-contest-will-trust-california /.
[4] See e.g., Wash.Rev. Code Ann. § 11.24.010.
[5] Tenn. Code Ann. § 32-4-108.
[6] See, In re Estate of Mary Reeves Davis, 308 S.W.3d 832 (Tenn. 2010).
[7] Estate of Dodge, 576 A.2d 755 (Me. 1990).
[8] In re Estate of Rosen, 23 N.E.3d 116 (Mass. App. Ct. 2014).
[9] In re Estate of Camin, 323 N.W.2d 827 (Neb. 1982).
[10] Langford v. McCormick, 552 So. 2d 964 (Fla. Dist. Ct. App. 1989).
[11] Id.
[12] Sandford v. Metcalfe, 954 A.2d 188, 191-9 (Conn. App. Ct. 2008) (citing Conn. Rules of Prof’l Conduct 1.8).
[13] Cal. Prob. Code § 21380.
[14] Legal Information Institute, In Terrorem Clause, https://www.law.cornell.edu/wex/no-contest_clause
[15] T. Jack Challis and Howard M. Zaritsky, American College of Trusts and Estates Counsel, State Laws: No-Contest Clauses, https://www.actec.org/assets/1/6/State_Laws_No_Contest_Clauses_-_Chart.pdf
[16] See, e.g., Colo. Rev. Stat. §§15-11-301, 15-11-302.
[17] A spouse can waive their elective share rights and be disinherited if they agree in writing, such as through a valid prenuptial or postnuptial agreement. See, In re Estate of Roberts, 388 So. 2d 216, 217 (Fla. 1980).
[18] See, Ellen Jackson, Estate Planning in a Community Property State, Stokes Lawrence, Aug. 11, 2016, available at https://www.stokeslaw.com/news-and-insights/estate-planning-in-a-community-property-state.
[19] Ariz. Rev. Stat. § 25-201, et seq. (Arizona Uniform Premarital Agreement Act).
[20] Ga. Code Ann. § 53-3-1 et seq.
[21] McClure v. Mason, 228 Ga. App. 797 (1997).
[22] Minn. Stat. Ann. § 524.2-202.
[23] Utah Code Ann. § 75-2-202.
[24] Alaska Stat. § 13.12.202.
[25] Alaska Stat. § 34.77.090.
[26] Del. Code Ann. tit. 12, § 902.
[27] Ohio Rev. Code Ann. § 2106.01
[28] Tenn. Code Ann. § 31-4-102(a)(1).
[29] UPC section 3-804(3) (2010).
[30] UPC section 3-806(d) (2010).
[31]UPC section 3-807 (2010).
[32] Cal. Prob. Code §9353.
[33] Cal. Prob. Code §9256.
[34] See, Cal. Prob. Code sections §§9003, 9300.
[35] Fla. Stat. Ann. § 733.705.
[36] Id.
[37] See, e.g., United Bank v.Estate of Frazee, 197 So. 3d 1190 (Fla. Dist. Ct. App. 2016)
[38] See, e.g., Wrongful Death Cases, Delaware County, Ohio Probate Court, https://probate.co.delaware.oh.us/formsservice/estates/wrongful-death-cases/
[39] Utah Code Ann. § 75-3-805.
[40] Taxes at Death, South Carolina Bar, https://www.scbar.org/public/get-legal-help/common-legal-topics/taxes-at-death/
[41] See,Cal. Civ. Proc. Code § 377.31.