Articles Posted in Estate Litigation

A last will and testament is generally valid if it meets certain statutory requirements.  In an August 15, 2017 Tennessee estate case, the son of the decedent contested the validity of the will submitted into probate for his father.  The affidavit attached to the purported will was signed, in the presence of the testator, by two witnesses.  After a hearing, the trial court held that the will and accompanying affidavit were not in strict compliance with the statute and denied admission of the will to probate.  The proponent of the will, the decedent’s wife, appealed that decision to the Court of Appeals of Tennessee.signature sticker

In Tennessee, a will must be signed by the testator and at least two witnesses.  The testator must signify to the witnesses that it is his will and either sign the will, acknowledge that he already signed the will, or have someone else sign his name while in the testator’s presence.  The witnesses must then sign in the presence of the testator and each other.

In 2016, the Tennessee legislature amended the law to allow for a separate affidavit containing the witnesses’ signatures to be integrated into a will executed prior to July 1, 2016, as long as the signatures were made at the same time as the testator signed the will.  If the witnesses signed the affidavit on the same day as the testator, it is presumed that they signed at the same time, unless there is convincing evidence otherwise.

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When a beneficiary under a will has died before the testator has passed away, the devise to the beneficiary is known as a lapsed gift.  In some cases, this may complicate the probate administration proceedings.  In a July 25, 2017 Tennessee estate case, the Court of Appeals reviewed a dispute involving a provision of the decedent’s will bequeathing the residue and remainder of her estate to her former husband, who had predeceased her. contract

The will at issue was executed in 1991.  When her husband died in 1996, the decedent never revoked the 1991 will.  The decedent passed away in 2012, and the husband’s children and the former stepchildren of the decedent claimed entitlement to the residuary estate by virtue of Tennessee’s anti-lapse statute.  Conversely, the executrix of the estate argued that such a disposition was inconsistent with the decedent’s intent.

In Tennessee, the intent of the person making the will is the most important factor in will interpretation cases, and it is primarily ascertained from the words of the will itself, read in the light of the surrounding and attending circumstances.  Evidence outside the will may be admissible to show the circumstances surrounding the testator when she executed her will and to resolve any ambiguity in the will as to the testator’s intentions.  However, evidence is inadmissible to add to, vary, or contradict the language used in a will.

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Some types of estate assets, such as a person’s business interests, can be complicated to settle during probate without a valid will or any other estate planning tools. In a June 29, 2017 Tennessee estate decision, the Court of Appeals was asked to decide which of the decedent’s heirs was entitled to ownership of a company operated by the decedent. The lower court had concluded that the widow was the owner of all of the shares of stock in a summary judgment motion, and the decedent’s daughters appealed.stock market

The stock certificate at issue was titled in the name of the decedent and his widow as joint tenants with rights of survivorship. The widow argued that the shares of stock in the corporation passed to her as the surviving joint tenant with right of survivorship. The decedent’s daughters, however, argued that the corporation’s assets should be part of the decedent’s estate. The daughters contended that the stock certificate was defective, citing a Tennessee statute that requires a share certificate issued by a corporation to be signed by two officers who are designated in the bylaws or by the board of directors. The widow responded that even if there was a technical defect resulting from the lack of a second signature, the clear intent of the incorporators and directors was to issue the shares of stock to the decedent and the widow as joint tenants with rights of survivorship.

On appeal, the court stated that the question of the ownership of the corporate stock turned on the intent of the directors and incorporators. The court observed that the widow had presented affidavits supporting the conclusion that she, the decedent, and the incorporator intended to issue the stock as joint tenants with rights of survivorship, and the stock certificate itself also supported her argument. The court went on to find that although the certificate was not signed by two corporate directors or officers as directed by Tennessee statute, it could nevertheless be used to indicate the intent of the issuers of the stock.

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In some estate cases, the court is called upon to determine the ownership and distribution of certain assets that may not typically be subject to probate, such as insurance policies, retirement accounts, and other accounts with named beneficiaries.  In an April 17, 2017 case from the Court of Appeals of Tennessee, the parties’ disagreement concerned annuities and insurance policies paid for by the decedent.  After the trial court ruled that the assets should be transferred to the estate and the decedent’s grandchildren, the executor appealed.gavel

The decedent in the case was survived by her two sons, one of which was the executor of her last will and testament.  The will provided that the sons were to share equally in the decedent’s residuary estate.  Before her death, the decedent had taken out insurance policies on the grandchildren’s lives, but no beneficiary was named in them.  In addition, certain annuities paid for with the decedent’s money were listed in the executor’s name and had never been owned by the decedent.

On appeal, the court first considered the matter of the insurance policies on the grandchildren.  Although no beneficiary was listed on either policy account, the trial court ordered that each of the grandchildren be named as the owner of their respective policy.  However, the appeals court held that there was no legal basis to support the result.  Without any designated beneficiaries on the insurance policies at the time of the decedent’s death, the court explained that the policies were subject to probate and are to be distributed in accordance with the terms of the will.  Accordingly, the appeals court reversed the lower court’s decision transferring the policies to the grandchildren, and it ordered that they be transferred to the estate.  The policies are then subject to distribution as part of the residuary estate, to be divided equally between the two sons.

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Probate and estate administration can be difficult to settle when there are claims or challenges involved. In a May 26, 2017 case, the Court of Appeals of Tennessee reviewed a claim against the decedent’s attorney-in-fact, which alleged undue influence arising from a confidential relationship. The decedent’s survivors, two nieces and one nephew, filed the complaint against the attorney-in-fact, who was the decedent’s other nephew. Following a bench trial, the lower court dismissed the complaint, finding that although a presumption of undue influence had been raised by a confidential relationship between the defendant and the decedent, the defendant had successfully rebutted the presumption. The plaintiffs brought an appeal.pencil on desk

To prove undue influence, the plaintiffs generally must prove the existence of suspicious circumstances warranting the conclusion that the decedent did not act freely and independently. Examples of such suspicious circumstances may include the existence of a confidential relationship between the decedent and the defendant, the decedent’s physical or mental deterioration, the defendant’s active involvement in procuring the will, secrecy concerning the will or the lack of independent advice, the unjust or unnatural nature of the will’s terms, fraud or duress, or any other circumstances that establish undue influence. Under Tennessee law, there is a presumption of undue influence when the dominant party in a confidential relationship, i.e., the defendant, receives a benefit from the decedent. Once a presumption of undue influence arises, the defendant must establish that the transaction at issue was fair by clear and convincing evidence to rebut the presumption.

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There are any number of situations that can complicate the settling of a decedent’s estate after their death.  In a March 7, 2017 case before the Court of Appeals of Tennessee, the decedent was in the midst of divorce proceedings with her estranged husband at the time of her death.  After the trial court concluded that the decedent’s assets were to pass to her estranged husband, the personal representative of her estate appealed the

The decedent in the case was in the process of divorcing her estranged husband at the time of her death.  The decedent and her husband had executed a separation agreement as part of the divorce proceedings, in which they agreed to individually maintain ownership of specified marital assets and execute the documents necessary to effectuate the transfer of each asset.  However, the decedent passed away before the respective transfers of property were made, and her personal representative filed an action seeking to enforce the terms of the settlement agreement.  The husband argued that the agreement had been rescinded because the parties failed to perform under the agreement.  The trial court determined that the agreement had been rescinded by the husband, and in ruling in this way, all jointly owned marital assets passed to him at the decedent’s death.

On appeal, the court initially determined that the agreement was enforceable pursuant to ordinary rules of contract construction, despite the absence of a final divorce judgment.  Since the agreement was executed in Georgia and contained a choice of law provision, the court looked at Georgia’s statutes governing contracts.  Accordingly, to justify rescission, there must be a material nonperformance or breach by the opposing party.  However, the right to rescind belongs only to a party who is free from substantial default himself.  A party who has substantially broken the contract cannot rescind it on the ground that the other party subsequently refused or failed to perform.

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If a person has exerted undue influence over a decedent in matters concerning his or her estate planning, it may be appropriate to overturn a bequest in some instances.  In an opinion released on March 14, 2017, the Court of Appeals of Tennessee reviewed a claim of undue influence following the decedent’s death.  The nieces of the decedent filed the complaint, contesting the validity of a quitclaim deed and the decedent’s will on the ground that they were results of undue influence exerted upon the decedent by her stepson and his wife.  After a jury found the documents to be valid, the plaintiffs brought the current appeal.golden pen

The decedent in the case died in 2012.  After the decedent’s death, a will that she executed in 1985 was submitted for probate.  However, the defendants subsequently provided a document dated in 2010, purporting to be the decedent’s will.  In the 2010 will, the decedent revoked all prior wills, disinherited the plaintiffs, and named the stepson as the sole beneficiary.  They also submitted a 2011 codicil that designated the stepson’s wife as the sole beneficiary in the event that her husband predeceased the decedent.  Lastly, the defendants presented a 2010 quitclaim deed conveying the decedent’s real property to herself, her stepson, and his wife as joint tenants with right of survivorship.

The defendants had moved into the house next door to the decedent in 1985.  After the decedent suffered a stroke in 2005, the defendants began caring for her.  In 2010, the decedent executed a document designating the defendants as her powers of attorney.  Witnesses testified that the 2010 will was read aloud to the decedent, and she seemed to be mentally sharp, although she was in a wheelchair, and her stepson steadied her arm so that she could sign.

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When planning the distribution of your estate, it is important to understand the legal consequences of naming beneficiaries on non-probated assets.  In a February 28, 2017 opinion, the Court of Appeals of Tdocuments-1427202-640x480-300x225ennessee considered whether evidence of the decedent’s intent was relevant in deciding the matter of her life insurance proceeds.  The decedent in the case had a life insurance policy designating her husband and sister as beneficiaries.  The husband filed suit to recover the proceeds left to the sister and place them in a trust for the benefit of his and the decedent’s son.  The trial court concluded the son was entitled to the proceeds based on the theory of promissory estoppel, and the sister appealed.

The decedent had been diagnosed with terminal cancer when her son was twelve years old.  A few years later, her husband discovered he had terminal cancer and was not expected to outlive the decedent.  The decedent’s life insurance policy initially named her husband as sole beneficiary.  However, the decedent added her sister as a co-beneficiary of her life insurance policy a few weeks before her death, unbeknownst to her husband.  Her husband believed that she left half the proceeds to her sister for the purpose of taking care of their son, who was a minor and would soon have no living parents to take care of him.  When the husband became concerned that the decedent’s sister was going to use the proceeds for purposes other than his son’s welfare, he filed a complaint against her and the life insurance company.

In the circuit court proceedings, the husband relied on a document created by the decedent that allocated $30,000 to her sister, her sister’s children, and her mother, and the substantial remainder of her sister’s share of the proceeds to the decedent’s son.  There was also testimony by several parties regarding the decedent’s wishes that the insurance proceeds be used by her sister to care for her son.

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The distribution of assets in a decedent’s estate may sometimes lead to disputes among beneficiaries.  In a February 15, 2017 opinion, the Court of Appeals of Tennessee decided a controversy regarding the disposition of several certificates of deposit that were held in joint tenancy, with right of survivorship, by the decedent and her daughter.  The other beneficiaries of the decedent’s estate argued that the certificates of deposit were probate assets.  The trial court denied the beneficiaries’ objection and closed the estate, prompting an appeal to the higher

The decedent died in 2008, leaving a valid will that devised her estate in equal shares to her children or their survivors.  Among her estate were three certificates of deposit titled in the names of the decedent or her daughter, with boxes checked on the signature card to indicate that they were held in joint tenancy with right of survivorship.  The decedent had originally opened and funded the original certificates of deposit decades before without her daughter’s assistance or knowledge.  During the administration of the decedent’s estate, the other beneficiaries contended that the CDs should be included in the residual estate, while the daughter argued they were non-probate assets because they were held in joint tenancy with right of survivorship.

In Tennessee, the decedent’s intent determines the disposition of the CDs at issue.  To establish the decedent’s intent, the court may consider the signed bank signature cards expressing the right of survivorship, as well as other extrinsic evidence to demonstrate intent as to the type of ownership.  At the trial, the daughter testified that she became aware of the CDs in the 1980s when she began to assist the decedent with her business affairs.  The daughter also stated that she renewed the CDs as joint tenants with right of survivorship while the decedent was alive, since it was the decedent’s wish to have them remain in joint tenancy.

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The executor of an estate owes certain fiduciary duties to that estate during its administration.  Recently, the Tennessee Court of Appeals considered whether a defendant had breached her fiduciary duties as an executrix in In re Estate of Darken (Tenn. Ct. App. Dec. 20, 2016).  The sons of the decedent filed the challenge, contending that the executrix breached her fiduciary duty by refusing to communicate with them, refusing to provide them with certain documents, and concealing certain assets of the estate.  The defendant was the decedent’s surviving spouse and served as the executrix of the

In Tennessee, executors occupy a fiduciary position and therefore must deal with the beneficiaries of the estate in the utmost good faith.  The duties of an estate’s personal representative include notifying the decedent’s beneficiaries that the will has been filed for probate, collecting and inventorying the decedent’s assets, resolving the claims submitted by the creditors of the decedent and the estate, making interim distributions of the estate when appropriate, and filing accountings.  An executor also has the duty to communicate with the beneficiaries of the estate in a professional manner.

The appeals court first addressed the plaintiffs’ claim that the executrix refused to communicate with them as the beneficiaries of the decedent’s estate.  While acknowledging that the record showed the executrix did not want to communicate directly with the plaintiffs, she provided the information to her attorney, who then communicated that information to the plaintiffs.  The court concluded that the evidence demonstrated that the defendant fulfilled her duty to communicate with the beneficiaries of the estate.

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