Articles Posted in Estate Litigation

In some estate cases, disagreements may arise as to whether an asset is part of the estate to be distributed to the beneficiaries, or whether it is marital property belonging to the surviving spouse.  A previous blog post from 2016 highlighted this issue in a Tennessee estate litigation case before the Tennessee Court of Appeals.  The dispute centered around the ownership of a certificate of deposit that the decedent had purchased with funds from a joint checking account with his wife.  Since that post, the decision has been appealed and reviewed by the Supreme Court of Tennessee.  In a December 6, 2017 opinion, the court ultimately reversed the appeals court and overruled prior case law on the issue.writing check

During the administration of the decedent’s estate, his surviving wife filed a petition to designate a certificate of deposit, titled in the sole name of the decedent, as her separate marital property rather than part of the decedent’s estate, which had been left to his children of a prior marriage.  The decedent purchased the certificate of deposit with funds he withdrew from his and his wife’s joint bank account, designated with a right of survivorship.  The Court of Appeals ruled that the certificate of deposit belonged to the surviving spouse because the funds could be traced back to the joint account.

In Tennessee, a tenancy by the entirety is a form of property ownership unique to married persons.  Each spouse holds an interest in the entire property, rather than in undivided parts. Upon the death of one spouse, the survivor continues to own the whole property.  In most cases, one spouse cannot alone terminate the tenancy by transferring part of it to another party without the consent of the other spouse because it would destroy the other spouse’s ownership interest in the whole.  However, bank accounts are treated differently, and portions of a joint bank account may be unilaterally withdrawn without destroying the tenancy.

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An individual generally has the right to decide how his or her estate should be distributed.  In cases in which the decedent’s will is a product of undue influence, however, the court may set aside the will as invalid.  In a December 28, 2017 case, the Court of Appeals of Tennessee addressed the issue of undue influence in a challenge to the decedent’s handwritten will filed by her son.diary

The relationship between the decedent and her son had become strained after a disagreement just three months before her death, and they stopped speaking.  Prior to their disagreement, the son regularly visited his mother and spoke with her on the phone.  Around the time of their falling out in June 2015, the decedent hired a housekeeper.  The housekeeper also assisted the decedent by running errands, caring for her pets, buying groceries, cashing checks for her, and keeping her company.

In August 2015, the decedent was diagnosed with cancer.  She did not tell her son that she was ill.  The decedent asked the housekeeper if she would stay at her house until she died because she did not want to be alone.  In September, she contacted an estate attorney and requested that he draft a will leaving everything to her housekeeper because she did not want her son to have anything of hers.  Before the attorney had time to prepare the will, the decedent took a turn for the worse.  The attorney advised her to write a handwritten will, which she did in front of her nurse.  Shortly thereafter, the decedent passed away, and her will was submitted to probate.  The son filed a petition to set aside the will, arguing that it was invalid because the decedent did not have the capacity to make her will, and the housekeeper exerted undue influence over her.

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During the administration of an estate in Tennessee, the decedent’s last will and testament, if there is one, will be submitted into probate.  An objection to the validity of the will is known as a will contest, and it may be brought by someone with legal standing.  In a November 22, 2017 Tennessee estate planning case, the issue before the Supreme Court of Tennessee was whether five of the decedent’s children, who were disinherited in two wills executed by the decedent, had standing to bring a will contest. The trial court dismissed the action for lack of standing, and the Court of Appeals affirmed.  The matter was then appealed to the Supreme Court of Tennessee.pens

The 2013 Will submitted into probate disinherited five of the decedent’s seven children.  Multiple prior wills also disinherited some or all of those five.  The disinherited children brought a will contest, alleging that the 2013 Will was invalid due to improper execution or attestation, lack of testamentary capacity, and fraud or undue influence.

In Tennessee, standing is a threshold issue in a will contest, and a contestant must show that he or she would be entitled to share in the decedent’s estate if the will were set aside, or if no will existed.  On appeal, the court noted that the contestants would clearly have standing if only the 2013 Will were at issue.  The question, however, was whether the contestants lacked standing because the 2013 Will and preceding wills disinherited them, based on the holdings of Tennessee cases Cowan v. Walker and Jennings v. Bridgeford.

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The executor of an estate owes fiduciary duties to the beneficiaries and may be held responsible for failing to carry out these duties reasonably. The Court of Appeals of Tennessee addressed this type of dispute in a October 11, 2017 case. The decedent’s two sons were the sole beneficiaries of their mother’s estate. One of the sons was named as the executor in the mother’s will. The beneficiary-son filed a petition alleging that the executor-son breached his fiduciary duty. When the Probate Court found there was no breach of duty, the beneficiary appealed.gavel

In order to recover damages for a breach of fiduciary duty, the plaintiff must establish:  (1) a fiduciary relationship, (2) a breach of the resulting fiduciary duty, and (3) an injury to the plaintiff or a benefit to the defendant as a result of that breach. In Tennessee, the executor of an estate has a duty to deal with the beneficiaries in utmost good faith and exercise the same degree of diligence and caution that a reasonably prudent person would exercise in the management of their own affairs. If the executor acts reasonably and in good faith, he is shielded from liability if, in light of subsequent events, his judgment turned out to be wrong.

One of the specific duties, among others, of an executor is to collect the estate’s assets within a reasonable time, timely discharge his statutory obligations, and distribute the estate and close its administration as quickly as possible. The beneficiary first alleged that the executor breached his fiduciary duty by failing to make any monetary distributions until more than five years after the estate was opened.

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Changes to the law can have a significant effect on the way an estate is administered. In a recent Tennessee estate litigation case involving a will contest, the Court of Appeals determined whether a 2016 amendment to the Tennessee Execution of Wills Act applied to a will that was executed prior to the effective date of the statute. The beneficiary of the decedent’s will argued that it was valid under the new law, while the decedent’s heir-at-law, her father, contended that it was invalid because it did not meet the requirements under the law in effect at the time of her death in 2015. pen

The decedent in the case executed her Last Will and Testament in June 2015. She signed the bottom of each of the three pages of her will in the presence of two witnesses, and the witnesses signed the attestation affidavit in the presence of the decedent, each other, and a notary public. However, the witnesses failed to sign the will itself. The decedent passed away in September 2015.

In April 2016, Tennessee enacted an amendment providing that wills executed prior to July 1, 2016 are validly executed if the witness signatures are affixed to an affidavit, provided that the signatures are made contemporaneously with the testator’s signature, and the affidavit contains language meeting the requirements of the law. On appeal, the court found that the language of the amendment was straightforward and unambiguous, and it clearly was intended to provide relief for testators like the decedent, who believed they had executed a valid will prior to July 1, 2016, when the two witnesses duly executed the attestation affidavit at the same time as the will was executed by the testator, but the witnesses failed to sign the will itself.

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Some issues brought up in Tennessee estate cases may seem unusual but are common enough that a skilled Tennessee estate litigation attorney will know how to approach them.  For example, in a September 28, 2017 case, family members of the decedent could not find her original will, although they knew she had executed it.  They filed a petition seeking to recognize and establish a copy of the lost will as the decedent’s last will and testament.  The trial court granted the petition, and the decedent’s heirs appealed.farm

The plaintiffs in the case were the decedent’s nephews by marriage.  They had assisted the decedent and her husband in maintaining their farm before their deaths.  When the decedent’s husband died in 2007, the plaintiffs visited the decedent every day, prepared her meals, and alternated spending nights with her because she didn’t want to be alone.  In 2007, the decedent executed a last will and testament bequeathing her personal property to her sister, her jewelry to her nieces, and the remainder of her estate, which included the farm and machinery, to the plaintiffs.  The will was last seen in 2012 when the decedent showed it to her sister and returned it to the safe in her home, but it could not be found after her death.

In Tennessee, the long-standing presumption is that if a will is traced into the hands of the testator and not found after her death, the testator canceled or revoked it.  The presumption can be overcome with adequate proof, which Tennessee courts have defined as clear and convincing evidence.  Proponents of the lost will can overcome the presumption of revocation by showing that the testator did not have control of the will after its execution, that she had lost testamentary capacity for a period before her death, and that the will was in existence at the time the mental alienation occurred.

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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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