Articles Posted in Probate and Trust Administration

In some situations, the existence of multiple wills can lead to confusion or even litigation after the death of the testator.  In a March 21, 2018 opinion, the Court of Appeals reviewed a will contest action arising out of a Tennessee estate dispute involving two wills.  The plaintiff in the case was the decedent’s daughter.  She filed an action challenging one of the wills that disinherited her and her sisters.campfire

In 1991, the decedent executed a Last Will and Testament, providing the majority of her estate to her husband and, should he predecease her, the remainder to her children.  In 2009, the decedent executed a second will, in which she explicitly revoked all former wills.  In the 2009 will, the decedent left the bulk of her estate to her husband and the remainder to a charity, and she disinherited all of her children.  The decedent’s husband passed away before her death in 2013.

The plaintiff filed a petition to probate the 1991 will and was named the executor of the decedent’s estate.  Shortly thereafter, the charity named in the decedent’s later will filed a petition to probate the 2009 will.  The plaintiff challenged the 2009 will, alleging that the decedent had instructed another person to destroy the 2009 will in her presence and indeed believed that it had been destroyed, therefore rendering the decedent intestate or making the 1991 will effective.  The circuit court dismissed the will contest for failure to state a claim.

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The executor of a will is responsible for settling the decedent’s financial affairs and distributing the assets, among other duties.  Disagreements may arise if the beneficiaries do not agree with the decisions of the executor.  In some situations, the dispute is litigated in probate court, where a judge can order the appropriate action, as illustrated in a March 22, 2018 Tennessee estate case.gavel

In the case, a deceased father had bequeathed an annuity to each of his two daughters in his will, with the residual of the estate to be transferred in a trust, of which the income would be paid to his wife.  However, according to the final settlement submitted by the executors of his estate, the net amount to be distributed from the probate estate was approximately $8,700.  Since that amount was not enough to purchase and fund the beneficiaries’ $75,000 and $50,000 annuities, the executors sought to divide only the $8,700 between them.  The beneficiaries filed an objection, requesting the court to order the sale of a portion of the decedent’s real property, which was valued at over $3 million, in an amount sufficient to fund their annuities.  The probate court agreed, and the executors appealed the matter.

In Tennessee, when a testator bequests property to beneficiaries, known as legacies, without indicating the source from which they are to be paid, and then disposes of the rest of the estate in a mass residuary clause, the legacies are considered a charge on the residuary.  An executor may utilize a decedent’s real property if the personal property is insufficient to pay for the decedent’s obligations.  Furthermore, the probate court has jurisdiction to sell a decedent’s real property.

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Establishing a trust may be advantageous for Tennessee estate planning purposes in some situations.  However, it is important to understand the limitations of revocable living trusts.  In a February 13, 2018 case, the Tennessee Court of Appeals considered a challenge filed by the beneficiary of a living trust against a trustee for exceeding her authority under the terms of the trust agreement.pen

The defendant in the case and her husband had executed a removable living trust agreement.  They conveyed approximately 200 acres of real property to the trust.  Upon the death of the husband, the trust was the sole residual beneficiary of his will.  The defendant, as the successor trustee, distributed all of the real estate in the trust to herself by way of a quitclaim deed.  She then terminated the trust.  Her son, who was a beneficiary of the trust, filed an action alleging that she had exceeded her authority under the trust.  He requested an accounting of the trust’s assets and sought the return of any wrongfully distributed assets.

In Tennessee, trusts are interpreted by looking at the language, context, purpose, and scope of the trust agreement to determine the grantor’s intent.  In addition, a trust must be interpreted in order not to frustrate the intent of the grantor.

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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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A legal challenge to the validity of a will may only be brought by a person who, if successful, would benefit under the terms of another will or the applicable intestacy law.  In In re Estate of Bostic (Tenn. Ct. App. Dec. 6, 2016), the Court of Appeals of Tennessee reviewed whether the decedent’s sister had standing to contest his will during probate administration, and whether the trial court erred in finding that she was estopped from bringing her claim after she entered the decedent’s will into probate as the executor.library

In In re Estate of Bostic, the decedent’s will bestowed his house, personal property, and $25,000 to a friend, $12,000 to each of his grandsons, and the residue of the estate to his sister.  The decedent’s sister was appointed as the executor of his estate upon his passing.  The sister also filed a petition challenging the bequest to the decedent’s friend as a product of undue influence, alleging that they had a confidential relationship, that the decedent was in a weakened mental and physical condition, and that the friend was involved in the creation of the decedent’s will.  In response, the friend denied the allegations and also filed a motion for the court to remove the decedent’s sister as the executor.

The trial court granted the motion and appointed a new administrator to carry out the provisions of the decedent’s will.  The trial court also dismissed the will contest, finding that although the sister did have standing in the matter, she was estopped from contesting the will because she had introduced it into probate and affirmed its provisions when she received her appointment as the executor.  On appeal, the sister argued that the dismissal was in error because she learned of the alleged fraud after the will had been offered for probate.  The estate argued that she lacked standing to challenge the will.

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In some cases, disputes may arise among family members during the administration of a loved one’s estate, leading to contentious court proceedings. The Court of Appeals of Tennessee recently reviewed such a case, In re Estate of Reed (Tenn. Ct. App. Aug. 22, 2016), involving a decedent who died intestate and claims made by her parents against her estate.signing will

In Reed, the decedent’s daughter was appointed administratrix of the decedent’s estate by the court. Following publication of notice, several claims were filed against the estate, including one by the decedent’s parents for approximately $28,500. The parents alleged that they loaned the money to the decedent in 2012 in order to pay off the mortgage on her home and prevent foreclosure. The claim was supported by an employee of the bank who facilitated the wire transfer. The decedent, however, never made any payments to repay her parents before her death. The daughter denied the claim, arguing that it was barred by the executor-administrator provision and the more than one-year provision of the statute of frauds.

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In a recent decision, the Tennessee Court of Appeals addressed the issue of whether a plaintiff lacked standing to assert a claim of inheritance by intestate succession. The case of In re The Estate of Ola Irene Tucker involved a decedent with three children, two of whom predeceased her and one who died shortly after her own death. The plaintiff filed a petition against the estate, claiming that she was the grandchild of the decedent. Specifically, the plaintiff alleged that one of the decedent’s sons was her father, despite the fact that her mother was married to another man at the time the plaintiff was born.gavel-2-1236453-638x424

Pursuant to Tenn. Code Ann. § 31-2-105, for purposes of intestate succession, a relationship of parent and child must be established. Under the same statute, a person born out of wedlock is the child of the mother, and is the child of the father if paternity is established before the death of the father, or thereafter by clear and convincing proof. However, the child is unable to inherit through the father or his kin under § 31-2-105 if the father did not openly treat the child as his and refused to support the child.

The defendants argued that the plaintiff was not “born out of wedlock” because her mother was married at the time of conception and birth. They argued that § 31-2-105 did not apply to her, and therefore she lacked standing to assert a claim of inheritance by intestate succession against the estate. The trial court found in favor of the defendants and granted summary judgment against the plaintiff.

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In a newly published opinion, Hussey v. Woods, the Tennessee Court of Appeals addressed the roles of the probate court and the circuit court in determining paternity for purposes of the Tennessee wrongful death statute. The procedural history of the case is lengthy, beginning with the death of the purported father after he was allegedly detained and assaulted by an employee of Family Dollar. The decedent’s mother subsequently brought a wrongful death claim against Family Dollar, which was settled out of court. Twenty months after the settlement, the appellant filed a Rule 60.02 motion to set aside the settlement, contending that her minor child was the son and lawful beneficiary of the deceased, and as a result he had priority over the deceased’s mother, pursuant to the Tennessee wrongful death statute. The deceased’s mother challenged the paternity of the child and requested DNA testing, arguing that, although the deceased had filed a Voluntary Acknowledgement of Paternity in Mississippi, he was in prison at the time the child was conceived.law-order-1240301-640x480

The circuit court ordered that the Rule 60.02 motion regarding the wrongful death settlement be held in abeyance pending the determination and priority of heirs by the probate court, and that the parties should agree to a DNA test (which the appellant repeatedly refused). The probate court ultimately accepted the Voluntary Acknowledgement of Paternity without a DNA test, ruling that the appellant’s child was the only heir of the deceased. The matter returned to the circuit court, which denied the appellant’s motion to set aside the order of dismissal. The appellant appealed the circuit court’s decision to the Tennessee Court of Appeals.

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paperworkThe Tennessee Court of Appeals examined a case in which heirs alleged undue influence by the decedent’s brother. In Re Estate of Linda A. Farmer, the decedent, a woman who had suffered from an uncommon medical condition, died with a sizeable estate. Prior to her death, the decedent worked for the majority of her adult life while saving nearly all of her income. As a result, she had accumulated nearly one million dollars in assets by the time of her death.

Several years prior to her death, the decedent created a revocable living trust, naming her brother as the trustee and the sole beneficiary of the trust residuary. Moreover, the decedent executed a power of attorney, naming her brother as attorney-in-fact.

After the decedent passed away at the age of 64, her sister brought a legal action on behalf of the estate to challenge the validity of the trust. Specifically, the plaintiffs alleged that the decedent’s brother had unduly influenced her into amending the trust and breached his fiduciary duties by converting the decedent’s assets. At the trial level, a jury returned a verdict for the defendant. The jury found that undue influence had not been proved. The verdict was appealed, and the plaintiffs argued that the amendments made to the trust instrument were not fair to the decedent.

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