Articles Posted in Probate and Trust Litigation

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In a recent will contest case, both the trial court and the Court of Appeals of Tennessee let it be known that the current state of the law in Tennessee regarding who has standing to bring a will contest case can result in a major injustice. Both courts also invited the Supreme Court of Tennessee to change the law.

Here is what happened in the case, In re Estate of J. Don Brock:

  • Don Brock had five adopted children (“Contestants”)
  • Mr. Brock also had a wife
  • Mr. Brock executed a will in 2013
  • The 2013 Will disinherited the Contestants, and left the assets of the estate (“Estate”) to Mr. Brock’s wife
  • Mr. Brock died
  • The 2013 Will was submitted to probate
  • The Contestants filed a notice of will contest based on undue influence, fraud, lack of testamentary capacity, and improper execution
  • The Chancery Court entered an agreed order that the Contestants had standing to challenge the 2013 Will and transferred the case to the Circuit Court for the will contest trial
  • The Estate filed a motion to transfer the case back to Chancery Court on the basis that the Contestants did not have standing to challenge the 2013 Will
  • The grounds for the Estate’s position was that there was a newly discovered 2012 Will which also disinherited each of the Contestants
  • The Circuit Court granted the motion of the Estate. It determined that the Contestants did not have standing because, even if the 2013 Will was set aside, the Contestants would still receive nothing because of the 2012 Will
  • The Contestants then filed a motion to amend their notice to contest, not only the 2013 Will, but also, the 2012 Will (as well as some wills before 2012)
  • Under the wills executed before the 2012 Will, some of the Contestants would be entitled to recover if both the 2013 Will and the 2012 Will were found to be invalid. If all of the wills before the 2012 Will were held to be invalid, all of the Contestants would recover
  • Applying existing Tennessee law, the Chancery Court determined that the Contestants did not have standing to bring a will contest case

So, what Tennessee law compelled the ruling of the Chancery Court which slammed shut the courthouse doors to the Contestants? How could the ruling be fair given the possibility that the Contestants might be able to prove that both the 2012 Will and the 2013 Will were invalid, in which event, it was undisputed that they would be entitled to assets of their father’s estate?  The first question is easy to answer. I do not have an answer to the second question (just like the trial court and appellate court did not).

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A recent Tennessee undue influence case proves that establishing undue influence requires more than proving that the person who was allegedly unduly influenced totally trusted the defendant. The case also illustrates how the outcome of fraud cases and undue influence cases depends so critically on the facts of each individual case. Lastly, it also proves how differently a Tennessee trial court and the Court of Appeals of Tennessee might view the facts of an undue influence case.

The case is Eledge v. Eledge and here is a summary of the relevant facts:

  • Father owned land
  • Father had a son (“Son”) and a daughter (“Daughter”)
  • Father became concerned that his land might be subject to the claims of creditors
  • Father sought advice from Son about how to preserve his land from debts
  • Son retained a lawyer who prepared a quitclaim deed for Father to sign
  • The quitclaim deed transferred half of the land to Son and half to Daughter
  • The quitclaim deed reserved a life estate in the land for Father
  • It was undisputed that Father totally trusted Son and relied on him for financial advice
  • Father was in good health, mentally and physically
  • Father lived alone and independently
  • While Son handled many business matters for Father and advised him, Father still handled a number of business matters competently and without Son’s help
  • Father did not read the quitclaim deed before he signed it
  • Two years after signing the quitclaim deed, Father became aware that he had only a life estate
  • At the request of Father, Daughter conveyed her interest in the land back to Father
  • Son refused to convey his interest in the land back to Father

Father filed an undue influence and fraud case against Son. Father alleged that Son owed him a duty to tell him that, if he signed the quitclaim deed, he was only retaining a life estate which would prohibit him from transferring the land if he wanted to do so. Father alleged that the failure of Son to disclose and explain was fraud because Son and he had a confidential relationship.

The trial court found that a confidential relationship existed between Father and Son. Therefore, it concluded, Son’s failure to disclose the ramifications of the quitclaim deed to Father was fraud.

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Tennessee courts, if they follow the law, which they usually do, are very disinclined to make a party do something or to make a party refrain from doing something until the usual legal processes which occur after a lawsuit has been filed have taken place. The usual processes, which typically take many months, are an initial round of pleadings and motions, an opportunity for each party to engage in discovery, and the occurrence of a trial (if one of the parties has not shown that it has a strong enough case that it is entitled to a summary judgment or dismissal).

There are situations in which Tennessee courts are authorized to, and will, grant what is referred to as “extraordinary relief” or “injunctive relief” on an emergency or semi-emergency basis. Such relief comes in the form of temporary restraining orders (“TROs”) and temporary injunctions, sometimes also called emergency injunctions. Temporary restraining orders and temporary injunctions are almost always granted at the outset of litigation in order to prevent irreparable harm to a party.  (Permanent injunctions are granted after a trial or dispositive motion and are not discussed in this blog.)

The notion behind TROs and temporary injunctions is that, in some situations, if a party has to wait on the usual legal processes to occur, even if it wins, it will suffer damages or harm that cannot be remedied even by an award of money damages.

A.  Requirements for Obtaining a TRO or Temporary Injunction

To obtain a TRO, a party must prove to the court that, absent a TRO, the opposing party’s actions will cause it immediate damage which will be irreparable. TROs are frequently issued in cases where ex-employees or independent contractors are violating valid non-compete agreements and/or have confidential information, which information gives them a competitive and unfair advantage over their prior employer or the party with whom they had the independent contractor relationship.

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In Tennessee, either a husband or a wife whose spouse has died has the right to elect to receive, from the deceased’s spouse’s assets, an amount allowed by a Tennessee statute, sometimes called the elective share statute, as opposed to receiving the amount left to him or her under the deceased’s spouse’s will.

Where a spouse has died without a valid will, the surviving spouse may also elect to receive the amount to which he or she is entitled pursuant to the elective share statute, as opposed to what he or she would receive under the statutes that prescribe what amount a surviving spouse receives when the deceased spouse did not leave a will. (Under Tennessee law which governs intestate estates, which are estates of those who have died without a valid will, a surviving spouse is entitled to the entire residue of deceased’s spouse’s estate where there are not children, and to the greater of one-third or a child’s share where there are children).

The amount of a surviving spouse’s elective share is based on the length of the marriage as follows:

Less than 3 years                                                     10% of the net  estate

3 years or more, but less than 6                         20% of the net estate

6 years or more, but less than 9                         30% of the net estate

9 years or more                                                        40% of the net estate

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In Tennessee, many spouses have joint bank accounts with rights of survivorship. Such accounts are considered accounts held by the spouses as “tenants by the entirety” unless the spouses have specifically agreed otherwise. Such accounts are referred to as “tenancy by the entirety accounts” or “entireties accounts.”

A tenancy by the entirety account is a form of ownership which is only available to spouses. Under Tennessee law, each spouse owns the entire account, and, when one of the spouses dies, the other spouse continues to own the entire account.

In a recent probate case which made it on appeal to the Court of Appeals of Tennessee, the Court of Appeals made some new law on tenancy by the entirety accounts. The case is In re Estate of Fletcher and here are the facts and procedural history:

  • Husband and Wife opened a joint account with a right of survivorship (which was deemed to be a tenants by the entirety account)
  • Husband and Wife deposited $100,000 in the account which they received from re-financing their home
  • According to the account agreement, either Husband or Wife could withdraw funds without the signature of the other
  • After the account was opened, Husband withdrew $100,00 from the account and bought a certificate of deposit (“CD”)
  • The CD was in Husband’s name only
  • Husband died with a will in place (died testate)
  • Husband’s will provided that his children (“Children”) were entitled to his personal property which included the CD
  • Husband’s will was admitted to probate
  • In the probate litigation, Wife contended that the CD was not part of Husband’s estate and Children contended that it was
  • The probate court held that the funds in the CD ceased to be owned by the entireties when Husband withdrew the funds from the entireties account and bought the CD in his name only
  • Under the holding of the probate court, the funds in the CD were, therefore, personal property owned by Husband at the time of his death, and, therefore, were part of his probate estate
  • Under the holding of the probate court, Children, not Wife, were entitled to the funds from the CD

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In Tennessee, family members and non-family members alike often provide care, perform services or pay for expenses for someone who passes away without compensating the person who provided the care or services or who paid expenses on their behalf. Can a family member or non-family member recover for care, services or expenses provided to someone while they were alive, after that person dies? The answer is: Sometimes they can, and sometimes they can’t.

If the person who provided the care, services or who paid the expenses (the “Provider”) has a valid and enforceable written agreement between him or her and the person who passed away (the “Deceased”), which is often not the case, then recovery against the estate of the Deceased should not be a problem (provided the probate estate has assets to pay the debt).

Frequently, life is not so orderly that a Provider receives an enforceable written agreement. Sometimes, death occurs before the Deceased was able to make arrangements to compensate the Provider by changing his or her will or by preparing a written agreement that will allow the Provider to recover. Sometimes, neither the Provider nor the Deceased anticipate that payment to the Provider will be a problem after the Deceased is gone, but it certainly can be.

If there is no enforceable written agreement between the Deceased and the Provider and the Deceased’s will or trust does not provide for payment to the Provider, whether a Provider can still recover for services, care or expenses paid is best approached by first determining whether the Provider was a family member or not. Why? Because the standard for recovery in such situations may well differ depending on whether the Provider was a family member or not, as explained more fully below.

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Many breach of contract cases in Tennessee involve written contracts which contain what I refer to as “no oral modification clauses.” Although the language of these types of clauses differs, they usually say something like this: “This Agreement may not be amended, modified, changed or extended except by a written instrument signed by both parties.”

There is also a statute in Tennessee, T.C.A. §47-50-112(c), which directs that, if a contract contains “a provision to the effect that no waiver of any terms or provisions thereof shall be valid unless such waiver is in writing, no court shall give effect to such waiver unless it is in writing.”

Especially given the above statute, if two parties in a breach of contract case are litigating a case with a written contract which contains a clause disallowing oral modifications or changes, it would be impossible for one of the parties to prove that the contract had, in fact, been orally modified, right? Wrong. In fact, it happens all of the time.

Here is a summary of cases not upholding and upholding no oral modification clauses:

CASES HOLDING WAIVERS, AMENDMENTS AND MODIFICATIONS EFFECTIVE EVEN THOUGH CONTRACT CONTAINED CLAUSE REQUIRING CHANGES TO BE IN WRITING Continue reading →

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Two fairly recent Tennessee undue influence cases prove a point:  To win an undue influence case, the plaintiff (or contestant if it is a will contest) must prove more than mere unfairness or favoritism.

Both cases involved alleged undue influence with respect to deeds for land.  In the first case, Bunch v. Bunch, a mother owned 35 acres of land. While the mother was alive, she deeded about half of the acreage to her daughter. At her death, the other half of her land passed to her daughter and son equally.

After the mother passed away, the daughter brought a partition action to have the land which was left to her and her brother jointly sold and the proceeds divided.  The son filed a counterclaim against the daughter, his sister, in which he alleged that the deed wherein his mother transferred half of her land to her daughter was the result of the undue influence of the daughter.

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In any Tennessee will contest case, there may be a number of relatives of the deceased who will benefit from the will contest case if the Will at issue is set aside.  There might also be non-relative beneficiaries of a previous Will who will benefit if the Will is set aside.  In such circumstances, who has the right to file the will contest case? In such circumstances, do relatives or beneficiaries who have not filed the will contest case have a right to join the case? Should the other relatives or beneficiaries join the will contest case as parties?

For answers to the above questions, let’s use a hypothetical and assume these facts:

  • Mother dies leaving six children
  • One of the children is Sister Susan
  • All of her life, Mother made it clear that she wanted her children to receive her assets in equal shares
  • Just before her death, when she was weak and dependent on Sister Susan, Mother executed a Will which bequeathed most all of her assets to Sister Susan
  • Mother had never executed any other Will

Following Mother’s death, Sister Susan offers the Will for probate.  Right after, Brother Bill, one of the six children of Mother, hires a will contest lawyer and files a will contest case based on incompetency and undue influence.

Under Tennessee law, none of the other siblings is required to join the will contest case filed by Brother Bill. Under Tennessee law, they can if they want to do so, but should they? Whether they should or should not depends on the circumstances of each case.

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Tennessee will contest cases, especially will contests where the basis for trying to set aside the will is undue influence, are often all about suspicious circumstances.  As Tennessee courts have observed for years, in many cases (I believe most), the only way to prove undue influence is by circumstantial evidence.  What Tennessee courts have declared are “suspicious circumstances” are just that — circumstantial evidence of undue influence.

A recent undue influence case exemplifies how a combination of suspicious circumstances can result in the setting aside of a Will even when there was no single piece of evidence of undue influence that was, in and of itself, particularly compelling.  This case is important to understand because it is, in my experience, pretty infrequent to have an undue influence case where there is anything close to “smoking gun” evidence of undue influence. Undue influencers are generally cunning, nontransparent and, often, keep the person whom they are influencing so isolated from others that there is little or no direct evidence of their actions.

A combination of suspicious circumstances surrounding the Will of a father (“Father”) who disinherited his daughters and left everything to his son (“Son”) caused a Tennessee trial court to set aside that Will. The ruling of the trial court was affirmed in all respects by the Court of Appeals of Tennessee, so I will focus on what facts where before the trial court to cause it to set aside the Will based on the undue influence of the Son.

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