Articles Posted in Probate and Trust Litigation

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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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There are Tennessee statutes which protect the proceeds of life insurance policies for surviving spouses and children even when the deceased parent may have owed creditors more money than the policy benefits at the time of his or her death.  Not only do the statutes protect the proceeds of life insurance policies, but also, they protect the cash value of life insurance policies and annuities while the parent is alive.

The two statutes which provide protection to surviving spouses and children are T.C.A. §56-7-201 and §56-7-203. Here are some examples of how they work.

Assume that, at Dad’s death, he had a $100,000 life insurance policy in effect, but had named no beneficiary for whatever reason.  At Dad’s death, he has lots of debt.  Will Dad’s creditors be able to collect from the proceeds of his life insurance policy?  After all, he did not designate a beneficiary?  The answer is “no.”

If Dad did not name a beneficiary, the life insurance proceeds will be payable to his estate. Under T.C.A. §56-7-201, whether Dad died with a Will (testate) or without a Will (intestate), the proceeds will not be subject to the claims of creditors if Dad died with a surviving spouse and children or either.  Under that statute, if Dad died without a Will, the life insurance proceeds must be distributed to his surviving spouse and children according to the statutes that delineate how assets are to be distributed when someone dies without a Will.

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In Tennessee, a bank account, certificate of deposit, money market account, or other type of financial account may be maintained as a joint account with a right of survivorship.  Such accounts may also be maintained as single owner accounts, but be made payable on death to a named beneficiary.  Payable on death designations are abbreviated as “POD.”

The difference between a single owner account, with no payable on death designation, and a joint account, with a right of survivorship, can have a major effect on relatives and beneficiaries under Wills.  The difference between a single owner account and a single owner account with a payable on death designation can also have a major effect on relatives and beneficiaries under Wills.

Let’s assume that I die with $200,000 in undisputed debt, and with $200,000 in a bank account which I own, but which has no payable on death beneficiary.  In that case, even if I bequeathed all of my assets to my wife in my Will,  and even if I specifically stated in my Will that I wanted her to have all of the money in my bank account, nevertheless, the $200,000 in my bank account at the time of my death would never become my surviving wife’s.  Why? The answer is because, at my death, it would become part of my probate estate. Once it became part of my probate estate, it would be subject to the claims of creditors.

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Daniel Kahneman’s bestseller, Thinking Fast and Slow, is not only a fascinating read, but also, it contains insights that can be an immense help to clients in making decisions about their cases, choosing lawyers, negotiating settlements, and evaluating the advice of their lawyers.  Here is what clients (and trial lawyers) can learn from the book:

Lesson One: Intuitions are not as Reliable as We Think

With objective evidence and data, Mr. Kahneman proves the point that many people are overconfident and place too much faith in their intuitions. I know from experience that lawyers are just as susceptible to this way of analysis as any other group. On many occasions, I have heard misguided advice from lawyers that was the result of their relying on some kind of intuitive impulse rather than spending time and effort evaluating a case from many angles (which takes time), bouncing the facts of the case off of several other people, including lawyers and non-lawyers (especially important where a jury trial is involved), and seeking and studying objective data (like published case law).

Lesson Two: Jury Outcomes are Unpredictable

When I first became a trial lawyer 25 years ago, I participated in the National Institute of Trial Advocacy and read extensively about the decision making process of juries.  What I learned, and was taught, by seasoned trial lawyers and psychologists, is that most juries will ignore the law, the jury instructions, to get to the result which they think is fair.  In my trial practice, I have found that to be true.

After reading Kahneman’s book, I realized that there is a whole other layer in the jury decision making process of which we have to be aware.  You can’t help but be persuaded by Kahneman that, even the people who make decisions, like jurors, do not understand fully why they decided something the way they did.  The point Kahneman makes, and makes well, is that we can all be primed to make decisions in a certain way without even knowing that we have been primed or what has primed us.

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The Tennessee Dead Man’s statute can be a major factor in the outcome of probate lawsuits in Tennessee, in some cases.  How so? It can prevent the admission of pivotal evidence at trial.

The key to understanding the Dead Man’s statute is to understand what it is supposed to prevent.  That may be best illustrated by an example.  Suppose, after John Jones dies and his daughter is appointed executrix of his estate, a former caretaker (“Caretaker”) of Mr. Jones files a lawsuit asserting that he is entitled to $100,000 from Mr. Jones’ estate.  The Caretaker claims that Mr. Jones told him repeatedly that he believed that he was underpaid and would receive $100,000 when he died.

In the above example, the Dead Man’s statute would prohibit Caretaker from testifying at trial that Mr. Jones had promised him $100,000.  The statute prevents a living party to a lawsuit  from testifying as to statements made by the deceased about transactions that party had with the deceased.

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Here is a scenario which happens sometimes with Tennessee wills:  A person gives a copy, not the original, of his or her Will to someone else for safekeeping.  Several years later, the person passes away.  No one can find the original of the Will.  If the copy of the Will is not valid, then it will change who inherits the assets, so whether the copy is valid or not is an important matter.

Can the Will be valid based on the copy?  It might be: It might not be. It all depends on the particular facts involved.

Here is what you have to prove in order to establish that a copy of a Will is valid: (1) that the testator made and executed the Will, and that it otherwise meets the requirements of a valid Will; (2) that the testator has died; (3) the substance and contents of the Will; (4) that there has been a diligent search for the original of the Will; and (5) that the testator did not revoke the Will. Usually, particularly considering the presumption discussed below, the difficulty will come in proving the last item, (5).

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A review of Tennessee case law, published and unpublished, demonstrates that the affirmative defense of accord and satisfaction is asserted far more often than it is successful.  Nevertheless, it can be effective.  Whether an accord and satisfaction defense is successful is dependent on the unique facts of each case, and, of course, on the reaction of the particular judge or jury to those facts.

The defense is used mostly in commercial litigation, though it pops up in tort cases from time to time in disputes about settlement agreements. Since it is an affirmative defense, the burden of proving it is on the defendant.  As well, whether there has been an accord and satisfaction is a jury question (provided that the defense survives summary judgment).

The defense of accord and satisfaction arises where a party who owes some obligation or debt to another gives something other than, or less than, what the party who is owed the obligation believes it is entitled to receive.  The giving of the something other than, or less than, is the accord part of the defense. The giving part of the defense, or the accord part, is usually a cinch to prove.

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When you are faced with a lawsuit or have filed a lawsuit, do yourself a big favor, hire a Tennessee lawyer with trial experience (aka a “Tennessee trial lawyer”) at the outset of your legal matter.  Having practiced trial law and handled litigation and arbitration matters for nearly 25 years, I have seen people’s cases hurt because they waited to bring in a trial lawyer with the hope that things would just get worked out. I have also seen clients end up with bad results because they never retained a lawyer with trial experience.

I have a friend who is a successful businessman who does a substantial amount of business outside of Tennessee.  He was owed some money from a company in Louisiana, but the Louisiana company denied that he was owed anything.  He hired a lawyer in Louisiana. (I was not aware of his situation until well after the fact).

My friend paid the lawyer for many months as the case proceeded to trial.  My friend thought that his case was one of clear liability, and it sounded to me like it was.  For some reason, although he kept paying his lawyer and waiting for the other side to come to its senses and settle, the other side never made a settlement offer.

 

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If you are bringing or defending an undue influence case in Tennessee, including a will contest based on undue influence, the presence of a power of attorney may be a game changer for your case.  Why would a power of attorney matter so much in such a case?  Because a power of attorney alone may establish what the law refers to as a “confidential relationship.”

Once it is established that the person who benefitted from the will or other transfer or transaction had a confidential relationship with the maker of the will or transferor of the property, a huge shift takes place — the person who benefitted is presumed to have received the benefit because of undue influence and that person may overcome that presumption only by proving to the jury, by clear and convincing evidence no less, that the making of the will, the transfer, or the transaction was not the result of undue influence.

In Tennessee, if the person who benefitted from the will, the transfer or the transaction was granted an unrestricted power of attorney by the maker of the will or transferor, that fact alone will establish a confidential relationship between the two with one condition.  That one condition is that, before the making of the will or the transfer, the person who was granted the power of attorney must have actually used it.

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