While it is important to engage a seasoned estate planning attorney to try and avoid the pitfalls associated with one’s estate, certain familial disputes cannot be prevented, no matter how savvy the estate plan. These disputes can arise from sibling rivalries, suspicions brought about by lack of communication, or just plain old greed.
Some of the most common estate litigation cases involve claims seeking to set aside one’s will as the product of undue influence or lack of capacity, setting aside an inter vivos transfer as the result of a change in the titling of assets either by a power of attorney or an heir altering the dispositive intent of the testator, demands for an estate accounting and objections to the accounting when produced, removal of an executor or trustee for malfeasance or breach of fiduciary duty, and guardianship disputes.
A will is a written declaration of an individual as to how he wishes his assets to be disposed of at death. In order for a will to have legal effect, it must be probated. Several attacks to the probate of a will can be asserted, including a claim that the testator did not intend that the document act as his will, that the proper formalities in executing the will were not adhered to, that the testator lacked sufficient mental capacity, that the will was procured as the result of undue influence, fraud mistake or misrepresentation, or that the will was revoked.
In a procedural sense, a caveat can be filed which prevents the will from being probated, or, once the will is probated, an action initiated by the filing of a complaint seeking to set aside the probate of the will. There are time frames and other procedural issues that must be considered and evaluated in addition to the merits of the matter and an experienced probate litigation attorney should be consulted immediately if wrongdoing is suspected.
Recent Cases:
Settlement During Non-Binding Mediation is Enforceable
Willingboro Mall, Ltd. v. 240/242 Franklin Avenue, LLC, et al., 421 N.J. Super. 445 (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Burlington County. Before Judges Cuff, Simonelli and Fasciale.
The Appellate Division upheld the lower court’s enforcement of a settlement reached at non-binding mediation between a vendor of commercial real estate and some purchasers. By way of analogy, so long as there is an agreement at mediation which is reduced to writing shortly thereafter, the agreement will be upheld.
In this case, the court held that a settlement reached at mediation was not required to be reduced to writing during the mediation session to be enforceable, but instead could be reduced to writing after the conclusion of the mediation session. The addition of terms to effectuate the settlement that do not alter the basic agreement will not operate to avoid enforcement of an agreement to settle a litigated matter.
Settlement reached at a mediation session between vendor and purchaser of real estate was sufficiently reduced to writing, as required for settlement to be enforceable, where three days after the mediation session, purchasers’ attorney prepared and sent a letter stating the terms of the agreement reached by the parties and two weeks later sent another letter informing purchasers that he had placed the sum required to resolve the dispute in an escrow account.
The parties had waived confidentiality of mediation proceedings to resolve dispute, and the court did not find the settlement to be the product of coercion, fraud, deception, undue pressure or unseemly conduct. It was therefore enforceable.
Settlement – Upholding Settlement Agreement
In the Matter of Peter, Susan and Steven Lindner Irrevocable Trust, 2011 N.J. Super. Unpub. ____ (Docket No.: A-0634-10T1) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Union County. Before Judges Lisa and Sabatino
Appeal was taken from the lower court’s decision to vacate the terms of a consent order to enforce the terms of settlement entered into between the parties. Finding sufficient questions of fact, the Appellate Division remanded the matter to the lower court to conduct a plenary hearing as to whether the parties in fact reached a settlement.
Plaintiff and Defendant are siblings and Co-Trustees of their mother’s Trust. Plaintiff filed suit seeking to have Defendant removed as Co-Trustee for allegedly removing funds from the Trust for his own benefit and Defendant counterclaimed, seeking Plaintiff’s removal. After undergoing mediation, Plaintiff and Defendant signed a three page handwritten Mediation Agreement prepared by the mediator. Thereafter, Plaintiff moved on several occasions to enforce the terms of the Mediation Agreement, eventually receiving Orders from the Court requiring Defendant to comply.
Following the signing of the Mediation Agreement, the parties attempted to enter into a more comprehensive and formal settlement agreement, but were unable to do so. On June 18, 2009, Plaintiff’s counsel submitted an unsigned copy of the settlement agreement together with a Consent Order for the Court’s signature under the five day rule, which the Court signed on June 25, 2009. No opposition was filed by counsel for Defendant. The Court also dismissed the matter. On July 24, 2009, Defendant moved to enforce a visitation provision of the Mediation Agreement requiring Plaintiff to return their mother to New York, and the Court entered an oral decision denying that motion on September 15, 2009, holding that the settlement agreement, not the Mediation Agreement, controlled the parties’ visitation arrangement.
On November 6, 2009, Defendant filed a motion for reconsideration requesting the Court to vacate the settlement agreement, which was denied.
On January 20, 2010, Plaintiff filed an Order to Show Cause and Complaint seeking to enforce the Court’s previous orders, and on February 22, 2010, the Court held a hearing. Defendant represented himself pro se, claiming that he never agreed to the terms of the settlement agreement. The Court enforced the terms of the settlement agreement. Defendant hired new counsel and moved to vacate the prior orders as Defendant did not give his prior counsel authorization to settle on his behalf and did not consent to the terms of the settlement agreement. Confidential emails were sent to the trial court in support of Defendant’s lack of consent. The trial court ultimately concluded that Defendant did not consent to the settlement.
Finding that the trial court did not make any credibility determinations regarding Defendant’s lack of consent, the Appellate Division remanded the matter for a plenary hearing, ordering that the emails be disclosed to opposing counsel, after redacting all information not pertaining to the consent.
Legal Malpractice – Beneficiary Suit Against Estate Attorneys May Move Forward Despite Prior Probate Proceedings
Higgins v. Thurber, 2011 N.J. Unpub. ____ (Docket No.: A-12-10) (2011). Before the New Jersey Supreme Court. On certification to the Superior Court of New Jersey, Appellate Division, whose opinion is reported at 413 N.J. Super. 1 (2010).
The Supreme Court considered whether Plaintiff’s legal malpractice action against the attorneys who represented their late father’s estate was barred by the entire controversy doctrine in light of the disposition of earlier law suits including an accounting action.
In a prior probate proceeding, the executor sought approval of his formal accounting of a Trust formed by plaintiffs’ deceased father. Plaintiffs’ filed exceptions in the prior proceeding, sufficient to constitute a legal malpractice claim against defendants, who intervened in the accounting action before trial. Following the conclusion of the accounting action, plaintiffs filed the within malpractice action. Summary Judgment was entered in favor of defendants barred the suit under the entire controversy doctrine. The Appellate Division reversed.
The Supreme Court, in upholding the Appellate Division’s remand, found that although a potential claim sounding in legal malpractice may have been raised in the probate proceeding, it cannot be said that plaintiffs had a “full and fair opportunity to litigate those claims or that it would otherwise be equitable to bar this subsequent suit” under the entire controversy doctrine.
The Court also found that an accounting proceeding in the probate part is formalistic in nature, involving line by line exceptions, and that the entire controversy doctrine is out of place. It involves a proceeding to address the conduct of an executor but not others. The Court also took note of the fact that the underlying pleadings in the accounting actions did not encompass claims for legal malpractice.
Legal Malpractice – No Duty of Care to Beneficiary Adverse to the Estate
Taffaro v. James R. Connell, Esq., at al., 2011 N.J. Unpub. ____ (Docket No.: A-4928-09T2) (2011). On appeal from the Superior Court of New Jersey, Law Division, Bergen County. Before Judges Payne, Simonelli and Hayden.
This matter involves plaintiffs’ appeal of the lower court’s dismissal of his malpractice actions against his step-mother’s estate planning attorneys for failure to include him as beneficiary of her Will. On appeal, the Appellate Court upheld the lower court’s dismissal finding that defendant attorneys, as estate planning attorneys, owed no duty to plaintiff as they represented plaintiff’s step-mother, not plaintiff, in preparing her estate plan. The Court also held that no duty was owed to plaintiff who failed to file a Will contest but instead filed a claim adverse to the interest of the estate.
Vincent Taffaro was the father of plaintiff, Michael Taffaro, and Scott Taffaro. After Vincent’s wife died, he married Dolores Taffaro, and they had 2 children. After Vincent’s death in 1998, Dolores’ daughter, Susan, asked attorney Connell to prepare a Will on Delores’ behalf. Connell met twice with Delores, who was unsure whether to include plaintiff as a beneficiary under her Will, as he was on disability and suffered from drug use. Delores signed a Will prepared by Connell on December 2, 1999, deciding to include plaintiff as a beneficiary. Soon thereafter, Delores was hospitalized until her death on December 24, 1999. On December 17, 1999, Delores called Connell and told him she had a change of heart and wanted to remove plaintiff as a beneficiary of her estate. Delores executed a new will (the “second Will”) on December 20, 1999, which did not include plaintiff as a beneficiary.
Following Delores death, the second Will was probated. Plaintiff did not challenge this Will as he claims that his sister, Susan, as Executrix agreed to include him as a beneficiary. Plaintiff eventually filed a Complaint seeking to establish a constructive trust over the assets of the Estate in an effort to receive his 1/4 share. The matter settled on December 5, 2005 with plaintiff receiving $110,000, representing his 1/4 share of Delores’ residence which was in addition to the 1/4 share he had previously received from Delores’ residual estate. On August 2, 2007, plaintiff and his brother Scott filed a complaint against attorney Connell claiming malpractice in the preparation of the second Will. Plaintiff also sued his attorney in the initial suit claiming that he failed to advise plaintiff that he had a viable claim for malpractice against Connell. The malpractice action was dismissed on summary judgment based on estoppel, statute of limitations, unclean hands and failure to establish damages. Plaintiff appealed.
To establish legal malpractice, a plaintiff must show:
1. the existence of an attorney-client relationship creating a duty of care upon the attorney;
2. the breach of that duty; and
3. proximate causation.
An attorney preparing a will owes a duty only to the testator, unless the attorney undertook a duty to the beneficiary. Also, an attorney owes no duty of care to a potential beneficiary if a beneficiary’s interest is adversarial to the interest of the estate and contrary to the will of the testator.
Based on the foregoing, the Appellate Division held that attorney Connell owed no duty to plaintiff because he represented Delores with respect to preparing the second Will, not the plaintiff. In addition, attorney Connell owed no duty to plaintiff as he took an adversarial position against the estate. Note: plaintiff did not seek to have the second Will set aside.
Palimony Claims – Prospective Application of Statute of Frauds
Botis v. Estate of Gary G. Kudrick, 2011 N.J. Super LEXIS 76 (Docket No.: A-5562-09T4) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County.
This case required the Appellate Division to determine whether to retroactively apply the amendment to the Statute of Frauds requiring palimony agreements to be in writing and for each party to be represented by separate counsel. The Court held that the amendment applies prospectively, thereby allowing a palimony claim filed against the Decedent’s estate prior to the effective date of the amendment on an alleged agreement enforceable when the complaint was filed to proceed against the Decedent’s estate.
In her complaint, Plaintiff alleged that she and Decedent lived in a marital-type relationship for over 30 years, that they purchased real property together, and that Decedent promised to provide for her at his death. Prior to the enactment of the statute, such a claim was cognizable under the common law. Decedent passed and his Will failed to provide for Plaintiff. She sued the Estate seeking palimony. The trial court failed to retroactively apply the amendment to the statute of frauds, and defendant estate appealed.
In affirming the trial court’s decision not to apply the amendment retroactively, the Appellate Court found significant the fact that the parties were simply unable to comply with the requirements of the amendment prior to its enactment. In this case, Decedent had died over a year and a half before its enactment and Plaintiff filed her Complaint almost a year before enactment. Decedent was simply unable to comply with the new statutory requirements, and prior to the amendment, case law supported a mutual expectation that the palimony agreement was enforceable without a writing executed after consultation with an attorney.
Palimony Claims – Prospective Application of Statute of Frauds
Pierson v. the Estate of Christopher Dahl, 2011 N.J. Super. Unpub. _____ (Docket No.: A-5997-09T4) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Atlantic County.
The Appellate Division, relying on its decision in Botis v. Kudrick, 2011 N.J. Super LEXIS 76 (App. Div. 2011), reversed the trial court’s dismissal of Plaintiff’s palimony claim which had been filed before the effective date of the amendment to the Statute of Frauds requiring palimony agreements to be in writing.
In Botis, the Court held that the statutory amendment should not be given retroactive effect to dismiss palimony suits that were filed and pending before the date of enactment.
Probate Litigation – Settlement and Dispute of Disposition of After-Discovered Assets
In the Matter of the Estate of Lillian L. Fischer, Deceased, 2011 N.J. Super. Unpub. ____ (Docket No.: A-0091-10T2) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Atlantic County. Before Judges Axelrad and J.N. Harris.
This matter involved a probate dispute between decedent’s domestic partner and decedent’s sister over the estate. The parties entered into a settlement agreement in May 2009, after which a disagreement arose concerning the disposition of certain assets that had not been disclosed during the court-ordered mediation. The trial court ordered that the assets be distributed to decedent’s sister, and an appeal was taken.
Appellant is 91 years old and the 66 year domestic partner of decedent. Decedent’s sister is 90 years old. Decedent died intestate on 12/31/08 at the age of 86.
Decedent and her domestic partner jointly owned real estate in Somers Point, NJ and Croydon, Pa. The NJ property was titled in joint names and the Pa. property was acquired in 1967 as joint tenants with rights of survivorship. After her death, decedent’s domestic partner was appointed as administratrix. Decedent’s sister filed a complaint seeking to remove her as administratrix. The parties mediated their dispute and entered into a settlement agreement, which was subsequently incorporated into an order. According to the agreement, decedent’s domestic partner was to receive the securities listed in Schedule A, and decedent’s sister was to receive the Pa. property and “100% of ….[unidentified] additional assets…”
On 6/23/09, the Pa. property was conveyed to decedent’s sister pursuant to the agreement. Some time thereafter decedent’s sister claimed she was entitled to certain “additional assets”, some stock, not listed in Schedule A of the settlement agreement. Following discovery, a hearing was held and the court awarded the securities to decedent’s sister, despite the fact that she was aware of the securities before the mediation and failed to disclose them. She claimed no one asked her about it, and that her sister wanted her to have them. On appeal, decedent’s domestic partner claimed bad faith. The trial court ruled that a reasonable reading of the agreement contemplated that decedent’s sister would receive any assets not listed on Schedule A. This was affirmed on appeal. The settlement agreement was a contract, and settlement has long been encouraged by the Supreme Court. The court did not find bad faith, and that appellant received the benefit of her bargain.