The High-risk Will: Where Planning and Litigation Collide

• Publication year: 2008
• Author: By Charles M. Riffle and Andrea Pierotti

THE HIGH-RISK WILL: WHERE PLANNING AND LITIGATION COLLIDE

By Charles M. Riffle^* and Andrea Pierotti^**

I. INTRODUCTION

It can be difficult for estate planners, who often are not litigators, to anticipate which of the instruments they draft will be contested, or how the instruments will be attacked. Moreover, estate planners sometimes need to act quickly to memorialize the client's testamentary wishes, especially when faced with a dying client. This article provides guidance which estate planners can use when confronted with the daunting task of preparing estate planning documents for clients whose capacity may be questioned, or who may be alleged to be under the influence of others. The advice is from the perspective of the litigator who will be defending the validity of the instruments. By following the recommendations in this article, the planner can reduce the chances of a postmortem challenge to the instruments and, if a challenge is made, provide defense counsel with powerful evidence to defend the instruments.

II. TIPS TO HELP ESTATE PLANNERS AVOID A CONTEST

A. Be Alert for Fact Patterns that Increase the Likelihood of a Challenge

Warning bells should ring in the head of an estate planner who encounters certain circumstances that may provoke a challenge to a will or trust. The Legislature has identified some of these circumstances, such as gifts to caretakers,¹ and case law provides a wide array of others. They include: (a) a second marriage,² especially when there are children from a prior marriage;³ (b) commingled community and separate property;⁴ (c) a diagnosis of Alzheimer's disease or dementia;⁵ (d) a medical condition associated with severe pain or the regular use of barbiturates, alcohol, or opiates; (e) someone other than the proposed testator setting up the appointment with the lawyer;⁶ (f) meeting with the testator in the hospital;⁷ (g) potential beneficiaries seeking to be present during the interview with the testator;⁸ and (h) a beneficiary who stands to inherit a substantial portion of the estate who is either an existing client of the planner,⁹ or the person who recommended the planner to the testator.¹⁰

Although the fact patterns described above should make a planner wary, the greatest predictor of a contest continues to be dispositive provisions which differ dramatically from the testator's existing instrument - or, if the testator has no existing instrument, from what the laws of intestate succession provide. A contest only makes sense when, if successful, the contestant stands to inherit a substantial portion of the estate. If the contestant would gain little or nothing by defeating the instrument, there will be little or no reason to file a contest. Therefore, the estate planning attorney should review the testator's existing instrument, or confirm that there is no existing instrument. If the proposed change from the status quo is significant, the attorney should follow the tips described below.

B. Tailor Questions to the Provisions of Probate Code Section 6100.5

1. Assessing Testamentary Capacity

Over the years, courts have consistently affirmed that the level of mental capacity necessary to make a valid will or trust is quite low. The testator need not be able to reason logically,¹¹ be free from delusions or hallucinations,¹² or be devoid of filthy habits, forgetfulness, or mental illness¹³ in order to make a valid will. The testator can even be conserved and still have testamentary capacity.¹⁴ The testator must, however, meet the three requirements of Probate Code section 6100.5(a), that is, he or she must be able to: (1) "understand the nature of the testamentary act," (2) "understand and recollect the nature and situation of [his or her] property," and (3) "remember and understand [his or her] relations to living descendants, spouse, and parents, and those whose interests are affected by the will."¹⁵

In assessing capacity, the planner should ask open-ended questions such as, "Why are you here?," "What do you own?," and "Who are the members of your family?" It is important that the testator articulate his understanding, not simply answer "yes" or "no" to leading questions, which may not indicate a true ability to understand. In our view, the planner should take extensive notes, writing down the testator's answers verbatim if possible. If an answer is incomprehensible or nonresponsive, the planner should write that answer down too.¹⁶ Following the testator's death, the drafting attorney's entire file becomes discoverable,¹⁷ and her notes of the meetings with the testator often become the focus of the trial of the validity of the instruments. Remember, the attorney is the gatekeeper to creating a binding will or trust. If the testator clearly does not meet the capacity standard, the attorney should not prepare a will or trust for signature.¹⁸

If the planning attorney anticipates a high likelihood of a postmortem contest, the safest approach is for the lawyer to retain the original instruments in her fireproof safe, rather than return the originals to the client. It is presumed in California that if the original will was in the testator's possession at the time of death and cannot be found after death, the testator intended to revoke it.¹⁹ Returning the original to the testator creates a risk that a disappointed legatee may find and destroy the original will after the testator's death.

a. The Testamentary Act

The "testamentary act" referred to in Section 6100.5 is commonly understood to be the making of a disposition of property to take effect after the testator's death.²⁰ Therefore, virtually any answer the testator gives that indicates he understands that by signing the will or trust he is disposing of his property at his death will satisfy the first requirement.

b. The Nature and Situation of Testator's Property

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The standard for the testator's knowledge of the nature and extent of his assets is low. The testator need not know specifics, but only be able to convey such information as his ownership of real estate, bank accounts, stocks, etc.²¹ He is not required to know the value of what he owns or, for example, the name of the bank that holds his money. It may be that at the time of the interview, a family member or conservator may have been actually handling the testator's funds for some time, and the testator may no longer know any specifics as to the assets he owns. Under such circumstances, accurate statements of what the testator owned when he last controlled his assets should suffice to satisfy this prong of testamentary capacity (and show that his long-term memory is still intact).²²

c. Relationship with People Closest to Testator

The attorney should ask questions to determine who are the people closest to the testator. She should not assume that his immediate family members are necessarily the natural objects of his bounty.²³ The testator may have been estranged from his close relatives for years, and the true natural objects of his bounty may be close friends, or even such distant relatives as nieces and cousins.²⁴ Once again, open-ended questions are the best way to see if the testator is still tracking the people to whom he is closest. A lawyer can check whether the testator is an accurate reporter of the people closest to him (and not delusional or subject to undue influence) by asking questions based on the testator's last estate plan. Indeed, it is hard to see how the planner can determine if the testator understands the effect the new plan will have on the people closest to him unless the planner knows whose interests are adversely affected if the testator signs the new will.

2. Assistance from Medical Professionals

Sometimes the planner turns to the testator's physician for an opinion on whether the proposed testator has testamentary capacity.²⁵ In doing so, the planner may feel that it is particularly appropriate to seek guidance from a physician on what, after all, seems to be a medical determination. In our experience, however, this rarely improves the chances of defending the will and can often boomerang on the planner. First, the physician is unlikely to know the legal standard for testamentary capacity unless the planner explains it.

Second, the standard is mostly a functional test, i.e., is the testator able to identify his loved ones and his property? In our view, the lawyer can make that determination as well as a physician. Moreover, whereas the lawyer can control whether she asks the critical questions, she cannot control whether the doctor does so.

Third, the physician may rely on the Folstein Mini Mental Ex-amination,²⁶ the most widely used test to determine cognitive acuity, to determine testamentary capacity.²⁷ However, that test is not directed to testamentary capacity. Although a very low score might show lack of testamentary capacity, a moderate score does not assure that the testator has testamentary capacity. Thus a contestant may later use a "moderate" score to undermine the planner's determination of capacity.

Fourth, the planner could ask the physician to complete a Capacity Declaration,²⁸ the Judicial Council form physicians fill out in connection with a conservatorship proceeding. But though more detailed than the Folstein Mini Mental Examination form, the form does not ask the physician to render an opinion of testamentary capacity. Rather, it is designed to elicit a physician's determination whether a patient continues to have the ability to manage his own financial affairs or make decisions regarding placement or medical treatment. A patient who lacks capacity to make financial decisions can still have testamentary capacity.²⁹ Thus the Capacity Declaration will not directly answer the question whether the testator has testamentary capacity. On the other hand, the form is based on Probate Code section 811, which identifies categories of evidence of incapacity, and requires evidence of a deficit in at least one of the categories to show a testator's...