Wills, Trusts, and Administration of Estates - James C. Rehberg

• Publication year: 1997

Wills, Trusts, and Administration of Estatesby James C. Rehberg^*

One of the most difficult tasks in the writing of a survey article is that of organization. Judicial decisions and legislative enactments just refuse to appear in any logical sequence and, just as a case or statute has been neatly assigned to a certain section of the paper, an issue pops up that suggests that it would fit better in another section. Should the discussion of that case or statute be moved into that other section or left where it is?

Given this difficulty, an effort will be made to classify the materials in a way that the major issues will be discussed in the sequence in which they usually surface in the process of administration.

I. Recent Decisions—Wills and Administration

A. Preliminary Issues

There are certain problems that, though not frequently encountered, do demand early attention simply because they must be resolved before normal administration can proceed.

1. Jurisdiction of Courts. In an action to determine heirship,¹ a claim had been filed by a person who alleged that she was the virtually adopted child and sole heir of a legatee who had predeceased the testator and that she, therefore, was entitled to the legacy that deceased legatee would have taken. After the trial court found in favor of the child, the court of appeals faced a motion that it lacked jurisdiction and the case should be transferred to the supreme court as a case "involving wills."² The court denied the motion.³ The parties did not raise, nor did the court consider or resolve, any issue relating to the validity or the meaning of the decedent's will. The sole issue was the child's virtual adoption.⁴

2. Advancements. In Tankesley v. Thompson,⁵ after the death intestate of the mother of four adult sons, one son, Richard, along with the court-appointed administrator, asserted that the mother had advanced about seventy thousand dollars to another son, Robert, during the last two years of her life. Robert denied this assertion. Checks were offered into evidence, all but one of which were made payable to a business started by Robert. Most of those checks had a notation of "investment" or "loan." Robert testified 1) that when his mother wrote each check, she indicated that it was an investment and 2) that she stated that she wanted her estate divided equally between the four children without regard to gifts she had previously made. The other two sons corroborated that this was her intention. The record also showed that she had been a shrewd businesswoman who often invested in other businesses.⁶ The court of appeals agreed with the trial court that while a presumption of advancement had been shown, it had been clearly rebutted by this other evidence.⁷

At this point it should be noted that Georgia's advancement statute⁸ will be considerably changed by the Revised Probate Code when it becomes effective on January 1, 1998.⁹ The new Code combines the treatment of lifetime transfers in both intestate and testate estates.¹⁰ It covers satisfaction of legacies as well as advancements by requiring written evidence that a lifetime transfer was intended either as a satisfaction of a legacy or as an advancement against the testamentary gift or against the intestate share the recipient would eventually receive.¹¹ The new Code requires either that the will specifically contemplate the lifetime transfer as a satisfaction or advancement or that there be a separate written expression of that intent.¹² Additionally, the writing may be one that is signed by the transferor within thirty days of the transfer, or it may be one that is signed by the recipient at any other time.¹³

3. Slayer Statute. In Bradley v. Bradley,¹⁴ one of two sons, James, sued the other, Benjamin, under Georgia's "slayer statute,"¹⁵ alleging that Benjamin killed their father with malice aforethought and for that reason was not entitled to share in the estate. In his will, the father left most of his property to Benjamin. However, if Benjamin predeceased his father and left no lineal descendants, that property went to other named persons. The father left James only one hundred dollars, explaining that he had previously conveyed real property to James. Later, the brothers entered into a settlement agreement in which they divided the property and James agreed to release Benjamin from the claims he had brought related to their father's death.¹⁶

In 1995 the alternative beneficiaries in the will sued Benjamin and the executor for a declaratory judgment as to whether Benjamin killed his father with malice aforethought. Under the "slayer statute," if Benjamin had done so, he would be presumed to have predeceased his father, and the alternative beneficiaries would take under the will. Following this claim, Benjamin moved to set aside the settlement agreement, asserting that he was unable to perform under the agreement because of the declaratory judgment action.¹⁷

In an action brought by James for enforcement of the agreement, the trial court ruled in his favor, and the court of appeals affirmed.¹⁸ The court found that Benjamin had an inchoate interest in the property that he was to take under the will, and this inchoate interest was legally assignable; hence, the settlement agreement remained effective.¹⁹ Although Benjamin's inchoate interest would not vest in him until the executor assented, the interest would relate back to the death of the father. Thus, the court determined that the declaratory judgment action brought by the alternative beneficiaries had no bearing on the validity of the brothers' settlement.²⁰

4. Fiduciary Commissions. The court of appeals interpreted statutes on fiduciary commissions on two occasions. In Sams v. Leskanic,²¹ an attorney who had served as county guardian was named administrator ex officio of the estate of an incapacitated adult ward.²² After completing administration, he filed a final return in which he claimed statutory commissions on extra compensation of $711.50²³ and on a previous commission of $46.80. The probate court denied these items, stating that it was "the practice of this court" to deny fiduciary commissions on the disbursement of extra compensation or regular commissions.

The court of appeals only partially agreed. It agreed that the administrator was entitled to the statutory commission of 2.5% in and 2.5%out for the payment of debts, legacies, or distributive shares,²⁵ including payment of a debt owed to him by the estate.²⁶ However, this statutory entitlement applies to only one payment of a debt. To allow a commission on the disbursement of a commission would permit payment of the same debt more than once and, logically, would lead to the administrator's right to get another commission on the payment of the first commission and so on ad infinitum. The court admitted that the literal language of the statute²⁷ could lead to that construction but refused to ascribe to the legislature such an unreasonable intention.²⁸

The reconciliation of statutes on the subject of fiduciary commissions was also required in In re Estate of Louise Donald.²⁹ After the death of an incapacitated adult, the probate of the will, and the qualification of the executor, the decedent's guardian filed a final return in which he proposed to pay himself the statutory commission on this final distribution as guardian. The probate court denied the claim, relying on Roberts v. Chew,³⁰ which relied on Official Code of Georgia Annotated

("O.C.G.A.") section 53-6-142,³¹ dealing with commissions to successive fiduciaries, and section 29-2-43,³² dealing with commissions to successive guardians.³³ The court of appeals reversed the denial of this claim.³⁴

The basic statute on fiduciary commissions contains the 2V6% in and 2V2% out rule,³⁵ which specifically applies to commissions received by an "administrator, executor, trustee, or guardian."³⁶ However, as applied to guardians, that section is limited by the more specific language of the guardianship statute, which provides that when a guardian resigns, dies, or is removed, no commission is allowed for turning the estate over to a new guardian or for receiving of the same by a new guardian.³⁷ The court of appeals held that this statute, being specifically limited to the case when a guardian has died, resigned, or been removed, was not applicable in Louise Donald because the guardian was seeking dismissal only because of his duty to turn the assets over to the executor named in the ward's will.³⁸

The court of appeals agreed that it could be rationally argued that the turning over of assets by a guardian to an executor should stand on the same footing as that of a guardian turning them over to another guardian, in which case no commissions are payable.³⁹ The specific language of the statute, however, does not so provide. The specific language of O.C.G.A. section 53-6-142 provides that when assets pass through the hands of "administrators and executors," the funds shall not be diminished by commissions for each successive administrator or executor.⁴⁰ The legislature's failure to include guardians in the section is explained by the fact that the guardianship situation is specifically covered by O.C.G.A. section 29-2-43.⁴¹ That section, which is limited to the situation when the guardian resigns, dies, or is removed, did not apply to Louise Donald because the guardian being granted dismissal was entitled to receive the statutory commission.⁴²

B. Problem ofNonprobate Assets

The estate of a decedent consists of all property interests owned by the decedent at death that survived the death. The personal representative is technically responsible only for "probate assets." All other assets owned immediately prior to death, but which cease to exist at the moment of death, are the "nonprobate assets." With reference to these, the personal representative technically has no duties. It is hornbook law that one of the first duties of the personal...