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

• Publication year: 1998

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

The aim of this Article is to summarize judicial and legislative developments in fiduciary law within the past year. Its organization reflects an intention to discuss the particular issues somewhat in the chronological sequence in which they are likely to appear.

I. Recent Decisions—Wills and Administration

A. Preliminary Issues

1. Inheritance by a Child Born Out of Wedlock. Sharp v. Varner¹ is the sequel to Varner v. Sharp,² in which a daughter born out of wedlock claimed to be the sole heir of her intestate father. The claim was opposed by the intestate's brother, who also claimed to be sole heir.³ The court of appeals ruled in the latter case that the daughter had offered clear and convincing evidence that she was the intestate's daughter, but that she had not offered similar evidence that he intended for her to inherit his estate to the exclusion of the intestate's brother.⁴ On remand, the probate court heard testimony which it found sufficient to show both that the daughter was her father's natural child and that he intended for her to take his estate as sole heir.⁵ The brother appealed, claiming evidence that the father loved both his brother and his daughter and that he wanted to benefit both of them could not be clear and convincing because it supported two different conclusions—either that she alone inherit the estate, or that she be provided for by the one joint account with her name on it.⁶

The court of appeals affirmed, stating that the clear and convincing evidence test does not eliminate all but one possible conclusion.⁷ Instead, it sets an intermediate standard of proof, one greater than the preponderance of evidence, but less than beyond a reasonable doubt.⁸

Further explanation by the court of the results of this case indicates that a person may die intestate and still do some valid "estate planning," however ill-advised. The court stated that this decedent was favorably disposed to both the child born out of wedlock and the brother, wanting to bestow his bounty upon both, and that he appeared to have accomplished both objectives.⁹ The evidence showed that the brother's name appeared on several of the decendant's bank accounts, including at least one joint account which the brother took as survivor, and that the brother was also the beneficiary of the decedent's three life insurance policies. This combination of will substitutes and the rules of intestacy carried out the decedent's intention to provide for both his brother and his daughter. The daughter got the intestate assets and the brother got the benefit of the will substitutes.¹⁰

2. Inheritance by Virtual Adoption. When the decedent in Franklin v. Gilchrist¹¹ married in 1961, his wife brought into the marriage two minor children by a previous marriage, which had ended in divorce, and in which she was awarded custody of the children. The decedent and his wife had no children of their own, and while there was undisputed evidence that he had been a good stepfather, he never formally adopted the children. The children kept their natural father's surname, but they seldom saw him before his death. Their mother predeceased the decedent, and when he died he left no will.¹²

When the decedent's sister applied for appointment as administratrix of the estate, the two children filed a caveat, claiming that they were the virtually adopted children of the decedent, that they were, therefore, the sole heirs, and that one of them should be appointed to administer the estate.¹³ The probate court denied the caveat and issued letters to the sister of the decedent appointing her as administratrix.¹⁴ The superior court, after a jury trial, directed a verdict for the decedent's sister on the ground that virtual adoption is a matter of contract, and that there was insufficient evidence of an agreement to adopt the children.¹⁵

The supreme court affirmed, emphasizing that an essential element of a virtual adoption claim is the existence of an adoption agreement entered into by parties competent to contract for the disposition of the child.¹⁶ Here the children presented no evidence that the natural father ever agreed to an adoption by the decedent, no evidence as to why such agreement was not obtained prior to the natural father's death, and no evidence of any agreement between the mother and the decedent for their adoption. At most the evidence showed that these children came to live with the decedent because they were his wife's children and she was their custodial parent.¹⁷

3. Year's Support. The precise place of year's support in Georgia's laws of succession to property was clarified considerably in this survey period by three opinions of the court of appeals.

a. Effect of Failure to Notify an Interested Party. In Scott v. Grant,¹⁸ a widow filed an application for twelve months support naming only two persons as interested parties, and after no objections were filed, the probate court granted the application.¹⁹ Later, one of the named interested parties moved for a new trial on the ground that there were other interested parties, specifically a bank, a church, and a granddaughter.²⁰ The probate court granted the new trial on the ground that the failure to name these other interested parties rendered the grant of the application void ab initio.²¹ A grandson, to whom the widow had conveyed a tract of land, objected on the ground that the granting of the motion for new trial placed a cloud on the title to that tract. The grandson appealed from the probate court's denial of his motion to vacate that order.²²

The court of appeals reversed, holding that even if there were interested parties who were not listed on the application, this would not automatically render the grant of the application a nullity.²³ The statute²⁴ requires only that the affidavit of the applicant list all interested parties known to the applicant and that he or she make reasonable inquiry as to the names and addresses of all interested parties. There is no authority declaring such an application void simply because there may be interested parties who are not listed. The court noted that in this case none of the complaining persons claimed not to have received notice.²⁵

b. Effect of Other Resources of the Applicant. In Richards v. Wadsworth,²⁶ the husband filed for a year's support out of the estate of his deceased wife. A jury awarded him $40,000, but the probate court entered a judgment notwithstanding the verdict, reducing the award to the statutory minimum of $1,600.²⁷ The court of appeals affirmed and explained the effect of the existence of other resources available for the support of an applicant.²⁸ The applicable statute spelling out how the amount of the award was to be ascertained, directed that consideration be given to the support available to the applicant from sources other than "year's support."²⁹ The specificity of the facts made this a good case for the court to use in the interpretation of the present statute. For example, the husband's waiting for over one year after the wife's death to file his application allowed the use of precise figures to show both his support needs for the year and the exact amount, independent of his resources, available to him during that year. This undisputed evidence showed the amount needed to maintain his standard of living during the year after her death was approximately $140,000. His independent resources during that year amounted to $334,000, not including the right given him in the will to live in their home the rest of his life free of any expenses of maintenance, insurance, and repairs.³⁰ These facts led the court to the inescapable conclusion that the most the husband was entitled to was the $1,600 minimum based on status alone.³¹ No support needs were shown.

c. Year's Support and Bankruptcy. In McClure v. Mason,³² a husband died while his Chapter 11 bankruptcy action was pending. His wife applied for a year's support and was duly awarded some cash, personal property, and realty. A bankruptcy creditor of the deceased husband appealed, claiming that the award was an unlawful award of property vested in the bankruptcy estate, and consequently, the awarded assets did not belong to the decedent's estate and could not be awarded as year's support.³³

The court of appeals affirmed the award but admitted that the probate court could only award the wife property belonging to the husband's estate, and that it had no jurisdiction to decide whether the property was vested in the wife, her husband's estate, or the bankruptcy estate.³⁴ However, these limitations did not prevent the probate court from including the property in the year's support award. If any property awarded did not in fact constitute a part of the husband's estate, then the probate court's judgment simply would not attach to such property and would be void as applied to it. Even if no legal title to any property remained in the decedent's estate at his death, any equitable estate owned by him may be included in a year's support award. Any enforcement of that award (a point not yet reached) would require a determination of the nature and existence of that title or interest by a court with jurisdiction of that issue.³⁵ The court interpreted the award as that of whatever interest in the listed assets the husband had at death.³⁶

4. Will Substitutes. A valid will substitute, by definition, removes the subject property from the decedent's probate estate. Whether it is a valid substitute, however, is often a vigorously disputed issue. Two cases in this survey period illustrate how will substitutes work and what pitfalls are often encountered if they are used in estate planning.

Caldwell v. Walraven³⁷ concerned the estates of a husband and wife who married in 1936 and lived together until his death in 1985. They never had children. The husband's will left his entire estate to the wife for life, giving her the...