Wills, Trusts, Guardianships, and Fiduciary Administration - Mary F. Radford

• Publication year: 2003

Wills, Trusts, Guardianships, and

Fiduciary Administrationby Mary F. Radford^*

This Article examines the major cases decided and legislation enacted during the period from June 1, 2002 through May 31, 2003. The cases and statutes discussed cover the substantive law relating to decedents' estates, trusts, and guardianships, and to the fiduciaries who administer these entities. The cases also explore procedural rules that apply in litigation arising from the creation and ongoing administration of these legal relationships.

I. Recent Cases of Note

A. Year's Support

Year's support is the financial protection offered by Georgia law to the surviving spouse and minor children of a decedent.¹ The petitioner for year's support asks to be awarded specified property from the decedent's estate,² and if no objection is filed, the petitioner is awarded whatever he requests in the petition.³ If an objection is filed, the probate judge must determine and set aside as year's support "an amount sufficient to maintain the standard of living that the surviving spouse and each minor child had prior to the death of the decedent"⁴ after considering other available means of support, the solvency of the estate, and "[s]uch other . . . criteria as the court deems equitable and proper."⁵ In recent years, the Georgia Court of Appeals has issued somewhat confusing pronouncements as to what amount constitutes an appropriate award of year's support. In Richards v. Wadsworth,⁶ the court of appeals upheld the probate court s decision to reduce the amount awarded to a widower by the jury, holding that the widower had ample resources of his own.⁷ The court of appeals pointed out that "[y]ear's support is not intended to pay the surviving spouse for loss of the relationship or for personal sacrifices made during the marriage."⁸ In Driskell v. Crisler,"⁹ when determining the appropriateness of an award of year's support, the court of appeals looked not only to the couple's income in the year prior to the death of the husband, but also to the standard of living the couple enjoyed throughout their marriage and to the fact that the decedent s illness had caused their standard of living to decline substantially in the years prior to his death.¹⁰ The financial and personal sacrifices made by his wife were considered by the court of appeals in its determination of the appropriateness of the award.¹¹

In 2002 in Hunter v. Hunter,¹² the court of appeals reversed the probate court's grant of the marital home¹³ to a seventy-four year old widow.¹⁴ The court of appeals held that the grant of the home, valued at over $91,000, bore no "reasonable relationship to the amount the surviving spouse need[ed] for a period of12 months . . . to maintain the standard of living she had prior to the decedent's death."¹⁵ In this case, the court of appeals refused to consider the personal sacrifices the widow made during the marriage.¹⁶ Instead, the court looked only to the couple's style of living in the year prior to the decedent's death and to whether the surviving spouse's needs increased in the year after the decedent's death.¹⁷ In doing so, the court seemingly ignored its discussion in Driskell v. Crisler¹⁸ but reiterated its assertion in the 1997 case Richards v. Wadsworth.¹⁹ In Richards the court ruled that year's support is designed to support a surviving spouse rather than to compensate him for sacrifices and contributions made during the marriage.²⁰ In Hunter the court of appeals noted that the latter type of claim was "in essence [a claim] for equitable division of the property, [which] cannot be maintained apart from divorce proceedings."²¹

B. Wills

1. Probate of Wills in Common Form

In In re Lyons,²² the court of appeals added the finishing touch to its evolving doctrine concerning the disallowance of appeals from proceed- ings to probate a will in common form.²³ In 1994 in Freeman v. Mobley,²⁴ the court held that there can be no appeal from the probate of a will in common form.²⁵ In 1998 in Henderson v. McVay,²⁶ the court determined that no one has a right to file a caveat to a petition to probate a will in common form.²⁷ In Lyons the court held "there is no right to appeal a probate court's decision"²⁸ to deny the probate of a will in common form.

2. Will Construction

a. Lapse. In Bridges v. Taylor,²⁹ the Georgia Supreme Court construed a will that left the residue of the testator's estate to three relatives in equal shares.³⁰ The will also provided that if any of these relatives should die before the testator, that person's share "[would] lapse and . . . augment proportionally the remaining shares."³¹ As fate would have it, all three of the relatives predeceased the testator. The surviving descendants of the last relative to die claimed that they should take the residue by virtue of the application of Georgia's anti-lapse statute.³² The supreme court disagreed, noting that the anti-lapse statute applies only if a gift in a will is "absolute and without remainder or limitation."³³ The court noted that the plain language of the will was conditional and expressly called for a lapse to occur if any beneficiary failed to survive the testator.³⁴ Consequently, the court held that the gift of the residue had lapsed, and thus, the residuary estate should pass to the testator's intestate heirs.³⁵

b. In Terrorem Clause. An in terrorem ("no contest") clause is a clause in a will by which the testator voids a testamentary gift to any beneficiary who attacks the validity of the will or any of its provisions.³⁶ Although recognized by Georgia law, in terrorem clauses are strictly construed by the courts.³⁷ This strict method of construction was applied by the Georgia Supreme Court in Preuss v. Stokes-Preuss.³⁸ The clause in Preuss called for the forfeiture of the interest of any "beneficiary" who contested the will.³⁹ One of the beneficiaries under the will was also a coexecutor who wished to bring an action to remove the other coexecutor. Prior to doing so, the beneficiary/coexecutor filed a declaratory judgment action to determine whether bringing the action against the coexecutor would cause her to forfeit her beneficial interest under the will.⁴⁰ The supreme court affirmed the probate court's finding that the clause applied only when a "beneficiary" brought an action,⁴¹ and, as the coexecutor was bringing the action in her fiduciary capacity for the sole purpose of removing the other coexecutor, the in terrorem clause did not apply to forfeit her interest.⁴²

3. Will Contests

During the 2001-2002 reporting period, in three separate will contest cases, the Georgia Supreme Court discussed the ramifications on an undue influence claim⁴³ when the testator and the alleged "influencer" are in a confidential relationship.⁴⁴ In these cases, the supreme court called into question whether the sheer existence of a confidential relationship is enough to raise the presumption that undue influence was exerted, or whether the individual accused of exerting the influence must also have played an active role in procuring the execution of the will.⁴⁵ In the two will contest cases decided during the 2002-2003 reporting period, Duncan v. Moore⁴⁶ and Ashford v. Van Horne,⁴⁷ the court made only a passing reference to this issue and shed no further light on the debate. Both cases were decided in favor of the propounders of the wills and against those who alleged undue influence.⁴⁸ In Duncan⁴⁹ the caveators alleged that the principal beneficiary under the will and the testator were in a confidential relationship and the "presumption of undue influence that accompanies" such a relationship had not been rebutted.⁵⁰ The supreme court cited a few cases that defined confidential relationships and undue influence,⁵¹ but then concluded that the finding of undue influence was one for the fact-finder and evidence that the testator was a strong-willed woman who was "sharp as a tack"⁵² supported the jury's verdict against the caveators.⁵³ In Ashford the individual accused of exerting undue influence drove the testator to his attorney's office for his first consultation concerning his will.⁵⁴ However, without mentioning the concept of confidential relationship, the court pointed out the propounder had neither actually been present with the testator in the lawyer's office nor otherwise participated in the will's execution.⁵⁵

C. Personal Representatives

Two cases decided during the reporting period explore the circumstances under which an executor, exercising discretionary powers spelled out in the will, may violate the rule against engaging in conflicts of interest. In Harp v. Pryor,⁵⁶ one of the testator's three sons was appointed the executor of her estate. The principal assets of the estate were cash and shares of stock in a family company. The residuary beneficiaries of the estate were the three sons, who were to take the residue in equal shares. The will granted the executor the power to make distributions of the estate in cash or in kind, and all in-kind distributions were to be made at the discretion of the executor. The son, who was the executor, knew that if he made equal distributions of the shares of stock, one of his brothers, who already owned a substantial number of shares, would become the controlling shareholder of the company. Consequently, the son petitioned the probate court for permission to make unequal distributions of the shares (resulting in equal ownership of the company by the three brothers) and to make up for the unequal distribution of stock by distributing cash to the brother who already owned a substantial number of shares. The probate court found that such an action on the part of the executor would be proper because the wording of the will was unambiguous, and the distribution would not violate any term of the will.⁵⁷ The supreme court reversed, holding that the "peculiar facts" of this situation indicated a conflict of interest on the part of the executor.⁵⁸ The...