Wills, Trusts, Guardianships, and Fiduciary Administration

• Jurisdiction: Georgia,United States
• Publication year: 2021
• Citation: Vol. 73 No. 1

Wills, Trusts, Guardianships, and Fiduciary Administration

Mary F. Radford

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Wills, Trusts, Guardianships, and Fiduciary Administration

Mary F. Radford^*

This Article discusses significant cases decided by the Georgia Court of Appeals during the period of June 1, 2020, through May 31, 2021, pertaining to Georgia fiduciary law, guardianship, and estate planning.¹ This Article also describes the highlights of legislation contained in a comprehensive bill that revised and clarified the laws relating to wills, trusts, and the administration of estates and that became effective January 1, 2021.²

I. Georgia Cases

A. Latent Ambiguities in Wills

In Luke v. Luke,³ the Georgia Court of Appeals vacated the Ben Hill Superior Court's finding that certain provisions in a will were unambiguous and remanded the case for an examination of parol evidence in order to discern the testator's intent.⁴ The will devised the testator's share in the "'Andrew W. Luke Irrevocable Trust'" to her son

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even though no such trust existed.⁵ There was, in fact, an "'Andrew W. Luke Revocable Trust'"⁶ in existence, but the testator was not a beneficiary of that trust. The court of appeals pointed out these were latent ambiguities because they became apparent only when the words of the will were put into operation.⁷ As to the first problem—the misnamed trust—the court of appeals agreed with the trial court that this may have only been a scrivener's error in referencing the non-existent Irrevocable Trust, as opposed to the Revocable Trust.⁸ However, the court of appeals found the second problem to be more serious, holding that portion of the will "cannot be put into operation without resolving that ambiguity."⁹ The court of appeals went on to note that, to resolve an ambiguity in a will, "parol evidence of all of the facts and circumstances respecting persons and property to which the will relates are admissible as legitimate evidence to show the intention and application of the words used."¹⁰ Thus, the trial court must hear parol evidence before ruling on the testator's intent because Item Four contained a latent ambiguity. Accordingly, the appellate court vacated the trial court's order and remanded the case with direction.¹¹

B. Presumption that the Will Was Validly Executed and Attested

Georgia law requires a testator either sign the will in the presence of two witnesses or acknowledge his or her signature to the witnesses.¹² In the case of In re Estate of McLendon,¹³ the witnesses, who had signed the will ten years prior to the testator's death, could not remember the exact circumstances surrounding their signing of the will.¹⁴ When a petition was filed to admit the will to probate, the witnesses' testimony at the hearing in the Bartow Probate Court was "contradictory." One witness testified he did not remember whether the testator had already signed the will when the witness signed it. However, this same witness also

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testified the testator had not signed the will when he (the witness) signed it. The second witness testified he only remembered signing the will and did not remember whether there were any signatures on it when he signed it. But he also testified he had not seen any signatures. The probate court admitted the will to probate even though the caveators had argued the testator had neither signed the will in the presence of the witnesses nor acknowledged his signature to them.¹⁵

The Georgia Court of Appeals affirmed the probate court's application of the presumption of validity.¹⁶ The probate court and the court of appeals cited Glenn v. Mann¹⁷ for the proposition that "[w]here a witness fails to remember events surrounding the will's execution, there is a presumption, given proof of the signatures appearing on the will, that all was done as the law requires."¹⁸ The court of appeals held despite the contradictory testimony, there was "some evidence [to] support[] the probate court's finding that the witnesses did not remember the formalities of execution and attestation[,]" and thus the court of appeals would uphold the probate court's conclusion that the testimony did not overcome the presumption of validity.¹⁹

C. In Terrorem Clauses in Trusts

During the reporting period, the Georgia Court of Appeals handed down two cases that examined the effect of in terrorem clauses. Both cases involved disputes among siblings. In terrorem clauses are clauses in wills and trusts designed to discourage vexatious litigation by providing a person who unsuccessfully challenges the validity of the will or trust will forfeit any interest that person would otherwise take under the will or trust.²⁰

Legislation that became effective on January 1, 2021, clarified in terrorem clauses are not enforceable if the challenger's claim is one for "interpretation or enforcement of the will; . . . an accounting, for removal, or for other relief against a personal representative;" or who is "entering

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into a settlement agreement."²¹ In Barry v. Barry,²² the Georgia Court of Appeals affirmed the Union Superior Court's finding that a purported petition to "seek an accounting" was in reality litigation that was designed to contest the authority of the personal representative/trustee and thus was a violation of the in terrorem clauses contained in the challenger's father's will and a trust set up by her parents.²³ Consequently, the testator's daughter, Cynthia Barry (Cynthia), forfeited her beneficial interests in both the will and the trust. Cynthia's brother, Thomas Barry (Thomas), was named as personal representative in the will and as trustee of the trust. Basically, the will and trust equally distributed the parents' assets among Cynthia, Thomas, and another sibling. The trial court enumerated a series of actions by Cynthia that the court found were indicative of her desire to "gain control of her father's estate."²⁴

Although Thomas lived in Maine, and was caring for an ailing wife, he managed within ninety days to produce a preliminary accounting and valuation of the assets and liabilities of the estate.²⁵ However, when he sought to hire a lawyer in the father's small hometown to help with the probate of the estate, the two local attorneys he contacted informed him that they could not take the case. Cynthia had contacted both lawyers and even though she did not hire either, she gave them enough confidential information to create a conflict of interest, which she refused to waive. The will and trust gave Thomas unfettered discretion to value, sell, and distribute estate assets in cash or in kind.²⁶ Thomas made several attempts to seek Cynthia's input in dealing with the estate, even after she sued him. Cynthia refused to open an account to hold her share of estate stock; she did not cooperate in setting a time to divide the father's personal property; she hired her own appraiser to appraise the father's residence and insisted that the professional appraisal Thomas

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had gotten was inadequate. For a year, she refused to respond to Thomas's request for input as to whether she wanted an in-kind or cash value distribution of stock and then complained that he had breached his fiduciary duty in selling the stock.²⁷

The trial court concluded that Cynthia's actions were brought "with malice, without substantial justification, [and] in bad faith[.]"²⁸ More importantly, the trial court concluded—and the court of appeals agreed—that Cynthia had, in effect, contested the will provisions, instituted a proceeding to prevent the will from being carried out according to its terms,²⁹ and "at least indirectly" contested the trust provisions that named Thomas as trustee and gave him the broad authority to value, manage, and divide the trust assets.³⁰ These actions constituted violations of the in terrorem clauses in the will and the trust. Cynthia's contention that she had merely been petitioning for an accounting was dismissed, with the court of appeals stating "neither the trial court nor this Court is confined by the nomenclature used in any particular cause of action, nor will we turn a blind eye to one's actual intent."³¹

The case of Giller v. Slosberg³² arose in the context of a contentious relationship between a brother and his two sisters.³³ A jury entered a verdict in favor of the brother on the charge that the sisters had unduly influenced their father in making beneficiary designations in an individual retirement account (IRA), an agency account, and a trust.³⁴ The trust contained an in terrorem clause that provided the interest of any person who challenged the validity of the trust would be "revoked and annulled."³⁵ In their appeal, the sisters did not challenge the jury's findings that they had exerted undue influence but instead claimed, among other things, the in terrorem clause in the trust precluded the brother from receiving any of the trust assets.³⁶ In a split decision,³⁷ the Georgia Court of Appeals held the brother's actions in initiating the lawsuit violated the in terrorem clause in the trust and thus he was not

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entitled to any of the trust assets.³⁸ The majority opinion claimed it was strictly construing section 53, chapter 12, section 22(b) of the Official Code of Georgia Annotated (O.C.G.A.), which does not include language stating, if a trust is invalid, the in terrorem clause is inoperable.³⁹ Chief Judge McFadden, writing in dissent, stated when the trust itself was declared invalid, "[t]he in terrorem clause falls along with the rest of the instrument."⁴⁰ He pointed out the majority was trying to "animate stillborn instruments."⁴¹ He clearly disapproved of the majority's conclusion, stating:

There appear to be no previous cases in which our appellate courts have faced the audacious claim the appellants make here: even though they have been found to have procured the trust before us by means of undue influence and do not contest that finding, they nevertheless claim to be fully entitled to

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