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

• Publication year: 2009

Wills, Trusts, Guardianships, and Fiduciary Administrationby Mary F. Radford^*

This Article describes selected cases and significant legislation from the period of June 1, 2008 through May 31, 2009, that pertain to Georgia fiduciary law and estate planning.¹

I. Georgia Cases

A. Attestation of Will by Witnesses

Georgia law requires that a will be attested and subscribed by at least two competent witnesses in the presence of the testator.² In 2006 the Georgia Supreme Court confirmed that the question of whether a witness is in the testator's presence is determined by applying the "line-of-vision" test.³ Under the line-of-vision test, the testator must be able to see the witness from her location, should he or she so desire, without having to change his or her place.⁴ In 2009 in Chester v. Smith,⁵ the supreme court applied this test and decided that the will in question had not been validly attested.⁶ The testator in this case was driven to her bank by a driver. When the driver of the car parked in the bank parking lot, the testator called a bank employee who then came out to the car. The employee read the will to the testator and watched her sign it. The employee then took the will into the bank, and two tellers signed as witnesses. The employee and the two tellers all testified at trial that the testator, who stayed seated in the car, would not have been able to see the tellers sign due to her place in the car and the structure of the bank.⁷ The supreme court affirmed summary judgment against the propounders of the will on the ground that the witnesses had not signed the will in the testator's presence.⁸

B. Construction of Language Commonly Used in Wills and Trusts

Three cases decided during the survey period examined the meaning of clauses commonly used by lawyers in both wills and trusts. The first case involves the testator's tangible personal property and a clause that contains precatory language related to the distribution of this property.⁹ The second case deals with a clause directing the payment of the testator's debts.¹⁰ The third case addresses a clause that directs a testamentary trust distribution to the "children" of the testator's son.¹¹

1. Distribution of Tangible Personal Property. Many testators own significant amounts of tangible personal property and are constantly acquiring more. They have specific recipients of some of these items of property in mind at the time they write their wills; however, they have not made up their minds about other items and, obviously, have no way of predicting what items they actually will own at death. one alternative for these testators is to list as many items as possible in the will, along with the intended recipients of these items, and then formally amend the will every year or so to cover newly acquired items.¹² This alternative, however, is both inefficient and expensive. To deal with this issue, Georgia lawyers often insert a clause into wills that refers to a separate list the testator will make and update to state which items should go to whom.¹³ This list is not a part of the will and thus is not legally binding,¹⁴ but many testators are satisfied that their family members and executor will abide by their wishes as set out in the list.

The testator of the will at issue in Kale v. Wilson¹⁵ devised all of her personal property to her niece but added that the niece was "honor bound to distribute items I have designated to my loved ones. It is my intention that she will be given a list before I die and I know I can trust her to carry out my wishes."¹⁶ The individual who contested the will alleged, among other things, that the quoted language created a condition precedent to the vesting of the niece's interest in the estate and that this condition had not been fulfilled.¹⁷ The supreme court determined that the testator's will did not contain any express intention to impose a condition precedent on the niece and thus would not construe those words as creating one.¹⁸ The court noted that the law does not favor conditions precedent that result in forfeiture.¹⁹

2. Payment of Debts. Testators often include directions in their wills for the executor to pay all the testator's debts.²⁰ This clause is unnecessary because the law requires the executor to pay any debts owed by the testator before distributing property to the beneficiaries;²¹ nevertheless, it is commonly used. If a beneficiary under a will is specifically devised property (usually real property) that is encumbered by a debt, such as a lien or mortgage, the question arises as to whether the beneficiary is entitled to receive the property free and clear (with the executor paying the encumbrance as a debt of the estate) or to receive the property subject to the encumbrance.²² If a will is silent on this point, the common law doctrine of exoneration indicates that the debt is to be paid from the testator's estate and that the beneficiary is to receive the property without the encumbrance.²³ Many states have reversed this doctrine by adopting section 2-607 of the Uniform Probate Code,²⁴ which provides that "[a] specific devise passes subject to any mortgage interest existing at the date of death, without right of exoneration, regardless of a general directive in the will to pay debts."²⁵ Georgia has not enacted such a statutory provision, and little case law in this state has dealt with exoneration.²⁶

In 2008 in Manders v. King,²⁷ the supreme court explained that Georgia still adheres to the common law doctrine; however, the court went on to hold that the doctrine of exoneration did not apply to the particular facts of the case.²⁸ The testator's will directed that the executor should pay "all [her] just debts . . . without unnecessary delay."²⁹ one of the testator's sons owned a condominium with the testator as joint tenants with right of survivorship.³⁰ The testator executed a promissory note when she purchased the condominium and secured the loan with the real property. The son became the owner of the condominium upon his mother's death, but he insisted that the note was a debt of the estate that must be paid from the estate pursuant to the directive in his mother's will.³¹ The supreme court disagreed.³²

The court examined cases from other states and concluded that the common law doctrine of exoneration does not apply to property that passes outside probate,³³ and the directive in the will to pay the testator's debts did not evidence a clear intent on her part that her estate should be liable for the payment of the note.³⁴ The court also noted that the son would not be compelled to pay the outstanding indebtedness on the condominium, but he would have to do so if he wanted to retain title to the property.³⁵ Alternatively, he could sell the property, pay off the note, and redeem any remaining equity.³⁶

3. Construction of the Term Children. It is quite common for the settlor³⁷ of an inter vivos trust³⁸ or the testator, in the case of a testamentary trust,³⁹ to direct distribution of the trust property to a class of persons who are generically described, such as the class of "children" or "descendants."⁴⁰ Questions have arisen in many cases over whether these classes are intended to include children or descendants who were adopted⁴¹ or born out of wedlock.⁴²

In Elrod v. Cowart,⁴³ the testator's will created a trust that left property to, among others, the testator's son for life with the remainder to "any child or children" of that son.⁴⁴ The testator died in 1970.⁴⁵ The son, who had no biological children of his own, adopted Steven Cowart in 2004 and then died in 2005. Cowart was age thirty-two at the time of the adoption.⁴⁶ The other remainder beneficiaries objected to Cowart taking a portion of the trust property.⁴⁷

The supreme court examined in depth the development of the Georgia adoption and inheritance laws and concluded that Cowart could take under the terms of the trust because the testator did not express intent that adult adoptees be excluded from the class of the son's "children."⁴⁸ The court applied Georgia law as it existed at the time of the testator's death.⁴⁹ The court noted that the adoption law of the state was amended in 1967 to provide that an adopted adult could inherit from and through the adopted parent in the same manner as someone who was adopted prior to reaching adulthood.⁵⁰ A later amendment of the law in 1975⁵¹ (after the date of the testator's death) was viewed by the court merely as a clarification of the law already in existence.⁵² This later amendment provided that an adopted individual "may also take as a 'child' of the adopting parent under a class gift made by the will of a third person."⁵³ The court stated that this law's effect is that extrinsic evidence cannot be considered; rather, only the four corners of the will can be considered in determining whether adopted individuals are expressly excluded from taking as beneficiaries of the testamentary trust.⁵⁴

C. Attorney Fees and the Slayer Statute

Georgia law prohibits an individual who feloniously and intentionally kills another individual from benefiting from the slain individual's estate or serving as the personal representative of that individual's estate.⁵⁵ For the killing to be felonious and intentional, it must be shown that the killing would constitute murder, felony murder, or voluntary manslaughter under Georgia law.⁵⁶ A conviction or a guilty plea for one of these crimes is conclusive evidence that the killing was felonious and intentional.⁵⁷

In Levenson v. Word,⁵⁸ the testator was murdered in October. In January of the following year, his wife qualified to serve as executor under his will. In September a grand jury indicted her for her husband's murder. The wife quickly retained a law firm to defend her. When she discovered that the state would seek the death penalty, she retained an additional firm to help with her defense. The wife agreed to pay a nonrefundable retainer that would be split...