The Importance of Planning Ahead and Independent Counsel

As estate litigators, there are many times we see a case which would not exist if the parties involved had received independent counsel and had planned ahead.  Sadly, such a case was recently highlighted in the Chicago Tribune. 

The article opens with the following: "When prominent East Dundee businessman Thomas McNamee died of cancer, an obituary noted that he was a peacemaker who "welcomed people of all walks of life into his heart and brought them together."  But in the two years since his death, a legal fight has erupted over his multimillion-dollar estate.  The latest volley took place recently when McNamee's widow sued her deceased husband's business partners and an Elgin attorney. Earlier, she had contested the validity of a trust McNamee established."

The reporter later notes the following: "[The decedent's widow] also alleges that [the defendant, an attorney] furnished a lawyer to represent her, but that the lawyer was a friend of [the decedent's] and didn't provide her with unbiased counsel.  [The widow] claims the two lawyers pressured her to sign the document minutes before the wedding.  "While approximately 40 guests waited, [the widow] was given the ultimatum to either sign the April prenup … or call off the wedding," the suit said.  [Defense counsel] disputed [the widow's] version, saying no one pressured her into doing anything."

It is likely safe to assume that, prior to his diagnosis of cancer, the decedent would never have imagined that his estate was going to be used up in attorney's fees, as is likely to happen here.  Had he put an estate plan in place prior to his diagnosis - and received advice from independent attorneys with experience in such complicated situations - it is likely that none of the alleged pre-death or post-death shenanigans would have occurred.

Another Senior Exploited by a Family Member; Luckily Civil and Criminal Law Provide Remedies for the Victim

Last week the Chicago Tribune ran a story about Chester Czerwinkski, who is alleged to have stolen more than $900,000 from his aunt who suffered from dementia.

See http://www.chicagotribune.com/news/local/breaking/chibrknews-man-charged-in-900k-theft-from-elderly-aunt-20110409,0,289858.story

Chester was able to access her money after she allegedly named him her agent under power of attorney. Recently, the First District Appellate Court of Illinois reaffirmed that if an agent under power of attorney benefits from the agency relationship, as Chester is alleged to have done, the transaction is presumed to be a product of undue influence. In Estate of Pawlinski, Victoria named her son, Sid, her agent under power of attorney. 942 N.E.2d 728 (1st Dist., 2011). As agent, Sid converted over $500,000.00 in Victoria's assets to accounts titled to jointly to himself and his mother. After his mother died, the joint accounts became Sid's by operation of law. That is until his siblings advised the Probate Court that the funds were re-titled during the time Sid served as their mother's agent.

The result: the Probate Court presumed the transfer was a product of undue influence because Sid was in a fiduciary relationship with his mother vis-a-vi her power of attorney.

Sid had the opportunity to overcome the presumption of undue influence by clear and convincing evidence that demonstrated that his mother agreed to have her accounts retitled. In order to rebut the presumption of undue influence the Appellate Court looks to factors such whether (1) the fiduciary made a frank disclosure of the information he had; (2) he paid adequate consideration; and (3) the principal had competent and independent advice.

In Sid's case, he could not prove any of these factors and the Court ordered him to return the money to the Estate. Chester has bigger problems than Sid. Not only does it appear that he has to return the funds he improperly transferred to his aunt's Estate but he has been indicted on felony theft and financial exploitation of an elderly person.

Clark Hill PLC attorneys help family members avoid situations such as these through proper estate planning and fiduciary representation. We frequently advise agents under powers of attorney on their responsibilities as agent and we also represent family members seeking to discover and recover assets belonging to their loved one that they believe were improperly transferred or retitled by their loved one's agent.

I want to contest a will or trust. Can I?

So, your great aunt Vera died and she left her entire estate and trust to your hated cousin Vincent and her former care giver Alex.  You think that Aunt Vera wanted you to receive a portion of her estate or trust and want to contest both her will and trust.  Can you?

If you are an heir of the deceased, or a legatee under her current or a prior will or trust, then you may be able to contest that will or trust.  However, you cannot just contest a will or trust because you do not like what it says.  You have to have actual legal and factual grounds to support an argument that the will or trust was not valid when executed.  The most common legal grounds are undue influence and lack of testamentary capacity. 

Undue Influence  Undue influence is any ‘improper urgency of persuasion whereby the will of a person is overpowered and he is induced to do or forbear an act which he would not do or would do if left to act freely.’   A rebuttable presumption of undue influence arises when there is proof that (1) a fiduciary relationship existed between the testator and a beneficiary; (2) the beneficiary receives a substantial benefit under the will; (3) the testator was dependent upon the beneficiary; (4) the testator reposed trust and confidence in the beneficiary; and (5) the will was written by, or its preparation procured by the beneficiary.

You will note that one of the elements necessary to prove undue influence is the existence of a fiduciary relationship.  A fiduciary relationship is presumed to exist in the following situations: guardian & ward, attorney and client, financial advisor/accountant and client, priest & penitent, care giver & patient, trustee & beneficiary; and principal and agent under power of attorney.  A fiduciary relationship can also exist in more informal situations; relevant factors in determining whether a fiduciary relationship exists include: the degree of kinship between the parties; the disparity in age; health; mental condition; education and business experience between the parties; and the extent to which the "servient" party entrusted the handling of its business affairs to the "dominant" party and placed trust and confidence in the "dominant" party.  

Lack of Capacity  The other most common legal ground to contest the validity of a will or trust is lack of capacity.  There are different levels of capacity necessary to execute a will of testamentary trust and a living trust.  The capacity necessary to execute a will of testamentary trust is testamentary capacity, while the capacity necessary to execute a living trust is contractual capacity.

To set aside a will (or testamentary trust) on grounds of lack of testamentary capacity, the contestant must demonstrate that at the time the will was executed, the testator lacked sufficient mental ability to: (1) know she was making a will; (2) know and remember the natural objects of her bounty; (3) comprehend the character and extent of her property; and (4) make the disposition of her property according to a plan formed in her own mind. 

To set aside a living trust, the contestant must demonstrate that at the time of the trust’s execution, the trust settler did not have: (1) the ability to transact ordinary business; or (2) the ability to understand, in a reasonable manner, the nature and effect of the act in which he or she is engaged.  The issue is not necessarily whether the settlor was generally of sound mind, but whether he or she had sufficient mental capacity to understand the trust that he or she executed.  Further, while the settler must have had he ability to understand the trust, it does not mean that the settler must be able to explain every technical term used in the trust.

Keep in mind that if you successfully win a will or trust contest, the relief granted is an order declaring that will or trust to be invalid.  That means that the estate or trust will be distributed accoridng to intestacy (by heirship to 'blood' relatives) or, in most instances, according to a prior will or trust.

Clark Hill PLC attorneys are very experienced in bringing and defending against will contests.  In fact, Ray Koenig was a co-author of the Will Contests chapter of the IICLE 2009 handbook for lawyers titled 'Litigating Disputed Estates, Trusts, Guardianships, and Charitable Bequests.'

Growing older and going back into the closet

There is a fantastic new documentary about what "experts in the film call an epidemic: gay, lesbian, bisexual or transgender seniors so afraid of discrimination in long-term/health care or bullying by other seniors that many go back into the closet."  The film is titled GenSilent and it has won all sorts of awards.  It is highly recommended for those who identify as LGBT or those with LGBT loved ones who are growing older.  It is also highly recommended for anyone who works in the senior care field. 

I dealt with this situation for a former ward a few years ago.  He was an out gentleman who had lived with his partner for years.  After his partner died, his dementia worsened.  Eventually, the public guardian filed for guardianship for him and I was appointed his Guardian Ad Litem.   The gentleman took a liking to me and decided that if he was going to have a guardian, only I could serve as such.  I accepted his selection and was appointed his guardian. 

Over the years, his cognitive and physical impairments increased to the point that he could no longer live in his home or an assisted living facility.  As was later reported in the Chicago Tribune in a story about a report titled "Improving the Lives of LGBT Older Adults": "when Koenig had to place the man in a North Side nursing home, the attorney had to decide whether he should set up photos of the man's partner in the room.   I made the decision not to because I wasn't going to be with him all the time and I didn't know if he was going to be treated differently because his partner was same-sex," Koenig said. "I had to make a decision that would protect him, but it was a very hard one to make. That's the sort of decision LGBT seniors are making all the time for themselves when they go into nursing homes." 

Clark Hill PLC attorneys routinely represent LGBT individuals and their family members to properly plan for their futures - and to fight to ensure those plans and their dignity are honored.

'The Will: Family Secrets Revealed' TV Show

Copyright © 2011 Discovery Communications, Inc.

I recently watched a few episodes of a relatively new show on a channel known as Investigation Discovery.  The show is titled 'The Will: Family Secrets Revealed.'  It is a fascinating show which highlights different wealthy and infamous families and how they tried to use their estate plans (wills, trusts an dother vehicles) to attempt to control the lives of their surviving family members long after they have died. 

One of the recent episodes I watched was about the Estate of Frederic C. Dumaine.  Mr. Dumaine was a fantastically wealthy man (a "textile tycoon") whose will ended up pitting his 'legitimate' daughters against one he had out of wedlock.  It is certainly worth watching for those interested in the ways of the super wealthy - and why it is important to be as explicit as possible in your final will (and your entire estate plan, for that matter).

The attorneys at Clark Hill PLC encounter these situations on a regular basis.  We routinely counsel clients on what they can or cannot - and should or should not - do to control the lives of their loved ones from the grave.  We are also frequently retained in these matters after death to either defend the estate plan - or contest it.  Regardless, it is very important that the intent of the testator is honored.