This is Estate Planning Awareness Week! Tip #5

Today’s Tip:  When a Contentious Probate Litigation Leads to a Disadvantageous Result

 

As is often the case, probate litigation can quickly become contentious, especially when competing Wills are offered for probate.  Litigation can become costly, and disadvantageous errors in judgment and strategy can result in unintended consequences. Read more here.

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When a Contentious Probate Litigation Leads to a Disadvantageous Result

As is often the case, probate litigation can quickly become contentious, especially when competing Wills are offered for probate.  Litigation can become costly, and disadvantageous errors in judgment and strategy can result in unintended consequences.

In Re Matter of Harper (2019 N.Y. Misc. LEXIS 1073; 2019 NY Slip Op 50333(U) ; 63 Misc. 3d 1203(A); 2019 WL 1281833), an initial probate proceeding was begun on March 24, 2010, almost 15 months after the death of the testator on December 31, 2008, to probate a Will dated May 27, 1997.  In that Will, the decedent, himself an attorney, left his real estate and other tangible property to be divided equally among two nephews, his sister, and his three sons.  The residuary estate was left to his wife.  Objections to probate were then filed by his wife, his three sons, and his daughter Faith through a guardian ad litem.

However, this probate proceeding was stayed pending the outcome of another probate proceeding, this time for a Will dated September 25, 2007.  For over a decade thereafter, the parties engaged in costly litigation over the validity of the 2007 Will.  Only a copy of the 2007 Will existed, dated March 6, 2006.  Decedent’s wife filed for summary judgment, arguing that the later Will revoked the 1997 Will, though she did not argue for the admission to probate of the 2007 Will.  On January 30, 2018, the court denied the wife’s summary judgment motion.

One of the decedent’s sons who would have benefited from the real estate provision in the 1997 Will then brought another summary judgment motion, nearly identical to the wife’s, asking that the court find that the 2006 copy of the Will revoked the 1997 Will.  Decedent’s sister and her son, both non-distributees under the 2006 copy, objected to the summary judgment motion on the basis that “that production of the copy of the “unauthenticated” 2006 will is ‘simply a ploy to plunge the Estate into Administrative chaos.’”  The court wryly noted:  “This last argument is made apparently as a result of amnesia regarding the last ten years of family conflict and litigation.” 2019 N.Y. Misc. LEXIS 1073, at 3; 2019 NY Slip Op 50333(U) at 2.

In order to succeed on a summary judgment motion to revoke a prior Will as a matter of law, the objectant must make a prima facie case that  a) the  instrument was properly executed;  b) the decedent had testamentary capacity at that time; c)  the Will  presented is a true and complete copy of the original; d)  the instrument by its terms revoked the prior Will;  and  e) that the earlier Will was intentionally revoked by the decedent (see EPTL § 3-4.1).

In support of his summary judgment motion, the son offered the following evidence: 1) a copy of the Will allegedly drafted by the decedent himself who was an attorney; 2) a showing that the Will was executed in the presence of two attesting witnesses; 3) the attestation clause included in the Will; 4) a contemporaneous self-proving affidavit; and 5) deposition transcripts of the two attesting witnesses and the notary to the 2006 Will.  One of the attesting witnesses was himself an attorney.  Both attesting witnesses testified to the decedent’s testamentary capacity and that the signatures on the copy were indeed genuine.

The court then explicitly noted this:  “As probate of the 2006 instrument as a lost will is not being sought.”  The question is why not?  Did the son not know that he could make the application to the court to probate a lost Will?  Why seeks a revocation of a prior Will without first seeking to probate the 2006 copy?

Here is why these questions matter.  If successful, by using the 2006 copy of the Will as a tool to only revoke the 1997 Will, the outcome would be that the decedent legally died without a Will and that New York’s intestacy statute (EPTL 4-1.1) would then apply to decedent’s estate.  Decedent’s wife is entitled to receive the following in intestacy:

1. Cash or cash equivalents, including bank accounts of up to $25,000.
2. One car of up to $25,000 (if the value of the car is greater than $25,000, the spouse has the option of paying the difference to the estate).
3. Household items, including the decedent’s clothes, furniture, appliances, and jewelry up to $20,000.
4. The decedent’s family pictures, books, computers, discs, and software, up to $2,500.

The surviving spouse also receives $50,000 in assets and 1/2 of the remainder of the estate if the decedent left children.  If there are surviving children, each child then shares equally in the other ½ remainder of the estate.  In this case, only the wife and decedent’s seven children would benefit in intestacy.  Decedent’s sister and nephews receive nothing under intestacy.

However, assuming that the 2006 copy recited essentially the same provisions or perhaps even more favorable provisions for the son, then the son could have sought to admit the copy as a lost Will under SCPA 1407.  Successful admission of the copy to probate would have meant that the 1997 would have been revoked, which seems to have been the desired outcome, and that the estate would not have gone into intestacy.  The requirements for admission of an instrument as a lost Will are the following:

  1. Due execution of the Will, including proof of testamentary capacity;
  2. No subsequent revocation of the Will;
  3. A copy or draft of the Will proved to be true or, if there is no copy or draft of the Will, then all of the provisions of the Will must be clearly and distinctly proved by at least two credible witnesses.

The son’s summary judgment motion contained all of the elements necessary to state a prima facie case for a lost Will.  Was it a deliberate choice to not do so, or simply a legal oversight? Since he and the other litigants had already spent time and money arguing for the probate of the September 25, 2007 Will that had been denied probate, did he deem it likely that this would be the result of a lost Will petition? Or did the new depositions make it more likely that a lost Will petition might succeed? Was the point of his summary judgment motion simply to defeat his aunt and cousins even at the expense of receiving less in intestacy than even under the 1997 Will?

We will never know.  The court found that the May 27, 1997 Will was revoked by copy the 2006 Will dated March 6, 2006.  As a result, the court found that the decedent has died intestate (without a Will).

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The Surviving Spouse in Same-Sex Marriages: A New Federal Approach in New York

Several foreign countries, eight states, and the District of Columbia now permit gay couples to marry.  Many gay couples who are New York domiciliaries have been married in these jurisdictions.  New York recognizes these marriages, granting these couples equal protection under state law.  As to federal law, these duly married couples have until now been denied the same protection under federal law. 

On 23 February 2011, the Obama administration took a new legal position with respect to the 1996 Defense of Marriage Act (DOMA), in effect granting federal legal protections to married gay couples.  Section 3 of DOMA states: “In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.”

The administration’s position does not go to the issue of whether same-sex couples should be allowed to marry.  Instead, the focus is on preventing federal discrimination against same-sex couples after they have been legally married.

Under this new approach, the burden of proof will now shift from a gay spouse or same-sex couple who challenges a federal statute to show that they are not prohibited under DOMA from making the claim and places the burden on the federal government to show that DOMA does not impermissibly discriminate against the gay spouse or couple.   

Courts will now apply a heightened standard of legal review to cases involving DOMA.  Since the passage of the law, courts have applied a legal standard of review called rational basis to all sexual orientation discrimination cases that concern federal issues.  For instance, same-sex couples who sought equal protection of the law under the Fifth Amendment (the Fourteenth Amendment’s equal protection clause applies to the states) were generally denied equal protection so long as the government could state a rational basis for the existence of DOMA.  The government almost always won a legal challenge under rational basis review because the challenger of DOMA had the burden to show that there was no legitimate purpose to the law and that the means used to enforce the law were not rationally related to its purpose. 

But moving forward, the government will no longer defend the law under rational basis review.  Instead, a heightened standard will used by the federal courts in cases involving DOMA.  Henceforth, the burden will fall on the government to show that the law is substantially related to an important government objective.  The government will base its position on the legislative record used to pass the law. 

One case that will be affected by this new position is Windsor v. United States, No. 1:10-cv-8435,  filed in U.S. District Court in the Southern District of New York on November 9, 2010.  In the complaint, the plaintiff Edith Windsor seeks “a refund of the estate tax levied on a married same-sex couple, which would not have applied to a married straight couple, and which consequently violates the United States Constitution.”  In 2007 Edith Windsor and Thea Spyer were married in Canada after an engagement lasting 40 years.  Two years later, Spyer passed away as a result of complications from a heart condition.

26 U.S.C. § 2056(a) permits an unlimited marital estate-tax deduction that allows property to pass from a decedent spouse’s estate to the surviving spouse free of the federal estate tax.  But because of DOMA, married same-sex couples are denied this marital estate-tax deduction that is enjoyed by every other married couple.

Both spouses had done extensive estate planning, each creating revocable trusts.  According to the complaint, Edith “in her capacity as executor of Thea’s estate, filed a Claim for Refund and Request for Abatement (Form 843) and a Disclosure Statement (Form 8275) with the IRS on April 7,2010, stating that Edie and Thea were lawfully married in Toronto, that New York State recognizes that marriage under local law, and that DOMA unconstitutionally discriminates on the basis of sexual orientation. As a result, Edie argued, Thea’s estate is entitled to the marital deduction and to a refund in the amount of $363,053.00.” (Windsor, at 19).

The IRS replied and denied the refund because “under DOMA ‘… the words [sic] “spouse” refers only to a person of the opposite sex who is a husband or a wife’. Section 2056 is inapplicable because the surviving spouse is not a spouse as defined by DOMA (Id.).”

But under the new Obama administration position, the federal government will no longer defend the legal position articulated by the IRS.  According to the letter from Attorney General Eric Holder to Speaker of the House John Boehner dated 23 February 2011, “heightened scrutiny is the appropriate standard of review and that, consistent with that standard, Section 3 of DOMA may not be constitutionally applied to same-sex couples whose marriages are legally recognized under state law.”

The net effect of the Holder memorandum is that the government will not file a motion to dismiss on or before March 11, 2011.  The case will move forward with the government still a party in the case, but the court will be instructed to apply a heightened standard to the case, and to remove Section 3 of DOMA as a barrier to possible recovery in this case.

If you would like to discuss your own personal situation with me, review your current Will, or put together an estate plan that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me Up” on the left-hand side of the page so that you can receive a notification when the next installment has been published. Thank you.