Magazine article The CPA Journal

Recognizing and Avoiding a Will Contest: Keeping the Family Together

Magazine article The CPA Journal

Recognizing and Avoiding a Will Contest: Keeping the Family Together

Article excerpt

Probate litigation and family controversy matters occur, with rare exceptions, when there is money or other valuable assets at stake and one or more parties believe they have received less than their fair share of the decedent's estate.

The process begins with the application for the probate of a will including any codicil. For example, in New Jersey, the application should be filed with the Surrogate's Court of the county in which the decedent resided when he died (N.J.S.A. 3B:3-24). Other states may vary, so executors should be certain to check the laws within their state or county.

Within 60 days of the probate, the executor must provide all beneficiaries a notice, in writing, that the will has been probated, where and when the probate will take place, who the executor is and where they can be reached, and how to request a copy of the will. The executor is then required to determine the assets and liabilities of the estate and carry out the provisions of the will. When a contestant files an objection to the will, this is the beginning of probate litigation. The executor must file an answer to the complaint.

The will contest is a court proceeding, but for the most part it can take the form of a negotiation among the parties or a lawsuit administered by the court The litigation will involve pleadings, depositions, interrogatories, and possibly the appointment of a mediator or arbitrator by the court. Furthermore, these matters often involve forensic accountants and various appraisers (e.g., real estate, businesses, or artwork). Forensic accountants and appraisers could be involved even if the parties negotiate outside of the close supervision and formality of the court system. If the parties cannot resolve the dispute, it will ultimately be heard by a judge of the Superior Court. The losing party would have the right to appeal the decision (R. 2:2-3).

Almost all will contests - whether with or without the direct involvement of the courts - have several things in common. The family relationships will change, and this can range from short-lived resentment to permanently broken family ties. The resolution will take much longer than any of the parties anticipate, and this usually takes its toll psychologically and financially. The professional fees will be substantial. In the end, a resolution often requires compromise on both sides, which, in turn, may leave everyone unhappy with the financial result and it is likely that the testator's plan will be altered. It is therefore the responsibility of the professional advisor to recognize a potential will contest while the testator is living, and take steps to avoid it.

Five Factors

Recognizing a potential will contest involves knowledge of the legal issues and awareness of several factors that often exist in a will contest There are five legal issues that any professional advisor should know. First the testator must have the requisite legal capacity to make a will. The testator must be 18 years of age or older and "of sound mind and competent when he executed the Will" (NJ.S.A. 3B:3-1 et seq). Second, undue influence exists when there is a mental, moral, or physical exertion which destroys the testator's free agency by preventing the testator from following his own desires in the context of his will [In re Neuman's Estate, 133 N.J.Eq. 532 (E.&A 1943); Geliert v. Livingston, 5 NJ. 65 (1950), In re Miles, 176 N.J. 282 (2003)1. Third, if there is a "confidential relationship" between the testator and a beneficiary along with a "special circumstance," this provides the appearance of undue influence and shifts the burden of proof to the executor, the proponent of the will, to prove the lack of undue influence [in re Rittenhouse's Will, 19 NJ. 376 (1955)]. Fourth, an advisor should keep in mind the New Jersey statute that guarantees tiie surviving spouse an elective share that is equal to one-third of the augmented estate (NJ.S.A. 3B.8-1 et seq). …

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