In Royal v. Blackwell, handed down by the Georgia Supreme Court on July 5, 2011, the court held that a lawsuit for an executor's breach of fiduciary duty was not moot, even though all parties except the executor had settled the case and the money that had been improperly distributed by the executor was returned to the proper party.
Executors of wills owe a strict duty to the estate, and the very fact that the executor had breached that duty, the Court explained, gave rise to damages, even if the breach had been corrected.
The judge of the trial court in the case had awarded attorney fees against the executor. The Supreme Court overruled this part of the lower court's decision, stating that it was for a jury to decide whether a party to a case has committed one of the acts that give rise to ground for awarding attorney fees.
Click "read more" below and to the right for the full text of the case.
The Wall Street Journal posted this about leaving unequal shares of your estate to your heirs.
Among the advice given by the columnist is a recommendation to write one's reasoning for unequal estate shares in a will. Similarly, one could write a letter of intent.
Experience in a litigation setting shows that such clauses and documents rarely carry much weight in court. The reason is that they are typically drafted by the law office preparing the will. If the testator lacked the capacity to make a will, the court will often think, then yet another piece of paper the lawyer drew up does little to add to that capacity.
Practical experience shows that the single best way to leave unequal shares in your will is to tell your children (or other heirs) you're doing it and why. Nothing leads to estate fights quicker than surprises in a will. Similarly, a child that has had months or years to digest the fact that he is receiveing a lesser share (and who has heard "why" straight from the testator) is much less likely to file a suit.
Second to this is some recording or document that demonstrates capacity. A handwritten note or letter; a video tape; a recording of the conversation with the lawyer; or (in extreme circumstances) examination by a physician competent to evaluate mental health are all ways to head off an estate fight before it begins.
Daily Finance posted an article here that purports to explain "Why More than Half of Americans Don't have Wills."
Though the predictable (and perhaps question-begging) answer "we procrastinate and don't like to think about death" leaves the reader mildly disappointed, the statistics the article cites make it well worth perusing.
Among other interesting numbers is the survey result that "13% [of people] believe that their spouse and children will automatically receive the assets they have in the event of their deaths."
Experience shows that the above number is perhaps understated. Anecdotal reports from contacts of this firm also yield the disturbing fact that most married individuals believe their spouse will inherit everything when they die.
Unfortunately, this is entirely untrue. In no U.S. jurisdiction of which we are aware does the spouse automatically take the entire estate. And not only is inheritance not "automatic," but it also does not follow such a simple scheme. In Georgia in particular, the spouse and children share equally in the probate property (with the exception that the spouse never takes less than one third).
Often, the survivor of a married couple with children will find him or herself going through lengthy administration only to inherit a share of his or her own home, such that the house cannot be sold or mortgaged without the consent of mutual children - something that can be a hassle when the children are grown and an outright disaster if they are minors.
With estate planning, as with other areas of law, a little knowledge is a dangerous thing. Wills and inheritance law is the specialty of Tanner Pittman, LLC, and we are skilled both in drafting estate plans to our clients' wishes and in explianing them in a way that non-lawyers find accessible.
In the State of Georgia, the statutory doctrine of "year's support" can utterly defeat some estate plans. The problem can be voided by careful planning and the use of a revocable, inter-vivos trust (also known as a "living trust.")
What is year's support?
In Georgia, year's support is the right of a surviving spouse or minor child of a decedent to take property from the estate. How much property? That question is not easily answered and is the source of an enormous amount of estate litigation . The technical answer is "an amount sufficient to maintain the standard of living" of the surviving spouse or minor child for one year. Ga. Code Ann. § 53-3-7 (West)
It is for the courts to determine how much money or property is needed to accomplish this. Such determinations are costly and time-consuming exercises in litigation and trial work. They typically involve months of preparation and at least one appeal. Furthermore, experience shows that some (typically non-lawyer) probate court judges in Georgia see year's support as a convenient way of administering an estate and will award all estate property to a petitioning survivor. (Despite settled precedent on the question. See Taylor v. Taylor, 288 Ga. App. 334, 337 (2007)).
A seemingly inescapable dilemma.
In any event, there is no way to deprive a spouse or surviving minor child of year's support in a will, by agreement, or otherwise. This is true even if (for example) the spouses have been married for only one year and the will clearly states that only the children from the testator's previous marriage are to receive his or her estate.
Solution: there is no estate.
To avoid these problems, one must simply die with no property. Though a seemingly drastic solution, it can be accomplished without also requiring that one's last check bounce. Attorneys use an agreement called a revocable, inter-vivos trust or "living trust" in order to make sure one can enjoy one's property during one's lifetime but have complete say over how it is distributed after one's death.
A "living trust" is defined in more depth at the link below. But the important aspect of the trust for our purposes is that <b>it</b> and not the settlor (the person who made the trust) owns the property. When the settlor dies, the property in his or her estate cannot be taken as year's support because there is no property to take: the trust technically owns it.
In Georgia, where wills are still the predominant method of estate planning, there is nevertheless a fine argument to be made for drafting a living trust in order to avoid the necessity of paying year's support. Even if year's support should be paid and the testator wants to provide for a spouse and minor children, a living trust can allow the testator to establish the amount he or she wants to grant the surviving family and not let it become a matter for costly, emotionally taxing dispute in probate court.
Tanner Pittman, LLC is an estate planning and probate law firm that regularly advises clients on living trusts, year's support, and a range of other complex estate planning questions. Feel free to contact us today about your own such issues.
Clients making last wills and other estate arrangements know that they are creating very meaningful documents for their families. Oftentimes, wills are accompanied with family "love letters" expressing in plain terms the clients' thoughts that occasion their own deaths.
One client in particular did some research before drafting his own will and discovered that common practice in the last century was to begin a will with a Christian prologue rather than the modern, dry "this is my will, revoking all other wills before it, period." I'll publish his preferred language below.
My question for the client (or attorney) reader is: would you like to be approached by your lawyer about inclusion of a religious or Christian prologue to your will, or would that sound to your ears like your lawyer were proselytizing? How best would the question be asked?
The comment field is open. Thank you for your responses.
In the name of God, Amen. I, John Q. Testator, of the town of Anytown, Some County, Georgia, being weak in body, but of perfect mind and memory, thanks be to God, calling to mind the mortality of my body and knowing that it is appointed for all mankind once to die, do make and ordain this my Last Will and Testament. That is to say, principally and first of all, trusting in Jesus Christ for my eternal salvation, I give my soul to God who gave it to me, and my body I commend to the earth to be buried in a decent Christian burial at the discretion of my Executor, nothing doubting but at the general resurrection I shall receive the same again by the mighty hand of God. And as touching such worldly state wherewith it has pleased God to bless me in this life, I give, demise, and dispose of in the following manner and form.
Perish the thought for attorneys who make their livings helping clients avoid estate taxation.
That said, the safe money is on continuation of an estate tax, especially as government debt load continues to climb and successive congresses seem powerless to stop it.
At the vanguard of abolishing the estate tax, however, is Dick Patten of the American Family Business Institute. Reuters recently ran a story reporting that 131 members of Congress have signed his pledge to vote to repeal the so-called "death tax," and a bill currently before the House to do the same has 168 co-sponsors.
Tanner Pittman, LLC assists clients in estate tax planning as well as general estate and will planning. We draft estate plans that seek a maximum of tax advantage for clients, regardless of where the political winds will take us.
A writer for the New York newspaper the Times Herald-Record commented Monday on the cost savings from using living trusts as vehicles for disposing of an estate and avoiding probate.
Since 1991, the article noted, a living trust has been a better bet in that state because of attorneys' high fees for probating - topping 3% of the gross estate.
Not so in Georgia.
Here, a typical represented probate case costs between $1,000 and $2,000 in attorney fees. And many estates can be successfully probated without the need for attorney representation. I have learned that other state bars' practice of charging a set precentage of the estate size is the product of what can be characterized as legalized price setting. That is, the state bar as a whole dictates the fee, and all attorneys must take it.
So living trusts are often not the cheapest route to handling an estate in Georgia.
But are they ever called for?
The article above-cited states a reason they may be. It notes that disinherited heirs (say, children) need not be given notice of a trust's operation, whereas probate of a will contains a notice requirement. So, if you want to disinherit your children, the argument seems to go, prefer a trust because you won't have to send them a ticket to an estate contest by certified mail.
Frankly, that reasoning sounds too clever by half. It is the rare disinherited child that doesn't know of his or her parent's death and estate disposition, and trusts can be challenged in court every bit the same as wills can.
A recent case handled by Tanner Pittman, LLC, however, may show a prominent exception in which a living trust could serve as a device to protect the estate. In that case, the disinherited challenger to the will was a distant half-sister who had not seen the testatrix in years. In that case, it was in fact the statutory notice requirement of probate sent to this half-sister that kicked off the will challenge. Had a living trust been drafted, it's possible expensive probate litigation could have been avoided.
Tanner Pittman, LLC drafts living trusts, wills, and other complex estate planning documents, and our firm is prepared to advise clients on whether a trust or a will is the best device for carrying out their estate planning needs.
Huguette Clark, whose copper-baron father died in 1925, died in New York recently, leaving a will that devises most of her property to charities, gives a substantial gift to her lawyer and accountant, and completely disinherits all of her family members, reports MSNBC.
As if this alone didn't make the estate rife for a fight, Joel Schoenmeyer notes in his "Death and Taxes" blog that the attorney, who was also named co-executor of the will, cut off Clark's relatives from contact with her in 2005. Meanwhile, the accountant co-executor . . .yeah - he's a convicted sex offender, of the distributing-lewd-materials-to-minors stripe.
The DeKalb County, Alabama, bar association has sued to prevent the website legalzoom.com from doing business in that state, a local newspaper reports.
The case will turn on the proper interpretation of Alabama's unauthorized practice of law statute, which I will not attempt to unpack here. I will, however, express sympathy with attorneys who are annoyed at LegalZoom and services like it.
The most profound issue with a form book (via online service or otherwise) is that use of the forms can create a tremendous false sense of security while potentially devastating problems linger unaddressed. I once gleaned from the web the case of an individual whose father made a LegalZoom will and died assuming his estate plan was properly made.
Much to the dismay of the son, it was not: LegalZoom, it was alleged, didn't remind the father to properly title his bank accounts such that they pass pursuant to the will. The result was that in excess of a hundred thousand dollars went to the wrong heir because that heir's (and not the son's) name was on the joint bank account.
So to the query "isn't a LegalZoom will better than no will at all," my usual reply is "no."
Georgia's trust law has become more onerous for trustees. Whereas in the past, you could leave property in your will to a trustee whom you (get ready) trusted to manage it well without much supervision, the default rule now is that trustees must make at least annual reports to the trust's beneficiaries of their doings. Furthermore, there is a new requirement that beneficiaries be informed of their rights in trust within 60 days of its becoming irrevocable (as when the maker of a will dies).
Of course, under the old, pre-2010 law, any testator could make a will with the above requirements, but few did. By altering the default rule, the Georgia legislature now requires that we opt out of the new reporting requirements. What are some reasons we might? For one reason, as stated, many testators (i.e., makers of wills) simply trust their trustees to report when and if necessary. Another reason to opt out: many trustees are non-professionals, family members of the testator, who serve only grudgingly and don't want extra paperwork every year at tax time.
So for those who would opt out of the new requirements, I have crafted the following two will provisions. Each attempts to eliminate a more onerous reporting requirement of the new law without doing away with the common law rule that fiduciaries must still use due care and report if and when necessary (or, as under the post-2010 regime, upon request.)
My provisions are below. I invite comment.
F. WAIVER OF TRUSTEE'S NOTICES. No Trustee serving pursuant to any provision of this Will shall be required to give the notice set forth in Georgia Laws 2010, Act 506, § 1 and codified in O.C.G.A. § 53-12-242(a) (as such statute may be amended and revised up to the date of signing of this Will) to the beneficiar(ies), qualified or otherwise, of any Trust created hereunder unless, under exceptional circumstances, prudence and reasonable fiduciary duty would so require, as when (by way of non-exclusive example) the failure to give notice would substantially impair a legal right of a beneficiary and the Trustee has actual notice of such impairment. Notwithstanding anything in this paragraph, any Trustee may give any notice to any beneficiary that seems reasonable and prudent in his or her discretion.
G. WAIVER OF TRUSTEE'S ANNUAL REPORTS. No Trustee serving pursuant to any provision of this Will shall be required to give the annual reports set forth in Georgia Laws 2010, Act 506, § 1 and codified in O.C.G.A. § 53-12-243(b)(1) and (b)(2) (as such statute may be amended and revised up to the date of signing of this Will) to the beneficiar(ies), qualified or otherwise, of any Trust created hereunder unless, under exceptional circumstances, prudence and reasonable fiduciary duty would so require, as when (by way of non-exclusive example) the failure to give such report would substantially impair a legal right of a beneficiary and the Trustee has actual notice of such impairment. Notwithstanding anything in this paragraph, any Trustee may give any report to any beneficiary that seems reasonable and prudent in his or her discretion. Nothing in this paragraph shall be construed as a waiver of the reporting requirement upon reasonable request codified in O.C.G.A. § 53-12-243(a).
Tanner Pittman, LLC is a West Georgia law firm that specializes in estate services, civil litigation, and legal transactions.
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