Frank W. Streng, Esq.

McCarthy Fingar LLP

11 Martine Avenue

White Plains, NY  10606-1934

914‑946‑0134 (fax)

914-946-3817 ext. 256 (voice)

e‑mail:  fstreng@mccarthyfingar.com

web: http://www.mccarthyfingar.com                                                                             www.mfdds.com

Carla D. Glassman, Esq.

Glassman & Brown, LLP

99 Court Street

White Plains, NY 10601

914-686-0108

914-288-9291 (fax)

 

 

 

 

 

 

 

Westchester Women’s Bar Association – Trusts & Estates Section

 

SCPA 1404: How to Examine the Witnesses to a Will and Defensive Estate Planning               `                 

 

March 15, 2005

 

 

A.   What is Defensive Estate Planning?

 

·        Attorney’s Perspective

·        Ethical Considerations

·        Attorney-Client Privilege

·        Who is your client

·        Actual or Potential Conflict of Interest

·        Irreconcilable conflicts of interests

·        Reconcilable conflicts of interests

·        Exoneration by multiple clients with full disclosure

·        Engagement Letters

·        Ethical considerations

·        Financial considerations

 

·        Representing One or More members of “Dysfunctional” Families

·        Dysfunctional – Webster defines it as “impaired or abnormal functioning”

·        Examples of Dysfunctional Families

·        “Bad families with No Parental Control”: No one likes each other, including the parents

·        “Bad families with Parental Control”: No one likes each other, but the parents are able to require members of the family to act with propriety and respect

·        Good Family with Bad Marriage: Children seem to respect each other, but parents hate each other

·        “Good Families that are Broken through Divorce”

·        “Good Families that are Broken through Remarriage (with children from second marriage)

·        “Good Families that are Broken through Remarriage (without children from second marriage)

·        “Good/Bad Families” on the Death of the Survivor Parent: Throw out the Family Rule Book and Become Super Dysfunctional

·        “’Good Families” that have Very Good Actors in which One or More members Hate Each other

 

·         Client’s Goal: Hiring you to protect integrity of client’s decisions in estate plan (e.g., preparing will where client cuts out distributees or makes so-called unequal distributions)

 

B.   Fact Pattern

 

Sally Jones (SJ) died on February 5, 2004 at age 49. SJ taught elementary school in Westchester County.  SJ became ill about 3 years ago, with a diagnosis of ovarian and cervical cancer.  Track list on surgeries:

 

1. April 13th, 2000. Sally's first surgery. Dr. Chung. Ovaries removed.

2. April 19th, 2001. Port removed after chemotherapy completed.

3. June 18th, 2001. Sally's mother, Marion Jones, passed away.

4. February 7th, 2003. Sally's surgery. Dr. Chung. Bladder removed.

5. November 14th, 2003. Sally's surgery. Dr. Seger. Clear blockage. Replaced external bladder.

 

Jill Smith (75) and her son, John Smith (33), were very close to Sally.  Sally is also John’s godmother.

 

Jill was with Sally every step of the way.

 

Sally not married but, nearly 27 years ago, Michael Evil, age 69, moved in with Sally and her parents, since Michael needed a place to stay.  They met each other at the Coach Inn in Ossining, NY.  Michael is apparently on a second marriage and apparently had children from his first marriage.  Client describes Michael as “violent” with an “uncontrollable temper” and “extremely jealous” of both John and Jill.  Jill was called Aunt Julie by SJ.  Michael’s relationship with SJ is somewhat strange in that, among other things, no one seems to know about Michael.  Words to describe Sally: “naïve”, “shy”, “overly protective”.  Considered to be “afraid” of Michael, according to friend of family.  Michael dependent upon SJ.

 

Will dated November 12, 2003, signed at Westchester Medical Center, and witnessed by a nurse, Lila Krump, and an apparent neighbor, Hillary Peters.  Lila is described as being in Michael’s “back pocket”.  Will prepared by Bill Noplan of Noplan & Noplan, of Yorktown.  Client believes that Noplan is Michael’s attorney and that they apparently go to the same church.  Grace Church is mentioned as the church, but client describes Michael as catholic.  Michael is named as sole executor and sole beneficiary.

 

Sally’s assets:

 

TPP: owned by Jill and John but in possession of SJ;

House: 9 Smith Road, Yorktown Heights, NY; has mortgage of $50,000, and probably worth $500,000

 

John is beneficiary of various Teacher Retirement funds, which seem to aggregate about $315,000.  John is also beneficiary of various Emigrant ITF accounts, but there is also a joint account at Emigrant with Michael.

John paid for funeral.

There may also be other benefits in Teachers’ retirement.

 

What do we know about Mr. Noplan’s file?

 

 

C.  Defensive Estate planning in Fact Pattern and Otherwise:

 

·        Your engagement as counsel

·        Separation between Sally and Michael

·        Attorney-client privilege

·        Joint representation issues

·        Diligence in legal work

·        Detailed interview with memoranda

·        Detailed description of assets and liabilities

·        Discussion with client as to nonprobate assets, including joint assets and intentions of client

·        Obtaining copies of existing and prior wills/trust agreements/power of attorney forms/health care proxies

·        Satisfying yourself that client has capacity and is not subject to undue influence

·        Sending drafts of instruments with letters of explanation

·        Dealing with Client, and Client alone, as to drafts and redrafts

·        Supervision of execution

·        No shortcuts

·        Exclusion of Michael from room for will execution

·        Other estate planning

·        Living will/health care proxy

·        Durable power of attorney

·        Revocable trusts

·        Attorney’s Perceived Resistance of Revocable Trusts

·        Client’s perspective: attorneys have self-interest in assuring probate through earning a huge percentage fee in estate

·        Client’s Misperceptions

·        Revocable trusts always avoid probate

·        Assets cannot pass through revocable trust unless asset is transferred to trust

·        Revocable trusts avoid estate and other taxes

·         Tax neutrality of revocable trusts

·        Advantages of revocable trust re procedural and substantive obstacles to “will contest”

·        Revocable trusts as “continuing” will

·        Effect of client managing financial matters through all-inclusive features of brokerage account for trust

·        Mechanics of Creation of Trusts – EPTL 7-1.17

·        To be effective lifetime trust must be in

o       Writing

o       Executed by the creator and at least one trustee

o       Acknowledged or executed in the presence of two witnesses

·        Grantor can be sole trustee

·        Oral trusts not recognized in statute

·        Amendment/Revocation is effective if in

o       Writing

o       Executed by the person authorized to amend or revoke

o       Acknowledged or executed in the presence of two witnesses

o       Notice of amendment or revocation shall be delivered to at least one other trustee

§         Effective date the date of execution

§         Failure to give notice does not make invalid

§         No liabilities for actions of trustee prior to actual notice

·        Funding of Lifetime Trust

o       Valid as to assets transferred to trust

o       Transfer is not accomplished by “recital of assignment, holding or receipt in the trust instrument:

o       Transfer is accomplished through “written assignment describing the assets with particularity” or, in the case of “real estate, stocks, bonds, bank and brokerage accounts and the like” a recording of deed or “completion of registration of the asset”

 

·        Additional procedural obstacles for challenging validity of revocable trusts, or transfers to trusts

·        Contrasts of Will Contests v. Trust Contests

·        Lack of identified procedural remedies in trust contests

·        Challenging client’s capacity in execution of documents that results in transfer to revocable trusts

 

 

D.   How to Win a Will Contest: Perspectives of Petitioner, Objectant and Court

 

·        Petitioner’s Perspective

 

·        Petition for probate and for Preliminary letters

·        Requirements for Attorney-Fiduciary under SCPA 2307-a

·        Issuance of citation

·        Need for appointment of Guardian ad Litem for persons under a disability

 

·        Marshalling of assets and other matters incident to estate

 

·        Objectant’s Perspective

 

·        Petition for temporary letters (SCPA 901)

·        If preliminary letters granted, consider a petition to revoke

·        if Will is facially (arguably) improper

·        if proper grounds under SCPA 711 or 719

·        If preliminary letters not sought, then possibly seek temporary letters

 

·        Petition to compel production of Will (SCPA 1401) for prior instruments

 

·        Pursuant to SCPA 1412(4)(b), take whatever actions necessary to make sure that “papers and records of the decedent” are properly preserved by the preliminary executor

 

·        Options on Return date of Probate Citation

 

·        Objectant’s Perspective

 

·        Conduct examination of attesting witnesses pursuant to SCPA 1404

·        Defer date for objections to probate until conclusion of examination of witnesses

·        Permits attorney and client to make studied decision as to whether to object to probate

·        If there is an in terrorem clause (EPTL 3-3.5), puts off decision as to possible forfeiture of client’s interest that may be caused by unsuccessful objections to probate

·        Pursuant to local rule of Surrogate's Court, Westchester County, expense of transcripts of examinations of witnesses are paid by estate

·        Defers other CPLR discovery devices until after objections are filed and issue is joined

·        1404 examinations are to take place at Surrogate's Court pursuant to Rule 207.28, unless the Court otherwise provides; and usually cannot be conducted until personal jurisdiction is complete

 

·        File objections to probate and to the issuance of letters

·        Grounds for objections to probate of will

·        Due execution

·        Consider not filing objection if it cannot be arguably supported based upon 1404 examinations

·        Testamentary Capacity

·        Fraud

·        Undue Influence

·        Demand for jury trial

 

·        Permits immediate use of CPLR discovery devices

·        Objectant generally pays for transcripts of depositions, including examinations of attesting witnesses

           

·        Objections to issuance of letters

·        Grounds generally under SCPA 711 and 719

·        For Attorney-fiduciaries, see SCPA 2307-a

 

·        If there is a person under a disability adversely effected by the Will and represented by a Guardian ad Litem (GAL), work closely with GAL

 

·        Consider options as to status of parties, e.g., is the spouse a distributee or not?

 

 

·        Petitioner’s Perspective

 

·        Make sure probate proceeding is aggressively prosecuted

·        Interview attesting witnesses and make sure they are available for SCPA 1404 examinations

·        If you want to expedite the proceeding, seek a discovery order

 

·        If you have not yet gotten preliminary letters, seek them

·        Make sure that your client is doing his/her/its job as fiduciary, i.e., ignore Will contest and administer the estate

·        Make sure records of the decedent are preserved

 

·        If a beneficiary under contested Will is also a petitioner, make sure that, at all times, your client is acting properly

 

·        Court’s Perspective

 

·        Notice of Objections Filed: Before discovery can begin, a citation for notice of objections filed must be obtained from the Court and served upon all beneficiaries under Will whose interest are adversely affected by objections (SCPA 1411; Rule 207.27); conduct discovery after return date of citation

 

·        Document production

·        Pursuant to local rule, duces tecum subpoenas for medical records are returnable at Surrogate's Court

 

·        Depositions

·        3 and 2 rule – Unless there are “special circumstances”, discovery limited to the period of three years before and two years after the execution of Will (Rule 207.27)

·        Attesting witnesses out of state: Pursuant to SCPA 508 and Rule 207.22, the Court may direct testimony to be taken outside of the state by a commission

 

·        Bills of Particulars

·        Generally, the petitioner is entitled to bill as to those objections in which the objectant has the burden of proof

·        See Rule 207.23 for further details

 

·        Summary Judgment Motions

 

·        Place burden on objectant to flesh out objectant’s case, if one exists

·        With volume of cases, summary judgment motions are getting greater sympathy from Surrogates

·        CPLR 4519 (dead man statute) problems do not help movant on summary judgment motion

 

·        Objections on lack of due execution

·        Submit transcripts of 1404s and other examinations

 

·        Objections on lack of testamentary capacity, undue influence and fraud

·        Make motion after the end of discovery

·        More difficult motion: do not make unless your case is compelling

 

·        Settlement Options

 

·        Factors:

·        Non probate and gifted assets

·        Estate tax apportionment

·        Distributions under the intestacy statute

·        Distributions under the elective share statute

·        Interest of beneficiaries under prior Wills

·        Appointment of executors and trustees