Last Will and Testament must comply with all parts of the law

A last Will and Testament needs to meet certain requirements. Those requirements vary from state to state. In today’s case, the trial court and two appellate courts found Ronnie Toney’s 2014 Last Will and Testament was not in compliance with the requirements of Louisiana probate law because the Will was intialled, not signed on the first two pages, and the witness clause did not specifically say each page of the Will was signed in front of the witnesses (though it apparently was). The last Will and Testament was signed by two witnesses and signed and initialed by Ronnie, and all three signatures were notarized at the same time, but though that would fly in Arizona, that just wasn’t good enough for Louisiana law.

Louisiana law has a persnickety provision that says “The formalities prescribed for the execution of a testament must be observed or the testament is absolutely null.” Not much wiggle room there. The Louisiana Supreme Court even put the words “must” and “absolutely null” in bold when quoting the statute.

One of the “formalities” spelled out in Louisiana law is that “witnesses shall sign the following declaration, or one substantially similar: ‘In our presence the testator has declared or signified that this instrument is his testament and has signed it at the end and on each other separate page, and in the presence of the testator and each other we have hereunto subscribed our names this ____ day of ____, ____.’ ” In a nutshell, Ronnie’s will did not include that magic phrase. Instead it used a standardized phrase that looks word for word like the one I use in the wills I prepare, and which would have been fine in Arizona. But it was not the magic phrase, and two of the three Louisiana Supreme court judges found it was not “substantially similar” to the magic phrase.

So Ronnie’s doubly witnessed, notarized, clearly spelled out desire 6 months prior to his death to leave everything to his brother in law failed, the Will was found “absolutely null,” and whatever Ronnie had went to Ronnie’s next of kin (an uncle) instead. Probate law requires more than proof of what the deceased wanted. For example, if he had tried to leave a video will, it would have been equally null, both in Louisiana and Arizona. Moral of the story: make sure your estate plan is drafted by someone who knows the law. A pdf of the case is here: http://cases.justia.com/louisiana/supreme-court/2017-2016-c-1534.pdf?ts=1493838121

Scammer request

Being an attorney sometimes means people will try to scam you. One such scam is below. Typically the “client” will send a bogus check either for my services or from the imaginary party on the other side of the transaction, and when it is deposited in my client trust account but hasn’t cleared, they will suddenly need me to wire a partial payment from that check, but will generously offer to let me keep a sizable chunk for my efforts. Which is great until the check they sent bounces and the money I sent disappears.
Incidentally, there is no website for sunrayglobalservice.com, the scammer didn’t bother to identify my state (often the scam email just says “in your area”) and the grammar is stilted. And other lawyers have received an identical email with a different email address. Yeah, I’ll pass.

To: Lonnie K McDowell
From: Michael
I want to inquire if you handle purchase agreements. I am in the process of selling a drilling rig to a company in your state and they agreed for us to employ a lawyer that will draw a purchase contract which will protect my interest in this transaction. A referral will be helpful if this is not your area of practice. Send your response to my email directly. michaeljones@sunrayglobalservice.com Regards, Michael Jones

Will Not Timely Probated, Gets Thrown Out

Every once in a while, I see a case I disagree with.  Today’s case comes from Montana’s supreme court.

Paul lived with his sister, her husband, his niece, and her husband.  His sister and her husband died before he did, and niece and husband continued to care for him.  Niece’s dad left her a small sum ($8,125) payable on Paul’s death.  Paul didn’t have any other known assets except furniture when he died in January 2000, so his estate was handled with a small estate transfer affidavit instead of a full blown probate.

Paul’s niece and husband helped him write up a will in February 1998: according to them, Paul dictated it, husband wrote it down and titled it “Instructions and Last Will and Testament”, and two witnesses signed it after Paul signed it.  As mentioned above, the estate was too small for probate, so the will was never submitted to the court.

Fast forward to February 2013.  Turns out Paul had an interest in some mineral rights (probably inherited, though the case doesn’t say) and now someone wants to develop them. They contacted Paul’s nephew.  Nephew offered to open a probate, but did not know about the Will, so he sought to have Paul’s share of the mineral rights lease go to his 3 surviving siblings and 9 surviving nieces and nephews as an intestacy (probate without a Will). “But wait,” cried the niece, “here’s his Will!”

Montana, like Arizona, has a statute that says there is a limited time to probate a Will (three years in Montana, two in Arizona).  There are two important exceptions, and they say 1) a probate can happen for the limited purpose of passing assets to successors, and 2) probate can happen to get assets of the estate from someone other than decedent.  Nephew claimed “too much time has passed, no exception applies.”  Neice claimed “the second one does.”

Two years of litigation ensued.  Nephew deposed niece and husband, and asked the court for permission to bring extra claims against them based on what he had learned.  The court said yes.  Niece and nephew then sought to include exception one as well as exception two, and the court said no, you should have raised it two years ago.  But even if I let you, I don’t think it applies.  Then the court ruled against niece and husband on summary judgement.

The Montana Supreme court reviewed and upheld the lower court.  They looked for “clear error,” and found none.  But Judges are sworn to uphold the law, not to ignore it.  Even when a party only lists the latter half of a statute, the judge should not strap on blinders and ignore other applicable law, especially when it is raised with enough time for the other side to appropriately respond.  This case was not on the eve of trial; it was decided by summary judgment.  I think trial court got it wrong by allowing nephew to amend but not niece, and by finding that “even if allowed, i don’t think it applies.”  I can only hope an Arizona judge would find differently, since the statute seems clear that the Will is admissible to allow transfer to “successors,” i.e. those identified in the Will.

And thus the Will of Paul falls by the wayside, not because it is found invalid, but because there was no reason to submit it to the court within the three year period.  No reason at all, until the mineral rights turned out to have some value 13 years later.  Sorry, Paul.

Bankruptcy, Probate, and Invalid Wills, Oh My!

In the case of Brown v. Sommers, No. 15-20034 (5th Cir. 2015), we look at how probate and bankruptcy interact. Michael Brown was a successful surgeon, accumulating a great deal of money for many years.  Unfortunately, he was not as successful in keeping his marriage together, and ended up moving from Texas to Florida while acrimonious divorce and child custody proceedings were pending.  In Florida, he filed a chapter 11 “with assets” bankruptcy.  He did not disclose what he should, however, and his case was dismissed for “significant misconduct,” with the court taking the unusual step of assigning a Chief Restructuring Officer (“CRO”) outside of the bankruptcy to operate Dr. Brown’s business and oversee his personal affairs.  Dr. Brown did not cooperate with the CRO, and the bankruptcy was reinstated and transferred to Texas (where most of the assets were held).

Dr. Brown died shortly thereafter.  He had numerous wills, but none of them appeared to be valid.  And since the divorce was not final, it was dismissed, leaving his wife as his lawful intestacy heir.  His chapter 11 was converted into a “sell everything” chapter 7 liquidation.

The rest of the case (here) deals with the wife’s efforts to get the bankruptcy court to pay several probate allowances from Dr. Brown’s estate: ultimately the court declined to give her the money, though she is entitled to any money left over after creditors are paid.  Can Wife still go through the Texas probate court to get her probate claims recognized?  Probably.  Will the Bankruptcy court then give her claims priority?  Maybe.  Will it cost a lot in legal fees?  Yep.

Let’s review: there is a stereotype that some surgeons believe they know everything and can do no wrong, sometimes called a God complex.  Dr. Brown thought he knew better than the bankruptcy court, better than his wife, better than the court assigned CRO, and better than any estate planning attorney (since he apparently drafted his own defective wills).  At the end of the day, he was wrong several times over.  He didn’t get a bankruptcy discharge, he didn’t get a divorce, he didn’t get control of his business or finances back, and he didn’t have his final wishes acknowledged or enforced by the probate court.  If only he could go back in time, perhaps he could fix it, but it appears he did not have a Delorean among his many assets.  Sorry, Doc Brown.

Help! My Stepdad Took my Inheritance!

I have had more than one client visit me with inheritance situations like the one described in the title.  In Arizona, a valid Last Will (or a trust, or survivorship or beneficiary designations) controls who is entitled to property when someone dies.  If none of these things were set up, then after bills are paid, Stepdad (or Stepmom) is entitled to 1/2 the estate, stepkids (children of the deceased) split the other half.  Stepparent also gets certain amounts as priority payments (I.e. before the stepkids or most creditors get paid).  They do not get to hide or take stepkid’s share, though they can hold it for a while in some cases if stepkid is a minor or incompetent.

If Stepdad wrongfully takes a stepkid’s share of the estate, the stepkid can file a probate and get double the value of the property wrongfully withheld.  Today’s case happened in California, but Arizona has a similar law.

In a nutshell, Mr. Staggers kept all his wife’s assets when she died, and did not give his two stepkids the share they were entitled to get.  They sued.  During the suit, Mr. Staggers died, and his son was appointed as his personal representative to resolve the lawsuit.   Son filed a motion to terminate the double damages claim, citing a 2008 case and arguing that since Mr. Staggers is dead, his estate can’t be punished with double damages under a specific California code section eliminating “punitive or exemplary damages” against estates.  He also wanted to throw out the requested attorney’s fees, which he argued were also punitive.  Stepkids argued the 2008 case was dicta, a non-applicable ruling about a different issue, and cited an 1866 case (issued a year after the Civil War ended) arguing the opposite.

The trial court found the 1866 case did not apply because the current code section didn’t exist in 1866, and entered summary judgment against stepkids.  Stepkids appealed, and got the summary judgment reversed.  The Appellate court said “Yes, the double damages and attorney’s fees are demonstrative and punitive in nature, but they are statutory damages, rather than punitive damages which have to be proved by clear and convincing evidence along with evidence of defendant’s bad faith and his net worth.  So attorney’s fees and double damages can be awarded against the estate.”

So now the case goes back to the trial court for an actual trial (not just summary judgment, i.e. trial by motion) against a dead man’s estate over a dead woman’s estate.  Meanwhile, years have passed and attorneys on both sides have been paid lots of money.  Stepdad’s estate may have to come up with the stepkids’ share of Mom’s estate, plus double damages, plus attorney’s fees to repay the stepkids.  Someday. If they win. And if there is any money left.  It is unlikely that Mr. Staggers contemplated any of this when he took his wife’s assets for himself.  For all we know, his wife wanted him to have everything, but didn’t write up a will to make that clear.  On the other hand, maybe he deliberately ignored her wishes.  Either way, unless his son beats this lawsuit, Mr. Staggers’ estate will eventually be asked to pay the price.  The Feb 18, 2016 appellate decision in the case (Hill v. Superior Court) is here.

Moral of the story: 1) Mr. Staggers should have talked to an attorney before making asset distributions to himself; and 2) Mrs. Staggers should have used proper estate planning such as Wills, life estates, beneficiary designations, and beneficiary deeds to avoid this kind of fight and make sure her estate automatically went to the people she wanted it to go to.  A good attorney now can help save tens or hundreds of thousands of dollars later.  At least that’s the moral I got.

Sincerity Does Not Equal Admissabilty

Sovereign Citizens: a movement propounded by people who believe that arcane and secret laws (usually quoted out of context or wholly made up) can be applied to thwart other laws, similar to the very underrated News Radio episode 15 season three (“There is a secret word that, when uttered, forces the judge to rule in your favor, then go to a secret location to paddle themselves in a secret ceremony.”)  In reality, “sovereign citizen” is most often unwittingly synonymous with “When I am done with my argument, send me to jail.”  Which is where the defendant meets other people equally as shocked that the court flat out ignored the “laws” they quoted.  It’s surprising how rarely the blame falls on the person who provided the secret “laws” in the first place.

Judge Posner is a pretty famous Federal court judge, handling an unusual case.  My favorite quote is the last line of the judge’s February 20, 2015 order: “(D)efendant … will not be permitted to present at trial the arguments to which I have referred, however deeply and sincerely he believes them to be valid.”

The specific beliefs and laws cited by the “unfailingly polite” defendant in this tax fraud case include citations to the Uniform Commercial Code, the Federal Rules of Civil Procedure, admiralty and maritime law, and the Foreign Sovereign Immunities Act, as well as old English “Common Law” from before the US was founded.  To be fair, these are by and large existing laws and rules.  However, “extant” and “applicable” are not the same.

Judge Posner writes: “These bodies of law are totally irrelevant to this criminal prosecution. Nor may he argue at trial that this court lacks jurisdiction over him  because he is a “sovereign citizen” or citizen of the Cherokee nation (he is in fact a U.S. citizen), that the U.S. Government is a corporation or is insolvent, or that the Internal Revenue Service has been dismantled. These are all utterly irrelevant and frivolous contentions. But I seem unable to convince him, and I am losing confidence that he will obey my order.”