Statutes of Limitation in Probate Litigation: Friend or Foe?
by Elizabeth Meck
Generally, the statute of limitations for the probate of a will or any action related thereto is three years after the death of the testator. See § 15-12-108(1), C.R.S. (2015); Matter of Estate of Kubby, 929 P.2d 55, 56 (Colo. App. 1996). Section 15-12-108(1) states that “[n]o informal probate or appointment proceeding or formal testacy or appointment proceeding . . . may be commenced more than three years after the decedent’s death… [.]”
Statute of limitations issues related to wills frequently arise in the context of will contests, which fall within the three year statute of limitations set forth in § 15-12-108(1). A will contest may be initiated in one of two primary ways: (i) by filing a petition in the appropriate court to request determination of the validity of the will instrument itself (or whether another valid will exists or any valid will exists at all); or (ii) by filing an objection within an existing probate proceeding in which a will has been probated formally or informally. Will contest actions include those in which the will signing itself is called into question (e.g., the adequacy of the witnesses, the number of witnesses present, fraud, mistake, and, if the will is a handwritten document, whether it meets the requirements of a holographic will under Colorado law under § 15-11-502), or the capacity of the testator to execute a valid will is in question.
Legal capacity to execute a will is known as “testamentary capacity” and requires that the testator understand what he is doing and the ultimate distribution of his property. The Colorado Jury Instructions set forth the factors to determine testamentary capacity. See CJS 3d § 34:9 (specifying that a testator must understand that he is making a will, the nature and extent of his property, how the property will be distributed, that the will devises his property as he desires, and who are the persons who are the natural persons to receive his property); see also Lehman v. Lindenmeyer, 109 P. 956 (Colo. 1910); Cunningham v. Stender, 255 P.2d 977 (Colo. 1953).
Additionally, pursuant to § 15-11-502, a testator must be an individual of eighteen years or more who is of “sound mind.” A testator must not be under the undue influence of another individual at the time he or she executed the will instrument, or suffer from an insane delusion or mental illness that materially impacts the testator’s ability to make dispositions under the will. See Breeden v. Stone, 992 P.2d 1167 (Colo. 2000) and Krueger v. Ary, 205 P.3d 1150 (Colo. 2009). Will contest actions questioning the testator’s legal capacity to execute a valid testamentary instrument as well as whether the testator was subject to any undue influence, insane delusion, or mental illness, are frequently litigated in the will and trust context and also fall within the three year statute of limitations period.
Another frequently litigated topic in the context of wills and trusts is an action for breach of fiduciary duties. The applicable statute of limitations period is found in § 13-80-101(1)(f), C.R.S. (2015), stating that all actions for breach of trust or breach of fiduciary duty must be commenced within three years after the cause of action accrues. Pursuant to § 13-80-108(6), a cause of action accrues “on the date the breach is discovered or should have been discovered by the exercise of reasonable diligence.” Clearly, this standard is somewhat vague and, as a result, issues frequently arise in determining exactly when the breach was or should have been discovered.
A very short limitations period applies when a trustee or a fiduciary has provided what is known as the “final accounting.” In this scenario, under § 15-16-307, C.R.S. (2015), any “claim against a trustee for breach of trust is barred as to any beneficiary who has received a final account or statement fully disclosing the matter and showing termination of the trust relationship between the trustee and the beneficiary unless a proceeding to assert the claim is commenced within six months after receipt of the final accounting or statement.” Emphasis added. This very short limitations period requires that the fiduciary provide to the beneficiaries an accounting that is “sufficient to put beneficiaries on notice as to all significant transactions affecting administration during the accounting period.” Colo. R. Probate P. 31.
Statute of limitations issues also arise in the context of equitable relief, which actions will be barred based on the applicable limitations period. An equitable remedy in the context of a will contest may include an action for constructive trust. For example, a constructive trust claim may arise in an undue influence action in which the rightful transferee of property from the decedent has been deprived of the property transferred because such property was transferred instead to an individual who unduly influenced the testator to devise the property to him or her instead. This equitable remedy may raise unique statute of limitations issues, however, and it is important to be aware of these issues. For example, in Eads v. Dearing, the court held that a constructive trust claim accrues at the time of discovery of the defendant’s breach of trust, not the initial transfer of property. 874 P.2d 474 (Colo. App. 1993).
Another tricky statute of limitations issue is the doctrine of laches, which may be raised as a defense in a will or trust litigation proceeding. Under the doctrine of laches, the time a claimant may raise a claim may be limited if he or she knew or was aware of the potential action and then unreasonably delayed pursuing the claim. Any practitioner should be particularly aware that the Colorado Supreme Court recently held in Hickerson v. Vessels, that the doctrine of laches may shorten the limitations period and defeat a lawsuit that was filed within the applicable statute of limitations. 316 P.3d 620 (Colo. 2014).
In the context of probate litigation, statutes of limitations can be both friend and foe depending on which side of the claim your client is on and whether relevant statutes of limitation deadlines have passed. As a result, it is always important to keep these deadlines in mind and to take action accordingly.