Thoughts from the Bench on Trust and Estate Litigation
by Carol Warnick
I recently read an article in the Utah Bar Journal1 that provides thoughtful insights into the area of trust and estate litigation in Utah based upon a recent survey to current and past Utah district court judges. As a trust and estate litigator who actively practices in Utah, Colorado, and Wyoming, I was most interested in what the district court judges had to say about the trust and estate cases they had either tried or dealt with on summary judgment motions. Some of their observations are particularly important to any lawyer practicing in this space either as an estate planner or a trust and estate litigator. Planners most certainly benefit from understanding these controversies from the judge’s perspectives, since it is the planner’s documents that will be front and center in the litigation of any contested case.
One of the most important points set forth by Mr. Adams is to remind the parties that the assets everyone is fighting about actually belong to someone else. The person who sets up the will or the trust gets to decide who gets the assets, and that decision doesn’t have to be logical or even what others might consider “fair.” It may also contravene what the decedent has previously stated orally to a family member or members. But the court is placed in the position of doing its very best to see that the decedent’s estate plan, whatever it may be, is carried out.
The Utah judges were asked about the success rate of claims of undue influence, which is routinely alleged in contested cases. Their answers revealed that while undue influence is often alleged, it is rarely found to exist at the time the decedent executed the document in question. The same goes for claims of lack of testamentary capacity. In Utah, and most other states, a testator is presumed competent to make a will or a trust and the contestants must prove by the preponderance of the evidence that the decedent was not competent. The standard for such capacity is quite low and therefore it is difficult to establish that the decedent was incompetent at the moment he or she signed the will or trust. In fact, the success rate extrapolated from the survey for contestants bringing such claims was only 5-6 %.
While observing that technical breaches of fiduciary duty don’t often prevail, the author concludes that what does catch a judge’s attention “and raises their ire is when persons who have fiduciary obligations knowingly and repeatedly refuse to comply with their responsibilities.” The judges cited self-dealing, blatant violation of ethical or fiduciary duties, and failure to keep beneficiaries informed as examples of such conduct that would justify removal of a personal representative or trustee.
In discussing no-contest provisions, a small minority of the judges reported having enforced them, but one judge observed that a custom-drafted no-contest clause that includes details and mentions specific concerns would be much more likely to be enforced than one that is plain boiler-plate. That judge also suggested that if the testator or trustor is concerned about a specific heir or beneficiary, they might consider identifying them by name in the document if they want in increase the likelihood of enforcement of the no-contest clause.
The article concludes with some practical advice from the judges to lawyers who try these cases regarding things like evidentiary issues and understanding the applicable standards. The judges also point out that the civil litigators they see often don’t understand the nuances of trust and estate law and fiduciary duties, while trust and estate lawyers often don’t do a good job of trying the case. This same observation is what lead us to develop our Fiduciary Solutions practice group and insist that all the lawyers in our practice group be trained in both trust and estate law and also in litigation.
Even if you don’t litigate in Utah, I recommend reading this article if you ever litigate trust and estate cases, or even advise potential contestants about challenging the will or trust. It provides valuable insights that carry over into wherever you practice law.
1The article is entitled What Utah Trial Judges Have to Say About Trust and Estate Litigation — Survey Results, Vol. 29, No. 1, Jan/Feb 2016, and was written by John A. Adams, a Salt Lake City litigator.