Is it possible to ignore or modify a person’s last will and testament if ALL the named heirs agree?
In both the example given below, assume that the testate has no other family or potential heirs that might make an effort to claim part of the estate and that the testate has named his attorney as executor of his last will and testament.
Example 1 - Bob passes away and in his will he stipulates that all his property and personal effects should be sold at public auction with the proceeds to be split equally among his three children. Bob was not a wealthy man but he owned his own house and had no real debts so his children expect to collect a tidy sum from his estate sale. The problem is that Junior isn’t happy with the will. Bob had spent years acquiring and refurbishing an extensive collection of antique pornography and Junior would like to have this collection for himself rather than having it go to auction where he might be outbid. What he proposes is that he take the collection, forgo his share of the estate auction and allow his two siblings to each take a 50% share of the proceeds. An official audit of the estate indicates that Junior’s siblings would probably come out money ahead on this deal so they readily agree to this. Can Junior just take the collection, walk away and call it even?
Example 2 - Old Man Whitherspoon passes away and in his will he stipulates that his entire vast estate be split equally among his his three oldest children. Large, specific bequests are made in the will indicating precisely how Old Man Whitherspoon wanted the estate to be divided. The problem is Buddy, the fourth and youngest child of Old Man Whitherspoon. Buddy was written out of the will and earned his father’s wrath when Old Man Whitherspoon (a lifelong Red Sox) learned that Buddy had taken of job as one of George Steinbrenner’s emergency third string minions and personal back waxer. After the reading of the will, Buddy’s sibling decide that Old Man Whitherspoon was being unreasonable and want to cut Buddy in for an equal share of the estate. Obviously the siblings could just let the will be executed as Old Man Whitherspoon intended and then each of them can issue Buddy a check to make up his share but with assorted estate and gift taxes that may or may not be the smartest, best way to include Buddy. What are the options?
I’m assuming that the will has to be probated, and the heirs can jointly petition the probate court to redistribute the estate in any way. The probate court has wide latitude to “interpret” the directives of the deceased. If it is clear to the court that none of their interpretations are going to be challenged by any of the heirs, the court is empowered to redirect whatever they wish. However, of course, the court is not obliged to, but might have a strong incentive to do so, not wishing to burden itself with any more challenges than it needs to.
It is important, though, for the distribution to comport with the directives of probate, in order that taxes are applied as inheritances, not as gifts.
I guess I never really thought about how much latitude probate courts had. I assumed that in the face of a legal and valid will, a group of heirs saying “We don’t like this!” wouldn’t constitute a valid legal argument for ignoring the documented wishes of the deceased. Maybe the courts would go along with this on the basis of “It’s easier than arguing.” theory - I just don’t know.
There are, of course, limitations to that, but usually not involving distribution of assets of value. For example, if the deceased wishes to be buried in a certain place, a probate court would be unlikely to relieve the survivors of that obligation. Eitherm that, or the court would just wash their hands of it and say this not a probate affair.
There are also certain kinds of terms that might be written into a will which are not binding in the first place. Such as the case of my ex-father in law, who, along with his brothers, inherited their father’s car dealership. The terms of the will were that they could never sell their interests in the business, nor even sell the property and move the business to a new locationm, and had to keep it in the family. They did steadfastly honor that, but lawyers I’ve mentioned that to just laughed and said that it is never binding to place limitations on what an heir can do with an inherited legacy.
I’m wondering if the following would generally work:
The heirs form a corporation: “Joe’s Heirs, Inc.” The donate their interest in the estate to the company. (Subject to all heirs following thru.) They then dissolve the company however they see fit. The rules of dissolution being set ahead of time to specify the allocation.
The one “gotcha” in the OP’s scenarios is the requirement that part of the estate being auctioned. Since that might be covered under the above mentioned rule that the deceased cannot impose a limitation on inherited property disposition, the auction might be avoidable.
Note that in fairly simple cases, I think it’s legal for one or more heirs to disclaim some or all of an inheritance. Usually that means the unclaimed share reverts to the estate to be given to those that don’t disclaim. I’m not sure that earmarking to a person not specified in the will is possible.
IANAL, but if everybody agrees that the will sucks and they also agree what would be a more equitable distribution, why is there a need to change the will? Probate it as written and then the beneficiaries can just pool the bequests and divvy them up the way they agreed.
Some property might be auctioned, and sold off to a highest bidder outside the family with the proceeds distributed to the heirs, and the heirs would rather have the item than the money.
Avoiding taxation issues. E.g. maybe Sis1 inherits Item 334, immediately gives it to Bro4, then has to pay inheritance tax (for inheriting it in the beginning), and then gift tax (for giving it away). If it could go straight to Bro4, then Sis1 wouldn’t have to deal with the taxes on it.
In the limited setting of my jurisdiction, it is frequently done. What is needed is the consent of “all interested persons” and the approval of the court (meaning the judge in charge of the matter). Interested persons means all the beneficiaries under the will AND all the heirs. It becomes complicated, however, when some of the beneficiaries/heirs are not competent (minors of senile or crazy). Generally if the (usually) family wants to pursue some distribution that is not set up in the will or is not established by the rules of intestate distribution a lawyer will be appointed to represent the interests of underage, incompetent and unidentified heirs/beneficiaries. As a practical matter, if everyone concerned does not agree it will be difficult, nearly impossible, to pull off.
Taxation is usually not a big problem in my state since most ancestors and decedents (including step-children and -grandchildren) schools, hospitals, churches, charities and the like are exempt from state inheritance tax and there is a big exclusion for federal estate tax.
Rule one is always consult a lawyer knowledgeable in the law of your state and don’t ever rely of off the cuff, free and maybe half-baked opinions on some message board.
Our church was left a sizable sum of money that was specified to go for loans for seminary students at a local college. After several years, no one had applied for a loan and we asked the court if the money could be used for scholarships instead. The sole surviving family member wrote a letter saying that she was cool with it and a judge so ordered.
So what I’m gathering is that generally speaking as long as the heirs play nice and make things relatively smooth for the probate judge then a fair bit of flexibility is generally available. As always, consult a professional in the jurisdiction and accept that laws and judge’s whims vary. Good enough for now, many thanks.
Not familiar with this area of the law, but making things easy for a judge is ALWAYS a good idea - in the areas I have been involved in - lawyers will usually draft the stuff that judges sign. You might get an “Order” from a judge, but 9 times out of 10 it was written by the opposing parties (or you own) lawyer.
Since we have an adversarial system - there isn’t much for a judge to do if both sides agree. Now in cases like this - who is on both sides isn’t always clear, but as a general rule - if everyone agrees - and there is no law prohibiting it - and especially if you type up a document that all a judge needs to do is sign - you are golden.