Questions about contesting a will

Factual Questions
21

Hmm, I’ve already set up a separate CD for each beneficiary, each payable to one beneficiary upon death. Every CD was opened with exactly the same amount of money at the same time.

The institution holding them and my other bank accounts have already stated that they will NOT be my executor because they don’t offer that service.

These CD’s are a relatively small part of the assets I have. I ain’t no millionaire, so don’t get the wrong idea.

I want the remainders go to charities. That and the relatively small size of each beneficiary’s portion is kinda where the possible contestability part comes in. I know it’ll piss this one beneficiary off.

22

My family was torn apart due to inheritance issues–luckily I was one generation removed so I was not directly involved. My maternal grandfather had built a “decent” nest egg, particularly given the relatively low means my family comes from. When he died it was fairly simple, everything went to his wife. The will written before his death also stipulated that when both died, everything would be divided equally between the five children, with their eldest daughter serving as executor.

Oddly enough, the eldest child, his eldest son, was a lawyer and would have been a good choice for executor, but he had a rare medical condition developed in his 40s and it was basically said by his doctors he didn’t have long to live at the time the will was written, so they didn’t put him as executor due to the fear he wouldn’t be alive (incidentally he ended up not going that route–he is still alive to this day 20 years later.)

The eldest daughter was not a good choice for executor, while not prone to corruption herself, her husband was a gambling addict who had also ran a few small businesses, heavily financed by family loans he never repaid, and then secured a job managing a used car dealership. Due to his influence (but the aunt obviously is responsible ultimately, for her actions) they stole almost the entirety of the estate and never distributed it to the other beneficiaries.

There were a lot of mistakes / bad things done during this process. When they sold their home, the aunt actually split the proceeds five ways and wrote checks to each beneficiary–this was the only money they ever saw, but even distributing those funds prior to the estate closing was sketchy. Around $800,000 in other investments and assets was just literally stolen.

Another $300,000 she took for herself but it was legal–my grandparents had a few accounts where they had named a beneficiary on the account, and they assumed if they named the executor, that meant it would split to the five children, that isn’t how it works, so she got all that money free and clear–that was a mistake by the grandparents and one easily avoided.

The $800,000 stolen, the family worked with the local commissioner of accounts to report this malfeasance, and they worked with local prosecutors to get the crime investigated and prosecuted. The aunt was dead to rights, and plead guilty, she had to take a felony conviction but was given no jail time, 2 years probation. The money was entirely gone–they used a small amount to renovate their home and the rest was lost in a gambling venture (we assume the intent was he gambled the principal, pocketed the winnings, and returned the $800k to the estate with no one the wiser, as he was a degenerate gambling addict this would be how his mind would work); while the aunt was required to pay restitution, her home was immune from that judgment so couldn’t be seized to fulfill, and she retired shortly after and has no other real assets or income. I think some amount of her monthly retirement is garnished, so the other four children get like $40/mo or something and obviously that will never work out math wise, and it irrevocably fractured the family–none of the siblings have spoken to her in over 20 years.

Note this incident is what lead me to make sure my own estate would be handled by a neutral, professional executor not connected to family.

23

Well, I did go to a presentation at this law firm around here that was attended by a bunch potential customers. The whole thing sent the hairs up on the back of my neck. They wanted literally thousands of dollars to be ‘fiduciary’ to anyone’s estate. That experience left a bad taste in my mouth. I went to another estate attorney who after the intitial free meeting would be charging me $285/hr. not including paperwork fees. Ugh.

I don’t know that they might not be willing, I just don’t want them to be.

Yeah

24

Martin_Hyde: That is a sad story.

After I’m dead I want my situation dealt with, done and over with in short order. Everyone moving on. No lingering crap. Just a hand full of people moving on.

25

Around here, there is no shortage of lawyers who will set up either a will or trust for you for well under a grand. If you are in the western burbs of Chicago I can give you a good recommendation.

Contact your local bar assoc., or just ask friends/family in your area who they used. It really is pretty simple.

I’m not talking as your lawyer, but I’ve seen pretty good guides on-line that a reasonably intelligent person could use to do a pretty good job. The main thing is to make your intentions clear, and avoid any obvious pitfalls. Then let the vultures at it!

26

Being a fiduciary for an estate is the same as being an executor, this is a service that reasonably will cost thousands of dollars. This is because it is a non-trivial amount of work, even for a relatively modest estate an executor might be doing paper work and other activity for days or weeks here and there. I know lots of people who have served as executor for family estates and it’s always been at least dozens of hours of work all told, so expecting a third party to do that for $300 isn’t really reasonable. I think there is a standard fee for being an executor that is a % of the total value of the estate, but I think for a modest sized estate it might be charged flat fee or hourly so the person is still making some amount of market rate remuneration.

There is a major difference in workload asking an attorney to draft a will or setup a trust versus asking a bank official or private attorney to serve as an executor, the latter is way more hours of work.

27

I’ve go to to stay within the state I’m but thanks plenty for the offer to help me source an attorney.

28

Only you can decide how much it’s worth to you to best ensure that your wishes are followed after your death. You should certainly shop around among trust and estate lawyers to find one whom you’re comfortable with and who gives you a reasonable rate. You should be upfront in your consultation about what your goals are and what the potential issue is you see here.

But I’ll just reiterate what @Martin_Hyde said – there is absolutely nothing you can do to prevent someone from contesting your wishes in court, no matter what arrangements you make. But a qualified attorney can structure things and foresee potential pitfalls to make it much less likely that a challenge will be successful.

To put it another way – you could do your own home construction, or you could hire a contractor to do it. Neither one of you can guarantee with absolute certainly that the house won’t fall down afterward. It’s probably not worth the cost if it’s a doghouse. But if it’s your home, which one would you choose?

29

Fiduciary = executor. I didn’t know that. The dollars wanted makes more sense now. So a fiduciary is any third party, not affiliated previously with the deceased that handles closing of the deceased estate?

Are there charities that in exchange for a donation would act as fiduciary, or would it be executor?

30

You really don’t want to do that. Most charities are run by essentially honest people but that doesn’t mean that they are necessarily skilled at accounting or constituted to handle the duties of an executor, and some charities are run by notably corrupt people who will take the opportunity to line their own pockets. Really, for the kind of setup you describe, you should be able to find a lawyer (who doesn’t charge $285/hr) to draft up the will and act as executor for a modest fixed fee.

Stranger

31

Terms like this are pretty jurisdictional. The generic English word / legal term “fiduciary” essentially just means a person who holds something in trust. This can mean a Church treasurer, a corporate manager, a public official, or any of the many types of legal guardians, or in this example the executor of an estate. Which specific terms are used in a specific state may vary. In Virginia the section of our state code dealing with this uses the term “fiduciary” to broadly mean:

“Fiduciary” includes a guardian, committee, trustee, executor, conservator, or personal representative.

I want to be careful since this is FQ–but a broad norm is that in most places essentially anyone can be named executor of a will. A bank will serve as an executor with the explicit understanding they will be paid a fee–a national norm is around 3%, some States actually cap the fees an executor can claim ( a common cap is 4-5%), some States allow the executor to charge “reasonable” fees. Due to the percentage based structure, in many jurisdictions a professional entity like a bank may not be willing to serve as an executor for an estate under $2m in value due to the value of the fee in relation to time spent working on the estate.

I think the entities that work on smaller estates, you often get around these limitations by agreeing to pay them some sort of “estate management services” fee that is contracted out before hand and isn’t considered a fee for being executor, I believe these services can be pre-paid or can be setup to be paid for by the estate as a cost (there are a number of costs estates can pay to cover to settle the estate.)

You can absolutely name a charity as the executor, but it is likely to cut into the net bequest. A common practice a charity might engage in would be to hire an estate attorney to do “all the leg work” of being executor, while charity is the executor in a legal sense, and those attorney fees will obviously reduce the value of the bequest.

As Stranger says, you could arrange for an estate attorney contractually to manage this yourself, and you would have more control over what the costs would be, if you make the charity the executor without any real restrictions they could do a lot of things with the fees you may not want.

Edit to add: A good will & trust attorney is not just an automaton who rights a document and does nothing else, when you meet with one, literally spell out:

  1. I want most of my estate going to a charity, and I’m worried about any of my family serving as executor
  2. I am worried about possibly the charity administrators taking improper fees to administer the estate
  3. I am worried about a specific relative causing problems.

The attorney is going to be able to go over very specific actions you can take for all things, and give you advice on what you may need to do to feel comfortable.

32

This sounds very interesting to me as I have no debt, no ‘fancy’ investments or anything complex going on. Just the accounts at my bank, the house and the stuff in it. If all accounts at the bank can have POD beneficiaries and the house can have a TOD deed, then maybe the will would only need contain the distribution of the stuff I have around here. For the most part I wouldn’t even care who gets that stuff.

So if a Checking, Savings, Money Market, Health Savings Account and the CD’s can all be Payable Upon Death (POD) and the house can have a Transfer On Death (TOD) Deed then this whole thing might have gotten a lot easier. Do I have that right?

33

Right. All that stuff gets paid out independently and doesn’t go through probate.The executor would be the one to contact the companies and county to get the transfer process started by providing the necessary death certificate and other info, but otherwise they’re not involved with the payout. It’s sort of like life insurance payouts in that way. Another advantage of having an impartial, 3rd-party executor is that they wouldn’t feel obligated to disclose how much was in the accounts or how much each person got. If one of your heirs was the executor, they would gain access to the accounts from their executor powers and could see the total value and what the split was. A 3rd-party executor could also know that, but they wouldn’t feel slighted that one person got more than another.

Not all accounts will have the ability to name charities or other non-person entities as beneficiaries. They all allow you to specify a person. If you have some assets you want to go to a charity, that might have to be done by the executor or by some other legal construct, like putting the asset in a trust and having the charity be the beneficiary of the trust.

Retirement accounts typically also have the ability to specify beneficiaries. So IRAs as well as your company’s 401k plan should allow you to specify beneficiaries. Some will let you give each beneficiary a unique percentage, while others just do equal splits.

34

What about a Traditional IRA held at the same bank?

35

As all these accounts and the house, excluding the CD’s would have charitable entities as beneficiaries. Now it gets more complicated again.

36

We just went thru the effort to make ALL of our acts POD. So all that leaves is our house - which we likely won’t still be living in, our cars, and the rest of our personalty. Which is covered by a will we drew up 30 yrs ago. No real need to update it or set up a trust. If you don’t care what happens to the personally, you may be overthinking things.

You are scant on details. Ours is just being divided equally among our 3 kids, 2 of whom have been named as executor and successor. But it sounds like your heirs might be more complicated, if you expect one of them to contest, and none of them will be executor.

37

Great movie. Really. I absolutely hated it.

38

It is worth noting that ANY executor can claim a fee for being an executor. It does not have to be a professional. It could be your daughter or neighbor. Whoever does that job is entitled to compensation for doing that job. This fee is partly determined by law (and differs between states) but also what the executor asks for. So, there is good reason to have this all sorted ahead of time.

For example:

In some states, the executor can claim a percentage of the estate. For example, in Florida, the executor is entitled to a particular percentage based on the estate’s size. If extraordinary service was required, the executor can request additional compensation.

Illinois takes a different approach. An executor cannot be paid a percentage of the estate. Instead, he or she is entitled to “reasonable compensation.” What is considered reasonable and how this amount is determined varies for each situation.

What Is a Reasonable Fee?

The Illinois Probate Act does not provide any details or guidance on how to calculate this reasonable compensation. Fortunately, Illinois courts have come up with different factors that go into determining whether or not a fee is reasonable. As an initial matter, the fee does not depend on the size of an estate. A small estate could be very complicated to administer, whereas a large one could be fairly easy. For this reason, Illinois courts do not allow an executor to use a set percentage. SOURCE

39

In the jurisdiction I practice in, and very broadly speaking, there are two primary forms of estate litigation. The first is attacking the will itself - either in terms of interpretation of the document or on grounds such as lack of testamentary capacity, fraud, undue influence etc. This is far less common and far more difficult to prove. There is also nothing you can do to stop someone bringing a claim - no matter how vexatious.

The second is by way of family provision - certain people, by virtue of their relationship with a deceased, can apply to the courts for adequate provision for propoer maintenance and support to be given.

What about a way to have legal and binding proof of my mental capacity at the time of me signing the will?

Again, speaking in relation to my jurisdiction only, only the court has power to determine testamentary capacity. If there are doubt about testamentary capacity, there are certain steps that your lawyer should take to assist the court in making this determination in the event it becomes an issue.

IRC a usual practice when making a will is having a couple witnesses who attest to your mental capacity/clarity/saneness (whatever they call it) and sign the will too.

Not really (in my jursidiction). Witnessess to wills are generally attesting that the will was signed by the testator in their presence (and often, but not necessarily, in the presence of the other witness). They need not even know that the document being signed is a will. They usually are making no declaration or statement about the testator’s capacity. There are some forms of estate planning instruments (like enduring powers of attorney) that require a certificate by a (qualified) witness as to knowledge/approval/understanding.

In any event, you should speak to a qualified lawyer who actually practices in this area.