Estate Conflicts

In Virginia, real property given by will generally passes immediately upon the probating of the will after the death of the owner. A probated will has the same effect as a deed in passing title to the beneficiaries. However, if the will gives any interest in the land to the executor (for example, if the will gives the property to the executor to sell), then the property will pass to the estate “in trust” for distribution. Real property may also be devised with certain restrictions on use.

Questions may arise when the language in the will is ambiguous. For example, a will may give a certain tract of land to a particular individual but then caveat the provision with language giving some unspecific portion of that land to another individual (i.e. “I give to Jane Smith Parcel A of land, except that a one-acre tract of Parcel A shall be given John Doe.”) The question then is whether Parcel A passed, in whole or in part, to the executor of the estate in order to divide out the one-acre tract, or if it passed directly to Jane Smith upon the owner’s death, then directing Jane Smith to give a non-specific one-acre tract to John Doe.  Further, if it passed directly to Jane Smith, did it also pass to John Doe in part because he received a non-specific portion of the property? And if it did pass to John Doe as well, what exactly is his interest?

While this particular issue has not played out in the Virginia appellate courts, there are two potential options. The first interpretation of this provision is that the party giving the one-acre tract to John Doe will be Jane Smith after she receives the property by way of the will.  Under this reading, the will did not give any ownership interest to the executor but rather devised the land to Jane Smith with a restriction that she individually transfer a one-acre parcel to John Doe thereafter. In this scenario, both Jane Smith and John Doe receive the property, with John Doe having an enforceable interest against Jane Smith for one acre.

Alternatively, this provision could be read as giving the executor authority to divide out the one-acre tract prior to transferring the remainder of the property to Jane Doe. Under this scenario, the estate would become record owner of the property, and the executor would be charged with selecting the one-acre tract. This would likely require completing one or more surveys and possibly petitioning the local governing body for a subdivision. The executor would need to take care to conduct due diligence to ensure that they do not favor John Doe or Jane Smith over the other when choosing which part of the land to transfer (i.e. the executor should not choose the most unproductive acre to give to John Doe).

This process could become tedious and expensive for the executor, so it may be worth the executor’s time to try and work out alternate arrangements between Jane Smith and John Doe.  If Jane Smith and John Doe can come to agreement regarding the disposition of the property, then the executor will be relieved of the challenges accompanying the division of land.  Additionally, if the executor is apprehensive about the interpretation of the will, they can institute a Petition for Aid and Guidance to seek assistance from the court in the correct path to take. Ambiguous land provisions in a will can become contentious, often requiring the assistance of legal counsel to sort out the details.

Explore how GRSM’s Estate & Trust Litigation practice group can assist with such issues.

Virginia has a version of the “harmless error rule” that may permit a will to be probated even if it does not strictly comply with the conventional formalities required for a writing to constitute a valid will.

Traditionally, Virginia, like most states, required all wills to strictly comply with the legal requirement rules set forth in the code for when a writing can constitute a valid will. Any deviation, even if minor, usually meant that clerks and courts would not admit the will to probate as a valid will. That often led to some harsh results.

In 2007, the Virginia General Assembly adopted the precursor to what is now Virginia Code Section 64.2-404. The current law is based on a provision contained in the Uniform Probate Code referred to as the “Harmless Error” Rule (Section 2-503). Virginia’s provision is a bit more restrictive than the provision in the Uniform Probate Code, but it nonetheless significantly relaxes the traditional requirements for what constitutes a valid will under Virginia law.

Conventional Formalities

Before we examine the law, let’s look at the conventional formalities. Under Virginia Code Section 64.2-403, a will has to fall within one of two categories in order to constitute a valid will under the conventional formalities:

(1) it’s (a) in writing, (b) signed by the testator (the person making the will) or another person in the testator’s presence and by his direction, in a manner as to make it manifest that the name is intended as a signature, and (c) the testator’s signature is acknowledged by at least two competent witnesses who are present at the same time and who sign the will in the presence of the testator;

  or

(2) it’s entirely in the testator’s handwriting and signed by him, and the handwriting and signature are proved by at least two disinterested witnesses.

Harmless Error Rule

The Harmless Error Rule, in Virginia Code Section 64.2-404, relaxes the conventional formalities. It provides:

A. Although a document, or a writing added upon a document, was not executed in compliance with § 64.2-403, the document or writing shall be treated as if it had been executed in compliance with § 64.2-403 if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute (i) the decedent’s will, (ii) a partial or complete revocation of the will, (iii) an addition to or an alteration of the will, or (iv) a partial or complete revival of his formerly revoked will or of a formerly revoked portion of the will.

B. The remedy granted by this section (i) may not be used to excuse compliance with any requirement for a testator’s signature, except in circumstances where two persons mistakenly sign each other’s will, or a person signs the self-proving certificate to a will instead of signing the will itself and (ii) is available only in proceedings brought in a circuit court under the appropriate provisions of this title, filed within one year from the decedent’s date of death and in which all interested persons are made parties.

Under this code section, litigants have a much easier task when it comes to trying to establish a writing as a valid will. It relaxes almost all of the conventional requirements with the exception of the requirement that the writing contain the testator’s signature.

In exchange for the relaxed legal requirements, the proponent of the will has to satisfy some additional hurdles. The proponent has a burden of proof of “clear and convincing” evidence, compared to the normal lower standard of a “preponderance” of the evidence. Also, the proponent has to bring a court proceeding within one year from the decedent’s passing and name all interested parties in that proceeding.

Because Virginia General District Courts are not courts of record, there is little literature or case law surrounding jurisdictional issues in these Courts. Questions regarding the jurisdictions of appeals from General District Courts to Circuit Courts are sometimes difficult to answer. Most General District Court cases can be appealed to Circuit Court pursuant to Virginia Code § 16.1-106, and those appeals are heard de novo (i.e. the Circuit Court looks at the case with a clean slate as if it had never before been heard). However, where a General District Court case is dismissed on a jurisdictional motion by the Defendant, the Circuit Court may not be able to hear the appeal at all.

In 2011, the Virginia Supreme Court heard a case with the following procedural history: Fairfax County brought a case in General District Court and won against the Defendant. The Defendant appealed to the Fairfax Circuit Court, and the County then non-suited the case pursuant to Virginia Code § 8.01-380 (a non-suit is a one-time dismissal of right that allows the claimant to re-file the case at a later time). Davis v. County of Fairfax, 282 Va. 23, 710 S.E.2d 466 (2011). The County then re-filed their claim in General District Court, which ruled it did not have jurisdiction due in part to the provision in Virginia Code § 8.01-380 that states that “[a]fter a nonsuit no new proceeding on the same cause of action or against the same party shall be had in any court other than that in which the nonsuit was taken, unless that court is without jurisdiction, or not a proper venue, or other good cause is shown.” The County appealed, and the Circuit Court, hearing the matter de novo, ruled in favor of the County. The Defendant appealed all the way to the Supreme Court, asserting that the Circuit Court did not have jurisdiction to hear the second appeal because the matter was re-filed in the improper court (i.e. the County should have re-filed in the Circuit Court).

The Supreme Court agreed with the Defendant. It noted that the jurisdiction of the appellate court on appeal from the General District Court is derivative, and if the General District Court had no jurisdiction, the appellate court acquires none on appeal. This is so even though the Circuit Court would have had jurisdiction to hear the case had the case properly been filed in the Circuit Court. “[A]n appeal is a mere continuation of the original case … The want of jurisdiction of the subject matter in the court where the action was brought, continues in every court to which the action may be appealed, for the reason that it is the same action, and an appeal is authorized only where the court from which the appeal is taken, in case of the failure to appeal, would have had authority to enforce its judgment.” Davis.

Certain claims regarding trusts and estates must be brought in particular courts, and some need to be brought in Circuit Court. Thus, when questions of jurisdiction arise in General District Court, individuals with trust/estate claims should be aware of jurisdictional issues and the implication of a dismissal on jurisdictional grounds. This is especially so when questions of statutes of limitations arise. Under normal circumstances, appeals from the General District Court to the Circuit Court will not interrupt the statute of limitations of a claim because the appeal is merely a continuation of the claim and there is an unbroken chain of litigation. However, where the General District Court dismisses on jurisdictional grounds, ruling that another tribunal has jurisdiction, no appeal will lie from the General District Court, and the matter must be brought anew in the new tribunal. If the statute of limitations for any of the claims brought in General District Court expired during the interim period, those claims may be barred when filing in the new tribunal. Claimants should carefully analyze jurisdictional issues and relevant statutes of limitations when analyzing whether to bring a matter first in General District Court or in Circuit Court.

The statute of limitations for breach of fiduciary duty in Virginia is two years. Colgate v. Disthene Grp., Inc., 86 Va. Cir. 218 (Va. Cir. 2013); see Virginia Code §§ 8.01-243, 248.  However, Virginia Code § 8.01–229(D) tolls the statute of limitations where a defendant obstructs the filing of an action.  To prevail on this argument, a plaintiff must allege that the defendant “undertook an affirmative act designed or intended, directly or indirectly, to obstruct [the plaintiffs’] right to file [their] action.” Newman v. Walker, 270 Va. 291, 298, 618 S.E.2d 336 (2005). A defendant must intend to conceal the discovery of the cause of action by “trick or artifice” and must have actually concealed it from the plaintiff for the statutory tolling to apply. The concealment cannot be passive.  Thus, in an estate context, if a claimant can show that a trustee/estate administrator actively blocked a claimant’s ability to file suit, the statute of limitations may be extended.

Virginia has one other statute of limitations savings clause: Virginia Code § 8.01–249(1), which states that, in actions for fraud or mistake or to rescind a contract for undue influence, the claim accrues when the fraud, mistake, misrepresentation, deception, or undue influence is discovered or by the exercise of due diligence reasonably should have been discovered.  However, multiple courts in Virginia have ruled that this so-called discovery rule does not apply to breach of fiduciary duties because the Virginia code explicitly lays out the causes of action subject to the discovery rule, and breach of fiduciary duty is not one of those enumerated categories.  As such, the Virginia General Assembly has specifically excluded breach of fiduciary duty from the scope of the discovery rule. See Jones v. Shooshan, 855 F.Supp.2d 594, 602–603 (E.D.Va.2012); Colgate, supra.

In the context of Estate and Trust litigation, estate administrators/executors and trustees owe fiduciary duties to the estate/trust and the beneficiaries.  If a beneficiary suspects a breach of the fiduciary duty, it is imperative that the beneficiary thoroughly investigate the possible wrongdoing and bring suit within two years of the alleged act of wrongdoing.  If the beneficiary fails to do so, she could waive her ability to bring a claim for breach of fiduciary duty.