Alan Thicke Estate Dispute Highlights Pre-litigation Threats

Actor Alan Thicke – best known for his role on the TV show Growing Pains – passed away at the end of 2016, leaving behind a dispute between two of his sons and his third wife.

Recently, Thicke’s two sons (Robin Thicke and Brennan Thicke) filed a petition in California state court, seeking a ruling that a premarital agreement between their father and his third wife (Tanya Callau Thicke) be declared valid. Tanya Thicke moved to dismiss the petition, claiming that she did not intend to contest the validity of the premarital agreement. The sons argued that Tanya Thicke had previously indicated that she was planning to challenge the premarital agreement (because if she was successful in her challenge, she would receive a larger part of Alan Thicke’s estate).

In support of their argument, the sons pointed to a letter that Tanya Thicke’s attorney had sent earlier in the year, alluding to a challenge to the premarital agreement. However, Tanya Thicke argued that the letter was merely a settlement communication, which, under the rules of evidence, was privileged (and therefore could not be introduced into evidence in a judicial proceeding).

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Virginia Supreme Court Issues New Estate Dispute Opinion

Back in June of this year, the Virginia Supreme Court handed down a ruling in an estate dispute case that, while it didn’t particularly break new legal ground, provides a helpful overview of the current state of Virginia law regarding Virginia’s Slayer Statute as well as claims contesting a deed of gift on the basis of undue influence.

In Gelber v. Glock, 293 Va. 497 (2017), the Virginia Supreme Court reviewed rulings of the trial court in a case involving allegations by several of the decedent’s children that, among other things, their sister wrongfully induced their mother to execute a deed of gift and bill of sale through undue influence and fraud. At trial, the trial court had excluded certain statements by the decedent as hearsay, and further struck the plaintiffs’ evidence as to their claim of undue influence. On appeal, the Virginia Supreme Court reversed the trial court on both issues.

Hearsay / Dead Man’s Statute

At trial, the plaintiffs sought to introduce into evidence statements made by the decedent whereby she disavowed the deed of gift that she had previously executed. The trial court held that those statements were inadmissible, apparently reasoning that the Dead Man’s statute is not available as a hearsay exception for statements by the decedent that were not made contemporaneously with the execution of the deed of gift. In general, the Dead Man’s statute prohibits someone from receiving a judgment based solely on his own testimony that a deceased person said something. Instead, there must be corroborating evidence to support it. There is a lengthy series of cases about how strong the corroborating evidence must be, and from whom it may and may not come.

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Legal Malpractice Claims Against Estate Planning Attorneys in Virginia: Post-Thorsen Legislation

The legal landscape in Virginia regarding claims for legal malpractice against estate planning attorneys changed significantly this past year when the Virginia General Assembly adopted legislation to address the issues raised in the Virginia Supreme Court’s Thorsen decision. This blog post discusses some implications of, and observations about, the new legislation, which was adopted as Virginia Code Section 64.2-520.1. My colleague Brett Herbert did a great job summarizing the terms of the new statute itself, in his earlier blog post on this issue (which can be found here).

Implication #1

First, Section 64.2-520.1(B) provides that only a personal representative can bring a claim for legal malpractice against an estate planning attorney. Beneficiaries may not (subject to a very narrow exception discussed below). This is a sea change in Virginia law in light of the Thorsen ruling. It will dramatically shrink the scope of malpractice claims brought against estate planning attorneys.

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Serial Suers and Vexatious Litigants: Can Courts Prevent Someone From Filing a Lawsuit?

The vexatious litigant is a problem that civil litigation attorneys very likely encounter at least once during their careers.  It is a well-accepted precept that courts exist, in part, for citizens to seek redress for their claimed civil wrongs.  But can a person abuse the privilege?  The Supreme Court of Virginia held that a person can indeed abuse that privilege, in its June 8, 2017 opinion in Dora L. Adkins v. CP/IPERS Arlington Hotel LLC, Record No. 160685.

While not a typical case involving an appeal on the merits, the Adkins decision was written upon a petition for a rehearing and a rule to show cause.  A petition for rehearing is a litigant’s request that a court, after already having ruled on a matter, give the losing litigant another opportunity to argue his or her position.  A rule to show cause is a court order which commands a person to appear before the court and provide good cause as to why that person should not be held in contempt of court (and potentially fined and/or imprisoned).  A rule to show cause is typically issued when a party misbehaves in the presence of the court, ignores a subpoena, or otherwise interferes with the administration of justice.

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Be Careful With That Power of Attorney!: Arbitration Clauses and Nursing Home Lawsuits

On May 15, 2017, the Supreme Court of the United States handed down its opinion in Kindred Nursing Centers, L.P. v. ClarkThis case addressed the issue of whether an agent acting pursuant to a power of attorney could bind an estate to an arbitration agreement.

The facts of the case were simple.  Beverly and Janis, family members of Joe and Olive respectively, each held their family member’s respective power of attorney.  Joe and Olive moved into a nursing home operated by Kindred Nursing Centers, L.P. (“Kindred”).  Beverly and Janis used their family members’ powers of attorney to sign an arbitration agreement, on behalf of Joe and Olive.  Arbitration is the process by which parties use a third-party person (rather than a court) to decide their claims. The agreements at issue in the case stated that Joe and Olive agreed to arbitrate all claims arising from their stay at the nursing home (rather than file a lawsuit).  Joe and Olive later died.

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Posted in Court Opinions, Elder Law Disputes, General, Legal Terminology, Long Term Care Facilities, New Laws, Power of Attorney Disputes \ Comments Off on Be Careful With That Power of Attorney!: Arbitration Clauses and Nursing Home Lawsuits

Trust Decanting Disputes

As trust decanting becomes increasingly popular, we can expect to see more disputes and litigation regarding trust decanting. This blog post examines some of the main issues that will likely arise in those disputes.

First, what is trust decanting? The Uniform Law Commission states: “’Decanting’ is the term used to describe the distribution of assets from one trust into a second trust, like wine is decanted from the bottle to another vessel. Decanting can be a useful strategy for changing the outdated terms of an otherwise irrevocable trust, but can also be abused to defeat the settlor’s intent.”

Essentially, decanting is designed to address a dilemma posed by irrevocable trusts. Unlike revocable trusts that can be revoked by the trust settlor (the person enacting the trust), an irrevocable trust by its terms can’t be revoked by the settlor. That poses an issue as to what should happen if, due to changing circumstances, the settlor would otherwise be (or has been) inclined to amend or revoke it. Decanting is designed to address this problem. In general, and with some caveats, trust decanting entails creating a new trust (often referred to as the “second trust”), into which the assets of the irrevocable trust (the “first trust”) are conveyed. The second trust will contain certain different terms from the first trust, thereby effectively changing the terms governing the administration of the trust assets.

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Trustee Removal Lawsuits: An Overview

How can a person remove a trustee of a trust? Depending on the language of the trust, there could be several ways. This blog post summarizes some of the options, and provides an overview of things to consider when a person wants to remove a trustee.

First, the terms of the trust itself may provide procedures for the removal of a trustee. Oftentimes, comprehensively-drafted trust instruments will contain specific procedures whereby beneficiaries or a beneficiary may remove a trustee. Those procedures could require a specific reason for the trustee removal (such as misconduct on the part of the trustee) or no reason at all. Additionally, the trust may provide that a certain number of beneficiaries need to consent to the removal (such as all of the beneficiaries, or a majority).

Furthermore, trusts may provide for a trust protector to remove the trustee (I wrote an earlier blog post on trust protectors, which can be accessed here). In brief, a trust protector is a third party who holds certain authority with respect to the terms of the trust, or the actions of a trustee (in this case, the authority to remove the trustee and potentially name his replacement). Estate planners are increasingly utilizing trust protectors in the trusts that they draft, so it’s likely that in the future we’ll see greater use of provisions granting trust protectors the authority to remove the trustee.

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Practical Tips Regarding Oral Contracts to Make Wills

This blog post is part 2 of the series on oral contracts to make wills, and this post contains several practical tips for how a person can optimize his chances of winning a claim for breach of an oral contract to make a will. In part 1 of the series, I provided an overview of the law in Virginia concerning oral contracts to make wills, whereby a testator (the person making the will) enters into a contract with another person, with the testator agreeing to provide for him in his will, in exchange for the other party doing something for him.

Tip #1

First, if a testator orally promises to provide for you in his will if you do something for him, do your absolute best to try to get the testator to put that promise in writing. You will have a vastly easier time enforcing a written contract to make a will compared to an oral contract to make a will. Preferably, you’d have an attorney draft up the written contract to make a will. If the testator is not willing to sign a written contract drafted by an attorney, you could simply draft up an agreement on a piece of paper that contains the names of the parties to the agreement (your name and the testator’s name), the terms of the agreement, and the parties’ signatures.  I don’t necessarily recommend that you try to do this yourself, but I only suggest it as the next best option in the event that the testator refuses to sign a contract drafted by an attorney.

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UPDATE: Can an Intended (and Disappointed) Beneficiary Still Sue a Will’s Drafter?: The General Assembly of Virginia Enacts a Statutory Fix to the Thorsen Decision

Back in the summer I wrote a post discussing the impacts of the Thorsen decision by the Supreme Court of Virginia.  In Thorsen, a testator wanted to leave her estate to a charity if her daughter did not survive her.  The lawyer erred in drafting the will.  When the testator died several years later (with her daughter having predeceased her), the testator’s property went to other people, contrary to her intentions.  The charity, the intended beneficiary, sued the lawyer, asserting breach of contract for legal services.

Thorsen was notable in that it held that Virginia common law permits intended third party beneficiaries (even contingent beneficiaries) of contracts to sue to enforce a contract for legal services and even a will itself.  Thorsen also held that the statute of limitations for a legal malpractice claim (relating to the drafting of a will) did not begin to run when the will was drafted by the lawyer.  Instead, the statute of limitations began to run when the testator died, which, in Thorsen, was about five years after the will had been written.  Ultimately, the Supreme Court of Virginia affirmed a monetary judgment of over $600,000.00 against the lawyer.

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Oral Contracts to Make Wills

The vast majority of people have no idea that Virginia law recognizes oral contracts to make a will. As a result, people often miss out on asserting a claim to an inheritance because they didn’t know that they had one to begin with. This blog post provides an overview of Virginia law on this issue. I’ll follow-up this blog post with another one in the coming weeks about practical tips for how people can optimize their chances of winning on a claim for an oral contract to make a will.

Virginia has long enforced contracts to make a will, whereby a testator (the person making the will) enters into a contract with another person, with the testator agreeing to provide for him in his will, in exchange for the other party doing something for him. This most commonly arises in scenarios whereby people agree to care for aging testators in exchange for being provided for in their will. Also, married couples will occasionally contract to make “reciprocal wills” to ensure that neither person changes their will after the first one dies (so as to prevent the other one from disinheriting a child, for example). If a testator breaches a contract to make a will, then the aggrieved party has a right to file a lawsuit for breach of contract against the personal representative of the testator’s estate, seeking a monetary judgment.

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