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2022 Year in Review for Trust and Estate Disputes

December 5, 2022 by

In today’s blog post, I discuss a few notable developments from this past year in the field of trust and estate disputes.

New Standard For Undue Influence In Will Contest Cases

First, probably the most notable development from this past year is that Virginia’s General Assembly adopted a law that provides for a new standard for undue influence in will contest cases. Senate Bill 554 added a new provision to the Virginia Code in Section 64.2-454.1. I wrote a lengthy blog post this past summer on the bill (which blog post can be found here), so I won’t repeat myself in this post. But I do have some observations to make now that the new law has been in effect for a few months.

Some estate planning attorneys opposed the new law because they were concerned that it could lead to a “wave” of new will contest lawsuits. In short, that has not happened. My team and I have filed quite a number of will contest lawsuits since the new law went into effect this past July, and we unquestionably would have filed all of them even if the old standard was still in place. The new law is certainly helpful to litigants seeking to overturn a will on the basis of undue influence, but as I pointed out in my earlier blog post, the new law is hardly a silver bullet. In fact, it does nothing to help a litigant who is contesting a will on some ground other than undue influence, and it also arguably does nothing to help a litigant who is concurrently contesting the validity of a trust.

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Legal Standing to Contest Inter Vivos Transactions in Virginia

August 31, 2022 by

In Virginia, a person has legal standing to contest an inter vivos transaction (a transaction made during the life of a person who is now deceased) when the person is the executor or administrator of the deceased person’s estate, or when certain legal exceptions apply. In this blog post, we analyze those exceptions and the state of Virginia law on this issue.

Background to the Issue

After a relative or friend passes away, a person may want to contest certain transactions that the deceased person made during their life (referred to as “inter vivos” transactions). Examples of inter vivos transactions that a person may want to contest include beneficiary designations, account titlings, gifts, conveyances of real estate, and transactions using a power of attorney. The person may want to contest these transactions on the grounds that the deceased person lacked the required capacity to enter into the transaction, or was unduly influenced or defrauded into making the transaction.

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Virginia Has A New Standard For Undue Influence In Will Contest Cases

May 31, 2022 by

Beginning July 1, 2022, Virginia has a new standard for undue influence in Will contest cases. For most Will contest cases in Virginia, the standard for undue influence will now involve a presumption that undue influence was exerted over the decedent (the deceased person). This is a profound change from the current (pre-July, 2022) state of the law (which merely created a temporary presumption that was extremely easy to overcome), and it will make it much easier to contest the validity of a Will in Virginia.

Text of the New Law

In the 2022 session, the General Assembly adopted Senate Bill 554, which adds a new section to the Virginia Code, which will be contained in Section 64.2-454.1., and will be titled: “Will contest; presumption of undue influence.”

The text of the bill states as follows:

In any case contesting the validity of a decedent’s will where a presumption of undue influence arises, the finder of fact shall presume that undue influence was exerted over the decedent unless, based on all the evidence introduced at trial, the finder of fact finds that the decedent did intend it to be his will.

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When Does a Trust Become Irrevocable? At the Settlor’s Death, or Upon the Settlor’s Loss of Capacity? Hunter v. Hunter’s Discussion of the Concept

April 5, 2022 by

This post is part 7 in our 7-part series on the Virginia Supreme Court’s ruling in Hunter v. Hunter (Record No. 190260). Today we focus on the opinion’s discussion of the issue of when a trust becomes irrevocable. Is it upon the death of the settlor (the person who created the trust)? Or at the time when the settlor loses the capacity to revoke the trust? You can find parts 1-6 of the series at the following links: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6.

For better or for worse, the Virginia Supreme Court did not decide that question in Hunter. Instead, it discussed the alternative viewpoints but declined to rule on the specific issue. The following is a summary of the Court’s discussion.

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Must a Will/Codicil be Signed?: Virginia Court Finds an Unsigned Codicil to be Valid

February 1, 2022 by

By recent letter opinion in the matter of In re George William Estate of Asmuth, the Fairfax Circuit Court held that an unsigned codicil was indeed valid under Virginia Code Section 64.2-404. The letter opinion, while not binding authority across all of Virginia, provides an instructive analysis and look at the legal framework for resolving a relatively common estate dispute scenario: whether a codicil/will which is unsigned is of any legal validity. My colleague Will Sleeth previously wrote an instructive blog post on this topic.

The facts of the case were that a testator (will-maker) (“George”) died in 2021. George signed a Will in 2018, which was admitted to probate in 2021 after his passing. There was, however, another document signed after the 2018 Will which purported to be a Codicil. The Codicil was not signed but George typed his name on the document. The Codicil also includes witness and notary certification pages, which were signed and completed.

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More Lawsuits Coming?: Virginia’s General Assembly Increases the Jurisdictional Limits in Virginia’s General District Courts for Certain Personal Injury Claims

January 11, 2022 by

Virginia has two levels of trial courts: the circuit courts and the general district courts. Circuit courts are considered “courts of record”, while general district courts are considered “courts not of record.” Both levels of trial court have their own unique jurisdiction to hear certain types of cases.

The Recent Legislation

In a significant development, the Virginia General Assembly recently passed legislation to increase the jurisdictional limit of Virginia’s general district courts from $25,000.00 to $50,000.00 for personal injury and wrongful death claims.

This is a substantial change from prior law in Virginia, which had previously capped the damages maximum at $25,000.00, exclusive of interest, attorney’s fees, and court costs. Notably, this damage cap did not apply to unlawful detainer lawsuits (eviction lawsuits seeking judgments for delinquent rent).

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No Contest Clauses and Challenges to Beneficiary Designations, Account Titlings, Gifts, or Powers of Attorney: Hunter v. Hunter’s Discussion of the Concept

November 10, 2021 by

This post is part 6 in our 7-part series on the Virginia Supreme Court’s ruling in Hunter v. Hunter (Record No. 190260). Today we focus on the opinion’s discussion of the concept of a no contest clause “seeking to seal the courthouse doors to a litigant.” You can find parts 1-5 of the series at the following links: Part 1, Part 2, Part 3, Part 4, and Part 5.

In the Hunter opinion, the Virginia Supreme Court stated: “To begin, we have never addressed (much less approved) a no-contest provision seeking to seal the courthouse doors to a litigant seeking an interpretation (rather than an invalidation) of a trust or will provision.” The Court proceeded to cite an array of secondary sources that criticize such a practice. The Court stated in Hunter that it did not need to technically resolve that question to rule in the case. That said, the citations and tone appear to indicate that the Court would look highly skeptically on any effort by a litigant to try to use a no contest clause to wholly prohibit judicial interpretation of a will or trust provision.

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The Supreme Court of Virginia Hands Down a New Decision on the Applicability of a No Contest Clause in a Trust

September 22, 2021 by

By recent unpublished order in the matter of McMurtrie, v. McMurtrie, the Supreme Court of Virginia reversed a trial court’s ruling that a no contest clause (in terrorem clause) in a trust did not apply to a trust settlor (trust creator).

While unpublished, the order nevertheless provides an instructive analysis of the legal framework for an increasingly common estate dispute scenario: whether a no contest clause in a trust or will has been violated by the actions of a beneficiary. Additionally, this unpublished order also applied certain principles from the Supreme Court’s recent Hunter v. Hunter decision. Notably, Hunter v. Hunter is the case that my colleague Will Sleeth and I litigated successfully up to the Supreme Court of Virginia, and about which my colleague Will Sleeth has written several previous posts (post 5, post 4, post 3, post 2, post 1).

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Trustee Accounting Requirements and Duties in Virginia: Hunter v. Hunter’s Discussion of the Concept

June 10, 2021 by

This post is part 5 in our 7-part series on the Virginia Supreme Court’s ruling in Hunter v. Hunter (Record No. 190260). Today we focus on the opinion’s discussion of the legal duties in Virginia of a trustee to “inform and report” and provide accountings to a trust beneficiary. You can find parts 1-4 of the series at the following links: Part 1, Part 2, Part 3, and Part 4.

Virginia law contains several sources of law that may apply with respect to a trustee’s duty to provide an accounting or to “inform and report” to a trust beneficiary.

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“Gift Over” and No Contest Clauses: Hunter v. Hunter’s Discussion of the Concept

December 15, 2020 by

This post is part 4 in our 7-part series on the Virginia Supreme Court’s ruling in Hunter v. Hunter (Record No. 190260). Today we focus on the opinion’s discussion of the “gift over” rule and how that rule relates to a no contest clause. You can find parts 1-3 of the series at the following links: Part 1, Part 2, and Part 3.

The “gift over” rule relates to what type of language a no contest clause must contain in order to be legally effective. English and early American courts required that in order for a no contest clause to be effective, it must be accompanied by language providing that if a litigant is disinherited under a no contest clause, that litigant’s share must be distributed to some other person or persons. Hence the name “gift over.”

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