Estate and Trust Disputes
Whether you are a trustee, beneficiary, executor or legatee, the Attorneys at Hale Ball are competent to handle any number of disputes involving the transfer of wealth by a decedent. These cases tend to be very fact-intensive, with many possible avenues of redress.
Surcharge and Falsification Suits
It is a suit to review certain expenditures made by a fiduciary. If the expenditures were contrary to law or authority, then the fiduciary will be personally liable for the repayment of those expenditures. This is a procedure that has been around for many, many years, but is not utilized very often. It is an extraordinary remedy, and should only be used in limited situations. It can be used when an accounting has been approved by a Commissioner of Accounts. An accounting (or “settlement of account” as it was known under common law) is presumed to be prima facie correct until it is duly surcharged and falsified – meaning, that the expenditure(s) are inappropriate and the executor or personal representative must personally repay what was inappropriately spent.
The beneficiaries can file exceptions to an approved accounting with the Commissioner of Accounts within fifteen days of the accounting being approved. However, if the Commissioner rules against the beneficiaries, then the beneficiaries’ sole recourse is an appeal of the Commissioner’s findings to the circuit court, and absent pure questions of law, the Commissioner’s findings are left intact unless found to be unsupported by the evidence. Beneficiaries can opt to forego filing exceptions and file a suit to surcharge and falsify the account. This is a “stand-alone” lawsuit.
Sometimes, it is best to take the issue to the Commissioner of Accounts. In other instances, a Surcharge and Falsification suit is more appropriate.
The Attorneys at Hale Ball are experienced in bringing and defending Surcharge and Falsification lawsuits and can guide you through the appropriate course of action depending upon the circumstances of your individual case.
Removal of Fiduciary
The Virginia Code allows for removal if a court order has not complied with or whenever it appears appropriate to a court to revoke and annul the powers of any fiduciary. Executors, administrators, and trustees, may only be removed for cause. Friction between the personal representative and the beneficiary is not sufficient for removal. Engaging in a course of conduct financially detrimental to the estate for which the fiduciary is responsible is grounds for removal. For instance, the executor purchases a “rental property” using estate funds, but the property generates no income – that could be the basis for removing that executor.
With regard to trustees, the governing statutes require a “serious breach of trust” to remove the trustee. A “serious breach of trust” is most commonly when a trustee is taking funds, he/she should not, or completely disregarding the trust document. Removal is a serious remedy, which requires a serious breach. If the trustee engages in this type of conduct, then it would seem appropriate that he/she should be removed.
Executors, administrators, and trustees have certain fiduciary duties that govern their behavior. If you are a beneficiary and believe that the executor or trustee is not following the document under which he/she is serving or is spending money inappropriately or contrary to law, then removal might be an option.
The Attorneys at Hale Ball are experienced in bringing and defending Removal Actions and can guide you through the appropriate course of action depending upon the facts and circumstances of your individual case. We can assist beneficiaries who have been wronged, and we can also advise executors on an appropriate course of action.
Breach of Fiduciary Duty
When an executor or administrator violates a duty to the beneficiaries of the Estate, then he/she may be personally liable to the beneficiaries of that Estate. Some examples include:
- Improper/illegal/excessive expenditures and/or fiduciary fees paid by an executor
- Failure by executor to communicate honestly
- Failure by executor to distribute assets
- Failure by executor to pursue enforceable claims of the Estate
The Attorneys at Hale Ball can review the will, accountings, communications by the executor, etc. to help you evaluate whether you should file a lawsuit or bring a hearing before the Commissioner of Accounts. If you are the executor, we can assist you in finding a resolution that protects both you and the Estate you are acting on behalf of.
Breach of Trust
Similarly, with respect to trustees, there are actions that seek either damages or other relief when a trustee violates a duty owed to the beneficiaries of the trust. These duties include:
- Duty to administer the trust as the agreement is written and in the interests of the beneficiaries. Along with this is the duty to manage and invest per the terms of the Uniform Prudent Investor Act.
- A trustee has the duty to administer the trust solely in the interests of the beneficiaries. See Va. Code Ann. § 64.2-764 (Michie 2018).
- A trustee must act impartially when there are more than two beneficiaries.
- A trustee must administer the trust in the same manner “as a prudent person would, by considering the purposes, terms, distributional requirements and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.” See Va. Code Ann. § 64.2-766 (Michie 2019).
Because the General Assembly has codified the law on trusts (for the most part), it is somewhat easier to see when or how a trustee could be liable for breach of trust. There are three forms of relief offered by the provisions of the Trust Code: remedies, damages, and removal. Removal is its own separate topic, so let’s look at remedies and damages.
Remedies appear to be non-monetary based solutions to a breach of trust, to include (a) enjoining a trustee from committing a breach of trust; (b) compelling the trustee to redress a breach of trust by paying money, restoring property, or other means; (c) suspending the trustee; (d) reducing or denying compensation; or other remedies as provided for by statute.
Monetary damages, on the other hand, can be awarded up to the amount required to restore the value of the trust property and trust distributions to what they would have been had the breach not occurred or the profit the trustee made by reason of the breach, whichever is greater.
The Attorneys at Hale Ball can review the Trust (and all applicable amendments), accountings, communications by the trustee, etc. to help you evaluate whether you should file a lawsuit. If you are the trustee, then we can assist you in finding a resolution that protects both you and the trust you are acting on behalf of.
Document Contests – Undue Influence, Lack of Capacity and Other Similar Causes of Action
Will Contests – Generally
A will is usually contested on one or more of six grounds; namely, lack of testamentary capacity, fraud, undue influence, improper execution, forgery, or subsequent revocation by a later will. Trusts can be assailed in similar ways as well.
Aspects of Will Contests Can Include
- Impeaching a will can be a difficult challenge. You must have the right combination of facts and evidence.
- If the alleged perpetrator was a fiduciary for the testator, then you might be able to prove the will or testamentary document is invalid on the basis of undue influence.
- If there is a copy of a prior will, combined with the fiduciary relationship – that can be helpful in a case for undue influence.
- Other facts that are helpful can include isolation of the testator from other family, statements by the decedent in front of unrelated third parties that they’re fearful of the benefitting perpetrator or other facts that show that what the testator did was not of his/her own volition.
- Lack of capacity essentially requires medical evidence. It is helpful for you to have an opinion by a doctor who saw the testator immediately prior to or immediately after the execution of the will, AND, it was that doctor’s opinion that the testator could not understand what he/she owned and how he/she wanted to dispose of such property, it is nearly impossible to prove incapacity. Other medical evidence can be explored to review the testator’s cognitive abilities and function at the time of execution of the disputed documents.
The complex nature of these disputes requires an in-depth review of all documents, medical evidence, and other facts. The Attorneys at Hale Ball can review your case and discuss the pros and cons of bringing or defending such complicated actions.
“Improper execution” is when the will fails to meet the statutory requirements making the document admissible to probate. The will could be lacking signatures by the witnesses, it might not wholly in the handwriting of the testator (if the will is a holographic will) or other similar issues.
Wills can be admitted to probate, under certain circumstances, even if they do not pass all of the statutory requirements. The Attorneys at Hale Ball can assist in figuring out whether a document is admissible to probate, or whether a will can be challenged if it does not meet the statutory requirements.
A forgery is, in its most basic terms, the signing of or writing of a document for another without his/her consent or approval. An example would be if someone signs a will for the decedent but without decedent’s knowledge or consent. This can happen, but it is very difficult to prove. Forgery is a species of fraud, which requires a higher level of proof.
The Attorneys at Hale Ball can assist in figuring out whether a document is admissible to probate, or whether a will can be challenged if it appears to have been forged. You will need to provide examples of the decedent’s handwriting and other medical or related information to show or prove that the signature was without authority.
Subsequent Revocation by a Later Will
This is pretty straight-forward – if there is another, later will, then there is a trial over which will is the will. That later will not be valid, which is why you should consult with an attorney at Hale Ball to provide you with options if you believe that later will to be false or void.
A fraudulent will maybe one that someone crafts, signs and presents for probate after the decedent passes away. It is an incredibly difficult case to prove, which is why you should consult with an attorney at Hale Ball to provide you with options if you believe that later will to be false or void.
Lack of Capacity
A testator must have capacity at the time the will is executed. “Testamentary capacity” is defined as the ability to comprehend what one owns and how one wants to dispose of these assets. Old age, by itself, is not sufficient to overcome the presumption of capacity. Neither is mental impairment by reason of disease. Something more is required, and the burden is upon the challenger to prove that the testator lacked capacity.
What are you looking for? The individual was incapable of knowing what he/she owns or who he/she wants to leave said property to. Since the threshold is so low, you will need a lot of evidence. Even a finding of incapacity by a court for which a guardian and/or conservator was appointed will not be sufficient.
The Attorneys at Hale Ball can assist in figuring out whether you can file a lawsuit to impeach a will on the basis of lack of capacity. The Attorneys at Hale Ball can also assist executors in defending cases against an attack based upon lack of capacity.
Undue influence is essentially improper use of power or trust in a way that deprives a person of free will and substitutes another’s desire or objective. The burden of proof is on a plaintiff to prove undue influence. In Virginia, there are two distinct and alternative theories by which to set aside a document on the basis of undue influence. The first requires “clear and convincing evidence of great weakness of mind and grossly inadequate consideration or suspicious circumstances…” at the time that the challenged document is executed. Friendly Ice Cream Corp. v. Beckner, 268 Va. 23, 31 (2004).
The second theory arises “[w]here one person stands in relation or special confidence towards another, so as to acquire a habitual influence over them, they cannot accept from such person a personal benefit without exposing themselves to the risk, in a degree proportioned to the nature of their connection, of having it set aside as unduly obtained.” Id. at 32 (quoting Fishburne v. Ferguson, 84 Va. 87 (1887)).
An example of undue influence might include an unrelated caregiver who becomes an agent under power of attorney and takes the decedent to see an attorney to draft a will, which effectively disinherits the decedent’s children. The Attorneys at Hale Ball have experience in bringing and defending undue influence claims in a number of different cases.
Trust Document Contests
All the grounds listed above also apply to assailing or seeking to void trust documents. As each case is very different, the Attorneys at Hale Ball can review the facts of your situation to see whether you can file an action contesting a document or a series of documents. We can also defend you if you are the trustee and an action has been filed seeking to void the document under which you were named.
Have you ever received an estate distribution and wondered – “Where did mom’s money go?” You thought there should have been more funds in the accounts, or that she owned other more substantial investments. What could have happened? Or, your father is incapacitated, and your sister has the power of attorney when all of a sudden, she is driving a fancier car and is making substantial improvements to her home when she never had the funds to do so. Could there be something else going on? Possibly. Fiduciary misconduct might be at the root of it.
There are many different types of fiduciary misconduct. For instance, if a person is serving under a Power of Attorney and uses that Power of Attorney to transfer property to himself/herself, then he/she may have breached his/her duties under that document.
What if an individual becomes a joint account holder with an elderly person and begins taking funds? That too may be fiduciary misconduct.
One of the primary ways of discovering what someone did with funds while acting as an agent is to utilize the Uniform Power of Attorney Act. The Act allows for children and other next of kin to obtain certain information as to how an agent handled the finances and decisions of the decedent. This is one of many tools to assist you in finding out what happened to the decedent’s money.
Joint Account holders hold fiduciary duties to one another, by statute. In fact, the provisions of the Uniform Power of Attorney Act apply to such individuals. You can find out what happened by sending demands similar to those permitted under the Uniform Power of Attorney Act. Also, if you are an executor, you can make a claim to certain joint accounts of the deceased, provided you follow the statutes.
The Attorneys at Hale Ball have experience in matters involving Fiduciary Misconduct and can assist you in finding the appropriate strategy in finding out what happened to assets and, more importantly, whether those assets can be recovered.
Schedule a Consultation with an Experienced Attorney
The attorneys at Hale Ball will be beside you through all the aspects of the litigation process including pre-trial motions, the discovery process, trial, post-trial motions, and even appeals. The attorneys at Hale Ball are committing to being your advocate so that you will not have to go through any of the litigation processes alone.
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