LAWYERS, ESTATES, AND TRUSTS
Notes
In most jurisdictions, named beneficiaries clearly have standing to bring malpractice lawsuits. In some states, intended beneficiaries do, as well.
Cases
Case
Blair v. Ing. (HI 2001) – Malpractice case
Loc.
33
Facts
Parents died. Attorney didn’t plan the estate in a way that would have avoided taxes. Kids (beneficiaries sued). Questions arose as to whether they had standing to sue for legal malpractice. Attorney successfully moved to dismiss.
Holding
Where the relationship between an attorney and a non-client would impose a duty of care, the non-client may proceed under either tort or contract theories of recovery.
Considers Lucas factors in determining if a non-client has standing. Only intended beneficiaries may bring a malpractice action. But, there is no blanket duty of care to all non-client beneficiaries in every case.
Malpractice is distinguished from an attack on the will because the beneficiaries will recover from the attorney and will not change the disposition of the estate.
SOL runs from when the error is discovered or should have been discovered. Adopts discovery rule.
App.
Kids were intended beneficiaries. They brought a malpractice claim. They had standing for legal malpractice but not accounting malpractice. Court reversed and remanded.
Case
The Stanley L. & Carolyn M. Watkins Trust v. Lacosta (Mont. 2004)
Loc.
CH 13
Facts
Lacosta (attorney) set up a trust for the Watkins. As part of that trust, a trucking business was to pass to stepson Steven. The wills were signed outside the presence of a witness and Lacosta. Lacosta never told this to anyone. Defect created problems. The trust and Steven sued 5 years after Stanley died.
Issue
1. Can non-client beneficiaries bring a legal malpractice action?
2. Were the claims barred by the three-year SOL?
Holding
1. Named beneficiaries in a will may bring a legal malpractice action.
2. Claims were not barred under discovery doctrine. Attorney must disclose facts.
App.
1. Steve and the estate were named beneficiaries, so they could bring the claim.2. Lacosta didn’t disclose the defects of the will. Stan and the trust didn’t discover the defect until 1995. So, the claim was not time-barred.
Case
Snyder v. Love (Mont. 2006)
Loc.
CH 19
Facts
Neil (son) received 100% of Lucille’s (Mom) stock when she died. He thought he should receive 51% and the sister 49%. He claimed Love (attorney) was negligent when she drafted the will. It was more than ten years after the drafting when Neil filed his complaint.
Issue
Is a statute of repose an absolute bar to claims
Holding
Yes. In Montana, no legal malpractice claim can be brought after 10 years of the alleged negligent act. The discovery doctrine and accrual doctrine do not apply. Statutes of repose are absolute bars
App.
Neil brought the action more than 10 years after the alleged negligence. His claim was time-barred.
INTESTACY
Intestacy: The condition of the estate of a person who dies owning property greater than the sum of his or her enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively, where such a will or declaration has been made, but only applies to part of the estate, the remaining estate forms the “Intestate Estate.” Intestacy law, also referred to as the law of descent and distribution or intestate succession statutes, refers to the body of common law that determines who is entitled to the property from the estate under the rules of inheritence.
Heirs: Those people identified by statute to take the estate to the extent that the decedent dies intestate.
Ancestors: Parents, grandparents, and the like, extending back into history.
Descendants: Also referred to as issue. It means children, grandchildren, and the continuing line.
Collaterals: Those people out of the lines of ascent and descent: aunts, uncles, brothers, sisters, cousins.
Policy of intestacy:
· Keep it in the family
· Provide for the closest relations
· Draws clear lines
Steps in analyzing intestacy
1. Is there a spouse – 72-2-112
2. Other heirs – 72-2-113
3. How does property pass? – 72-2-116
4. If there are no takers – 72-2-115
Applicable law – law of state where domiciled, except for real property.
Statutes
72-1-103(50) Definition of “Survive”
72-1-108 Evidence of death or status
72-2-111 through 72-2-116 Intestacy statutes
72-2-712 Requirement of survival by 120 hours
72-2-812 Effect of divorce, annulment or decree of separation
72-11-101 through 72-11-104 Determining kinship
INTESTACY
Spouses
Notes
Bigamous marriages – the general rule is that the 1st spouse takes under intestacy.
Cases
Case
In re Estate of Gardiner (Kan. 2002)
Loc.
53
Facts
Marshall (father) married a transsexual (J’Noel). Marshall died, and J’Noel thought property should pass to her. Joe (son) was awarded summary judgment. J’Noel appealed and Court of Appeals reversed and remanded. Joe appealed to Kansas Supreme Court
Issue
May a transsexual be considered a spouse?
Holding
No. The ordinary meaning of “persons of the opposite sex” found in the marriage statute contemplates a biological man and a biological woman. Not transsexuals.
App.
J’Noel was not Marshall’s spouse. Wasn’t entitled t
contested cases and grounds for contest
Notes
Negative will – a will that excludes a person.
Codicil – an amendment to a will
Testamentary intent is the intention to dispose of property after the testator’s death.
When you’re looking for testamentary intent, you look to see whether the testator recognized they were drafting something that would transfer property at death (e.g., title it as a will – “Last Will of [X]”).
Cases
Case
In re Estate of Kuralt, 15 P.3d 931 (Mont. 2000)
Topic
Wills
Loc.
87
Facts
Kuralt (deceased) had a long affair with Shannon. Kuralt’s wife never knew about it. Before his death, Kuralt wrote a series of letters to Shannon indicating his intent to devise property in Montana to her. Kuralt had a formal will drawn up, but it didn’t include any devise to Shannon because he wanted to keep the will secret.
Issue
If a party expresses clear intent to leave property to a person and a the formal will is not inconsistent with that devise, is the devise valid?
Holding
Yes. You have to look at the circumstances to understand the intent of the testator.
App.
Kuralt had a long affair with Shannon and he clearly indicated through letters that he wanted the Montana property to pass to her upon his death.
WILLS
Contesting wills: Mental Deficiency (Testamentary Capacity)
Statutes
72-3-310 Burden of proof and grounds for will contests
Notes
If a mental deficiency is established, the entire will is thrown out (cf. insane delusions).
Mental deficiency is not a high standard to meet. You just have to be able to illustrate competency. A person can be very eccentric and still have testamentary capacity.
Framework for establishing a mental deficiency – the testator must
· know the nature and extent of her property
· know the natural objects of the testator’s bounty, namely, those persons most of us would expect to take the property
· understand the basics of the plan for disposing of the property, and
· understand how the above elements interrelate.
Montana applies the framework a bit differently (see Brooks)
1. Nature and extent of property
2. Know the nature of the act
