Testamentary Intent: Understanding the Three Dimensions

1. Trusts & Estates EssentialsPower Point Slides Class #6 2-5-19 National Shower with a Friend Day

2. Trusts & Estates Essentials: Logistics ASSIGNMENT FOR THURSDAY ON COURSE PAGE Please See Me Alejandro Diaz Sahily Ortega

3. UNIT TWO: WILLS CHAPTER 3 WILLS: PROTECTING TESTAMENTARY INTENT Section 3.2 & Intro to Section 3.3

4. Chapter 3.2.1: Testamentary Intent (Recap) Animus Testandi: The requirement that a testator intend, at the time of execution, for the document signed as a will to be his or her will. • Rationale? Need to distinguish between preliminary documents (e.g., drafts, notes for a will) and the final testamentary instrument. Cf. joint party planning: early guest lists, menu, music selections. Three Dimensions (In text from Prof. Glover; helpful art a general level): • Donative testamentary intent (testator’s intent to make a gift at death) • Operative testamentary intent (testator’s intent for the purported will to make such gifts at death) • Substantive testamentary intent (the substantive meaning of the words of a will)

5. Estate of Hand73 N.E.3d 880 (Ohio Ct. App. 2016) [Dear Natalie, [I love you because . . . .] As my last will and testament, I appoint you the primary beneficiary of all I have and all I have worked for. With the complete trust that you will look after the children, my business interests and all the other things that I have put together over the years and not let anyone try to deprive you of those things. I love you eternally, ERIC ANTHONY HAND s/ Eric Anthony Hand

6. Chapter 3.2.1: Testamentary IntentEstate of Hand: General Points • Some states allow holographic/handwritten wills with fewer formalities than otherwise required • We’ll cover later • Ohio must allow these for case to make sense; • Authors suggest if same thing done w full formalities, likely diff outcome b/c getting witnesses etc. would make testamentary intent much clearer • Note: Standard of review is deferential: • Does credible competent evidence support lower ct decision? (Cf. football replay) • NOT de novoreview (would = appellate court reads/interprets evidence itself to decide outcome). • Court quotes earlier case: T needed to have intended document to be final “as it stood, without further act on his part to complete it.”

7. Chapter 3.2.1: Estate of Hand: Evidence re Testamentary Intent • Style was like his other love letters BUT • only one with will language • only one w full signature • Natalie stores w other love letters b/c she viewed as love letter • N testified Eric said he would legally create will at later date • Strong suggestion he didn't consider it final • Court quotes earlier case: T needed to have intended document to be final “as it stood, without further act on his part to complete it.” • [NOTE: E is disinheriting his 4 kids, so court may be disinclined to support Natalie. Not evidence, but a story court may not like.]

8. Chapter 3.2.1: Problem 3.1 Maria Gonzalez lives in a state that enforces holographic wills. While on vacation, Maria Gonzalez handwrote the following letter to her daughter, Rosa: I’ve thought a lot about my estate on this trip. When I return home next month, I’ll see my lawyer and ask him to prepare a new will for me. Right now, under my current will, you get half of everything and your brother gets the other half. But I’ve changed my mind about that and want to write a new will. When I have a chance to formalize everything with my lawyer, I’ll make sure you get it all.

9. Chapter 3.2.1: Problem 3.1 • Mrs. Gonzalez died in a train wreck while returning from her vacation. • The letter was dated and signed by Mrs. Gonzalez, satisfying the formalities for a holographic will. • Her daughter offered the letter for probate as Mrs. Gonzalez’s will and claimed the entire estate for herself. • Rosa’s brother objects and claims that Mrs. Gonzalez called him shortly before her death to say that he would get at least half of her estate. • Looks like intent to formalize later as in Hand. • Casebook authors say might be treated as a will because court might see as intent to do final disposition of her estate. (Kuralt = Next Slide) • Problem: What if letter was attempt to get daughter to stop nagging?

10. Chapter 3.2.1: Kuralt, 15 P.3d 931 (Mont. 2000) Dear Pat- Something is terribly wrong with me and they can't figure out what. After cat-scans and a variety of cardiograms, they agree it's not lung cancer or heart trouble or blood clot. So they're putting me in the hospital today to concentrate on infectious diseases. I am getting worse, barely able to get out of bed, but still have high hopes for recovery . . . if only I can get a diagnosis! Curiouser and curiouser! I'll keep you informed. I'll have the lawyer visit the hospital to be sure you inherit the rest of the place in MT. if it comes to that. I send love to you & [your youngest daughter,] Shannon. Hope things are better there!

11. Chapter 3.2.1: Kuralt, 15 P.3d 931 (Mont. 2000) Evidence that letter showed testamentary intent : • Decedent and Pat enjoyed a “long, close personal relationship which continued up to the last letter;” D & Pat’s “children had a long, family-like relationship which included significant financial support.” • D conveyed adjacent parcel to Pat & extrinsic evidence of intent to convey this one as well. • The use of the term "inherit" underlined by Kuralt • D died two weeks after letter; he was reluctant to consult a lawyer to formalize his intent because he wanted to keep their relationship secret [from his wife and 2 kids!].

12. Chapter 3.2.2: Testamentary Capacity UPC §2-501 -- Who May Make Will: An individual 18 or more years of age who is of sound mind may make a will. Fl. Stat. 732.501 § Who may make a will.—Any person who is of sound mind and who is either 18 or more years of age or an emancipated minor may make a will. Restatement (Third) of Property: Wills and Other Donative Transfers § 8.1 Requirement of Mental Capacity (a) A person must have mental capacity in order to make or revoke a donative transfer.

13. Testamentary Capacity: General Points Measured when will executed. • Threshold generally lower than for inter vivos transfers b/c not worried grantor will be left impoverished. • Qs often arise when testator suffers from a condition affecting mental capacity like Alzheimer’s, dementia, or some manifestations of AIDS, but • These conditions are not sufficient by themselves to show incapacity; need evidence specific to testator in relevant time frame. • Testamentary capacity is a capability standard, not memory test or intelligence quiz. One need not be able to recite from memory all members of one’s extended family or an inventory of all property. • You aren’t responsible for info about atty’s ethical responsibility to look for capacity issues.

14. Testamentary Capacity: Traditional Rule (FL follows) Restatement (Third) of Property: Wills and Other Donative Transfers § 8.1 Requirement of Mental Capacity … (b) If the donative transfer is in the form of a will, a revocable will substitute, or a revocable gift, the testator or donor must be capable of knowing and understanding in a general way [i] the nature and extent of his or her property, [ii] the natural objects of his or her bounty, and [iii] the disposition that he or she is making of that property, and must also be capable of relating these elements to one another and forming an orderly desire regarding the disposition of the property.

15. Testamentary Capacity: Traditional Rule [i] the nature and extent of his or her property, • What [s]he has [ii] the natural objects of his or her bounty, and • Logical recipients given specifics of his/her life • Casebook makes clear doesn’t have to be nearest relatives or even relatives at all • Don’t have to give to “natural objects,” but merely be capable of understanding who they are [iii] the disposition that [(s)he] is making of that property, • How the will distributes what [s]he has

16. Chapter 3.2.2: Ascertaining Capacity If probate is contested on grounds of capacity: Majority rule: “Burden of proof. The party contesting the validity of a donative transfer has the burden of persuasion in establishing that the donor lacked mental capacity to make the transfer.” Restatement §8.1, Comment f. Florida Probate Rules take this position. Minority rule (including New York & Texas): Will proponent bears the burden of demonstrating testamentary capacity.

17. Estate of Nalasch90 A.3d 8 (Pa. Super. Ct. 2014)

18. Ascertaining Capacity: Nalasch Challenge to Testator’s Capacity at time of 2d Will (2011) • Expert Dr. concludes T suffering from alcohol-related dementia when 2d will signed based on a long list of individual incidents related to problems with T’s memory, understanding, and ability to take care of himself. • Atty who drafted 2d will says T seemed to understand what he was doing at time of execution • Appellate court affirms finding of capacity b/c: • Most of the incidents relied on by the Dr. were in 2010 (some more than a year before 2d will) and • No specific evidence that T didn't meet traditional 3-prong test • Dr never met T personally, just reviewed record

19. Ascertaining Capacity: Nalasch Some Take Away Points • Note textbook’s discussion in Qs after case of most significant evidence of incapacity • Note specificity of inquiry. • Not satisfied by general diagnosis • Looking at specific Qs at specific time • Authors’ points about case: • May matter that Penn. Puts burden on challenger • Concern with this type of evidence: may be too easy to paint a picture of general incapacity from series of scattered incidents (particularly with a condition that gets progressively worse)

20. Problem 3.2A: Last Names F-L Timeline 1970: Harold executes a will devising his art collection to Waterchester University 1971: Harold joins the board of trustees of the City Art Museum 1972: Harold ceases lifetime giving to Waterchester and begins making annual gifts to City Art Museum 1979: Harold sends a letter to City Art Museum stating his intent “that my art collections find a permanent home at CAM after I’m gone.” 1980: Court adjudicates Harold as mentally incapacitated and imposes a conservatorship; Harold enters in-patient care 2010: Harold dies

21. Problem 3.2A: Last Names F-L Timeline 1970: Harold executes a will devising his art collection to Waterchester University (alma mater) 1971: Harold joins the board of trustees of the City Art Museum (founded by ancestor) 1972: Harold ceases lifetime giving to Waterchester and begins making annual gifts to City Art Museum 1979: Harold sends a letter to City Art Museum stating his intent “that my art collections find a permanent home at CAM after I’m gone.” 1980: Court adjudicates Harold as mentally incapacitated and imposes a conservatorship; Harold enters in-patient care 2010: Harold dies Should the probate court give effect to the 1970 will? Of what relevance is the 1979 letter? Of what relevance is the 1980 court order declaring H mentally incompetent? NOTE difficulty of litigating capacity 30-40 years after key events.

22. Chapter 3.2.3: Lucid Intervals A lucid interval is a period during which a testator, who is mentally incapacitated part of the time, has testamentary capacity: Restatement (Third) of Property: Wills & Other Donative Transfers §8.1, comment M Lucid interval. A person who is mentally incapacitated part of the time but who has lucid intervals during which he or she meets the standard for mental capacity…can, in the absence of an adjudication or statute that has contrary effect, make a valid will or a valid inter vivos donative transfer, provided such will or transfer is made during a lucid interval.

23. Chapter 3.2.3: Lucid Intervals A person suffering from diminished capacity can nevertheless make a valid will if the will is executed during a “lucid interval:” “A testator needs only a lucid interval of capacity to execute a valid will, and this interval can occur contemporaneously with an ongoing diagnosis of mental illness, including depression or progressive dementia. [O]ld age and physical weakness are not necessarily inconsistent with testamentary capacity.” In the Matter of the Probate Proceeding, Will of Leon Feinberg, Deceased, 37 Misc.3d 1206(A) (NY Sur. Ct. Queens Cty., 2012). • In some states (e.g., NJ; Not FL), the lucid interval doctrine does not apply to an individual who has been adjudicated incompetent by court order.

24. Problem 3.2B: Last Names F-L Timeline 1970: Harold executes a will devising his art collection to Waterchester University (alma mater) 1971: Harold joins the board of trustees of the City Art Museum (founded by ancestor) 1972: Harold ceases lifetime giving to Waterchester and begins making annual gifts to City Art Museum 1979: Harold sends a letter to City Art Museum stating his intent “that my art collections find a permanent home at CAM after I’m gone.” 1980: Court adjudicates Harold as mentally incapacitated and imposes a conservatorship; Harold enters in-patient care 2008: Notarized document dated this year purporting to be will leaving everything to hospital, with shaky H signature and 2 nurses as witnesses. 2010: Harold dies

25. Problem 3.2B: Last Names F-L Timeline 1980: Court adjudicates Harold as mentally incapacitated and imposes a conservatorship; Harold enters in-patient care 2008: Notarized document dated this year purporting to be will leaving everything to hospital, with shaky H signature and 2 nurses as witnesses. 2010: Harold dies • Could be issues of fraud or undue influence by the hospital; I’ll save for you (and sample multiple choice Qs) • Should the probate court give effect to the 2008 document? What would the hospital have to prove to show that the 2008 document was a valid testamentary instrument? • Of what relevance is the 1980 court order declaring H mentally incompetent?

26. More on Gen’l Incapacity & Lucid Interval Restatement Example 5 to Comment M on Lucid Intervals:G's daughter D contests the will of her father on the ground of mental incapacity. G had suffered from schizophrenia and had been in and out of mental hospitals for 20 years. G was on medication when executing the will. The will is valid if G, when executing the will, was experiencing a lucid interval during which he satisfied the standard for mental capacity for executing a will …. If, as with H, there is a conservatorship, the UPC provides that a conservator for an incapacitated person, “after notice to interested persons and upon express authorization of the court,” may “make, amend, or revoke the protected person’s will.” UPC § 5-411(a)(7).

27. Kincaid’s Will Can you have testamentary capacity while intoxicated? • Footnote 6 in text: Breeden v. Stone: “the decedent, who committed suicide during a police standoff at his home, executed a holographic will while intoxicated with alcohol and cocaine. The will was upheld on grounds that he had testamentary capacity and was not suffering from an insane delusion.” • Probably need evidence going to capacity at precise time document executed. Might also get evidence as to how decedent handled the intoxicant. (E.g., if strong tendency to do things would not normally do after 3 drinks, maybe no good)

28. Problem 3.3 I’ll add slides giving you a write-up of this

29. Chapter 3.2.4: Insane Delusions Restatement (Third) of Prop.: Donative Transfers § 8.1, Comment s. Insane delusion. An insane delusion is a belief that is so against the evidence and reason that it must be the product of derangement. A belief resulting from a process of reasoning from existing facts is not an insane delusion, even though the reasoning is imperfect or the conclusion illogical. Mere eccentricity does not constitute an insane delusion. A person who suffers from an insane delusion is not necessarily deprived of capacity to make a donative transfer. A particular donative transfer is invalid, however, to the extent that it was the product of an insane delusion.

30. Chapter 3.2.4: Insane Delusions Casebook gives as examples • “the erroneous belief that one’s spouse is unfaithful, [Note that this might be supported by reason/evidence even if erroneous] • that one’s son is the devil incarnate, or • that one’s daughter is a witch.” Court invalidates disposition caused by delusion. Can do just specific part of will or whole thing. Casebook says “Courts generally choose [the latter] option only if they find that the insane delusion affected the entire dispositive plan or if invalidating the provision that resulted from the insane delusion would significantly disrupt the decedent's overall disposition.”

31. Estate of Cecilia Zielinski, 208 A.D.2d 275 (App. Div. NY 1995) • D’s will left her entire estate to her sister and brother-in-law and disinherited her only son and [numerous] further descendants. • Evidence of D’s delusions about abuse from her late husband and only son • son injected her buttocks, • husband broke her legs & replaced her legs with another person’s • son was taking instructions from a device that turned the world inside-out, • son placed balloons in her stomach, • she kept her spit in jars as evidence of the abuse (25-30 one-gallon jars were found)

32. Insane Delusions: Zielinski • Appellate court held evidence supported conclusions … • that T was suffering from an insane delusion as to her son; • that the delusion directly affected T’s decision to disinherit him; and • that proponents failed to demonstrate the delusions had a rational basis. • Easy case for insane delusion and for invalidating entire will as being wholly the product of the delusion • Dictum in opinion supporting specificity of inquiry: • “…a person suffering from an insane delusion can still be competent to manage their own affairs and, if the person’s behavior is not centered on the subject of the delusion, can appear to be normal.” • “Even if…D had general testamentary capacity, she could [simultaneously] have an insane delusion which controlled the testamentary act, thus rendering it invalid”

33. Problem 3.4 Who should bear burden of proof on capacity and related issues where will is facially valid (meets all formalities)? • Proponents of will to show capacity? (NY, TX) • Those contesting the will to show incapacity? (UPC, FL) IDEAS?

34. Problem 3.4 Who should bear burden of proof on capacity and related issues where will is facially valid (meets all formalities)? • Those contesting the will to show incapacity? (UPC, FL) • Authors prefer for efficiency reasons because most estates don’t raise capacity issues & contestants can challenge relatively easily • Proponents of will to show capacity? (NY, TX) • Authors point out that this can be relatively easy to meet. In Zielinski above (in NY), despite extensive evidence of delusions, court found general capacity where testator had been managing her own affairs reasonably successfully.

35. Intro to Chapter 3.3: External Factors Restatement (Third) of Prop.: Donative Transfers §8.3 Undue Influence, Duress, or Fraud. (a) A donative transfer is invalid to the extent that it was procured by undue influence, duress, or fraud. ([A]pplies to all donative transfers, inter vivos and testamentary; also applies to making of a donative transfer and revocation of one. See Cmt. A) Fla. Stat. §732.5165 Effect of fraud, duress, mistake, and undue influence.—A will is void if the execution is procured by fraud, duress, mistake, or undue influence. Any part of the will is void if so procured, but the remainder of the will not so procured shall be valid if it is not invalid for other reasons. If the revocation of a will, or any part thereof, is procured by fraud, duress, mistake, or undue influence, such revocation is void.

36. Chapter 3.2.4: Insane DelusionsStrittmater: Last Names M-Q As textbook suggests, case can be read to invalidate the will based on testator’s “insane delusion” about men. For purposes of this exercise, let’s look at evidence going to her capacity generally in the context of arguments to the finder of fact Evidence Supporting “No Sound Mind”?

37. Chapter 3.2.4: Insane DelusionsStrittmater: Last Names M-Q • Evidence Supporting “No Sound Mind” includes: • MD testimony: symptoms of split personality • “Happy childhood,” then turning on parents • Great aversion to men • Ominous Incidents: smashing clock; killing kitten • Evidence Supporting “Sound Mind”?

38. Chapter 3.2.4: Insane DelusionsStrittmater: Last Names M-Q • Evidence Supporting “Sound Mind” includes: • Behavior with lawyer & bank • Beneficiary was org. she belonged to/volunteered for (so logical to support in will) • Not close to nearest relative • MD who testified was GP (not psych expert)