Death and Taxes Blog

Besides an action to contest a Will, a frustrated beneficiary may attempt to proceed with a tort known as "intentional interference with an inheritance." In some cases, this may be the ONLY way in which the potential beneficiary can proceed.

In the Nemeth case (425 N.E.2d 1187), for instance, the decedent's stepdaughter (not an heir of the decedent) filed an intentional interference with an inheritance action against her step-sister because a successful Will contest would have done her no good.

A number of cases have followed, trying to explain the limits and ramifications of the tort. A recent case involves the estate of a woman named Grace Ellis (found here as a PDF). The case was brought by the Shriners Hospital for Children, beneficiaries under a previous Will, against a man named James G. Bauman (who was named as sole beneficiary and executor under the Will that was admitted to probate). Ms. Ellis evidently died in 2003, but the Shriners took no action to contest anything until 2006. Maybe their itty-bitty cars were in the shop all that time? Or (more likely), perhaps the Shriners had no idea that they were named as beneficiaries in a previous Will.

Anyway, the Shriners file their suit, making the same sorts of allegations as you might see in a Will contest (lack of capacity and undue influence). But, of course, they can't file a Will contest, because Will contests must be filed within six months after the Will in question was admitted to probate.

Can you use the intentional interference with inheritance tort to get around the six month period, since it isn't a Will contest? No, says the court.

I usually talk about estate planning in terms of two different approaches:

Simple: having a simple Will, where you give away all of your property outright

vs.

More involved: having what's known as a pourover Will and a separate living trust. You give your property away in your living trust -- you leave it to a trustee, who holds it for one or more beneficiaries

But there's also a middle way, which involves having only a Will, but incorporating trusts into that Will. This is known as having a Will with a testamentary trust. What's the drawback to this approach, and why isn't it more popular?

Well, when I talk about the advantages of a living trust, I address 5 of them in particular:

1. Probate avoidance
2. Control
3. Creditor protection for beneficiaries
4. Privacy
5. Estate tax minimization

If you create trusts under your Will rather in a separate document, those trusts can't be funded during your life (since your Will has no effect until death). As a result, you will need a probate. Your beneficiaries also don't get privacy, since the trust information is all located in your Will, which is a public document. But the other three advantages still exist.

I've talked before -- most recently, here -- about executors who don't obey the wishes of decedents, and refuse to burn their works. Vladimir Nabokov's case (which involves this scenario) has been in the news lately, in a two-part series in Slate entitled The Fate of Nabokov's Laura:

Part 1

Part 2

A discussion of Illinois health-related directives such as powers of attorney and living wills.


MP3 File

A couple of things involving probate in Cook County that have changed recently (or maybe I just became aware of):

1. Fee increase. It now costs $304 in fees to open a probate estate worth more than $15,000, up from $279. The entire fee schedule can be found here (as a PDF).

2. Cover sheet. One procedural thing that needs to be done when you go to file your petition to open an estate: completing a probate division cover sheet. I don't know why it's needed, but it is -- the form is here (again, as a PDF).

This short blog entry on Slate regarding John McCain's income taxes is interesting. Not for what it says about Senator McCain's income, but for the following:

John McCain’s released two years of tax returns today to little fanfare. We learn that he earned $405,000 in 2007. We learn that he’s giving his ex-wife $17,000 a year in alimony. What we don’t learn, though, is how much he’s getting from his current wife. That’s because the returns don’t include the assets of Cindy McCain, whose beer fortune is estimated at more than $100 million—a reminder that McCain would be the first president to have signed a prenuptial agreement.

The post goes on to wonder if voters might object to Senator McCain because of the prenup:

Then there’s the moral aspect. In a race that has feature the thrice-married Rudy Giuliani, McCain’s marital situation doesn’t seem particularly controversial. But some Americans might look askance at a prenup, commonly considered leaving the door open for divorce.

I'm not sure about that. A recent poll (results here) doesn't seem to indicate that Americans hate the idea of prenups:

The Thomson West survey found that when asked if they would sign a prenuptial or postnuptial agreement, American adults said: -- Yes, definitely (14%) -- Yes, maybe (27%) -- No, probably not (21%) -- No, definitely not (20%) -- Not sure (18%)

While the question is "would you sign a prenup?" and not "would you vote for a presidential candidate who signed a prenup?", I don't see anything here indicating animosity for prenups per se. Only 20% said "no, definitely not," and I'd imagine that only those who feel the strongest about that "no" vote would view Senator McCain's prenup as a deal-breaker.

To me, Senator McCain's marital situation DOES seem like it might be a little bit controversial to social conservatives. The prenup isn't the problem -- the divorce of wife #1 in order to marry (younger, richer) wife #2 might be. The prenup only reminds social conservatives of the prior divorce.

This time the topic is living trusts.

The music is #40 (In Yugoslav Style) from Mikrokosmos, by Bela Bartok.


MP3 File

Last night's episode of 30 Rock (still, I think, the funniest show on TV) featured TV executive Jack Donaghy (played by Alec Baldwin) trying to convince Tracy Jordan (played by Tracy Morgan) to become the celebrity voice of the Republican party. Jordan's resulting commercial, meant to appeal to what he first refers to as "blackmericans," is pretty funny:

My fellow black Americans. Dr. King once had a dream, a dream that we all share: to build a 200-foot wall to keep Mexico out. And he also hated the estate tax.

(Later, Jordan says that "I get it -- the Republican party means less taxes, more guns, and the end of the gun tax.") The whole episode is available for free here -- the commercial comes at around 15:45, but the entire thing is really funny (especially Baldwin's Richard Nixon impression).

I recently finished reading Philip Roth's The Ghost Writer, which is the first book in his Zuckerman trilogy (or trilogy and epilogue, as I guess it's now known, since it contains four books and Roth evidently doesn't like the word "quartet"). It's a short but engaging work about a young novelist (Nathan Zuckerman) who pays a visit to a very well-respected older novelist (E.I. Lonoff).

Interestingly enough, one of the central conflicts of the book involves a fight between Zuckerman and his father over one of Zuckerman's short stories, which focuses on a will contest. According to Zuckerman, the story was based on the following facts:

A great-aunt of mine, Meema Chaya, had left for the education of two fatherless grandsons the pot of money she had diligently hoarded away as a seamstress to Newark's upper crust. When Essie, the widowed mother of the twin boys, attempted to invade the trust to send them from college to medical school, her younger brother, Sidney, who was to inherit the money remaining in Meema Chaya's estate upon conclusion of the boys' higher education, had sued to stop her.

Zuckerman's father objects to the story, on the grounds that it airs the family's dirty laundry and (more importantly) portrays Jews in an unfavorable light.

Not to take the fun out of the novel, but the whole fight over Meema Chaya's estate could have been avoided if she had clearly defined "education" to include (or exclude) graduate and/or professional school.

I've complained loudly in the past about Oak Park's unconstitutional ban on "for sale" signs. The issue has arisen once again -- here are links to the present controversy:

It's time to rethink For Sale signs, by Ed Messina (3/18/08)

Rethink 'For Sale' signs? Think again, by Dan Lauber (3/25/08)

Galewood integrated without engineering, by Ed Messina (4/1/08)

No, it's not time to go back to For Sale Signs, by Kurt Hedlund (4/8/08)

Galewood used OP techniques to integrate, by Kurt Hedlund (4/8/08)

The most frightening thing to me about the above exchange is the editor's note at the end of Mr. Messina's 4/1/08 piece. It says, "Contrary to conventional wisdom, there is no formal For Sale sign ban in the village. It's a longstanding, voluntary agreement among local Realtors at the request of the village."

I can only assume that this was an April Fool's Day joke. When I check the Oak Park village code (via the village's website), and click through to the Village Code page (here), I see section 13-2-3. That section reads as follows (the emphasis is mine):

13-2-3: REAL ESTATE FOR RENT AND FOR SALE SIGNS PROHIBITED:

The President and Board of Trustees find as follows:

A. That a prohibition of "For Sale" and "Sold" signs has been recommended by the Commission on Community Relations on the basis that said signs tend to encourage unfair housing practices and tend to defeat the purposes of the Village's Human Rights Program.

B. That a prohibition of "For Rent" signs has been recommended by the Commission on Community Relations for the following reasons:

1. "For Rent" signs presently are used more frequently in areas that have a greater percentage of occupancy of minority residents. "For Rent" signs are seldom used in connection with buildings that have no minority occupants. The use of these signs therefore tends to "signal" that minorities may be more welcome in some areas of the Village than others and this tends to segregate areas contrary to the policy of the Village to maintain an integrated community.

2. A proliferation of "For Rent" signs encourages panic peddling and block busting.

3. "For Rent" signs may give an appearance of community instability when concentrated in a limited geographic area.

4. A proliferation of "For Rent" signs may infer that an area is less desirable than other areas.

5. A system of apartment management that refers tenants to the source of rentals will encourage greater professionalism in apartment management.

It shall, therefore, be unlawful for any person to construct, place, maintain or install a "For Sale", "Sold" or "For Rent" sign on any property developed for residential use in the Village. The term "For Sale" sign shall include signs carrying the following or similar words: "Open House" or "Open for Inspection" and shall include any other devices placed on the property to indicate that the property is for sale.

In the case of new construction of residential property or conversion of an existing structure to condominium use where a condominium declaration is recorded, a "For Sale" sign shall be permitted on the property until the property or condominium units are sold, but not to exceed one and a half (1 1/2) years after issuance of a certificate of occupancy for a new building or from the date the "For Sale" sign is posted in the case of a conversion. (1981 Code)

Does that look to you like an informal, voluntary agreement between the village and local realtors?

My letter to the editor was published on April 8 -- here it is (yay! I'm officially a crank!) The Features/Viewpoints editor for The Wednesday Journal, Ken Trainor, tried to respond to my concern about the constitutionality of Oak Park's ban with this editorial, published at the same time. My two problems with Mr. Trainor's editorial are:

1. He admits that, "in 2003, we were told by staff at village hall that there was no official For Sale sign ban. it was simply a voluntary ban observed by local Realtors all these years. Well, they weren't being entirely upfront about that. Turns out the ban is still on the books, only it's not enforced." And yet, in 2008, the viewpoints page of The Wednesday Journal includes an editor's note stating that ""Contrary to conventional wisdom, there is no formal For Sale sign ban in the village. It's a longstanding, voluntary agreement among local Realtors at the request of the village." I don't know which is worse -- that the Village would lie to The Wednesday Journal about the nature of the ban in 2003, or that The Wednesday Journal would perpetuate that lie by repeating it in 2008.

2. Mr. Trainor tries to make the argument that "Oak Park might very well be able to withstand a court challenge" on the ban. I'm not a big fan of the John Yoo school of legal thought, where a clear law that you don't like can be read to say whatever you want it to say. The Supreme Court stated, in 1977, that bans on "For Sale" signs of the type employed in Oak Park are unconstitutional. The reasoning for that ban given by Justice Marshall is pretty clear (the opinion is available here). That Mr. Trainor thinks the ban will be overturned by showing "the documented resegregation of the West Side of Chicago" only shows US that Mr. Trainor either hasn't read or doesn't understand the case. And all the thousands of words put down in The Wednesday Journal about why Oak Park needs the ban, has to have the ban, will be destroyed if the ban is lifted, are just wasted.

Note that I am not commenting on whether Oak Park should be able to do what the Village, Mr. Trainor, and others seem to want it to do -- protect Oak Park from the (in their opinion) danger of low-income black people swarming into the community and destroying it once the "For Sale" sign ban is lifted. Rather, I'm stating that, if Mr. Trainor and the Village want to maintain what they see as an "appropriate" level of diversity in Oak Park, they're going to have to figure out a different way to do it.

A couple of things:

1. The podcasts don't take very long to record, but they take a while to write (no, for the most, I'm not improvising). I'll try to get the next one up this coming week, hopefully by Saturday at the latest.

2. You can now download the Death and Taxes podcast on iTunes. If you go to the iTunes store and search for "death and taxes blog podcast," you can find it. Unfortunately, I'm not sure how else you can find it -- there's no "legal" category in iTunes, so I'm stuck in the "business" category. Anyway, you can listen to or download individual episodes, or subscribe to the podcast.

Clients often ask me, "why is probate litigation so expensive?" The main reason is that the law tends to behave like an unruly beast. Some questions posed to me are easy to answer -- if you want to know the requirements for executing a valid Will in Illinois, I can give them to you. But other questions are much more difficult to answer.

Take, for instance, pleading requirements for a Will contest. Most Will contests include allegations of lack of testamentary capacity (the person who signed the Will didn't know what he or she was doing) and undue influence (someone "forced" the person who signed the Will to do it). As you might imagine, there's a lot of proof required to win a Will contest -- that's as it should be. But what about getting in the door, and being allowed to prove your case through discovery, etc.? The first step in a Will contest is the filing of a petition. The second step in almost every Will contest is for the other side to file a motion to dismiss the petition, on the grounds that it "failed to state a claim for which relief can be granted."

There is no magic book to turn to in order to find out whether a petition will survive a motion to dismiss. Instead, attorneys have to look to caselaw:

Lack of Testamentary Capacity

Two very old cases -- American Bible Society v. Price and Anlicker v. Brethorst -- suggest that pleadings for lack of testamentary capacity don't have to be very in-depth. But then there's this curious Estate of Sutera case from the 1st District in 1990. It seems to suggest that conclusory statements are insufficient, but it's hard to tell. On the one hand, a very well-known book on Illinois probate states that Sutera does not apply to the issue of testamentary capacity generally, but applies only in cases where the petition includes allegations of an "insane delusion." At least one subsequent court case implies the same thing. But Sutera never mentions the phrase "insane delusion"!

That being said, my experience in court has been that judges still view American Bible Society and Anlicker as setting forth the law on pleading lack of testamentary capacity. But I suppose it depends in large part on how the attorneys frame their arguments, and the judge's take on the caselaw. It is, however, an attorney's job to make sure he or she understands and can argue for or against any of the cases that may come up at the hearing on this issue. And reading and understanding cases takes a LOT of time.

Undue Influence

Undue influence requires more in-depth pleading, but there appear to be (again, "appear to be," since there's no answer set in stone) two ways to approach it:

1. You need to make a "specific recital of the manner in which the free will of the testator was impaired." OR

2. You need to show that the person you are accusing of undue influence had a fiduciary relationship with the person who signed the Will (aka the Testator), that the Testator depended on the person and reposed trust in the person, and that the person "prepared or procured" the Will.

Of course, no case says the above, and clearly indicates that you have two paths to take in proving undue influence for motion to dismiss purposes. Again, this is something of which the petitioning attorney must convince the judge.