What is a Will Contest?

What happens when a prospective heir, devisee or legatee is disappointed to learn that they’ve been disinherited, or have been left a less than what they feel they deserve under a Last Will and Testament? This situation can often give rise to a will contest. In Indiana, a will contest is a special type of lawsuit with specific and unique requirements, as set forth in Indiana’s probate code.

In Indiana, any interested person (for purposes of the probate code, “interested persons” means heirs, devisees, spouses, creditors, or any others having a property What happens when a prospective heir, devisee or legatee is disappointed to learn that they’ve been disinherited, or has been left less than what they feel they deserve under a Last Will and Testament? This situation can often give rise to a will contest. In Indiana, a will contest is a special type of lawsuit with specific and unique requirements, as set forth in Indiana’s probate code.

In Indiana, any interested person (for purposes of the probate code, “interested persons” means heirs, devisees, spouses, creditors, or any others having a property right in or claim against the estate of a decedent being administered) may contest the validity of any will in the court having jurisdiction over the probate of the will within three (3) months after the date of the order admitting the will to probate by filing in the court the person's allegations in writing verified by affidavit, setting forth:
(1) the unsoundness of mind of the testator;
(2) the undue execution of the will;
(3) that the will was executed under duress or was obtained by fraud; or
(4) any other valid objection to the will's validity or the probate of the will.

Indiana’s probate code requires that the executor and all other persons beneficially interested in the will shall be made defendants to the action, and notice must be served upon those defendants in the same manner as required by the Indiana Rules of Trial Procedure. In addition, the contesting party must also serve a copy of the complaint on the counsel of record, if any, for the personal representative.

One unique requirement of will contests, is that at the time of filing a verified complaint to contest the will, the plaintiff in the action, or some other person on the plaintiff's behalf, must file a bond with sufficient sureties in an amount approved by the court, conditioned for the due prosecution of the proceedings and for the payment of all costs if in the proceedings judgment is rendered against the plaintiff. This is very different from the filing of most other lawsuits.

Once the will contest is properly filed, the contesting party bears the burden of proof to show the existence of one of the following reasons that the probate of the will should be revoked and such will set aside in favor of a previous will or intestate succession.
(1) the unsoundness of mind of the testator;
(2) the undue execution of the will;
(3) that the will was executed under duress or was obtained by fraud; or
(4) any other valid objection to the will's validity or the probate of the will.

Obviously the grounds for which a will can be set aside are each fact sensitive determinations. Accordingly, building a case to either prove or disprove the existence of any of these grounds typically involves reliance on discovery requests, medical records, deposition testimony, etc. At Halcomb Singler, we are experienced in helping clients obtain the information and evidence they will need to vigorously pursue or defend will contest suits.

If you have questions about potentially contesting a will, or if you are administering a will that may be subject to a will contest, you should consult with counsel immediately, as the time limits and procedural requirements are strict and difficult to navigate. At Halcomb Singler we are happy to consult with potential clients regarding probate litigation matters, and can utilize our experience to help clients navigate those dangerous waters, helping them to obtain a just resolution through pragmatic advice.  If you have questions, please contact us at (317) 575-8222 to schedule an appointment, or check out our website for additional info at www.halcombsingler.com.   

Online Estate PLanning: To Zoom, Or Not To Zoom...

I’ve wanted to address this topic for some time, as it’s kind of a hot-button issue, but I’ve been putting it off probably for that very reason.  I had an experience this week that pushed me off the fence and into the blogosphere about it. 

One of my many quirks is that I love to listen podcasts, my favorite of which is “The Joe Rogan Experience.”  I listen to every single Joe Rogan podcast and have them automatically downloaded to my phone when new ones are released.  This week, while running through his sponsors at the start of the show, Joe did a promotional bit for one of the podcast sponsors, an online legal document website, in which he mentions how said website can help you create a will and other estate planning documents quickly and cheaply.  You've probably heard similar promos on the radio.  In mentioning the reasons why one should use this website to create a will or trust, the discussion quickly turned toward estate taxes that can be imposed on amounts to be inherited.  First, this is not an indictment of Joe or his guest, as it’s not specifically stated by Joe or the guest that creating a will through the aforementioned website will eliminate or minimize any estate tax liability, but it would be very easy for a listener unfamiliar with estate and tax laws to infer that from the conversation.  I was yelling back at the car stereo at this point, as I wanted to interject a disclaimer warning listeners that simply creating a Will doesn’t necessarily affect your estate tax liability.  Because no one, except my kids in their car-seats behind me, could hear me, I’m going to posit my comments in written form here:

11.     The federal estate tax typically only affects estates in excess of $5,340,000.00 (in 2014), and in Indiana there is no longer a separate state inheritance tax.  Some states still have additional estate or inheritance taxes, but it’s still an incorrect inference to take from the discussion that a Will automatically shields you or your loved ones from that liability if it exists.   

If you do have an estate large enough to get hit by the federal estate tax, the tax rates can be as much as 40% on the amount to be inherited.  I’m terrified by the idea of someone with an estate potentially large enough to be dealing with estate tax liability trying to use a “self-help legal website” to create their estate planning documents.  The stakes are too great to not be absolutely sure it’s done correctly.

22.     Don’t take this as a personal affront, but unless you’re an estate planning attorney, you probably don’t know exactly what kind of estate planning documents you need. 

This is very much akin to a novice golfer ordering a set of clubs online because they are a little cheaper than purchasing from a professional club-fitter.  That novice may end up with a set of clubs that is horribly mismatched for his height, swing-speed and swing trajectory.  However, he may use them his entire golfing career without ever knowing anything is wrong except that he’s just not a very good golfer.  That same principle applies to estate planning documents.  I don’t care how intelligent you are or how much research you’ve done on the topic, it’s not likely that you (or a questionnaire on a website) can know or pose all the relevant questions to ask to begin to correctly diagnose your situation. 

The vast majority of my clients will start out our initial conversation by telling me that they “just want a simple will.”  As I talk with them about their families and assets, I usually discover that, for the majority of them, a “simple will” is not an appropriate vehicle to help them achieve their objectives at all.  The questions asked by a skilled estate planner in a face to face conversation are the only way to be sure that what you’re getting what you really need.   

3.       3.    The savings to be had by using an online legal document website are probably not that great, or at least not great enough to offset the potential risks of not having that face to face meeting with experienced and local counsel.  I’ve run through the pricing structures online in the past and, by the time all the fees and “extras” are added in, you’re pushing pretty close to the “real live attorney” price.  My advice is: Don’t try to save a little cash by putting a band-aid on a wound that “might” need stitches.  You don’t know if it does or not, and only a professional is going to be able to tell you for sure.

If you have questions or concerns about any of these issues, please feel free to contact me at (317) 575-8222, or email me at greg@halcombsingler.com

***Please be advised that nothing in this blog should be considered legal advice. In order for me to give legal advice, it would be necessary for me to meet with an individual and discuss his or her unique situation before rendering a legal opinion or strategy.

Please also be advised that any comment or communication posted here will not be considered confidential and does not create an attorney-client relationship with me or our firm. Also note that I do not seek to practice law in any jurisdiction in which I am not licensed to do so.

Estate, Property and Health Care Planning for Same-Sex Couples in Indiana

The debate surrounding HJR-3 in the Indiana House of Representatives serves to highlight a fact that hoosier same-sex couples have known for some time:  Indiana doesn’t exactly foster a hospitable legal environment for same-sex couples.   Simple rights and privileges granted to heterosexual married couples, many of which we take for granted, are almost always inapplicable to same-sex couples.  Accordingly, it is especially important for same-sex couples in Indiana to consult with legal counsel in order to avail themselves of the protection that the law does afford to them, and to help them create legally binding documents and contracts to help place them on a slightly more equal legal footing with married couples.  Here are some examples:

Health Care Representative and Power of Attorney:   

Parties to a heterosexual marriage are entitled to some common rights and responsibilities with regard to decision-making for their spouse, should he or she become incapacitated or unable to look after his or her own affairs.  Health care providers will almost certainly allow a spouse in to visit a hospitalized spouse, or to help make medical decisions on behalf of an incapacitated spouse.  It’s also a near certainty that there will be some preference given to a spouse should a legal guardian need to be appointed.  Same-sex couples do not receive these preferences, and can easily be shut out of these important decision-making roles. This unfortunate consequence can be avoided however, through sound legal planning. if it is important to you that your same-sex partner be entitled to visit you in the hospital, talk with your doctors, and be given preference in dictating your course of treatment in the event that you cannot communicate for yourself, then it’s imperative that you consult with your attorney and execute a valid Health Care Representative designation so that these rights are contractually conferred and are enforceable under Indiana law.  Without the proper documents in place, a same-sex partner can be completely excluded from even visiting a sick or injured partner in this hospital.   

Cohabitation Agreements:  

What happens when, in the words of John Prine, "the dove of love falls off the perch?"  For married couples, there is a robust body of law to guide parties through a dissolution of that marriage.  Indiana has an entire section of the Code set aside for dealing with divorce issues including the procedural and substantive aspects of  dividing up and distributing property, payment of joint debts, etc.  Just like heterosexual married couples, sometimes same-sex couples find their relationship to be irretrievably broken, and desire to dissolve the relationship and divide and apportion their property, rights and responsibilities accordingly. However, unlike married couples, same-sex couples are left to wander in the darkness in search of a legal framework under which to carry out this split.  The standard laws of dissolution do not apply and often these disputes are hashed out using old common law claims and remedies that are ill-suited to deal with what the situation really is: a dissolution.   It is for this reason, same-sex couples who have taken it upon themselves to cohabitate, share property, share expenses should consult with legal counsel and strongly consider entering into a written cohabitation agreement.  This is simply a written contract, in some ways similar to a prenup, that dictates the rights and responsibilities of the parties in the event that a split does occur.   This process allows the parties to agree ahead of time how these situations will be dealt with, contractually, as opposed to leaving the decisions up to an applied framework constituted by an ill-fitting body of law.   

Estate Planning:

 What happens to the assets when when one partner in a same-sex couple dies without a valid will?   Probably not what he or she would have intended.  Dying without a will in Indiana means that the property of the deceased will be distributed under Indiana's laws of intestacy.  Here's a link to the actual code section if you want to read it yourself: (http://www.in.gov/legislative/ic/2010/title29/ar1/ch2.pdf), but for the sake of brevity, I'll summarize:  If you die without a will, and you leave behind no surviving legally recognized spouse, also leave no surviving "issue" (direct descendants like children, grandchildren), then your assets will first pass to your surviving parents, if any, and surviving siblings, nieces, nephews, and on down the line.  If one is in a committed same-sex relationship, this law can leave the surviving partner out in the cold, both literally and figuratively.  If this is not your intent, then it becomes very important to address these issues with an experienced estate planning attorney.  The most horrific possibilities are usually easily avoided through the use of well-drafted wills, trusts and other estate planning tools at our disposal.  

Same-sex couples face a less than ideal legal landscape in Indiana, and while there appears to be a shifting of public sentiment and of the political tide on these issues, change will likely happen slowly here in Indiana.  However, many of the common obstacles discussed above can be overcome through sound legal advice and a well crafted plan.  If you have additional questions about these issues, please feel free to contact us at (317) 575-8222, check out our website at www.halcombsingler.com, or email me directly at:greg@halcombsingler.com.  

JTWROS: Don't Take This Perilous Estate Planning Shortcut!

You've probably heard the term "Joint Tenants with Rights of Survivorship," or "JTWROS" for short.

The term essentially means a method of joint ownership by more than one person or entity whereby one owner's interest in the property automatically transfers to the other owner(s) upon his or her death.  I'm climbing on my soapbox today because the common misuse of this ownership arrangement as a "bootleg" or "DIY" estate planning tool is a personal pet peeve of mine, and another instance of it recently came across my desk.  A prospective client explained that he or she "added" a child to one of his or her accounts so that the child would be able to help the parent with banking tasks as the parent ages. This is not ALWAYS a bad idea, but it does come with some very serious risks.

So, why do I freak out when a client says:

"I put my daughter's name on my account so she can help me with my banking."

Here's why:

1. The statement above that the parent "put daughter's name on the account," is legally vague.  This could potentially be interpreted to mean that the daughter has been given signature privileges, has been made a Joint Owner with Rights of Survivorship, or has been designated as a authorized signer pursuant to a valid Power of Attorney.  Most commonly, in my experience, the client means that he or she has added the child as a Joint Owner with Rights of Survivorship.  Regardless, it becomes incumbent upon us to investigate to determine what "putting daughter on the account" really means.

2. Adding a child as a joint owner on an account places the assets in that account at unnecessary risk in that a joint owner of an account could simply empty the account on a whim leaving the parent with little, if any, recourse.  Taking into account the obligatory, "my child would never do that to me," statement from the client, and assuming that the child in question is a pillar of moral rectitude as parent asserts, then we move to the next set of risks...

3. Adding a child as a joint owner of an account potentially subjects the account to the claims of child's creditors.  This doesn't just mean that the funds might be attached by a traditional "creditor" like the child's credit card company or mortgage lender should the child default on a loan.  Maybe the child causes a car accident which result in damages exceeding his or her policy limits, or maybe the child gets a divorce and the "in-law" spouse claims the account funds should be split off to him/her. Do you know what happens when an account with the child's name on it as a joint owner is discovered by any of these aforementioned parties?  Often a discovery request is sent to the financial institution and the account is immediately frozen with little or no notice.  How upset would you be if you were unable to access your funds because one of these adversarial parties had the account frozen?

4. Making someone a joint owner of an account can foul up your previously executed estate plans.  Even if you've already made a will or a trust designating a particular distribution of your assets upon your death, making one child a joint owner (JTWROS) of an account or other property will result in that particular account or property automatically passing solely to that child upon your death. That will or trust that you went to the effort and expense to have prepared just became completely ineffectual with regard to that particular JTWROS account or asset. There's no automatic "reallocation" of assets from a will or trust to compensate the other child(ren) for not receiving the assets in that JTWROS account.  It usually just ends in a lopsided division of the assets and an awkward feeling amongst all the parties involved.  

All of these scenarios are easily avoidable through the use of proper estate planning methods instead of trying to take the JTWROS shortcut.  Your banker might be very knowledgeable and helpful, but it's not likely that he or she is also an attorney experienced in estate planning matters.  For this reason, it is imperative to seek the assistance of experienced legal counsel before attempting to add anyone to an account as a joint owner.  I assure you, there are almost always much safer ways to accomplish your goals without placing the assets in peril, and without costing an arm and a leg.  

If you have questions or concerns about this or other legal matters, please see our website at www.halcombsingler.com, or contact us at (317) 575-8222.

President Obama's 2014 Budget Proposal Calls for Estate Tax Hike

Casting aside the many other tax tweaks in the President's new proposed budget, I scoured the document for any proposed changes to the Federal Estate Tax.  It appears that, although he recently signed into law an increase in the Federal Estate Tax exemption amount allowing the first $5 million to pass tax-free, the new budget proposal ratchets that exemption back to $3.5 million.  Specifically, the budget calls for a return to the "2009 estate tax parameters," which leaves me wondering whether they intend to repeal the portability of the exemption between spouses, and whether there will be any attempt to curb the use of FLP's, LLC's and other business entities for minimizing the estate tax.

Here's the actual language used in the budget summary:

              "Return Estate Tax to 2009 Parameters and Close Estate Tax Loopholes.
The Budget returns the estate tax exemption and rates to  2009 levels beginning in 2018.              
Under 2009 law, only the wealthiest 3 in 1,000 people who die would owe any estate tax.
As part of the end-of-year “fiscal cliff” agreement, congressional Republicans insisted on permanently cutting the estate tax below those levels, providing tax cuts averaging $1 million per estate to the very wealthiest Americans. It would also eliminate a number of  loopholes that currently allow wealthy individuals to use sophisticated tax planning to  reduce their estate tax liability. These proposals would raise $79 billion over 10 years."

This may be much ado about nothing, as many are saying the proposal is dead on arrival in Congress, but it does indicate a desire to take back the estate tax concessions that were granted in the fiscal cliff deal.  Stay tuned.

Do You Need to Probate a Will?

Most folks, regardless of the value of their assets, will have made a Will at some point in their lives.  I'm often asked by family members after a loved one has passed whether it is necessary for them to probate the decedent's Will.  As with most legal questions, the answer is "it depends."

First, I should quickly explain what it means to "probate the Will." In Indiana, "probating" a Will, means to formally petition the Probate Court in the county in which the decedent resided at the time of his or her death to admit the Will into probate.  An Indiana estate attorney can prepare the necessary "Verified Petition to Probate Last Will and Testament," as well as the necessary proposed orders and Letters Testamentary that will be executed by the Court and the County Clerk, should the Court find in your favor that the Will should be admitted to probate.  Only then can the probate administration process actually begin.

The general rule in Indiana is that formal probate administration can be avoided if "the value of the gross probate estate, wherever located (less liens and encumbrances), does not exceed fifty thousand dollars ($50,000)." (See Indiana Code Section 29-1-8-1)

In estates where the value is under this $50,000 threshold, most of the necessary transfers of property can be conducted using what is commonly referred to as a "small estate affidavit."  An experienced estate attorney can prepare these affidavits for you, and more importantly, can evaluate the estate situation as a whole to determine whether the use of a "small estate affidavit," even if allowed by statute, is appropriate or advisable under the circumstances.

One should tread carefully, for example, if one of the estate assets happens to be real estate.  Even if the real estate value (less liens and encumbrances) is less than $50,000, it may be necessary to probate the Will and transfer the real estate through traditional probate administration to ensure that clear (and insurable) title to the property passes to the intended beneficiary.  

Also, it may be the case that even though the estate does not exceed $50,000 in value, the Will should be "spread of record."  This allows the Will to be admitted to probate without actually requiring a probate estate to be opened and without the need for formal estate administration.  One reason to file the Will with the Court to "spread the Will of record," would be to avoid the potential problems that can arise if additional assets are discovered later.  If a will is not offered for probate within three (3) years of the date of death, then it is not entitled to be admitted to probate, and the heirs will be stuck with passing the property according to the Indiana Laws of Intestacy.  In other words, it will be as if the decedent had never executed a Will at all.  Thus, if the will is admitted to probate without administration, and assets are discovered several years later, the Will can still be used as the mechanism to pass the property to its intended beneficiaries.

These are just a few of the many criteria that  your estate attorney will consider when helping you to make the decision as to whether to probate the Will of a deceased loved one.  The most important lesson is to always consult with experienced counsel before making any such decisions, as there are many pitfalls to which the "do-it-yourself-er" may succumb.
If you have questions about Wills, Trusts, probate issues, or other legal matters, please feel free to contact me at (317) 575-8222, or visit our website for more info at www.halcombsingler.com. 

How to get Guardianship / Letters of Guardianship

I've stressed in previous blog postings the importance of having an experienced attorney prepare valid Power of Attorney documents so that your designated family member or loved one can step in and legally manage your affairs should you ever become incapable of doing so. What happens if your loved one has (1) failed to take this advice, (2) is no longer capable of executing a Power of Attorney document, (3) needs someone to take over financial and/or medical decision making and (4) there is no valid written Power of Attorney document to be found?

If this has happened to you, then it's likely that the only solution to the problem is to have a probate court in the county of residence of the incapacitated person appoint someone to be a legal guardian.

In a nutshell, here's how the process works:

First, a determination must be made that the prospective ward is no longer able to manage his/her own affairs. It is helpful is this determination is made in conjunction with the prospective ward's treating physician or family doctor.

Second, after consulting with a qualified attorney, the attorney representing the prospective guardian will draft a Petition for Appointment of Guardian to file with the appropriate probate court. The court will then set the matter for a hearing at which the prospective guardian, the attorney, and the prospective ward (if he or she is able to attend) will appear before the court. The attorney will examine the relevant witnesses and enter their testimony into evidence so that the Court can make the necessary findings to enter a guardianship order.

Finally, If the Court finds that the legal standard has been met, then the Court will enter an order appointing guardian, and ordering that the County Clerk issue Letters of Guardianship. These Letters of Guardianship are the documents that banks, investment brokerages, and other institutions will require to prove that the guardian has legal authority to act on behalf of the ward.

If there are time-sensitive issues that must be addressed before it is practical to obtain a court hearing, then the prospective guardian may also petition the Court for emergency temporary guardianship which will give the guardian the authority to act in the interim until a formal permanent guardianship hearing can be held.

While this process may seem cumbersome, it is usually relatively easy to navigate so long as you are represented by experienced legal counsel. If you are struggling with these issues on your life, I urge you to contact an attorney and discuss your options and potential strategies before acting on your own and potentially creating unnecessary problems. If you are in Indiana, and have questions about guardianships, power of attorney, estates and estate planning, or other legal matters, please feel free to contact us at (317) 575-8222, or visit our website for more information at www.halcombsingler.com