By Eileen Moore and Sarah Sweet
We return to the scenario presented in a previous article, “Premortem validation could help avert will, estate contests” (Indiana Lawyer, Oct. 16, 2019). Recall that the mother (“mom”) changed her will six months before her death, giving the entire estate to her caregiver-daughter (“daughter”) and leaving nothing for her out-of-town son (“son”). Since Indiana has not yet enacted pre-mortem validation statutes for wills or trusts, daughter and son must argue the validity of the final will in court after mom has passed. This article discusses how the scenario (and a similar one dealing with a revocable trust) might play out under current Indiana law.
Determining the validity of mom’s will
In Indiana, will validation occurs during the probate process. Assuming mom’s estate is valued at or above $50,000, daughter delivers the will to the court for administration of the estate. Within three months after the date of the order admitting the will to probate, any interested person — e.g., son — may contest the validity of the will by filing a formal, verified complaint in the existing probate action (“the complaint”).
The complaint should state the facts showing son’s right to contest the will and must allege the incapacity of mom, the undue execution of the will or make any other valid objection. The undue execution of a will encompasses many specific challenges such as: (1) lack of proper execution pursuant to Indiana Code § 29-1-5-3, (2) undue influence over the testator when she executed the will, or (3) the execution of the will as a result of fraud.
The complaint must name all interested persons as defendants, and son must serve notice to all defendants in the same manner required by the Indiana Rules of Trial Procedure. According to the Indiana Supreme Court, an “interested person” means any person having an interest in the estate of the testator, as well as a necessary and indispensable party (e.g., the personal representative). Here, daughter — as the personal representative and a person having an interest in the estate — is a necessary and indispensable party. Son names daughter as a defendant and properly serves her with the complaint.
In the complaint, son alleges that mom lacked capacity when she signed her will and that daughter pressured mom into disinheriting him. Son, as the contestant of the will, has the burden of proving his allegations. As to the issue of capacity, Indiana presumes every person is of sound mind to execute a will. In order to overcome this presumption, son cannot just show that mom was of unsound mind at the time of execution. He must show that mom was not mentally capable of understanding the act of executing the will and did not have the capacity to comprehend the extent and value of her property, those who are the natural objects of her bounty and what they deserve based upon their treatment and conduct toward her. If, however, mom was adjudicated incapacitated prior to making the will, the presumption shifts and daughter must prove that mom had the requisite degree of capacity when she executed the will.
As to the son’s second allegation that daughter exerted undue influence on mom while acting as her caregiver, the burden shifts to daughter because of the nature of her relationship with mom. Under Indiana law, the existence of a confidential relationship, such as one between a parent and a child where the parent depends on the child for day-to-day care, may shift the burden to the dominant party to rebut the presumption of undue influence. In the last six months of her life, mom was dependent on daughter as her full-time caregiver. As a result, daughter would have to show by clear and convincing evidence that she acted in good faith in taking mom to a lawyer to change her will and that she did not take advantage of her position of trust.
It is likely that the litigation regarding mom’s capacity will drag out for years. Son and daughter will engage legal counsel and likely experts to defend their positions. They will incur significant legal fees. There will be a diminution of mom’s estate and an irreparable breakdown in their relationship. Ultimately, if son is successful, the court will revoke probate of the will, which will be deemed void for all purposes. Depending on the circumstances, an earlier, properly executed will may be revived, or the administration of the estate may proceed intestate.
Determining the validity of mom’s trust
Assume that instead of a will, mom had established and funded a revocable trust six months before her death, disinheriting son and naming daughter as the trustee. In Indiana, a person may initiate a post-mortem action to contest the validity of a trust that was revocable at the time of the settlor’s death. The proceeding to commence a trust contest may occur within three years of the settlor’s death. But daughter doesn’t want to wait that long. She wants to get the process of administration over and plan her trip to Fiji. She knows that son does not always act timely and wants to avoid conflict, if possible.
Under Indiana law, daughter can shorten the time for filing a trust contest by taking the following steps. First, daughter must send son a copy of the trust or a trust certification containing the information set forth in Indiana Code § 30-4-4-5, such as the date the trust was executed, the identity of the settlor and the identity of the trustee, among other things. Second, daughter must send son a notice informing him of: (1) the trust’s existence, (2) daughter’s name and address (as trustee), (3) son’s interest in the trust or that son has no interest in the trust, and (4) the time allowed for commencing a proceeding contesting the trust. If son receives both the trust certification and notice, he must bring an action within 90 days.
Even though son has no present interest in the trust, Indiana courts have held that a person may challenge the validity of a trust if he is entitled to some interest in the property if a court declares the trust invalid. For example, son may be in a position to challenge the validity of the trust because he would receive part of the estate if the court declared the trust invalid.
Ultimately, son would have 90 days to determine whether he had a valid claim to challenge the validity of the trust. In reaching that decision, like the will contest, he would have to decide if mom had the mental capacity to create the trust at the time of its execution. He may also consider whether the trust is invalid as a result of mistake of fact, fraud or undue influence.
If son brings a legal action, he has the burden of either showing that mom lacked capacity under the same standard applied to capacity for executing a will or proving any other theory upon which his contest lies. If son succeeds and the court finds that mom lacked capacity to execute the trust, or that daughter exerted undue influence over mom, the trust will be declared invalid. Regardless of the outcome, the trust contest will be as taxing, expensive and distressing as the action to contest the will.
This article exposes the limited nature of will and trust validation under current Indiana law and the tension that arises among family members arguing over their loved one’s estate after her death. The Indiana State Bar Probate Review Committee is considering the issue of whether Indiana should adopt a pre-mortem validation statute for wills and trusts. For a more detailed discussion of the effect of pre-mortem validation statutes and the various forms enacted in other jurisdictions, see the article “Premortem validation could help avert will, estate contests.”•
• Eileen Moore is a partner and Sarah Sweet is an associate at Ice Miller LLP. Opinions expressed are those of the authors.