Wednesday, May 27, 2009

Another Undue Influence Case ... With Some Twists

I read about a recent trial involving a challenge to a will and transfers of property during the decedent's lifetime based on undue influence, and as to the will on the alternative basis that it was forged. The case, Leitner v. Shimanski was against the decedent's housekeeper, who moved in with the decedent for a period of time before the decedent died. The decedent transferred two BMWs and about $67,000 in cash to the housekeeper before he died, and before he died executed a new will leaving everything to his housekeeper, effectively disinheriting his three daughters. The jury invalidated the will (though did not indicate whether on the basis of undue influence or forgery) as well as the lifetime transfers.

The case was tried before a jury by Brian Brake, an attorney with the Lenhart Obenshain firm in Harrisonburg, who I talked to about the case. A couple of things about this case are interesting.

First, a Virginia will contest is normally brought under a specific statute that calls for a jury to determine if the will (or one of several wills) is the true last will and testament of the decedent. Virginia courts have generally held that a will contest brought under that statute is limited to determining if a will or one of several wills is valid. So normally, claims related to non-probate assets cannot be heard in the will contest. In this case, the plaintiff initially brought two suits, the will contest and a separate suit challenging the lifetime transfers. Ultimately, the defendant agreed to have all of the claims heard in one trial by the jury. My guess is this was a cost-saving move (one trial instead of two), but doing it that way allowed the jury to hear a lot more evidence of undue influence since all of the evidence related to the lifetime transfers was introduced in the case as well.

The other interesting aspect of this case is the court allowed the jury to award attorneys fees to the plaintiff (the amount will be set by the court at a later hearing). As I discussed in my March 14, 2009 post, it can be difficult to recover attorneys fees in civil litigation generally. One exception is if the plaintiff can prove actual fraud. Undue influence is considered a type of fraud by Virginia courts, so it is possible to get an award of attorneys fees in an undue influence case. But in my experience, this is the exception rather than the rule.

Wednesday, May 13, 2009

Virginia Adopts Uniform Power of Attorney Act...Almost

The Uniform Power of Attorney Act (the "Act") was passed by the Virginia General Assembly in the past session - sort of. It's confusing when you look at the actual Acts of Assembly that sets out the bill as passed, but the bottom line is the Act will not go into effect on July 1, 2009, as it states in the actual text of the Act. Rather, the very last line of the bill as passed states:

That the provisions of this Act shall not become effective unless reenacted by the 2010 Session of the General Assembly.

I spoke with Senator John Edwards, the sponsor of the bill, and he said that the reenactment provision was needed to get the bill passed. He expects the Act to be re-introduced next year and passed in a form close to what was passed this year. But he said that if anyone has comments or suggested changes to the Act as passed this year, they should feel free to send them to him.

The delay is in part designed to give interested parties like lawyers, banks and other businesses time to review and analyze the Act so that everyone understands how the Act will change the way that POAs are used in Virginia.

There has been some confusion among folks I have talked with about the effective date of the Act, so I thought I would post and try to clarify when and how the Act likely will become law in Virginia.

Tuesday, May 5, 2009

Will Formalities: Some Statutory Relief

Based on the documents I see that are pretty clearly intended to be a person's last will and testament, it is clear that many folks don't know what is required to validly execute a will under Virginia law. From online and office supply forms, to handwritten and typed wills, I often see documents people intend to be their will, or a change to their will, that don't comply with the legal requirements.

Though there are a few exceptions and some gray areas, generally a typed will must be signed by the person whose will it is (the testator), and signed by two witnesses present at the time the testator either signs the will or acknowledges to the witnesses that it is his or her will. Most often, people get tripped up by the requirements related to witnesses. (A will can also be handwritten, but only if it is signed and wholly in the testator's handwriting and two disinterested people can verify the person's handwriting after death).

These technical failures to comply with the statutory requirement have led to many Virginia will contests. But, the point of this post is not to cover all of the gray areas and potential pitfalls of complying with the requirements of a will. Rather, it is important to know about a Virginia statute that can save a will if the testator didn't comply with the statutory requirements.

Virginia Code Section 64.1-49.1 states:

Although a document, or a writing added upon a document, was not executed in compliance with §64.1-49 [the statute that sets out the requirements for executing a will] the document or writing shall be treated as if it had been executed in compliance with § 64.1-49 if the proponent of the document or writing establishes by clear and convincing evidence that the decedent intended the document or writing to constitute (i) the decedent's will, (ii) a partial or complete revocation of the will, (iii) an addition to or an alteration of the will, or (iv) a partial or complete revival of his formerly revoked will or of a formerly revoked portion of the will.

The remedy granted by this section (i) may not be used to excuse compliance with any requirement for a testator's signature, except in circumstances where two persons mistakenly sign each other's will, or a person signs the self-proving certificate to a will instead of signing the will itself and (ii) is available only in proceedings brought in a circuit court under the appropriate provisions of this title, filed within one year from the decedent's date of death and in which all interested persons are made parties.

The purpose of the statute is clear and well-intentioned: If someone doesn't comply with the witness requirements, it can still be a valid will if it is clear that's what the person intended, though a lawsuit will have to be filed to get the will declared valid. The goal is clearly to prevent some pretty silly lawsuits and to allow a person's clear wishes to be carried out despite a failure to comply with the statutory requirements.

This statute was enacted in 2007, and no reported cases have yet applied the statute (though the Virginia Supreme Court mentioned it in a footnote in a 2008 case). I have a case right now that will hinge in part on whether this statute will save a will that was not properly witnessed or otherwise executed in compliance with the statutory requirements. I'll let you know what happens.