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Wednesday, September 18, 2013

Au Revoir, Will Contests

Here’s an amazing fact for those of us in trusts & estates: in France, there are almost no will contests brought on the grounds of a lack of capacity, fraud, or undue influence.  In the United States, on the other hand, 3% and 5% of all wills executed will be contested, most commonly, on undue influence grounds.  Why the difference?

Two answers may be 1) the forced share of the estate that children receive in France and 2) the role of the notaire: a neutral, specialized type of attorney with authority from the French state to draft wills and be responsible for those wills.   

Although some commentators have advocated for the importation of these two aspects of French wills law to the American system, importation would be difficult given the structure of American law.  Wills law in the states favors giving forced shares to surviving spouses (through the elective share), not to children (through the forced share; an exception is Louisiana due to its civil law).  As for notaires, they are completely foreign to the American legal system.

However, there are other aspects of French wills law that could be more readily imported to reduce the number of will contests. 

For example, the neutral intervention of the legal system during the lifetime of the testator through the notaire can be recreated in the United States by antemortem probate.  Only Arkansas, North Dakota, and Ohio currently permit such antemortem probate statutes, which authorize a person to initiate, during life, an adversarial proceeding determining the validity of the will.  The proceeding allows judicial evaluation of the testator’s capacity, intent, and freedom from undue influence or fraud during the testator’s lifetime, which has the obvious benefit of the presence of the testator at the proceedings.

Another easily adoptable aspect of the French system is a registry for wills.  The registry would consist of a centralized location to deposit wills upon their execution to ensure that they do not disappear or encounter tampering.  Officials registering the wills could check the wills to ensure their compliance with statutory formalities before their registration.  For example, officials could check for the testator’s signature and the requisite number of witnesses.             

Will contests are expensive in terms of judicial resources and the depletion of the estate, so it is important to safeguard against them to the extent possible.  Of course, it may be difficult to eliminate them entirely in the United States given that they are often driven by high emotion, as implied by the fact that small estates are as contested as significant ones.   

Posted by Margaret Ryznar on September 18, 2013 at 12:10 PM | Permalink

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Comments

Thanks for the interesting facts regarding French wills law about which I was unaware.

I do agree that a forced share for children (although politically unrealistic) would reduce will contests in the U.S.

But isn't it true that antemortem probate is rarely used in the states where authorized? If that's the case, I'm not sure making it available in more states would have much impact on will contests.

Also, some jurisdictions do allow wills to be deposited with the court in a registry for safekeeping. I don't think that is used much either.

And how would implementing these two suggestions affect nonprobate transfers?

Finally, why is a 3-5% will contest rate problematic? Are you assuming that most or many of those contests are without a reasonable basis? Or is it only because, whether or not warranted, litigation is an inefficient way to resolve these issues ("expensive in terms of judicial resources and the depletion of the estate")?

Posted by: Kent Schenkel | Sep 17, 2013 2:16:45 PM

At least in New York, wills can be deposited with the court for safekeeping during the testator's lifetime. This is not a common procedure, though. I wonder whether there is any empirical study of cases in which New York testators do deposit their wills with the court, though. Are will contests less likely, or even more likely?

Posted by: Bridget Crawford | Sep 17, 2013 5:36:19 PM

Love the title of this post, Margaret. Just sayin'.

Posted by: Steven R. Morrison | Sep 17, 2013 5:53:50 PM

Thanks for all the great comments.

I think a 3-5% will contest rate is problematic for all of the reasons that Kent suggests: 1) not all will contests are valid (with meritorious claims), and 2) valid contests should never have come to be: the issues underlying them should been addressed before the will's execution, when it would have been far cheaper.

It is very interesting to me that both antemortem probate and the registry of wills are rarely used in the states that permit them, which I understand to be the case across the board. I wonder if the low use of these tools is another gap between theory and practice in this area of law: it's no secret that not every person who should write a will does, and that best practices are not used in every will that is drafted. Data on the success of these tools might persuade people to use them more, although I am not familiar with any studies on the issue. I think, for example, a study on New York registered wills would be a great idea.

I think nonprobate transfers face some of the same issues; trust contests are the replacement for will contests. However, if wills law is able to make the will more reliable, perhaps more people will use it instead of nonprobate transfers.

Posted by: Margaret Ryznar | Sep 17, 2013 10:47:22 PM

It can present tricky problems as anyone who owns a second home in France discovers (a lot of Brits and French émigrées do.) The difficulty is that owning any real property in France pretty well compels the owner to have a French will - but their domicile in another country will usually mean a will in that country too. Each country will usually have some statutory forced shares or required provision for at least minor and dependent children - which may vary somewhat - and some will also have a forced share for wives (and in Ireland potentially even former fiancées under the Family Home Protection Act.) So if you have for example clients with a handicapped child and a second home in France held say through joint tenancy, the will arrangements can present some problems - one solution is to incorporate the French will by reference in the domestic will.

Posted by: MacK | Sep 18, 2013 4:40:43 AM

Wonderful post. A couple years ago, I had the pleasure of speaking with a group of French law students visiting Rutgers from Paris. We discussed the topic of will contests and the French students agreed that the concept was foreign for the precise reasons stated here.

Posted by: Reid K Weisbord | Sep 18, 2013 8:35:23 AM

Arizona and Connecticut harassment statutes under facial attack as over-broad and vague concerning 1st amendment expression. 5 motions in the below,

http://www.scribd.com/doc/166451048/Summary-Judgment-filing-against-Arizona-Vermont-and-Connecticu

Posted by: scott huminski | Sep 18, 2013 10:22:13 AM

The notaire is also required for a mortgage in France. Notaires charge significant fees (enough to discourage most mortgage refinancing). I assume they do so too for wills. So this raises the question of whether it is better for everyone to pay a higher ex ante price than for there to be a presumably much higher ex post price to a small number of people because of will contest litigation. Basically do we mandate insurance for all even though only a small percentage of cases will result in claims?

My off-the-cuff temptation is to say "no" here. It is relatively easy to identify ex ante those cases where the will is likely to be challenged (where children are cut out of the will). That means it is possible for testators in high-risk wills to "insure" and take the steps to establish testamentary intent with adequate clarity so as to defeat incapacity/undue influence attacks. Assuming that these testators don't want to see their wills contested (and possibly overturned), they should want to take the steps to ensure that their wills will hold up. That is, they should want to internalize the cost, rather than require a mandatory insurance system for all via notaires.

Posted by: Adam Levitin | Sep 19, 2013 1:53:22 PM

Thanks, Reid.

Adam, you raise a great point. My understanding is that the Notaire does not cost substantially more than a U.S. wills attorney, and potentially costs less. The holographic will, most used in France, is about 150-200 euros with advice from the Notaire (granted, it is free in the U.S. if one doesn’t use an attorney). The authenticated will is a notarial deed in France so it is more expensive: approximately 500 euros, which includes tax, the national register cost, and regulated fees. Upon the testator’s death, there are some additional fees, but again, not all of those go to the Notaire. Thus, the Notaire fees for wills seem less of a disincentive than in the refinancing context—especially if one considers that U.S. wills attorneys are not free either.

But, if we were to assume that the Notaire system were more expensive because of some premium for insurance a Notaire provides against will contests, you make a great point that the premium is not worth it for the vast majority of testators, whose estates will not be contested.

Posted by: Margaret Ryznar | Sep 20, 2013 7:55:15 PM

MacK,you are absolutely right--it can be surprising to those who own property in France that a forced share for children will apply. Fortunately, it seems like Regulation (EU) no 650/2012 will solve some of the conflict-of-law and multiple will issues.

Posted by: Margaret Ryznar | Sep 21, 2013 12:08:13 AM

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