Lack of Capacity to Make A Will In North Carolina

One of the grounds upon which a North Carolina will may be successfully contested is that the testator (person making the will) lacked the mental capacity to do so. In North Carolina, a person has sufficient capacity to make a will if he  (1) comprehends the natural objects of his bounty; (2) understands the kind, nature, and extent of his property; (3) knows the manner in which he desires his act to take effect; and (4) realizes the effect his act will have upon his estate. In re Womack, 53 N.C.App. 221, 280 S.E.2d 494, disc. rev. denied, 304 N.C. 391, 285 S.E.2d 837 (1981); see generally 13 Strong’s N.C. Index 3d, Wills, § 22; Wiggins, Wills and Administration of Estates in North Carolina, § 43 (2d Ed.1983). The law presumes that a person who made a will possessed capacity to do so, and those who allege otherwise have the burden of proving by the preponderance or greater weight of the evidence that he lacked such capacity. In re York, 231 N.C. 70, 55 S.E.2d 791 (1949).

Proving a lack of capacity is often difficult and typically requires medical records of the testator. In order to have standing to bring a successful case, a plaintiff must have been named a beneficiary under a prior will revoked by the contested will or have been an heir at law of the testator prior to the will’s execution. Contact North Carolina probate litigation attorney Evan Lohr at (919)348-9211 or evan@lohrnc.com to discuss your potential case.

The Dead Man’s Statute – NC Rule of Evidence 601(c)

Estate litigation poses significant challenges to parties and practitioners, not the least of which is that the person whose wishes should dictate the distribution of the property at issue in a dispute is dead. In many cases, parties seek to introduce purported statements of the deceased as evidence to support their claims. Rule 601(c) of the North Carolina Rules of Evidence applies in these circumstances and serves to render a witness incompetent “when it appears (1) that such a witness is a party, or interested in the event, (2) that his testimony relates to … a communication with the deceased person, (3) that the action is against the personal representative of the deceased or a person deriving title or interest from, through or under the deceased, and (4) that the witness is testifying in his own behalf or interest.” In re Will of Lamparter, 348 N.C. 45, 51, 497 S.E.2d 692, 695 (1998)(quoting Godwin v. Wachovia Bank & Trust Co., 259 N.C. 520, 528, 131 S.E.2d 456, 462 (1963)). The text of the rule is as follows: “Upon the trial of an action, or the hearing upon the merits of a special proceeding, a party or a person interested in the event . . . shall not be examined as a witness in his or her own behalf . . . concerning any oral communication between the witness and the deceased person . . . .” N.C.G.S. § 8C-1, Rule 601(c).

Both propounders (the person submitting the will for probate) and caveators (the person challenging the validity of the will) may be considered interested persons. In re Will of Hester, 84 N.C. App. 585, 595, rev’d on other grounds, 320 N.C. 738 (1987). However, the named executor is not. Id. at 595–96. The effect of the rule is to prohibit testimony by interested persons regarding oral communications between themselves and the decedent about the will, the decedent’s intent to make a new will or to change the beneficiaries of his will, or about the desired disposition of his property.

In conducting discovery and examining witnesses, practitioners asserting the protection of the rule must be careful to avoid waiving it. In a long line of cases, including Wilkie v. Wilkie, 58 N.C.App. 624, 294 S.E.2d 230, disc. rev. denied, 306 N.C. 752, 295 S.E.2d 764 (1982), the appellate courts have held that when a party elicits incompetent evidence under the Dead Man’s Statute, the party then waives any protection afforded by the Statute.  Id. at 627, 294 S.E.2d at 231.   In that case, the plaintiff answered interrogatories implicating the Dead Man’s Statute and there were no objections made by either party to the interrogatories themselves or the answers given.  Id. at 626, 294 S.E.2d at 231. Counsel may avoid a situation such as the one in Wilkie by not asking questions that elicit evidence of oral communications between the deceased and the opposing party and by promptly objecting to, and moving to strike, answers given that concern such communications.

Evan Lohr is a trust and estate attorney with Lohr and Lohr PLLC. He can be reached at (919)348-9211 and evan@lohrnc.com.

Undue Influence as a Ground for Will Contests in North Carolina

A will caveat is a challenge to the validity of a will that has been submitted for probate. The purpose of a caveat is to determine whether the writing purporting to be a will is in fact the will  of the person for whom it is propounded. The Superior Court presides over caveat proceedings before a jury, and the issue for the jury is the question of devisavit vel non – “he devises or not.”

There are many potential grounds for a caveat, including lack of testamentary capacity, duress, and fraud. This post explores the relevant law when a challenger(“caveator”) alleges that the will was procured by undue influence. In some cases, only one writing will be in issue; in other cases, the caveator may present another writing as the purported valid will. The jury may decide that one of the wills is valid. If not, the estate will be administered by intestate succession.

Undue influence occurs when “Something operat[es] upon the mind of the person whose act is called into judgment, of sufficient controlling effect to destroy free agency and to render the instrument, brought in question, not properly an
expression of the wishes of the maker, but rather the expression of the will of another.” In Re Will of Jones, 362 N.C. 569, 575, 669 S.E.2d 572, 578 (2008). The four elements that a caveator must prove to succeed in an action are: a) the decedent is subject to influence; b) the beneficiary has opportunity to exert influence; c) the beneficiary has a disposition to exert influence; and d) the resulting will indicates undue influence. In addition, the North Carolina Supreme Court has outlined a number of factors to assist juries in determining whether undue influence was present:
(a) Old age and physical and mental weakness;
(b) That the person signing the paper is in the home of the beneficiary and subject to his constant association and supervision;
(c) That others have little or no opportunity to see him;
(d) That the will is different from and revokes a prior will;
(e) That it is made in favor of one with whom there are no ties of blood;
(f) That it disinherits the natural objects of his bounty;
(g) That the beneficiary has procured its execution.
In Re Will of Andrews, 299 N.C. 52, 55, 261 S.E.2d 198, 200 (1980).

For a recent and thorough example of the application of Andrews factors to a set of facts, see  In Re Will of Jones, 362 N.C. 569, 575, 669 S.E.2d 572(2008).

Evan Lohr is an estates attorney in Raleigh. He can be reached at evan@lohrnc.com or at (919) 348-9211.

Can I Request a Spousal Elective Share and File a Will Contest?

According to the North Carolina Court of Appeals, yes. In In re Will of Shepherd, decided last month, the court held that the doctrine of election of remedies does not bar a person contesting a will (a “caveator”) from sustaining a will contest (“caveat”) action while also seeking payment of their statutory elective share. The court found this to be the case because payment of a spousal elective share and the caveat of a will are not inconsistent remedies.

The court also rejected the propounder’s argument that the doctrine of judicial estoppel should bar the caveat action. The court determined that judicial estoppel was not applicable in this case because the caveator did not make clearly inconsistent factual assertions.

This holding is good news for spouses left out of wills who believe they have a legitimate claim that a purported will should be set aside due to claims that the testator was subject to fraud or duress, or lacked testamentary capacity. In practice, the court’s decision means that many disinherited spouses who contest their deceased spouse’s will may be able to receive payment of at least a portion of their spousal elective share during the pendency of the suit.

Evan Lohr is an estates attorney in Raleigh. He can be reached at evan@lohrnc.com or at (919) 348-9211..

“In Terrorem” Clauses

Many wills include provisions that are referred to as “in terrorem” or “no contest” clauses. An example of this type of clause may read, “In the event that any provision of my last will and testament is contested by any of the parties mentioned herein, the portion or portions of the estate to which such party or parties would be entitled shall be disposed of in the same manner as though their name or names had not been mentioned herein.” Essentially, the goal of an in terrorem clause is to attempt to dissuade a beneficiary from contesting a will in court. It should be pointed out that these clauses have no effect on someone who is not a beneficiary under the will submitted for probate – if they have no beneficial interest under the will as it is written, then they have nothing to lose by contesting the will.

Moreover, the presence of a no contest clause does not necessarily mean that a beneficiary will lose their inheritance if they file an action to contest the will. In Ryan v. Wachovia Bank & Trust Co., 235 N.C. 585, 70 S.E.2d 853 (1952), the North Carolina Supreme Court found that in terrorem clauses would not be enforced when the caveat is based on good faith and probable cause. In addition, it is generally held that the provisions of a “no contest” clause are to be strictly construed and not extended beyond their express terms. Haley v. Pickelsimer, 261 N.C. 293, 134 S.E.2d 697 (1964).

If you are a named beneficiary in a will that contains an in terrorem clause and want to contest the will, it is advisable to consult with an attorney prior to doing so, to ensure that contesting the will does not result in the loss of your interest under the will.

Evan Lohr is an estates attorney in Raleigh. He can be reached at evan@lohrnc.com or at (919) 348-9211.

Trust Reformation in North Carolina

Reformation of a North Carolina Trust Pursuant to N.C.G.S. 36C-4-415

Suppose that Mr. Smith created a trust during his lifetime that he intended to benefit his two daughters and his nephew at his death. When drafting the trust, Mr. Smith’s lawyer mistakenly omitted language naming the nephew as a beneficiary of the trust. After Mr. Smith’s death, the trustee administers the trust according to the terms of the document. Does Mr. Smith’s nephew have any means of recourse?

Historically, the nephew would have been unlikely to succeed in an action to recover his interest under the trust. However, since the codification of the North Carolina Uniform Trust Code, Mr. Smith’s nephew may be able to reform the terms of the trust to include the provision naming him as a beneficiary. N.C.G.S. 36C-4-415 provides that:

”[t]he court may reform the terms of a trust, even if unambiguous, to conform the terms to the settlor’s intention if it is proved by clear and convincing evidence that both the settlor’s intent and the terms of the trust were affected by a mistake of fact or law, whether in expression or inducement.”

The statute represents a substantial departure from the prior approach and provides aggrieved parties with a significant means of recourse: if the aggrieved party can prove by clear and convincing evidence that the person who created the trust intended to include a term but did not because of a mistake of fact or law, then a court may reform the terms of the trust to include that term. In the case of Mr. Smith’s nephew, he could petition the court to include him as a beneficiary of the trust in whatever amount the settlor intended.

As of this writing, no North Carolina appellate court has interpreted 36C-4-415, so it is unclear what its reach will ultimately be. It does, however, provide hope to intended beneficiaries mistakenly left out of trust documents.

Evan Lohr is an estates attorney with Lohr and Lohr PLLC in Raleigh. He can be reached at evan@lohrnc.com or at (919) 348-9211.