Here’s a real-life scenario to ponder. Your mother has passed away of a rare cancer. You find yourself the executor of her estate. Your mother’s marriage to your step-father did not thrive, but she and your step-father never divorced. Upon your mother’s death, you discover she wrote your step-father out of her will. You and your siblings were never close to your step-father, and you disapproved of the way he treated your mother, so you are not surprised about the omission. But now your step-father requests that you pay him a portion of the estate. What do you do?
In Ohio and Kentucky, as well as in Florida (where much of this case played out), a surviving spouse who is written out of a will can obtain a percentage, or “elective share” of the estate simply by virtue of being the surviving spouse. He may claim this share in addition to any property held jointly with the deceased. The executor must make sure the estate pays the surviving spouse the correct percentage and dollar amount. When, as in this case, the executor does not get along with the step-parent and a disagreement develops over the value of the elective share, the problems become tricky to resolve.
In this case, most of the larger estate assets were easy to identify and value. But as is often the case in estate disputes, the problems centered on assets that weren’t worth much but carried high sentimental value. Though the surviving spouse did not want these items, he was so determined to prevent our client, the executor, from even viewing them that we had to get a court order to gain access to the condominium where they were located. The surviving spouse then removed everything from the condominium, relocated it to two different states, and refused to release any of it. Before long, there were three lawsuits: suits in Ohio and Kentucky to get control of the personal assets, and a probate suit in Florida where the surviving spouse litigated his elective share.
The executor faced a dilemma: on the one hand, how to distribute her mother’s property consistent with both her mother’s will and the elective share law; and on the other, how to stop the surviving spouse from spending the estate’s money to defend against antagonistic litigation.
These issues are not atypical in estate and probate litigation. But the intensity and duration of the problems – this case spanned 42 months – create a study in how to handle estate disputes effectively. With our guidance, the executor used litigation techniques to the estate’s benefit. First, she boxed in the surviving spouse by offering him a certain amount for his elective share and demanding he pay the estate’s attorney fees if his share turned out to be lower than the offer. Then, she narrowed the estate assets in dispute by obtaining pre-trial rulings from the probate court. The court determined as a matter of law, prior to trial, the elective share value of all but a few assets. The court then determined the elective share value of the remaining assets at a trial in Florida.
At trial, the central question was: are the estate’s attorney fees an administrative expense that are paid before the surviving spouse is paid his elective share? To our surprise, no court in Florida had considered this question definitely, nor had a court in any other state. We are charting new ground. If the surviving spouse were paid before the estate’s attorney fees, this would have meant an unhappy family member could hold the rest of the family hostage by litigation endlessly over estate assets.
Fortunately, the judge in Florida reached the correct conclusion: the estate’s attorney fees are an expense of administering the estate, to be paid before the surviving spouse receives his elective share. Since this spouse had erected so many roadblocks to efficient handling of the estate, the judge penalized him by ordering his elective share (not including the jointly-held assets). Financially, he would have been much better off had he taken the jointly-held assets and never sought an elective share. Seeing at last the problems he had created for himself, he opted not to appeal.
To our knowledge, this case stands as perhaps the only in modern probate law to address a disaffected surviving spouse’s responsibility for paying an estate’s attorney fees. The moral is threefold. First, if you are inclined to write someone out of your will, consult your attorney and think hard about the possible expense to your estate. Second, if you are an executor, confer regularly with y our attorney about how to handle an adverse family member. Make sure the other beneficiaries agree on which course of action to take. Realize that action may be expensive. Third, if you are the adverse family member, be careful to litigate your interest within the bounds of commonly accepted practices. Crossing the line will put you worse off than when you started.
(The executor of this estate gave DBL full permission to write an article based on her situation. Nothing in this article is attorney-client privileged.)
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