Tips from the Trenches: Bequest Management Insights from Trio of Recent Cases
Experience – our own or someone else’s – is a good teacher. That is true in most disciplines, including bequest management. This newsletter highlights three recent estate cases illustrating valuable pointers for charitable beneficiaries. If there is a common theme in these cases, it is this: prudent and attentive bequest management at all stages is the best defense against undesirable outcomes.
Good Estate Planning May Have Saved Charitable Bequest by Betty Arakawa, Spouse of Gene Hackman
Our first item is the headline-grabbing Gene Hackman matter. One lesson from this case should interest gift planners as well as bequest managers. The sad facts of the saga have appeared in both mainstream and gossip media.[1]
Investigators discovered the 95-year-old Hackman and the 65-year-old Arakawa dead in their New Mexico home on February 26. Subsequent investigation has concluded that Betty died on February 12 and Gene on February 18, six days later.
The couple had developed estate plans many years earlier. Gene’s assets would go to his living trust (which is private), whether he died first or second. Betty’s assets would go to Gene’s living trust if she died first, but into a charitable trust if she survived Gene. They certainly expected that he would die first and that her charitable gift would occur.
Fate intervened and Betty died first, which would ordinarily have derailed her philanthropic intentions. However, forward-thinking estate planning many years back saved the day. Betty’s will provided that if Gene survived her for less than ninety days, her estate would pass as if she survived him. Therefore, Betty’s probate assets will pass as if Gene died first, meaning that the charitable bequest is on track for distribution.[2]
CCK Tip: When dealing with high-dollar bequest donors and their complex estate issues, gift planners would do well to encourage the use of highly sophisticated estate lawyers. These practitioners routinely draft wills and trusts that address every contingency and can ensure that any charitable intentions are realized, regardless of life’s unpredictable twists and turns. Advising major donors to take this precaution does not increase the risk of an “undue influence” allegation unless the gift planner becomes actively involved in the estate planning process or refers the donor to a lawyer partial to the charity. While do-it-yourself template wills are wonderful tools in many cases, they usually cannot create unique solutions for intricate estate plans.
Tragic Udell Case Points to Value of Independent Counsel for Beneficiaries
Probate cases are not usually “Shakespearean.” The matter of the Estate of Evelyn Udell is a rare exception, as it is a mixture of murder, wealth, and family warfare.[3] The case is Udell v. Udell, 397 So.3d 1050 (Fla.App. 2024).
A Brutal Murder
Evelyn Udell and her husband of fifty years (Joel) lived in Florida, as did their two adult sons, Maury and Harran. The sons are both practicing attorneys licensed in the Sunshine State.
In August of 2019, the Udells took delivery of a new washer and dryer. One of the delivery people inexplicably attacked Evelyn with a mallet, doused her body with paint thinner, and set her on fire. She expired a day later from her horrific injuries. [In 2023, the killer was sentenced to life without parole.]
The Will
Evelyn’s will was admitted to probate, with Maury as the personal representative. The will created two trusts, one designated as “marital” and the other as “non-marital.” The two sons were joint trustees. Joel was to receive the assets of the marital trust. The non-marital trust was mostly for the benefit of Maury and Harran and their respective families. Joel could receive payments from that trust as well, but only at the discretion of his sons.
The Wrongful Death Lawsuit
As personal representative, Maury filed a wrongful death lawsuit against the various parties involved in the delivery that led to Evelyn’s death. The centerpiece of the complaint was Joel’s “loss of consortium” claim for the violent loss of his spouse of fifty years. Joel did not retain separate counsel to represent his interests in the wrongful death lawsuit. The estate settled the case for roughly $8 million. Maury deposited the proceeds, or at least most of them, into the non-marital trust created by Evelyn’s will. That effectively removed those monies from Joel’s direct control. Instead, the sons agreed to pay him an undisclosed monthly sum from that trust and to make a charitable contribution to an organization that he and Evelyn valued. For those “concessions,” Maury required that Joel sign a waiver of all rights to a further share of the $8 million. Soon after, probate was closed.
Undoing the Waiver
Joel quickly realized that the $8 million likely belonged largely or completely to him. Accusing his son of fraudulent conduct, he sought to reopen the estate administration to rescind his waiver of rights and to gain control of the wrongful death settlement. The probate court rejected his petition, finding that the waiver was effective and binding. Luckily for the widowed husband, an appeals court saw the matter differently. It found that Joel’s waiver was void because its language did not cover cases in which he was, or may have been, the victim of fraud. The case went back to the probate court for reopening and further proceedings, which are ongoing.
CCK Tip: Had Joel retained his own attorney to represent his interests in the wrongful death case (and the estate administration), it is quite likely that all the subsequent litigation may have been avoided. For charities, it is critical that someone has eyes on the process. It is impossible to predict when a probate case will take a wrong turn, putting a significant gift in jeopardy. Joel succeeded in reopening estate administration, but achieving that concession is the exception rather than the rule. The probate court’s initial denial of reopening is by far the most common outcome. Noteworthy also is the fact that the court initially found that Joel was bound by the release/waiver that he signed. Charities must review and understand these documents, which often involve the relinquishment of financial and legal rights and, quite often, the assumption of burdensome legal obligations.
Reliance on Co-Beneficiary’s Lawyer: A Costly Mistake
The recent California case of Studer v. Bresler, 2025 WL 424785 (Cal.App.2025) is a vivid illustration of the wisdom of active bequest management by beneficiaries of estates.
Wife died and left an unsigned will with Husband as the primary beneficiary, but included a significant bequest to other relatives that were not heirs (collectively “Relatives”). At Wife’s death, Husband and his Attorney agreed that the unexecuted document was not a valid will and undertook intestate administration. Husband was to receive everything. Relatives, who were not statutory heirs, would get nothing. Husband was the executor/administrator of the estate and the client of Attorney.
During probate, Husband found a will executed several years earlier by Wife. It was like the unsigned will, including the gift to Relatives. He furnished it to Attorney with instructions to change the intestate administration to a probate case. The Relatives received notice but did not engage counsel or verify that Attorney made the necessary filing. They just assumed he would do so.
Attorney delayed and missed the deadline for submitting the valid will for probate. The case proceeded as intestate, and the gift to Relatives never materialized. Husband sued Attorney for not carrying out his wishes. Relatives sued Attorney for negligence in allowing their bequest to evaporate. The Husband’s case was dismissed. He suffered no damage from the failure to file since he received more from the intestate proceeding than would have passed to him through probate. However, the trial court did enter a negligence judgment against Attorney in favor of Relatives for the value of the lost bequest.
But the Attorney appealed. The reviewing court reversed the judgment in favor of Relatives, holding that absent a specific agreement, the attorney for a fiduciary (here the Husband) has no duty to other beneficiaries. These beneficiaries are free to engage their own counsel to protect their interests and assume all the risks of not doing so. The Studer court quoted and endorsed this scathing language from an earlier California case: “[A] lawyer’s duty to a nonclient does not extend to being a babysitter, a risk mitigation strategist, a sounding board, or a mental health specialist for the [nonclient]. Making a lawyer liable in malpractice to a nonclient…is bad public policy.”
CCK Tip: This case is vastly different from the more common situation in which a firm undertakes to represent multiple charitable beneficiaries with similar interests. When that happens, the lawyers assume a duty of loyalty to each one of their clients, all of whom are aware that they are “sharing” an attorney and have consented to the arrangement. Such a situation is usually economically beneficial to the clients and has the advantage of presenting a “united front” to opposing parties. Here, Relatives were just “hitching” a free ride on Husband’s legal train. Sometimes that works out. In this instance, it failed spectacularly. There is no substitute for the watchful management of estate administration proceedings by a qualified professional responsible for protecting the charity’s interests.
Charitable bequests do go south. Sometimes, the stars just do not line up, and an expected – and intended – gift fails to materialize or is reduced. These disappointing outcomes can result from a host of factors: a flawed testamentary document, a debt-ridden estate, or, most often, some manner of human frailty that thwarted the process of administration. These human factors are most often the product of inattention or ignorance, and occasionally of malfeasance. Whatever the cause, the loss is always painful.
The discipline of professional charitable bequest management is enjoying heightened attention and respect in the non-profit community because it is a powerful tool for avoiding preventable losses. This oversight can come from an outside firm or from a knowledgeable employee who has sufficient time to perform the task. Either way, having “eyes on the process” is a tried-and-true method for bringing more gifts to fruition.
Resources
[1] There has also been a fair amount of misreporting. For example, there are many headlines that the late actor disinherited his children. There is simply no way to know that. The Hackman will “pours over” into a trust that has not been made public. He may well have provided for them in the trust.
[2] We do not mean to imply that Mr. Hackman did not have charitable goals. His trust may contain charitable provisions. As that document is nonpublic, we simply do not know its terms.
[3] As this is being written, the Udell case is still being litigated in the Palm Beach (FL) County Circuit Court. As such, the actual rights and liabilities of the various parties have yet to be fully and finally resolved.