Cases of Interest for Bequest Managers: Part 2

Long Delay Bars Reopening

In Estate of Kaiser, 13 N.W.3d 251 (Wi.App. 2024), the issue concerned an estate that closed in 2005. During probate, the estate transferred land restricted to use for single-family homes. The land was resold during the ensuing years with the same restriction. In 2019, Townline (a company that was not involved with the original probate) purchased the property with full knowledge of the restriction. It then sought to reopen probate (15 years later) to eliminate the deed restriction. Townline won the first round at the circuit court. Various interested parties appealed the ruling, and the appellate court reversed, citing the passage of time and Townline’s complete lack of involvement in the original matter.

Beneficiary’s Second Thoughts Not Enough for Reopening

In Succession of Barbier, 395 So.3d 357 (La.App. 2024), Ms. Caballero was one of several beneficiaries entitled to an equal share of a business interest owned by the decedent. The shares of the business were valued at about $1 million each and recipients had a share-or cash option. Cabellero took the share.

Three years later, Caballero had a severe case of beneficiary’s remorse. She wished she had taken the cash and sought to reopen the estate to fix the matter, punctuating her petition with allegations that the executor had hoodwinked her.

The court did not agree. It declined to reopen the estate administration, finding that Ms. Caballero’s allegations against the executor were vague and unsubstantiated. The decision pointed out – more than once – that she had “acquiesced” in the valuation when she accepted her bequest.

Genuine Injustice and Prompt Action Support Reopening

 Udell v. Udell, 397 So.3d 1050 (Fla.App. 2024). Joel Udell’s wife was murdered by a delivery man. The executor of her estate filed a wrongful death action against the companies that recruited and employed the perpetrator. The case settled for $8 million.

The executor failed to inform Joel that the bulk of the recovery belonged to him and had him sign a waiver of his rights. Probate closed shortly thereafter. When Joel found out that he had been misled, he immediately sought to reopen probate to pursue his claims, and his money. Although the original probate court denied reopening, an appellate court saw the matter differently and proceedings are now ongoing.

Duties to Nonclients

The general rule is that lawyers do not have duties to non-clients. In nearly all cases, this pertains to estate matters as well. For example, in Waterbury v. Nelson, 557 P.3d 96 (N.M. 2024), Attorney Nelson was working with John Emry (the testator) to prepare Emry’s estate plan. Emry decided to name Waterbury as the POD of a $2 million bank account.

Waterbury himself signed Emry’s name to a “change of beneficiary” form. He had Emry’s consent to do this, as well as a power of attorney. Waterbury asked Attorney Nelson to confirm that the change would be effective. Nelson did not respond. When Emry died, the changed POD was deemed ineffective, and Waterbury lost his $2 million. Predictably, he sued Nelson.

The New Mexico Supreme Court ruled that Nelson had no duty to advise Waterbury, a non-client. This is consistent with most cases involving similar factual situations. For example, in Studer v. Bresler, 2025 WL 424785 (Cal.App.2025), a law firm represented a recently widowed man. He instructed the firm to file his wife’s will for probate. The will left sums to the widower and to other relatives.

The law firm failed to file the will, and the case proceeded as an intestate administration. The widower lost nothing (he received more than the will would have provided) but the other relatives named in the will took nothing. They sued the law firm for failing to offer the will for probate, but their lawsuit failed because the firm did not represent the other relatives and thus had no duty to them.

An Outlier Case

In a case similar to Waterbury, the Connecticut Supreme Court issued a decision that should be jarring to estate planning attorneys. Testator retained Attorney to prepare an estate plan. He told Attorney to draft a will that would leave a $1 million Ameritrade account to five specified persons. Attorney did so, but did not advise Testator that the POD designations on the account would need to be changed (as it stood, the account was designated in full to one of the five persons). Predictably, when Testator died, the single beneficiary received all the funds. The four disappointed recipients were permitted to pursue a professional negligence claim against the Attorney even though they were not his clients. This is an unusual ruling and one that undermines the principle that an attorney has a sole and undivided duty of loyalty to his clients. Wisniewski v. Palermino, 330 A.3d 857 (Conn. 2025).

Contingent Fees and the Seinfeld Syndrome

Some years back, Jerry Seinfeld had a hilarious but accurate bit about how restaurant customers view menu prices before and after a meal. Starting out, they are hungry and willing to order everything in sight. Price is no object. At meal’s end, they question why they should pay for anything, since they are not even hungry anymore.

This mirrors the psychological journey of some that engage litigators on a contingent fee, get the desired result, and then wonder why the lawyers are getting what may appear to be an outsize payoff.

In Levenfeld and Associates v. O’Brien, 248 N.E.3d 1053 (Ill. 2024), estate beneficiaries had reached a dead end in trying to recover their $15 to $20 million share of a large estate. Having no funds to hire “hourly” lawyers, they engaged new lawyers (the plaintiffs) on a sliding-scale contingent fee arrangement of 15% on the first $10 million and 10% on amounts over that. The lawyers spent thousands of hours on the project and appeared in multiple courts. The attorneys’ efforts resulted in the beneficiaries’ receipt of settlement offers in the $15 million range. While final negotiations were proceeding, the beneficiaries suddenly fired the lawyers and hired a new firm to finalize a $16 million settlement. The clients paid the new firm a fee of $500,000.

The Levenfeld lawyers sued to recover the approximately $1.7 million in fees they had earned. Although the beneficiaries opposed the claim, the trial and appellate courts both ruled that the Levenfeld attorneys had conferred substantial benefits on their clients and had indeed earned the agreed-upon fee.

Receipts and Releases

Few topics are of greater importance in bequest management than careful review of receipts and releases that emerge during estate administration. Valuable rights can be waived and gigantic liabilities assumed by charities executing these innocent-looking documents without sufficient legal analysis of the key provisions.

In Udell v. Udell, 397 So.3d 1050 (Fla.App. 2024), mentioned above in connection with the reopening of estate administration, the beneficiary signed a release waiving his rights to an $8 million-dollar personal injury settlement for the death of the decedent. The release was prepared (or at least reviewed) by the attorney-executor who had a competing interest in the windfall. (The beneficiary and attorney were father and son, respectively.) The appellate court invalidated the waiver only because it did not specifically mention “fraud” among the causes of action that the release encompassed. Absent that very technical error, the beneficiary that signed the document would have made an expensive mistake.