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Bequest Management

Probate Before Death? Gift Planners and Bequest Managers, Take Note!

July 21, 2021
Charities and Ante-Mortem Probate: Considerations for the C-Suite Executive

Charities do not care much about “living probate” cases. Until one of the cases hits home. This post is an introductory essay on an obscure topic and provides the “must-know” that a bequest manager will need.

What is Living Probate (Also Known as “Ante-Mortem Probate”)?

A handful of states have enacted statutes permitting judicial approval of a will prior to the testator’s death. These include Alaska, Arkansas, Nevada, North Dakota, and Ohio. The desired effect of these judgments is to eliminate the possibility of challenges to the will after the testator’s death. There have been creative efforts by litigators to utilize other means (such as declaratory judgment proceedings) to accomplish the same result in other states. These attempts fail more often than they succeed, usually because of adherence to the venerable maxim that “the will does not speak until its author dies.”

How Would a Charity Get Involved in an Ante-Mortem Probate Case?

If a will naming a charity becomes the subject of a living probate case, then the charity is an “interested party” and thus receives notice and can participate.

Can a Charity File a “Living Probate” Case to Protect a Large Bequest from an Anticipated challenge From, for Example, a Disgruntled Disinherited Relative?

Those who remember early television quiz shows would call this the “$64,000 Question.”  The query raises various issues:

  1. A charity’s ability to file a “living probate” case is a matter of the law of the particular jurisdiction. For example, the pertinent Alaska statute permits any “interested party” to initiate such a case.
    • Conversely, North Dakota grants standing (the ability to become a plaintiff) only to the author of the will or his/her legal representative (such as a guardian).
  2. The issue of whether a charity can file a living probate case pales in comparison with the issue of whether it should.
    • To be blunt, absent truly extraordinary circumstances, the optics of such an aggressive filing could be horrifying (“charity asks court to prevent donor’s deathbed revocation of bequest”). It takes little imagination to visualize the avalanche of bad press the organization would receive.
  3. It is possible that a charity’s initiation of a living probate would offend a testator to the point of causing them to remove the organization from their estate plans. (If the testator approves of the filing of the living probate case, it is far better for the testator to become the plaintiff.)

So, If the Charity Is Notified That a Living Probate Case Has Been Filed by Someone Else, Should It Just Sit on the Sidelines?

Absolutely not. The charity has every right to participate in the case and in so doing, to protect its interests.

A living probate case usually arises when a testator anticipates a post-mortem challenge to their will, often by disinherited (and therefore disgruntled) relatives. The living probate case frequently deteriorates into an attack on the competency of the testator by those relatives.

A charity may have information that is relevant in such a dispute. For example, gift planning representatives may have had significant interaction with the testator around the time of the execution of the will and can therefore testify to her degree of competence. Even better, a charity’s records of a testator’s long history of donations can derail an allegation by heirs that a generous charitable bequest is evidence of mental impairment sufficient to invalidate the will.

Can the Judgment in a Living Probate Case Be Challenged at the Time the Testator Dies?

Yes, again proving the adage about the “best-laid plans of mice and men.”  The most common basis for such challenges is “the missing heir/interested party.”

Suppose that someone has a provision in their will leaving their sizable bank account to “my grandnieces and grandnephews, but not a penny to my grandchildren.” Suppose also that the will was approved in a living probate case but notice of the proceeding never reached an undiscovered-but-now-resurfacing grandchild. Such a situation could lead to the disregarding of the living probate, meaning that the entire litigation was for naught.

If a Charity Gets Few or No Bequests from Living Probate States, Does All This Information Have Any Relevance?

Yes, it does, and for two reasons:

  1. Although there are not many states that have adopted a formal living probate procedure, a number of jurisdictions have a similar option for testamentary trusts.  Thus, living probate-type options may be available in 25 percent of the states.
  1. Some estate planners seeking to allay their clients’ concerns about will contests have begun filing living probate cases in the five states even though the testators do not live there. Once a judgment of validity is obtained in the foreign jurisdiction, it is enforceable in the testator’s home state under the “full faith and credit” clause of the Constitution. For example, there are reports that California-based estate planners are looking to Alaska as a venue for filing living probate cases. This “forum-shopping”—reminiscent of the era when Nevada was a magnet for those seeking a quick divorce—increases the pool of testators that might seek a pre-mortem probate. It also increases the likelihood that charities will be involved.

CCK TIP:  The availability of living probate should not be a worry for charities. However, it is something that should be on the radar of the savvy bequest manager. We believe that a simple policy of “participating as appropriate” in such cases will serve most organizations very well.

A trickier question—and one that each charity must answer for itself—is whether to suggest living probate to any of its donors. Such a suggestion could, in the right case, protect a large bequest. However, the gift planner needs to weigh that against the risks, especially whether the suggestion might constitute:

  1. The unauthorized practice of law,
  2. Undue influence/duress, or
  3. Tortious (impermissible) interference in the relationship between the testator and, e.g., disinherited heirs.