Because they were unconventional, the wills
could be challenged
Aug 26, 2019 @ 2:32 pm By Greg Iacurci
While they couldn't have been any more different
as people, as news reports continue to trickle out about the estate of Jeffrey
Epstein and that of Aretha Franklin, one thing is becoming clear: They both had
unconventional wills.
That lack of convention doesn't pertain so
much to the wills' contents, but rather to the circumstances around their
drafting, which could prove instructive for financial advisers when dealing
with client estates.
In Mr. Epstein's case, the issue is timing.
The financier, who committed suicide in a Manhattan jail on Aug. 10 while
awaiting trial on sex-trafficking charges, signed a will only two days before
his death.
Mr. Epstein, who was 66, had a substantial
estate, valued at nearly $578 million. He left his assets to a trust, The 1953
Trust, according to his will.
"It is unusual to sign a will two days
before you die," said Bruce Steiner, an attorney at Kleinberg, Kaplan
Wolff & Cohen.
Signing a will so soon before death doesn't
negate the document's legality — a will could be signed minutes before death
and be perfectly sound if executed with the proper formalities.
However, Mr. Epstein's circumstances may bring
questions around "testamentary capacity" into play, attorneys said.
This refers to a person's legal and mental ability to make a valid will.
"If he was so depressed to have killed
himself, was he in the proper state of mind to write a new will?" Martin
Shenkman, founder of Shenkman Law, said of Mr. Epstein.
A court could invalidate terms of the will if
this were ultimately found to be the case. However, the capacity standard is
fairly easy to meet — Mr. Epstein would essentially have had to have known who
he was, what he owned, and whom he wanted to provide for, said Mr. Steiner.
That likely wouldn't be tough to prove, he added, since there were witnesses
present when Mr. Epstein signed the will.
However, the short timing could ensnare Mr.
Epstein's estate from the standpoint of fraudulent conveyance rules. States
have these rules to prevent the transfer of assets to another person or company
in an effort to shield the assets from creditors.
"If it wasn't for that, no one would be
able to collect on anybody," Richard Behrendt, an estate planning
attorney, said of the conveyance rules.
Though the scope of Mr. Epstein's creditors is
unknown, it is likely that
his alleged victims will file civil claims against his estate, and prosecutors
may bring charges that result in criminal forfeiture actions.
Creditors have up to a year after a transfer
is completed to file a claim against fraud. So, Mr. Epstein signing a will two
days before his death increases the odds of creditors being successful.
In Aretha Franklin's case, the lack of
convention pertains to the informality around the drafting a will. Initially it
seemed The Queen of Soul, who was 76, had died without a will.
But three handwritten documents, dated between 2010 and 2014, were found in her
Michigan home: one in a notebook found under her couch cushions.
The question is, do any of these handwritten
documents count as Ms. Franklin's will? The answer has major implications for
her estimated $80 million estate. Dying without a will would, according to
Michigan law, mean her estate would be divided equally among her four sons.
"We don't know if any of those pieces of
paper is, in fact, a will because it is unconventional," Mr. Steiner said.
"Had they been conventional, it would have been easier. She had plenty of
money and plenty of access to lawyers."
State laws differ over whether handwritten
wills, also known as "holographic" wills, are acceptable. In Michigan
they are; in New York, they're not. Michigan law requires the document to be
signed, dated, and in the deceased's handwriting to be valid. Some states like
New Jersey don't even require a handwritten will to be signed.
In Ms. Franklin's case, some of the
handwriting in the documents is borderline illegible and slightly ambiguous,
attorneys said. There may also be questions around whether Ms. Franklin meant
for the documents to ultimately serve as her will.
There have even been some cases in which yet
more unconventional wills — such as digital documents drafted on an iPhone —
have been scrutinized for their legitimacy, a circumstance that will likely
occur more in the future.
"I think the trend is toward them,"
Mr. Steiner said. "Our society is generally trending away from formality
in lots of things."
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