An August 2024 court opinion pointed out the importance of understanding who will inherit assets that are handed down through families and of taking specific planning actions to assure those assets end up with the intended persons in order to avoid conflicts.
Michael Laws, Sr. (“Michael Sr.”) executed the Michael Laws Living Trust Agreement (“the Trust”) on May 7, 2013. Michael Sr.’s children, Michael Laws, Jr. (“Michael Jr.”) and Malinda Salinger, were intentionally omitted from the Trust. Michael Sr. executed a revocation of trust and a will on January 15, 2015. The will distributed one-half of his estate to Michael Jr. and Malinda and one-half of his estate to his aunt, Ethel Moreau. Michael Sr. died on June 1, 2015, and his will was filed with the probate court a few days later. Michael Jr. and Malinda filed a petition to contest the will on December 15, 2015, alleging that Michael Sr. lacked testamentary capacity to execute the will and that it was procured by the undue influence of Ethel. Previously, one of Ethel’s sisters disinherited Ethel and left all of her property to Michael Sr.’s mother, who in turn left all of her property to Michael Sr. Michael Sr.’s estate received an inheritance of $712,309 from Mary’s estate, as Michael Sr.’s mother predeceased Mary (“the Inheritance”).
The personal representative challenged Michael Jr.’s and Malinda’s standing to bring the will-contest pleading, arguing that if they were successful in contesting the will, then the Trust would remain in effect and they would not benefit from the Trust. Because they would not benefit from the Trust, he contended, they were not “interested persons” who had standing to contest the will. The trial court entered summary judgment against Michael Jr. and Malinda for lack of standing. The trial court’s order did not address the Inheritance or how it would be considered property of the Trust, despite Michael Jr. and Malinda raising the issue of the Inheritance in their response. Michael Jr. and Malinda appealed.
On appeal, Michael Jr. and Malinda argued they stand to benefit from a successful will contest whether or not the Trust is deemed to be effective because a successful contest would cause all of the estate’s assets to be distributed according to intestate succession, passing to them as Michael Sr.’s sole heirs. The appellate court agreed. Standing, in a will contest, “has been described as belonging to one who would either gain or lose under the contested will.” A will contestant must have a “financial interest in the estate, and one which would be benefitted by setting the will aside.” The Inheritance is an asset of Michael Sr.’s estate, not part of the Trust. Michael Sr. died before his estate received the Inheritance, so there was no way for him to add the Inheritance to the Trust property. The will was not a pour-over will that directed any assets outside of the Trust be directed to the Trust. Furthermore, the court had no authority to direct the Inheritance to the Trust. Summary judgment was vacated.