What is a Will Contest?
Will contests are brought when someone alleges that a will is not valid. These disputes regarding wills are most often caused if there was no valid execution of the will, there was no proper acknowledgment or proof of its execution, or if there is a lack of required attestation. There are many people who will make an allegation that the will is not valid even though there may be no evidence to support this claim. If there is sufficient evidence one may be able to bring a will contest to trial, but doing so will have an adverse impact on the relationship between family members.
If a party alleges that the testator did not have testamentary capacity, this allegation must be supported by medical evidence in order to be actionable. A medical expert will need to testify as to why the testator did not have testamentary capacity. For example , allegations that the testator was incompetent will not be sufficient to set aside a will. There must be affidavits and other evidence and testimony that testator did not have testamentary capacity. A will can also be set aside if there is fraud or undue influence. This again requires both strong evidence and testimony. If a will is not properly revoked, it can caused the Court to invalidate the later executed will. In order for a writing to revoke a earlier executed will, the later executed writing must contain intent to revoke the earlier executed will. Only the clearly expressed intent to revoke is adequate to revoke a will. The mere act of making a new will does not revoke an earlier executed will.
Cost Principles for Will Contests
In contested probate matters, the general rule provides that the losing party will be liable to pay the legal costs of the winning party. The basic rationale for this rule is that the assets of a deceased person’s estate belong to the estate, and not to beneficiaries or executors. Therefore, any damages or distributions from the estate following a suit should normally be borne by the estate not by the estate’s beneficiaries or executors personally.
That said, in the ordinary course of probate litigation, the issue of who pays the legal fees of the parties is determined by statute. Where the Court has made an order that probate may proceed, the costs of the proceeding (that is the costs of administering the deceased person’s estate including the legal costs) form a debt of the estate (under s 145 of the Succession Act 2006 (NSW)) and are to be paid by the estate in priority to all other debts.
In Clarke v Hamel, a case from 2017 relating to a deceased person who died in 1995, the NSW Court of Appeal held that the following objectives under s 99 of the Succession Act 2006 (NSW) are relevant in determining the question of costs and the relevant provisions are designed to further each of these objectives, with the section reflecting the experience of the legislature as to the general nature of the functions of the Court:
- (1) to give just reward to those who undertake the problem of proving the will,
- (2) to afford security to bona fide purchasers and persons dealing with an executor or administrator,
- (3) to afford relief in special circumstances so as to prevent hardship, injustice or hardship to third parties.
If successful in contesting a will, the applicant’s legal costs may be awarded against the estate, but the Court will consider whether the proper conduct of the proceedings by the applicant, and the circumstances in which the proceedings have occurred, is such that the applicant "seeks to profit from his or her own wrongdoing, in which case the law will not assist him or her." For example, in Wong v Lee (see our blog post on this decision) the NSW Court of Appeal ordered the party who unsuccessfully challenged a will to pay the successful party’s legal costs. The unsuccessful party had wilfully failed to comply with orders for the provision of evidence whilst still insisting upon and proceeding with its application challenging the will. The presiding judges held that the overriding purpose of the civil procedure rules is "the just, quick and cheap resolution of the issues in the proceedings."
In addition, the courts do have the power to allow all, some or none of the costs of a successful applicant out of the estate, and to require an applicant to undertake security for the potential outcome, and the costs of the process.
Things that Affect Who Pays the Costs of Litigation
Factors Influencing Who Bears the Costs of Contesting a Will
Challenges to the validity of a Last Will and Testament can be a long, costly process for everyone involved. The time and expenses associated with these cases tend to raise the question of who will pay the attorneys’ fees?
At its most basic level, the presumption is that the party making the claim, usually a beneficiary of the estate, to contest a will bears the burden of the legal fees. For example, if an individual believes they are entitled to receive a gift or an inheritance from the decedent’s estate, and that the decedent’s Last Will and Testament does not conform to his/her wishes, the individual may initiate a proceeding that could ultimately result in the cancellation of the Will. If the individual prevails, he/she is "successful", and should not be responsible for the legal fees associated with the case. However, if the individual’s claim is unsuccessful, he/she may be required to reimburse the estate for the cost of the lawsuit.
The facts and circumstances of each case need to be considered when determining the outcome of a proceeding and who is responsible for the payment of the legal fees.
The first factor considered is the outcome of the case itself. As noted above, the losing party is typically responsible for the costs of the case, which is known as the "American Rule". However, exceptions to the American Rule exist in the Surrogate’s Court, which is the court with jurisdiction over the probate of estates.
A Surrogate has the discretion to require the losing party to reimburse the other parties for the legal fees incurred in connection with a proceeding. Under SCPA 2307, a Surrogate can determine that a party acted "in bad faith" in the initiation of a lawsuit. In that case, the Surrogate may require the party that acted "in bad faith" to pay the cost of the legal fees. The reason behind this type of rule is to deter party’s from unnecessarily burdening a Surrogate’s Court with frivolous proceedings.
Another factor in determining costs is the conduct of the parties relative to settlement. For example, if a party receives seven settlement offers, and rejects each offer, then ultimately loses the case, a Surrogate may determine that the party was unreasonable, and therefore, may require him/her to pay the cost of the legal fees.
The key to establishing a legal costs claim is whether the party seeking compensation can demonstrate an undue hardship, which caused by the actions of the other party.
Factors for Judges to Consider When Deciding Who Pays Costs
In addition to requesting a respective party’s attorneys’ fees from the opposing party as part of a "sanctions motion" whereby one party shows the opposing party engaged in "bad faith," one might explore seeking an award of attorneys’ fees from the probate court. In this regard, there is a common law principle that allows a probate court to shift the burden of a contest’s legal costs to the losing party.
Generally speaking, the court may, in its discretion, award attorneys’ fees and costs in proceedings to "construe" or "vitiate" a Will. See Estate of Morgan, 118 Cal.App.2d 504, 258 P.2d 568 (Cal. App. 1953); Estate of Spencer, 113 Cal.App.2d 655, 248 P.2d 579 (Cal. App. 1952). The general rule is that the loser’s decision to oppose the Will is sufficient to justify a fee award against them if the party opposing the Will loses, and that such fees are payable out of the estate; however, it is the exceptional case in which the prevailing party should be awarded costs against the losing party. In the case of Estate of Kimmel, 36 Cal.2d 703, 226 P.2d 565 (1951), the court held: "Where there is a good faith dispute concerning the proper construction of a will, the necessity of employing counsel and the incurring of expenses in the litigation are to the estate . Where, however, the executor or proponent of the will has acted improperly, culpably, or in bad faith in carrying out his trust, he may not be permitted to charge the estate with his expenses in sustaining an unlawful will. … [W]e note that in construing wills the conduct of parties litigating an issue is of little moment. Thus, the mere raising of a question arising under the language of a will does not implicate the power of the court to award costs against the losing party. … Moreover, the fact that a will may be of such doubtful meaning that the question of its construction is a close one does not warrant the imposition of costs against the losers. The filing of a contest upon a legitimate issue is a proper matter." The case of Estate of Hochstein, 2 Cal.App.3d 682, 83 Cal.Rptr. 817 (1970), illustrates such circumstances when a court might decide to depart from the general rules. The Probate Court awarded recommended attorney’s fees to the opposing party as the executor and trustee of estate. The executor and trustee unsuccessfully contested the validity of two reciprocal wills made in 1966 and 1970 by the decedent and her second husband, herself. They unsuccessfully sought to have the probate court remove the 1966 and 1970 wills as improperly executed, and to have his own son appointed as executor; however, there was no evidence that the executor and trustee’s actions were of any benefit to the estate or beneficial to it.
Costs Case Examples
The following are examples of cases illustrating cost allocation in will contest litigation in Michigan: Case Law Example 1: In Estate of Kalandyk v. Kalandyk, 2017 Mich. App. LEXIS 1986 (2017), the court’s remand to the trial court with instructions that it must re-examine the trial court’s award of costs to either the primary contestant (the personal representative) or the secondary contestant (the heirs) based on the best result obtained via mediation and to compare the result to the final judgment entered. Case Law Example 2: In Estate of Gorman v. Gorman, 2013 WL 708447 (Mich. Ct. App. Feb. 26, 2013), the personal representative’s petition to recover costs was denied because the case was ultimately resolved by way of settlement which was not the result either party had sought. Case Law Example 3: In In re Estate of Brenner, 284 Mich.App. 323 (2009), a petition for costs of litigation was granted. The court found that the proponent of the will received the award that he was attempting to get all along via litigation. Case Law Example 4: In In re Estate of Kane, 314 Mich.App. 389; 884 N.W.2d 525 (2015), the court overturned the trial court in awarding costs and attorney fees to the winners due to a finding of bad faith. Case Law Example 5: In Villafane v. Estate of Vega, 2005 Mich. App. LEXIS 2401 (2005), the Court of Appeals noted simply that where a will contest was maintained in a bad faith in a manner that is prohibited by MCR 2.405, the losing party was not entitled to push their judicially tenable litigation position onto the prevailing party as the burden of litigation was justly allocated to them.
Practical Tips for Managing Costs
If you are thinking of or currently are contesting a Will then this is probably an overwhelming process for you and managing your legal fees is at the bottom of your priorities. For these reasons we have provided tips to help you.
Estimates
In advance of any steps being taken, it is always important to have an estimate of the cost. This should be in the form of a letter from your solicitor which should contain the range of costs based on time / hourly rates and any additional disbursements (e.g. court fees, counsel fees). The difficulty is that estimates are often difficult to predict in a contentious estate as the hands of the solicitor are often tied. For example, the matter could settle quickly if the other side agree to allow you access to financial information in the alternative the other side may just dig their heels in and refuse to disclose anything. To combat the risk that the matter may proceed to Court, ask your solicitor to consider whether it would be possible to agree a "costs cap". This is not a common step taken but will provide you with some level of certainty that your costs do not spiral out of control. You should therefore ask your solicitor to write to the other side and explore whether the other side can agree a "costs cap". If this is agreed, there will be a specific point at which you cannot go beyond.
Contingency Fee Agreements
Starting from June 2014, it will be possible for your solicitor to enter into a contingency fee agreement with you in connection with your claim. Contingency fee agreements may only be entered into or varied with the written authority of the client. A law firm’s fees under a contingency fee agreement must be calculated by reference to a percentage of damages received by the client (none of which can be more than 25%) . For example, your solicitor might agree to charge 20% of any damages saved through settlement. It will also be possible for your solicitor to enter into a staged contingency fee agreement which you may wish to consider if it is difficult to ascertain the value of your claim.
Alternative Dispute Resolution
What is Alternative Dispute Resolution? Alternative Dispute Resolution ("ADR") is a process of settling disputes outside of litigation. There are several alternative methods of dispute resolution which include: Are these methods successful? ADR can be very successful particularly when compared to litigation. It requires all parties to actively engage in the process and thus, agreement between parties is often reached through mediation. Given that the parties have taken time to negotiate the matter it may also be possible to reach a settlement which allows "all parties to come away smiling". What is the cost of Alternative Dispute Resolution? The cost of ADR is significantly less than litigation in terms of both time and money. An experienced mediator will be able to resolve the matter within one day. The benefit to you is that your legal costs are reduced thus allowing you to retain a greater share of your inheritance. Negotiating an agreement reached through ADR is also far quicker than negotiating a settlement during litigation proceedings.
Complaining to the Solicitors Regulatory Authority
Any complaints against your own solicitor for charging you excessive fees should first be taken up with them directly. The first step is therefore to raise your concern with the solicitor and you should receive a response within eight weeks. If however, you are unhappy with the response you have received or you do not receive a satisfactory response within the eight week timescale then you can contact the Solicitors Regulatory Authority and initiate a complaint.