Wills are often referred to as ambulatory documents, meaning that it can usually be changed or revoked at any time before death.  But what does it take to revoke a will?  Sometimes an individual will simply mark through a provision or attempt to modify the will with a few handwritten notes. Will that work?

A recent Ohio case addressed whether or not markings on a will were effective to revoke a will.  The case of Horst v. Horst arose out of a dispute between two siblings, Patricia and William Horst, over the Last Will and Testament of their mother, Mary Horst.

Before Mary’s death, she had marked up one copy of the will but left another copy unaltered.  The markings included drawing an “X” over about 10 lines of a page, then attempting to mark out the “X.”  She also blacked out the words “the amount of Five Hundred Dollars ($500.00)” in one section. At the top of the page she wrote “This Will is correct.”  The will contained multiple signatures by Mary placed between and around typewritten lines in the will. The second page marked out area around the final signature on the will.

Patricia argued that all of these markings show that Mary had revoked her will and that it was no longer valid.  Like most states, Ohio has a statute that defines the ways in which a will can be revoked.  The statute allows revocation in the following ways:

1. When the testator tears, cancels, obliterates, or destroys the will with the intention of revoking it;
2. When, at the request of the testator and in the testator’s presence, another person tears, cancels, obliterates, or destroys the will with the intention of revoking it;
3. When a person tears, cancels, obliterates, or destroys the will at the express written direction of the testator;
4. By way of another written will or codicil that is properly executed according to statute; or
5. By another writing that is signed, attested to and subscribed pursuant to statute.

The Court found that Mary’s markings on her will did not qualify as a revocation of her will under the statute. Mary only put an “X” on portions of the first page of the will and crossed out some language in the margins, but she did not destroy, obliterate, tear, or cancel the entire document. Most of the document remained visible, including her signature and the date. She also left another copy of the will completely intact, without any markings at all. Moreover, the fact that Mary wrote at the top of the will “This Will is correct” further evidenced her intent that this document remain as her valid will to be probated upon her death. If anything, the markings showed that Mary intended to make some changes to a few of the provisions in the will. As such, the court upheld the validity of Mary’s will, to be probated as written.

One good lesson the Horst case teaches is that the best way to keep a testator’s intentions clear is to always consult with a probate attorney when seeking to draft, amend, revise, or even revoke a testamentary document such as a will. This avoids confusion as to the testator’s wishes and could save a lot of money in court disputes arising over the validity of will.

Horst v. Horst, No. 22993, 2009 WL 3068261 (Ohio Ct. App. Sept. 25, 2009)

You may have heard the term “fiduciary” used in connection with the role of executor, administrator, or personal representative of a person’s estate or the trustee of a trust.  Most people are unclear about what exactly it means to be a “fiduciary.”  And because the term is based on somewhat elusive common law theories of equity, the details of a person’s fiduciary duty in a given situation can be difficult to define.

So what is a “fiduciary?”  Black’s Law Dictionary perhaps defines the term best: “A person having duties involving good faith, trust, special confidence, and candor towards another.”  The concept of the fiduciary and the relating obligations have been developed to address a basic concern:  In many situations, we want to prevent persons with discretionary power over the interest of others from abusing that power to improperly benefit them.  Fiduciary duties are imposed to protect the weaker party against abuse of the fiduciary relationship.

Fiduciary duties involve the twin obligations of the duty of loyalty and the duty of care.  The duty of loyalty obligates the fiduciary to put the needs of the beneficiaries ahead of its own self-interest.  The fiduciary is not to exploit the fiduciary relationship for its own benefit.  The duty of loyalty is the basis of several more specific duties, such as the prohibition against self-dealing, the duty to disclose material facts, and duties involving conflicts of interest.

The second fiduciary duty—the duty of care—requires a fiduciary to carry out its responsibilities in an informed, prudent manner and to act as an ordinary prudent person would act in the management of his or her own affairs.

Executors, administrators, trustees, and personal representatives are all fiduciaries, meaning that they are subject to the fiduciary duties of loyalty and care.  They must recognize that they hold assets for the benefit of the beneficiaries (and, in some circumstances, creditors) and should not treat them as their own.

Fiduciary duties can be more complicated when the fiduciary is also one of the beneficiaries.  In that situation, fiduciaries should be sure that they act in the interest of the other beneficiaries involved and not simply in their own interest as a beneficiary.

As a practical matter, many concerns regarding fiduciary responsibilities can be resolved by obtaining the consent of all individuals with an interest in the transaction. For example, if a trustee needs to sell a trust asset, he can protect himself against claims for breach of fiduciary duty by providing the beneficiaries with full disclosure of the terms of and reasons for the sale and obtaining informed consent prior to the sale.  By obtaining the consent of all parties involved, the fiduciary can minimize the potential for an abuse of fiduciary duty claim.

You may have heard of Dr. Robert Atkins, who started popular carb-hating diet craze.  Dr. Atkins died in 2003, but was survived by a spouse and a trust that has become the subject of some interesting litigation.

It seems that Dr. Atkins’ widow, Veronica, became depressed after his death.  But, fortunately for her, she doesn’t have to worry about paying the bills.  She has a small fortune left to her in trust by her late husband.

In situations like this, many people will turn to an institutional trustee (such as a bank trust company).  Although institutional trustees charge for their services, the cost is often warranted by the professional expertise, fiduciary accountability, and investment services that the trustee provides.

In this case, though, Veronica turned instead to three people, which she referred to as the “Three Musketeers.” The Three Musketeers consisted of a “self-described entrepreneur,” an accountant, and an attorney.  Veronica had the trio appointed as trustees of the marital trust that Dr. Atkins created for her benefit.  They also became officers of Dr. Atkin’s private foundation.

It turns out that this was a favorable arrangement for the Three Musketeers. Under their arrangement, Veronica:

• Agreed to pay each of them $1.2 million per year.  Because this salary was excessive under the statutory limits on trustee commissions, some of this was paid from Veronica’s own pocket.
• Gave them 10-year contracts with built-in extensions.  The Three Musketeers read these contracts to make them lifetime employees of Veronica.
• Consented to the purchase of a $5 million life insurance policy on Veronica’s life, naming the Three Musketeers as beneficiaries.

But, as these things tend to do, the relationship has soured.  Veronica has remarried.  Her new husband, Alexis Mersentes, is a Palm Beach socialite that is referred to in the litigation as an “opportunist skilled in the art of seduction.”  She has also fired the Three Musketeers, claiming that they breached their fiduciary duties by engaging in self-dealing and permitting waste of the trust assets.  As expected, the Musketeers aren’t going down without a fight.  They claim that their termination was improper.

Here’s the moral of the story:  Consider an institutional trustee.  The annual fees charged by a professional trustee can be far less expensive than the damage caused by incompetent individuals and the litigation it takes to straighten out the mess.