Court Rules Last Will And Testament Controls The Disposition Of Estate Assets Transferred To Revocable Trust During Decedent’s Life

Earlier this month, Hon. Robert P. Contillo, Presiding Judge of the Chancery Division, Bergen County, New Jersey, set aside a decedent’s Last Will and Testament, ruling that the Will was the result of undue influence by one of her adult children who was the principal beneficiary of the will. In doing so, Judge Contillo made an interesting ruling by concluding that, had the will been upheld as valid, it would have controlled the disposition of the decedent’s vacation home at the Jersey shore in Sea Isle City even though the vacation home had been transferred by the decedent many years before to a revocable trust which named her three children as equal beneficiaries. Matter of the Estate of Edith Weiner, Docket No. P-483-11 (Ch. Div., Bergen Cty, February 12, 2013)

Edith Weiner died in 2011, survived by her three children, Craig, Lynne and Scott. She was 93 years old at the time of her death. Edith resided in Florida from 1974 until 2006 when she moved back to New Jersey and began residing with her son Scott. She remained a resident of New Jersey, living in Scott’s home, until her death.

While a Florida resident, Edith created the Edith Weiner Revocable Trust. Thereafter, over a number of years she signed four (4) amendments to the trust. Among her assets she placed in that trust was the vacation home which she owned at the Jersey shore in Sea Isle City. The shore house was worth between $1.2 and $1.5 million. With minor exceptions, the assets in the trust were left to the three children equally.

Within four (4) months of commencing residency in Scott’s home, Edith met with a New Jersey attorney recommended by Scott, and created a Last Will and Testament with a substantially revised testamentary plan that left the Sea Isle City home to Scott. In a marked departure from all prior versions of Edith’s estate plan, the new Will created an unequal distribution which favored Scott over his siblings.

After Scott submitted the Will to probate, Craig and Lynne filed a Verified Complaint to set aside the Will based upon undue influence allegedly asserted upon Edith by Scott. Scott filed an Answer and Counterclaim For Advice and Direction regarding the conflict between the Trust and the Will with respect to the Sea Isle City property.

The case was tried by the Court sitting without a jury. The Court found “that the [2006] Will …is not the free and voluntary act of Edith Weiner but rather is the product of undue influence by her son [Scott], the primary beneficiary thereunder. I therefore set it aside.”

The Court then went on to address whether the Will, if valid and not the result of undue influence, would have been effective to control the disposition of assets titled in the name of the Revocable Trust that Edith had established. The Court concluded that the disposition pattern in the Will, not the trust, would have controlled the disposition of the shore home if the Will was upheld as valid. To reach that result, the Court determined that the Will effectively modified the trust with respect to the disposition of the Sea Isle City property because a later Will can modify a trust under Florida law when the Will “specifically devises property that would otherwise have passed according to the terms of the trust.” Section 736.0602(3) of Florida’s version of the Uniform Trust Code.

The Court also analyzed the situation under New Jersey law and reached the same result through application of the doctrine of probable intent:

[I]f we posit that Edith clearly intended to dispose of Trust assets by Will –  that she clearly intended by her Will that Scott inherit the Sea Isle City property – then, under the doctrine of probable intent, the court would give effect to that specific bequest, notwithstanding that the property was titled in the name of the Trust.

Under N.J.S.A. 3B:3 – 33.1, which codifies the doctrine of probable intent.

a. The intention of a testator as expressed in his will controls the legal effect of his dispositions … .

b. The intention of a settlor as expressed in a trust, or of an individual as expressed in a governing instrument, controls the legal effect of the dispositions therein and the rules of construction expressed in N.J.S. 3B:34 through N.J.S. 3B:3-48 shall apply unless the probable intent of such settlor or of such individual, as indicated by the trust or by such governing instrument and relevant circumstances, is contrary.

If one posits a [2006] Will untainted by undue influence, then that Will effectively left the Sea Isle City property to Scott, notwithstanding that it was titled in the Trust, because Edith clearly and expressly so intended, and the ‘technicality’ of title in a revocable living trust would not defeat that intention.

The Court’s decision is annexed here – Matter of the Estate of Edith Weiner, Docket No. P-483-11 (Ch. Div., Bergen Cty, February 12, 2013)