Introduction

            Virginia courts are taking a closer look at questionable estate plans and scrutinizing whether they are the result of duress or undue influence. In one recent case, a will left the bulk of her estate to the attorney that drafted the plan. In another case, mother, who was the power of attorney for her son, had given away over $2 million in gifts from his estate to herself and his siblings. 

Case Study

Last Minute Will Deemed Invalid // Williams, et al. v. Machen, et. al 

            In Williams, et al. v. Machen, et. al, when the deceased signed her Will, she was 93 years old and had recently suffered from a fall and resulting stroke. Evidence showed that defendant (the deceased’s attorney and eventual executor) helped the deceased while she struggled to maintain her independence, but also took advantage of her diminished capacity. Ten days before her death, the attorney-defendant arrived at her bedside with three copies of a will that he had drafted. The Will named himself as the beneficiary of her $1.7 million estate and included a no-contest clause. Additionally, the Will named attorney’s son as Executor and contingent beneficiary, even though the plaintiffs (and deceased’s family) had never met him. It is believed that the deceased was not aware of what she was doing when she signed the Will. The jury held that the evidence supported the finding that the Will was either not signed by the deceased, or that she had signed it, but lacked the capacity to do so. 

Further, after her death, the attorney-defendant reached out to another attorney to send a letter to all of descendant’s beneficiaries (the plaintiffs) with an accord in satisfaction, which stated that in exchange for $30,000, the plaintiffs’ released their claims against the estate. One of the plaintiffs endorsed the accord and satisfaction, the other did not. After the accord and satisfaction was already executed, the plaintiffs filed the following suit. The court held that the accord and satisfaction, along with any other actions that the attorney-defendant took, were invalid, because the Defendant did not have the authority to dispose of the assets of the Estate. 

Because the purported will was found to be invalid and she did not have any other valid will, the deceased’s estate was deemed intestate, leaving her assets to be distributed pursuant to the Code of Virginia, and equal shares to her surviving beneficiaries, and not the attorney. 

Power of Attorney Agent Forced to Return Gifts // Davis v. Davis

            In Davis v. Davis, the Will’s validity turned on gifts the power of attorney agent authorized before the decedent’s death. 

The deceased was a quadriplegic for approximately two decades before his passing. During his infirmity, he was assisted by Ms. Mills, whom he eventually ended up secretly marrying on October 1, 2013. On October 31, 2013, the deceased’s mother, who was his power of attorney, transferred the vast majority of his personal property to herself and signed three deeds of gift that transferred all of his real property to his siblings. The value of these transfers totaled approximately $2 million. The deceased passed away on November 15, 2013. 

The Executor of the estate, the deceased’s brother, challenged the transfers. The Supreme Court of Virginia held that the power to “sell and convey” given to the power of attorney, did not include the power to make gifts. Particularly, self-dealing ones. 

In determining fraud in the gifting, the court looked reviewed the gifts from the power of attorney agent to see if they were in accordance with the deceased’s history of lifetime gifts. This required comparing the factual similarities between the deceased’s prior lifetime gifts and the gifts made by the attorney-in-fact. In Davis v. Davis, the evidence suggested that the gifts to the deceased’s mother (who was the power of attorney) and his siblings was not similar to what he did during his lifetime. Therefore, the gifts were invalid. The court then turned to the Will to determine the proper distribution of his property, including the improper gifts. 

Conclusion

            When thinking about creating your will, a loved one’s will, or making any actions as an Executor or power of attorney, it is important to make sure that there is not undue influence, duress, or any other type of fraud and the actions are done within reason. The attorneys at Smith | Strong, PLC are here to help you ensure that all transactions are done legally and help avoid innocent error in the handling of the finances or estate of a loved one. To understand your options, we encourage you to attend our free Estate Planning Workshop or meet with one of our attorneys for a private consultation by calling (804) 325-1245. 

Editorial Assistance by: Kala Swenson

H. Van Smith
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