Jenkins, Moore: Indiana’s premortem validation statute takes effect

We again return to the scenario presented in a previous article, “Premortem validation could help avert will, estate contests” (Indiana Lawyer, Oct. 16, 2019). In that scenario, the mother had two children — a daughter who lived with her and took her to all her appointments and a son who lived in another state and typically only saw her on holidays. Six months before she died, mom changed her prior estate plan (which divided her estate evenly between her two children) and left everything to her daughter. Mom died and her son learned, for the first time, that he was disinherited. He filed a will contest claiming that mom lacked capacity to change her estate plan. The litigation went on for years. The son and daughter each offered competing medical opinions about mom’s capacity, but the best person to attest to mom’s capacity (mom) was deceased. We previously addressed how this scenario and a similar one dealing with a revocable trust might play out under current Indiana law in an article, “A guide to will and trust validation in Indiana” (Indiana Lawyer, May 27, 2020).

Now, three years later, there will be a more proactive way to deal with will and trust contests in Indiana. Indeed, on July 1, Indiana will become one of only a handful of states that have a premortem validation procedure for Hoosiers’ last wills and testaments, as well as their revocable trusts. In other words, mom will soon have the ability to prevent actions like the one filed by son, challenging her will after she died.

With the passage of Senate Enrolled Act 287, a new statute under the probate code, Indiana Code § 29-1-7-16.5, will permit a testator (like mom in our example) or an agent acting at the testator’s direction to serve written notice on a testator’s beneficiaries, heirs (such as mom’s son and daughter) and others with a copy of the testator’s will. Such notice must be served in the same manner as a summons would be served under Indiana’s Trial Rules and must include not only a copy of the testator’s will, but also a list of the names and addresses of the individuals receiving the notice. Sending notice to the individual’s last known address will be considered “prima facie evidence” that the notice was received unless controverted by competent evidence to the contrary. The noticed individuals will then have 90 days after receipt of the notice to bring a contest of the testator’s will or of the testator’s exercise of a power of appointment under such will.

Similar to a will contest, a proceeding brought by a noticed individual under I.C. 29-1-7-16.5 must allege that the will was not validly executed, that the testator lacked capacity to execute the will, or that the will is the product of undue influence, duress, fraud or otherwise invalid. The contesting individual must name as defendants in any such action the testator, the testator’s spouse, all heirs who would be entitled to receive estate assets if the testator died intestate, beneficiaries named under the contested will, the personal representative nominated under the contested will and any other person who received written notice from the testator. If the noticed individual fails to bring a contest during that period of time, and assuming that the testator stays alive for the full 90-day period, then the statute dictates the noticed individuals are barred from filing a will contest, either under I.C. 29-1-7-17 or this new statute. However, if the testator does die during the 90-day notice period, then the individuals are not barred but may thereafter bring a will contest. This procedure will only serve to bar contests against wills for which the testator or his agent has served notice, meaning that if the testator later executes a new will or a codicil, then unless the same notice procedure is followed, the new instrument can be challenged by those who have not received notice of its execution. The new statute specifies that a testator’s failure to follow this notice procedure cannot be offered as evidence to show that a will is invalid, and it also specifies that this procedure may not be used to change or cut short the time period for a spouse who files a claim for an elective share of the testator’s estate.

Likewise, SEA 287 amends Indiana’s trust code on trust certifications, and specifically I.C. Section 30-4-6-14, to allow a settlor or a settlor’s agent to serve similar notices on beneficiaries and heirs of their trusts to start the clock running on such noticed individuals’ ability to bring a trust contest. As with the notice procedure for wills, a settlor or a settlor’s agent may serve a copy of a trust certification on any individual the settlor wants to bar from bringing a trust contest after the settlor’s death. The notice must include a complete copy of the trust as well as a trust certification that informs the person of the trust’s existence, states the trustee’s name and address, identifies the person’s interest in the trust or that the person does not have any interest in the trust, and also states the time allowed for commencing a proceeding to contest the trust. Only trust instruments for which notice is provided may be barred under the amended statute, meaning that any amendments or restatements that the settlor later executes could be contested unless the settlor followed the same notice procedure. As with the premortem validation of wills, any noticed individual will have 90 days after receipt of such a notice to bring a trust contest or will be barred from bringing a later contest. A complaint to contest the trust must name as defendants the settlor, the settlor’s spouse, each qualified beneficiary under the contested trust, the trustee and any other individual who received notice of the trust’s existence.

Back to our example. If mom served her son and daughter with a copy of her will (or it could be a revocable trust) using the process outlined in these new premortem validation statutes, son would have 90 days after receipt of the notice to contest mom’s will. Under the new law, son could bring an action and allege, for example, that mom did not have capacity to execute the new will or that she had been unduly influenced by her daughter to disinherit the son. He would name mom and daughter as defendants in the action. Under the new probate code section or the amended trust code section, if son were to bring a legal action to challenge mom’s capacity or otherwise invalidate the instrument under any other theory, he would bear the burden of proof. Importantly, for the first time under Indiana law, mom would be able to defend her actions. She could submit to a medical exam and have the ability to demonstrate that she did have the capacity to execute the new will disinheriting son. Most importantly, she could provide testimony demonstrating that she knows the extent of her assets, knows the natural objects of her bounty and understands what each of them deserve given their treatment of her.

As with any new law, the new premortem validation statutes bring new opportunities and new risks. Clients will now have the opportunity to defend their actions and prove their capacity while they are living. Forcing parties to challenge the validity of a will or a trust before the testator or settlor dies has a number of benefits. Testators or settlors can defend their actions, prove their capacity and demonstrate the validity of their instruments, as well as cure any deficiencies in their instruments. Further, the awkwardness of challenging a testator’s or settlor’s capacity, while they are living, will likely have a chilling effect on bad faith claims. Still, it is expected that not every client will take advantage of the new premortem validation procedures even in the face of likely discord following their deaths. Certainly some clients will want to maintain the privacy of their documents during their lifetimes simply to avoid the discomfort of conflict. Nevertheless, whether it is an option a client will want to take advantage of or not, estate planning attorneys should consider counseling their clients about their options under these new laws. Such advice may be especially warranted when there is known animosity in the family or the client’s estate plan intends to treat similarly situated family members disproportionately.•

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Sarah Jenkins is a partner at Taft Stettinius & Hollister and Eileen Moore is a partner at Ice Miller. Reach them at [email protected] and [email protected]. Opinions expressed are those of the authors.