Fraud is often the basis of a will contest. Fraud occurs when a testator executes or revokes a will or disposes of his property differently because of an intentional misrepresentation by someone hoping to benefit from the fraud.
Fraud in the inducement occurs when the testator disposed of his property differently because of the intentional misrepresentation that the testator considered important but where the misrepresentation was not directed to a particular provision in the will. For instance, if a fraudster convinces the testator that an heir apparent has already died, but is, in fact, alive, this would probably cause the testator to distribute his assets differently, either in the execution of the 1st will or a codicil or revoking a will that included the heir apparent so that a new will can be executed not including the presumed deceased heir apparent.
Fraud in the execution occurs when the fraudster misrepresents the document that the testator is signing as the testator's will, when, in fact, it is not. For instance, fraud in the execution would occur if the fraudster drew another will naming himself as the primary beneficiary then substituted his will for the testator's will and had the testator sign it as if it was his will.
Another fraud claim is duress, when the fraudster exerts undue influence by threatening violence or some other wrongful act that compels the testator to do as he says.
Note that both fraud in the inducement and in the execution, and duress, would be easier for the fraudster if the testator were in poor physical and/or mental health, and was dependent on the fraudster, as is often the case, since many testators are in their last years of life.
The remedy for fraud is to strike those provisions that are the result of the fraud, or to even strike the whole will, if necessary, and to distribute the property as the court finds that the testator intended or would have intended if the testator knew all of the facts. If the fraud prevented the testator from revoking a will, then the courts, who will not create a new will, will give effect to the will, but will create a constructive trust on the beneficiaries of the fraud so that technically they receive it, but the property is, then, distributed according to the terms of the trust.
Tortious Interference with an Expectancy of Inheritance or Gift
Sometimes fraud concerning a will or estate isn't discovered until after probate has closed. While the case could be reopened in probate court and a plaintiff could then sue for fraud or undue influence, another remedy, the tortious interference with an expectancy of an inheritance or a gift, has some advantages over a will contest:
- Not only is the statute of limitations generally longer for tort actions, but the running of the statute doesn't begin until the discovery of the tort or when it should have been discovered, whereas the statute of limitations for will contests starts when the testator dies.
- The tort challenge will not fall under no-contest clauses, since a tort challenge is an in personam action against the tortfeasor but a will contest is an in rem action against the probate estate; hence, a tort action is not considered a will contest, so that if the challenger were a beneficiary under the will that had a no-contest clause, then he would still receive the property even if he loses the tort suit. (If the challenger is not a beneficiary under the will, then he has nothing to lose from a no-contest clause.)
- The tort action may be the only remedy available to someone who is neither an intestate heir or beneficiary under the will, since only plaintiffs with a financial stake under the will or intestacy will have legal standing in a will contest.
- Because the tort action is in personam, the tortfeasor is personally liable for damages, so the plaintiff can still recover even if the probate property is not available. Furthermore, the successful plaintiff in a tort action can recover pre-judgment interest, attorney's fees, and punitive damages—none of which are recoverable in a will contest.
- A lower standard of proof is required. Because the testator is dead, will contests require clear and convincing evidence while a tort action only requires a preponderance of the evidence.
There are several variations of tortious interference of an expectancy:
- tortious interference with an inter vivos gift;
- tortious interference with an at-death benefit, such as when a fraud causes the testator to change the beneficiary of a revocable inter vivos trust;
- tortious inducement of inter vivos transfers that diminish a testator's probate estate, thereby reducing a testamentary beneficiary's or heir's testamentary benefit;
- tortious inducement to execute, not execute, revoke or not revoke a will, thereby interfering with the claimant's testamentary expectancy.
The probate court has no jurisdiction with those torts involving inter vivos gifts or nonprobate at-death benefits. For instance, someone with undue influence could get the donor to change his inter vivos gift or trust to benefit them rather than the heirs apparent, which would not only possibly reduce inter vivos gifts to the heirs apparent but would also reduce their testamentary expectancy by reducing the value of the estate upon the testator's death.
Remedy for Tortious Interference of an Expectancy
Generally, to recover under the tortious interference of an expectancy doctrine, the plaintiff must prove the following:
- that the plaintiff had a reasonable expectation of receiving the gift or benefit;
- that the defendant interfered with that expectancy with tortious conduct, such as fraud, duress, or undue influence;
- that the plaintiff suffered damages as the result of the tortious conduct.
Only about half the states officially recognize the tortious interference with an expectancy tort. Those that do only allow the tort action if there is no probate remedy, or the remedy sought in probate court is either inadequate or denied altogether.
This tort has received recent attention, especially in light of the substantial awards, both compensatory and punitive, in a California Bankruptcy Court, 253 B.R. 550 (Bankr. C.D. Cal 2000), and, on appeal, in the U.S. District Court for the Central District of California, 275 B.R. 5 (C.D. Cal. 2002), in Marshall v. Marshall (In re Marshall), to Vickie Lynn Marshall (aka Anna Nicole Smith) in her action against her stepson on the ground of tortious interference with her expectancy of an inter vivos gift from her then recently-deceased husband, J. Howard Marshall, II. Vickie Lynn Marshall won more than $449 million, later reduced to $88 million, in compensatory damages, minus whatever she recovered in the probate action in Texas, as well as $25 million in punitive damages. (More info: VICKIE LYNN MARSHALL, PETITIONER v. E. PIERCE MARSHALL)