The recent decision in Estate of William Lipson (Pattillo, J., December 1, 2009, not yet reported) illustrates an important issue that can arise where multiple wills are executed.
Multiple wills can serve as a valuable estate planning tool for the purposes of saving Estate Administration Tax (probate fees). Simply put, one will deals with assets that require probate in order to be administered. The other will deals with assets that do not require probate: usually shares in a privately held corporation. Probate is only required for the one will, and probate fees are only payable with respect to those assets. As probate is not required for the other will, no probate fees are payable with respect to those assets where probate is not required.
The wills are usually executed at the same time. However, great care must be exercised so that the signing of the second will does not revoke the first.
This was precisely the problem in the matter of Estate of William Lipson. There, draft wills were prepared. Unfortunately, the clause that revokes all prior wills was not properly crafted, and each contained a clause that revoked all prior wills. Therefore, the execution of the second will revoked the first. The possible effect of this was that there was a partial intestacy with respect to all assets dealt with by the first will. The draft wills were executed by the testator prior to a final review.
(There was also a problem with how the two wills identified the assets: both wills purported to deal with all assets other than shares in a private corporation. Therefore there was a potential intestacy with respect to the shares.)
One lesson that can be taken from this decision is that when executing multiple wills, extreme caution must be taken in reviewing the wills and monitoring their execution so that one will does not inadvertently revoke the prior will.
More on this decision tomorrow.
Thanks for reading.
Paul E. Trudelle – Click here for more information on Paul Trudelle.