Fiduciary Dispute Resolution and Litigation

There is no dispute that the North Carolina courts have experienced an exponential increase in the amount of trusts and estates litigation in the past several years. Hickmon & Perrin, PC is a leader in North Carolina trust and estate related fiduciary litigation. Firm principals James Hickmon and Christian Perrin have earned a reputation for excellence through their efforts to protect client interests in high-stakes trusts and estate disputes.

Types of Fiduciary Disputes

A dispute regarding an estate or a trust almost universally centers on one or more parties disagreeing as to the disposition of another person’s property.

  • Whether the document actually reflects the testator’s intentions
  • Whether the testator was mentally or physically competent to understand that he or she was signing a will and that the document that they signed controlled the manner of the disposition of their property at the time of their death
  • Whether the testator was coerced, forced, or unduly influenced by another to sign a document that did not actually manifest the testamentary wishes of the testator
  • Whether the terms of a decedent’s will are contrary to North Carolina law
  • Whether the document was properly drafted or if a dispute arises regarding the interpretation of a provision within the document
  • With respect to an estate’s administration disputes can arise regarding:
  • The ability of the personal representative to properly administer the estate
  • The existence of conflicts of interest which create an adverse relationship between the personal representative and other parties with interests in the estate
  • Whether a personal representative has negligently or intentionally breached a fiduciary duty owed to the estate or parties with interests in the estate

The attorneys of Hickmon & Perrin are available for engagement by clients directly or through Hickmon & Perrin’s association with another attorney or law firm during all phases of a fiduciary dispute, including during litigation and at trial. The firm can advise fellow attorneys and fiduciaries in litigation prevention and assist in managing dispute resolutions.

Declaratory Judgment Actions and Trust Modifications

North Carolina law permits a party with an interest in an estate or a trust to request that a court issue an order declaring the rights, duties, and interests of parties in connection with an estate or trust. A request for declaratory relief can arise not only out of disputed interpretations of a document’s language but also to provide some level of security to a fiduciary when a document is less than artfully drafted and the document’s intent is not entirely clear on its face.

Trust Reformations, Modifications & Terminations

Hickmon & Perrin, PC represents trustees and beneficiaries in connection with consensual and contested proceedings to reform, modify, or terminate otherwise irrevocable North Carolina trusts. North Carolina’s Uniform Trust Code permits a trustee or beneficiaries to petition the court for approval to modify, reform, or terminate a trust for the following reasons:

  • Circumstances exist that were not anticipated by the creator of the trust
  • Modification or termination will actually further the purpose of the trust
  • A termination of the trust is warranted if its continued existence would be impracticable or wasteful or impair the trust’s administration

In limited circumstances, North Carolina’s Uniform Trust Code permits a trust to be modified or terminated without the involvement of the courts. However, a nonjudicial consensual modification requires the written consent of each of the trust’s grantors and all of the trust’s beneficiaries, including contingent beneficiaries. If one or more of the grantors is deceased or incompetent, or one or more the trust’s beneficiaries is unable or unwilling to consent, then a court ordered modification or termination is required.

Will Caveats

The Latin term “caveat” means, for legal purposes, a challenge or contest to the validity of a deceased person’s last will and testament. A person who challenges a will’s validity is referred to as a “caveator.” A person who defends the validity of the will is called a “propounder.”

The most common challenges to a will’s validity involve:

  • Lack of testamentary capacity
  • Undue influence
  • Fraud or forgery
  • Mistake
  • Improper execution; and
  • Revocation

 

Spousal Elective Share Proceedings

The purpose of North Carolina’s elective share statute is to prevent the partial or complete disinheritance of a surviving spouse, whether such disinheritance was intentional or unintentional.

Only a surviving spouse may file a claim with the court for an order awarding an elective share from the deceased spouse’s estate. The claim must be filed during the surviving spouse’s lifetime and must be filed within six months after Letters of Administration or Letters Testamentary are issued to the personal representative of the deceased spouse’s estate.

Unless waived by the decedent’s personal representative and the surviving spouse, the court is required to calendar a hearing to determine the value of the surviving spouse’s elective share no later than six months after the surviving spouse has filed a petition for an elective share.

As a general rule, the value of a surviving spouse’s life estate is based upon the value of all property over which the deceased spouse had a controlling interest at the time of death. Therefore, the elective share calculation not only considers the value of a decedent’s probate assets but also the value of:

  • The death benefit of any life insurance policy insuring the decedent’s life and over which the decedent had the authority to designate a beneficiary
  • The value of any qualified retirement plan assets (Code Sec. 401(k), IRA, or defined benefit plan) over which the decedent could designate a beneficiary
  • The value of all bank accounts, including accounts owned as joint tenants with rights of survivorship with another person and accounts designated as payable-on-death (“POD”) to another person upon the decedent’s death
  • The value of any asset held in a trust over which the decedent had a presently exercisable general power of appointment at the time of death (including the value of such a trust created by another person)