Let me tell you the story of Ted Will, a man who recently became part of California Judicial history. Ted’s story began years ago when after a divorce, he established a living trust and will to protect his estate for his five children. Flash forward to a few years ago when Ted, at age 81, became reacquainted with 80 year old Gertrude Fochs, his high school flame. They dated, fell in love, and married, even though Gertrude was diagnosed with lung cancer. Because Ted had a substantial estate, they met with his attorney to draft a prenuptial agreement wherein each spouse agreed to waive the right to inherit from the other. Ted’s attorney explained the agreement and offered to obtain independent legal counsel for Gertrude, all at Ted’s expense, but she declined. Based on court testimony, she told the attorney, ‘‘he keeps his assets, I keep mine.” The following day Ted and Gertrude married.
In a twist of fate, two years into their marriage, Ted unexpectedly died, leaving Gertrude as the surprised survivor. Although grieved at the loss of their father, Ted’s children were glad he had sheltered his assets from Gertrude. It was not that they didn’t like her. It was just that, you know, she wasn’t “family.” After all, she had her assets and Ted had his, right? Well, as you might have guessed, Gertrude changed her mind and filed a petition claiming she was a forgotten spouse under California’s Omitted Spouse statute, and attacked the prenuptial agreement as invalid under provisions of the Family Code.
The Omitted Spouse.
The probate code protects a spouse who is not mentioned in estate planning documents executed prior to the marriage. The statute gives the “forgotten” spouse a share of the estate, but not if (1) the spouse was specifically disinherited, (2) the spouse receives assets outside the estate, or (3) the spouse executed a valid waiver. Gertrude’s claim as an omitted spouse relied on her assertion that the prenuptial agreement failed to comply with the Family Code. She claimed she was not afforded the required seven-day waiting period, was not given an opportunity to be represent by independent counsel, and did not receive a separate document explaining the rights being waived. The court found that although Gertrude’s waiver failed to meet the Family Code requirements, the agreement was nonetheless valid. The court relied on a series of Probate Code sections that allow for a written waiver of inheritance rights if, at the time of signing, the waiver makes a fair and reasonable disposition of the surviving spouse’s rights. Another section of the Probate Code allows a written waiver if the surviving spouse had adequate knowledge of the decedent’s property and there was no violation of a fiduciary duty owed to the affected spouse. Ted didn’t hide anything from Gertrude and she knew he had a substantial estate. She also declined an offer of independent counsel to review the agreement, and married Ted the day after she signed the agreement.
Lessons Learned
In the end the court refused to let Gertrude go back on her word and rejected her claim. The lesson learned from the Estate of Will is that life changing events, such as marriage, childbirth, divorce, or the death of a loved one, should cause a person to reevaluate their estate plan and execute amendments of documents as necessary. Had Ted amended his trust and will after he married Gertrude, she would never have made it to court, and Ted’s family would have saved money and aggravation by avoiding a protracted probate litigation after his death.
Courtesy of David Sarazen, Attorney at Law