Court Rules Testator Was Not Under Insane Delusions When He Revoked His Will

It has been estimated that well over 1/2 of all Americans do not have a will.  I personally know many attorneys that do not even have a will, even though virtually every Arkansas lawyer passed a bar examination covering wills and trusts and more than likely also took a decedents' estates class in law school.  Whether because of not wanting to confront the inevitable (death), procrastination, or other factors, drafting a will is simply not high on the list of priorities for a large percentage of people. 

A primary reason why people do have a will, however, is to have direction and control as to whom their property will be distributed after their death.  Dying without a will is called dying "intestate," and the intestacy laws of the State of Arkansas set forth a rather strict statutory scheme detailing how a person's property will be divied up (to children, descendants of children, surviving spouse, parents of the decedent, etc.).  If a person does have a will, but then validly revokes it without ever executing a new one, then that person will "die intestate" as well.

That is what happened in the recent appeal of Heirs of F.D. Goza, Jr., et al. v. Estate of William E. Potts, Deceased, CA 09-235 (February 17, 2010).  Specifically, this was a probate case in which the former in-laws of the decedent, Mr. Potts, were attempting to take their shares as beneficiaries of a 1989 will which, the estate asserted, was revoked sometime between 2002 and Mr. Potts' 2006 death.  The appellants, relatives of Mr. Potts' deceased wife, Ms. Goza, argued that Mr. Potts lacked testamentary capacity and was under insane delusions when he revoked his will.  The trial court disagreed, ruled that Mr. Potts died intestate (meaning that Mr. Potts' property amounting to several hundred thousand dollars went to persons other than the appellants), and the Arkansas Court of Appeals affirmed. 

The facts and circumstances surrounding Mr. Potts' revocation were interesting to say the least, and involved Mr. Potts marking "void" over each paragraph, writing "bastard" and "get nothing" on the will, applying Liquid Paper over the names of the beneficiaries, and later shredding the document in front of witnesses.  There were tales of alleged affairs and "wife stealing," temper tantrums, and other curious claims, but in the end the Court held that "the evidence clearly showed that Bill was an irascible, angry, suspicious, controlling, profane, and difficult man for most of his adult life; however, we cannot say that the trial court erred in refusing to find that he labored under insane delusions."   

The lesson learned from this case is that not only must a testator have the capacity to execute a will (the ability to understand the effects if executed), the testator much also have the same capacity to later revoke that will after it has been executed.  As the Court held, "complete sanity in a medical sense is not essential to testamentary capacity, provided power to think rationally exists."  Given the steep standard for proving lack of capacity by a testator, contesting a will (or, in this case, a will revocation) can be a difficult task in the absence of very persuasive evidence.    

Removal Of An Executor (Personal Representative) From An Estate Under Arkansas Law

As previously discussed on this Blog, an executor, also known as a personal representative, is a person who is charged with the responsibility of administering an estate after another person has passed away.  They will typically do things like collect and inventory the deceased's assets, manage the property, pay the debts, and distribute property according to any will or the intestacy laws (setting forth distribution priorities for those dying without a will).

However, conflicts will sometimes arise between the executor of the estate and the beneficiaries of that estate, the latter of whom are generally supposed to receive bequests or property from the estate.  Perhaps the executor is alleged to be operating under a conflict of interest, is improperly personally benefitting from the property of the estate, or is simply not carrying out their duties.  In Arkansas, there is a specific statute that governs these conflicts and sets forth the grounds for when an executor can be removed from his or her office.  For anyone who currently is or ever anticipates administering an estate in Arkansas, or who is or ever will be the beneficiary of an estate,  it is worth getting familiar with the removal statute.

Specifically, under the Arkansas Probate Code of 1949, Ark. Code Ann. § 28-1-101 et seq., the Court appoints and issues letters testamentary to a personal representative to manage and preserve the property and rights of the decedent until distribution according to the testamentary document or appropriate intestate statute. Ark. Code Ann. § 28-48-102. It is well-established that "[t]he personal representative occupies a fiduciary position toward the heirs, and it is his duty to act toward them, as the beneficiaries of the trust administered by him, with the utmost good faith." Price v. Price, 253 Ark. 1124, 1137, 491 S.W2d 793, 801 (1973). The personal representative generally continues in that office unless removed due to one or more of the grounds set forth in Ark. Code Ann. § 28-48-105.

Ark. Code Ann. §28-48-105(a) (emphasis added) provides that:

(a)(1) When the personal representative becomes mentally incompetent, disqualified, unsuitable, or incapable of discharging his or her trust, has mismanaged the estate, has failed to perform any duty imposed by law or by any lawful order of the court, or has ceased to be a resident of the state without filing the authorization of an agent to accept service as provided in § 28-48-101(b)(6), then the court may remove him or her.

(2) The court on its own motion may, or on the petition of an interested person shall, order the personal representative to appear and show cause why he or she should not be removed.

With this in mind, Ark. Code Ann. §28-48-107(a) (emphasis added) provides that "[w]hen a personal representative dies, is removed by the court, or resigns and the resignation is accepted by the court, the court may, and, if he or she was the sole or last surviving personal representative and the administration is not completed, the court shall, appoint another personal representative in his place upon the motion or petition of an interested person."

Separate and distinct from the statutory grounds for removal of a personal representative, multiple Arkansas cases also shed light on this issue. For example, in Robinson v. Winston, 64 Ark.App. 170, 175-76, 984 S.W.2d 38, 40-41 (1998), the evidence was deemed sufficient to warrant removal of the personal representative due to her attitude toward a person interested in the estate that created a reasonable doubt as to whether she would act honorably, fairly, and dispassionately in her trust, and because the tension and her continuance in the office would likely render administration of the estate difficult, inefficient, or unduly protracted. See also Matter of Guardianship of Vesa, 319 Ark. 574, 579-82, 892 S.W2d 491, 494-95 (1995) ("unsuitability" of ward’s sibling to serve as guardian of the estate, justifying removal on probate court’s own motion and appointment of neutral successor, was established by evidence of family friction among ward’s siblings which adversely affected administration of estate).

Likewise, in Guess v. Going, 62 Ark. App. 19, 23-25, 966 S.W2d 930, 932-33 (1998), testimony of the personal representative that "mother’s love" precluded her from challenging a land sale agreement that was extremely favorable to her daughter, even though the terms of the agreement made it unlikely that the heirs of the estate could ever benefit from what would have been the estate’s largest asset, established a conflict of interest making the executrix unsuitable and warranting her removal. See also Price v. Price, 258 Ark. 363, 378, 527 S.W.2d 322, 332-33 (1975) (wherein a personal representative who had persistently acted in furtherance of her own interests in a manner to deprive her step-children of any benefits from their rights of the father’s property, and who had been recalcitrant about compliance with her fiduciary responsibilities and directions of the court, was deemed unsuitable for discharge of the trust involved in acting as personal representative of the estate such that removal was appropriate).

In sum, those administering estates in the State of Arkansas must take their duties seriously so as to avoid placing themselves in a situation in which their actions and inactions could be questioned.  Similarly, beneficiaries of an estate should be vigilant in monitoring the conduct of the executor to ensure that they are properly doing their job.  In the appropriate case, Arkansas courts have not hesitated to remove executors where the facts and circumstances warrant it.