Ernie Banks and the Caregiver: Who Gets the Estate?

If you're pulling for the family of Ernie Banks in their dispute with his long-time caretaker over his estate, know this: The widow will fare well no matter what, and the children have some tools to work with (though the best one is too new to be available to them).

 

  

 

The facts: Mr. Cub died on January 23, 2015 in Chicago at the age of 83. A wife and three children survived him. The wife secured appointment as the administrator of the estate (which implies that he died without a will). Then the caretaker filed a will made in October of 2014 that named her the executor and gave all the property to a trust that she controls. A will of that kind is fairly common and is known as a "pour-over will": The probate estate pours over into a trust. Details of the trust have not been reported, which is one of the virtues of having a trust - privacy: Trusts do not go through probate as wills do.

The wife will do all right in this contest no matter what. A spouse cannot be disinherited. At minimum, the wife can exercise her right to renounce the will and thereby receive one-third of the property (the share would be one-half if there were no descendants). (See 2-8 of the Probate Act of 1975 (755 ILCS 5/2-8)). (Of course, that right can be waived pursuant to a pre-nuptial agreement.)

The children have no right of renunciation. Their recourse is to contest the will on the basis of some defect in the making, signing, or witnessing of it. For instance, these facts invite a challenge on the "composite theories" of undue influence and incompetence: The will was made only three months before Ernie Banks died, and he had dementia, according to the death certificate. He put great trust and confidence in the caretaker, who has ended up with total control of the property (if not ownership of it). The will was prepared by a suburban attorney who apparently had no prior relationship with the ballplayer but only with the caretaker.

However, Ernie Banks had every right to give his property away as he pleased, and it is not illegal to be 83 years old. The law presumes that he was competent when he made that will, and the burden is upon challengers to the will to rebut that presumption.

 Which gets to the aforementioned point about a "tool" that is too new to be available to the children of Ernie Banks. Today certain transfers of property to caregivers are presumptively void. Public Act 98-1093, which added Article 4a to the Probate Act, applies to wills, trusts, and the like made or changed after January 1, 2015. Any transfer of more than $20,000.00 of money or other property to a caregiver is presumed to be void if (i) it is challenged, (ii) provision for it appears in a "transfer instrument" intended to take effect after the death of the transferor (e.g., a will or a trust), and (iii) the caregiver is unrelated to the transferor.

The caregiver can attempt to rebut the presumption by (i) showing, by a preponderance of evidence, that the share is no greater than what the caregiver would have been entitled to under an instrument in effect before the caregiver became a caregiver; or (ii) showing, by clear and convincing evidence, that the transfer was not the product of fraud, duress, or undue influence. A caregiver who tries and fails to overcome the will be chargeable with the costs and attorney's fees of the proceeding.

This new law could be improved by expanding it to caregivers who are family members. Family members, after all, account for much of the mischief in this area. An opportunistic family member was the mastermind in a contested probate matter that was recently resolved to the satisfaction of some 30 clients of this office. First he submitted for himself a $17,000.00 claim against a probate estate for caregiver services to a sibling who lived in a nursing home with round-the-clock professional care. That claim, which was allowed in full before we entered the case, was a trifle compared to his other activity. He orchestrated an eleventh hour change to a trust that increased the share earmarked for his children from a mere nine percent of the value of the trust to 75 percent. We built a case for undue influence and incompetence that induced the opposition to propose a settlement conference with the judge. The ensuing settlement agreement restored nearly $900,000.00 to the side of the family that we represented, and reversed the split from 75/25 in favor of the opposition to 63/37 in favor of our clients.

Probate II: A Tool to Avoid Probate Becomes Even More User Friendly

by David McCarthy

One of the many probate-avoidance devices available in Illinois has just been amended to make it easier for homeowners to transfer ownership of the home without going through probate.

 The Illinois Residential Real Property Transfer on Death Instrument Act (755 ILCS 27/1 et seq.) permits residential real estate to be conveyed outside probate by the use of a document that blends the features of a deed and the features of a will and is known as a transfer-on-death-instrument ("TODI").

The amendment, which became effective on August 1, 2014, made a transfer simpler and easier in at least two ways. It eliminated an inference that the beneficiary must accept the transfer during the owner's life time in order for the transfer to take effect. It also altered the nature of the so-called notice of death affidavit. The recording of that document is now required in order for the beneficiary to confirm his or her title to the property where before it was required to perfect title. Failure to record the document is still risky and could be fatal. If it is not recorded within 30 days of the death of the owner, the personal representative of the estate of the owner may take possession of the property, assert control over it, and gain rights to reimbursement and to lien the property; and if the document is not recorded within two years of the death of the owner, the TODI will become void and ineffective.

The amendment also imparted some protection to the so-called BFP -- bona fide purchaser for value: Persons, groups, and organizations who acquire an ownership or mortgage interest in the property for value and without notice before the recording of a lis pendens for an action to set aside or challenge a TODI, take free of the contest.

The amendment also removed the authority of agents acting under a durable power of attorney from creating or revoking a TODI.

The TODI is a handy item in the probate-avoidance tool box, alongside living trusts, the use of joint tenancies, and the small-estate affidavit. Picture this: A married couple raised their family in a house they owned as tenants by the entireties. One of them dies. That would terminate the tenancy, and the house would become part of the probate estate of the survivor unless it is put in a trust or sold. The survivor wants to stay in the house and does not have a trust. And but for the house, the probate estate would be modest enough to qualify for treatment under the small estate affidavit provisions of the Probate Act. That is not a far-fetched hypothetical. And the TODI is an almost perfect solution to the problem.