By Robert Shea III
The death of a loved one is a tragic event. Unfortunately, following in the wake of a loved one’s passing, disputes often arise as to the decedents Last Will and Testament. If such a dispute arises, it is important to understand how legal fees could impact the assets of the Estate.
Once an Executor of an Estate is appointed and the Will is challenged, the Executor may use Estate assets to defend the challenge as long as the contesting party challenges the Will’s validity, interpretation, distribution, or a specific clause. The estate assets may be used to hire an attorney to defend the challenge of the Will. Legal fees incurred in defending the challenged Will, its contents, clauses, or distribution are not be the personal responsibility of the Executor. Instead, under such circumstances, the legal fees are payable from the Estate. However, when an Executor has to defend claims against non-probate assets, then the circumstances change and certain limitations apply.
Probate assets consist of any asset that is owned solely by the decedent and are distributed to heirs by the court. Probate assets may include real property that is titled solely in the decedent’s name or held as a tenant in common; Personal property, such as jewelry, furniture, and automobiles; bank accounts that are solely in the decedent’s name; an interest in a partnership, corporation, or limited liability company; any life insurance policy or brokerage account that lists either the decedent or the estate as the beneficiary.
A non-probate asset is as an asset which does not “pass” through the decedent’s Estate, and bypasses the court process by transferring directly to the beneficiaries. Non-probate assets include property that is held in joint tenancy or as tenants by the entirety; bank or brokerage accounts held in joint tenancy or with payable on death (POD) or transfer on death (TOD) beneficiaries; property held in a trust; life insurance or brokerage accounts that list someone other than the decedent as the beneficiary; retirement accounts.
If a party to a Will challenges the transfer of a non-probate asset, an Executor may be forbidden from utilizing Estate assets to defend against such a claim. When a transfer of non-probate assets benefits the Executor of the Estate to the exclusion of other beneficiaries, then the Executor will not be allowed to use the Estates assets to pay legal fees in defense of such a dispute. Should an Executor use the assets of the Estate to make such payments, then these assets may be payable back to the Estate by the Executor.
The law firm of R.C. Shea & Associates, Counsellors at Law, is a full service law firm representing and advising clients in the areas of Estate Planning, Estate Litigation, Personal Injury, General Litigation, Real Estate Law, Medicaid Law, Medical Malpractice, Workers’ Compensation, Land Use and Planning Law, Wills, Trusts, and Powers of Attorney and much more. Call or visit our office Toms River office at 732-505-1212, 244 Main Street, Toms River, email us at Rshea@rcshea.com or visit our website at www.rcshea.com.