Probate litigation typically occurs when underlying family dynamics predispose family members to distrust. Often the basis for the suit is that one or more of the deceased person’s family believes the deceased was:
- Incapacitated at the time that the Will was executed;
- Unduly influenced by other beneficiaries; or
- The victim of fraud.
In other instances, probate litigation arises when there are disputes among family members involving Guardianships and Conservatorships, the interpretation of the terms of a will or when a beneficiary alleges misconduct or mismanagement of the estate by the Personal Representative. Although most probate litigation involves family members, it can also involve creditor issues.
Abuse of Power of Attorney
Because a power of attorney grants authority and control over one individual (the principal) to another (the agent), there is potential for abuse.
The most common breach of fiduciary duties concerns:
- Failure to make decisions in the best interests of the principal
Breaches of Fiduciary Duty and Beneficiary Rights
Trustees, executors and personal representatives owe a fiduciary duty to both the beneficiaries and the creditors of the the trust/probate estate.
Additionally, they must protect and conserve assets of the trust/probate estate in compliance with applicable laws and the terms of the trust/will.
Fiduciary duties include:
- The duty of loyalty: The fiduciary duty to refrain from engaging in self-dealing or otherwise not use his or her fiduciary position to further personal interests rather than those of the beneficiary.
- The duty of impartiality: The duty to treat beneficiaries and creditors equally and fairly, to divide and distribute assets appropriately and in accordance with the testamentary intent.
- The Uniform Prudent Investor Act: In Colorado, A fiduciary has a duty to manage estate assets pursuant to the Colorado Uniform Prudent Investor Act.
- Duties of an estate’s personal representative: To settle the affairs of estates–appraisals, creditors, taxes, and distributions–promptly, and to use appropriate means of asset protection and to conserve the estate’s assets; and to act in the beneficiaries’ best interests at all times.
Contesting a will may require the probate court to address issues such as diminished capacity and/or undue influence.
Once a will is admitted to probate, issues regarding alleged breach of fiduciary duty, or other forms of impropriety, as well as beneficiary rights may need to be resolved before probate can be completed and the estate closed. If these are not resolved, then extended probate litigation could result.
When the validity of a will is suspect, it is important to formally open a probate. When probate is opened formally, all beneficiaries under the will receive formal notice of the probate.
All parties who wish to challenge the will’s validity must do so at this point or waive their rights to later challenge the will. A probate, informally opened, subjects the will to challenges throughout the probate process.
Some of the main issues the court must resolve before a will can be probated and the estate administration takes place such as lack of testamentary capacity, undue influence, or if a will is not signed or witnessed in accordance with Colorado state law, it is susceptible to challenge.