Can A Beneficiary Do An End-Run Around An In Terrorem Clause By Getting Someone Else To File A Caveat?
January 17, 2013
Authored by: Luke Lantta
Well, probably not in Georgia. If someone is behind the scenes pulling the strings to “initiate” legal proceedings, then that person – who didn’t actually file a caveat him or herself – may have violated the in terrorem clause.
In the first appearance of Norman v. Gober before the Georgia Supreme Court in 2011, the Court decided that eleven-year-old William Howard Norman, the grandson of Margaret Susan Scheer, lacked standing to challenge Scheer’s will because Norman was not an heir-at-law when the caveat was filed. Norman was a contingent residuary beneficiary under Scheer’s will. In other words, even if Norman’s caveat was successful, he would still take nothing. As the Georgia Supreme Court put it, Norman was not “a person who will be injured by the probate of [the] [W]ill, or who will benefit by its not being probated.” Actually, Norman would have benefited by the probate of the will because it’s the only way he could possibly have had any chance to take a part of Scheer’s estate.
Norman’s mother, however, stood to benefit if the caveat was successful. At the time, the Georgia Supreme Court actually stated that it appeared that the caveat was undertaken for the benefit of Norman’s mother, not him. But, why didn’t Norman’s mother, Lyncia Aynes Norman, file the caveat herself?
Well, there was that problem of an in terrorem clause in the will. Since in terrorem clauses are narrowly construed, let’s take a look a the specific language in play:
Should any beneficiary contest or initiate legal proceedings to contest the validity of this Will or any provision herein or to prevent any provision from being carried out in accordance with its terms (whether or not in good faith and with probable cause), then all the benefits provided for such contesting beneficiary, and any such beneficiary’s descendants, in this Will are revoked and annulled.
So, after the co-executors of Scheer’s estate were successful in fending off Norman’s caveat, they filed a petition for declaratory judgment. In connection with that declaratory judgment action, they served discovery on Norman’s mother and other beneficiaries to figure out who was really behind the caveat. If the caveat was ‘attributable’ to someone other than Norman, then the co-executors wanted to prevent that party from taking any property under Scheer’s will.
Norman’s mother, along with two other beneficiaries, sought to dismiss the co-executor’s petition on two grounds. First, they claimed that because Norman’s caveat was dismissed for lack of standing, it wasn’t an actual will contest, and, therefore, couldn’t have violated the in terrorem clause. Second, they claimed that the rights of the parties already accrued and, thus, there was not reason for a declaratory judgment. Which brings us to Norman v. Gober (II).
On the first argument, the Georgia Supreme Court found that Norman “initiated” legal proceedings which triggered the in terrorem clause. This triggering just might be attributable to another party and the co-executors were entitled to figure that out. The Georgia Supreme Court distinguished this case which sought to “destroy the Will altogether” from a petition for accounting and for removal of executor which affirms rather than destroys the validity of a will.
On the second argument, the Georgia Supreme Court stated that it was “highly probable” someone other than Norman was responsible for the caveat. Under those circumstances, the co-executors rightly invoked Georgia’s declaratory judgment statute to seek clarification from the probate court whether the in terrorem clause can be applied to unnamed parties.