A man’s son’s are involved in litigation over their late father’s estate after his sudden death prevented him from completing an updated estate plan. The man had drafted a plan in 2000 that was complete and properly executed but decided to change it dramatically in 2012, diverting funds that he had planned to leave to his real estate development company to a charitable trust he named for his dog. Unfortunately the man passed away suddenly, just four days after checking with attorneys to see when he could sign the final papers to finish the process.
As a result, the second will was not put into effect at the time of his death and the charitable trust that was a large element of the new plan was not created.
Part of the funds that were going to charity included $105 million in promissory notes from the man’s company. The notes had been scheduled to mature for repayment in 2015 but the man agreed to extend the loan to 2052 in exchange for the company paying back the charitable trust instead of him. That extension had already been completed at the time of his death and conferred a substantial benefit to the company’s balance sheet. However, now that the rest of the plan is not currently in place, the company has the benefit of the extension without the obligation to repay the trust. The man also provided for the company by taking out $60 in life insurance policies which were finalized before his death.
On the other hand, if the court allows the terms of the second will to go into effect it could set a precedent for other incomplete estate plans, rendering the previously strict standards for will execution in that state to be somewhat less strict.
Source:
Charlotte Observer, “Sons of late developer Henry Faison suing his firm over will,” Eric Fraizer, Oct. 22, 2013.