Dead Men Tell No Tales and Other Issues with Contracts to Make a Will
February 19 2020
First, what is a contract to make a will?
A contract to make a will is exactly as it sounds. It is an agreement to provide for a person as part of a decedent’s will. The terms of the agreement could be as simple as a promise to provide services in exchange for a specific cash gift as part of a decedent’s will. For example, Elizabeth may promise to provide caregiving and household services to William in exchange for William’s promise to provide her with $250,000 upon his death. When William dies, hopefully his will has a provision leaving a specific cash gift of $250,000 to Elizabeth. If not, then there has been a breach of the agreement. The agreement can become substantially more complex, particularly when real property is the subject of the agreement. Instead of agreeing to pay Elizabeth $250,000 in exchange for her services, William may promise to leave his house to Elizabeth. Again, when William dies there may be a breach of the agreement if William’s will contains no provision instructing that his house be given to Elizabeth.
A contract to make a will in California can be oral or in writing. The cases litigated often relate to oral agreements which are difficult to prove. Further, the terms of the oral agreement may be so uncertain and indefinite that the agreement is incapable of being enforced. In the above examples, the agreement between William and Elizabeth is potentially vague. What are the specific terms of the agreement? What is the duration of the agreement? Does Elizabeth have to provide services for William’s lifetime? What happens if Elizabeth ceases providing services or dies first? Would this simple agreement be enforceable if there were no writing? These questions make litigation of these matters a near certainty.
The many issues relating to promises to make a will
How do you prove the existence of an oral agreement?
The ability to enter into an oral contract to make a will leads to many problems as the courts attempt to enforce valid agreements, while still trying to effectively dispose of fraudulent agreements. It can be challenging to prove the existence of an oral agreement under any circumstance. The ability to bring an oral contract to make a will claim may lead to parties performing legal contortionism in order to adequately plead the existence of an agreement which may be enforceable in a court of equity. In the context of a contract to make a will claim, it is even more challenging to prove or disprove the existence of an agreement as generally one of the parties to the contract is deceased. Thus, at least one material witness cannot testify, and, if the agreement is oral, there is no writing to substantiate the alleged agreement.
The statute of frauds requires most agreements to be in writing to prevent people from concocting agreements which do not exist. (See Cal. Civ. Code § 1624.) When an agreement involves real property, a writing becomes even more important due to the presumption that the owner of legal title to the property is the owner of the full beneficial title. (See Cal. Evid. Code § 662.) If your name is on the deed, there is a legal presumption that you own the property. The statute of frauds is important for a reason. The formality of a writing requirement dramatically reduces the likelihood that a person could simply invent a fake agreement and enforce such an agreement to his or her benefit.
California Probate Code section 21700 sets forth the criteria for when a contract to make a will can be enforced. Absent the existence of a writing, a contract to make a will can be established by clear and convincing evidence of an agreement that is enforceable in equity. This is the highest evidentiary standard in civil litigation. The idea is that if there are enough indicia of an agreement, then even an oral agreement will be enforced. However, claimants with little to no evidence (likely because the agreements are imaginary or completely contrived) may be able to get out the starting gates with a scintilla of evidence of an agreement, which may or may not be enforceable in equity. Depending on the evidence and the unique facts surrounding the purported agreement, an evidentiary hearing may be warranted. On the other hand, persons with completely legitimate agreements which were never memorialized in writing may be protected from an unfair or inequitable result due to his or her failure to comply with the statute of frauds. This is particularly true when, for all intents and purposes, the parties acted as though there was an agreement.
How do you know when there is a breach of the agreement?
You will often not be able to tell whether the decedent lived up to his or her side of the deal until the decedent has died and the decedent’s estate plan (or lack of estate plan) is revealed. If you were supposed to be in the decedent’s estate plan, but were not included, and are also not an heir of the decedent, you may never even receive notice of any proceeding regarding the decedent’s estate or any administration of the decedent’s trust.
Essentially, the decedent’s promise is akin to Popeye’s friend Wimpy’s promise that “[he’ll] gladly pay you Tuesday for a hamburger today”. You will often not be able to tell whether the decedent lived up to his or her side of the deal until some future time. With respect to Wimpy, the telling time period is when Tuesday comes and goes without any payment by Wimpy for the hamburger. With respect to a decedent’s promise to provide for another upon his or her death, it is normally only when the decedent has died that one can determine whether the agreement was honored by the decedent. At that point, the decedent has likely already received something of value (just like Wimpy with the hamburger) and may not be particularly inclined to honor his or her promise in the future. Like in the cartoons, Wimpy may promise to pay for his hamburger on Tuesday, but he simply will not be around on Tuesday when the debt should be collected. This makes enforcement of the debt challenging.
Of course, there are always exceptions, but it can be difficult to determine when such a promise is breached. Certainly, if Wimpy did not pay up on Monday, he would likely not be in breach of the agreement. However, if Wimpy stated on Monday that he was moving across the country, had no intention of ever paying for his hamburger, and had in general taken steps in contravention of his promise to pay for the hamburger, it may be possible to enforce the agreement prior to waiting until Tuesday. Likewise, a decedent can typically create or revise a will up until his or her death, and is not generally in breach of his or her agreement until the decedent’s death. However, if the decedent promised to give a house to a person under the decedent’s will, and then actively tried to sell it prior to the decedent’s death in contravention of the agreement, it may be possible to enforce this promise prior to the decedent’s death. Clearly, breach of such a claim is largely fact specific.
Should you try to enforce the agreement?
Many wills and trusts contain express language in which the decedent states that he or she has not entered into any contracts to make a will. Thus, enforcement of the agreement may very clearly be in contravention of the decedent’s existing estate plan. As such, a party trying to enforce a contract to make a will should be mindful that enforcement of such a claim may be a creditor’s claim, i.e. a claim for liability of the decedent. If the claimant already inherits under the decedent’s estate plan, the claimant should evaluate whether such a claim would trigger enforcement of the instrument’s no-contest clause. In addition to incurring expenses of litigation, it may not make sense to enforce such a claim if there is a risk of losing one’s inheritance if the no-contest clause is triggered. It is important to timely evaluate and bring such a claim as various statute of limitations or other time bars may be in effect to prevent a person from bring a contract to make a will claim.
How do you enforce the agreement?
Remedies can include money damages or quasi-specific performance. If the decedent promised to leave a specific sum of money, then money damages would be appropriate. If the decedent promised real property or something otherwise unique, then quasi-specific performance may be the preferred remedy, so that the person can obtain exactly what was promised, i.e. the real property or other unique asset. However, if money damages will adequately compensate for the breach, then enforcement of the promise in equity is unlikely.
Contracts to make a will can be difficult claims to prove and enforce. While this litigation can be frustrating when it appears that an agreement has been fabricated and the decedent is no longer around to testify to contradict the fraudulent claim, with the help of experienced trusts and estates litigators these claims can be successfully defeated. Further, in the event that there is simply no writing memorializing a valid agreement, experienced trusts and estates litigators can aid in bringing such a claim so as to hopefully circumvent the statute of frauds.