Friday, May 16, 2014
Legal mistakes made during ones lifetime can create many problems at death. Provided below are three court cases, in which legal mistakes triggered unnecessary litigation after death.
- Selzer v. Dunn. “No buy-sell agreement means no sale.” In this case, two co-business owners in Texas purchased $2 million life insurance policies on each other’s lives. When one of the business owners passed, the proceeds were paid to the surviving shareholder. However, the family of the deceased wanted the surviving owner to surrender the insurance proceeds in return for stock, but the owner refused. The court held the owner was not required to purchase decedent’s stock. There was neither an oral agreement nor an implied trust.
- Aldrich v. Basile. “A DIY last will and testament is DOA in Court.” Ms. Adrich failed when she created her own will. Her pre-printed forms failed to indicate who would inherit her estate and after her death, her brother asserted he should inherit the bulk of her estate as her intent was clear. Her nieces argued there was no valid will and therefore they should receive the residue of the estate by law. The Florida Supreme Court held for the nieces.
- PHL Variable Insurance Company v. Bank of Utah. “The consequences of lying.” A $5 million life insurance policy was issued on William Close. When he died, the insurance company refused to pay the death benefit and refund the premiums paid because Mr. Close had lied on various material questions in the life insurance application. The court agreed that no death benefit should be paid.
See Steve Parrish, Legal Mistakes That Haunt After Death: Three Cases, Forbes, May 13, 2014.