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Keywords

liabilitymotionprobatetrustwill
contractprobatewill

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In re Estate of Oliva, Not Reported in A.3d, 2011 WL 3714973

Facts

John Oliva, Jr. named Kellie A. McHugh as the sole beneficiary in his holographic will and on his life insurance policy and pension before taking his own life. Following his death, his parents contested the will, claiming undue influence and lack of testamentary capacity. The court dismissed the lack of capacity claim but allowed the undue influence claim to proceed, which was later settled between the parties. The parents sought to recover counsel fees, which the court initially awarded but later reduced upon McHugh's motion for reconsideration.

On September 22, 2002, decedent named McHugh as the sole beneficiary in a holographic will and the primary beneficiary on his life insurance policy and pension. Decedent took his own life nine days later on October 1, 2002.

Issue

Whether the decedent's parents are entitled to recover counsel fees from the life insurance and pension proceeds, which are considered non-probate assets.

McHugh argues that Parents are not entitled to counsel fees because there is no fund and that any award should not be payable by her personally or from the life insurance or pension proceeds she received as beneficiary.

Rule

Counsel fees in probate actions may be awarded from a fund when it would be unfair to burden a litigant solely advancing their own interests. Non-probate assets, such as life insurance and pension proceeds, do not form part of the probate estate available for such awards.

Rule 4:42–9(a)(2) 'permits an allowance from a ‘fund’ when it would be unfair to saddle the full cost upon a litigant who is in court to advance more than her own interests.'

Analysis

The court analyzed the nature of the assets involved, determining that life insurance and pension proceeds are non-probate transfers that pass outside the decedent's estate. Since the parents did not provide authority to treat these assets as part of the probate estate, the court concluded that they could not recover counsel fees from McHugh, who was the named beneficiary of these assets. Additionally, there was no evidence of gross abuse of trust by McHugh that would warrant personal liability for counsel fees.

However, non-probate assets such as life insurance and pension proceeds pass by operation of contract and property law outside of the decedent's estate.

Conclusion

The appellate court reversed the order requiring McHugh to pay counsel fees to the decedent's parents, concluding that they were not entitled to such fees from non-probate assets.

The award of counsel fees against McHugh is vacated.

Who won?

Kellie A. McHugh prevailed in the case because the appellate court found that the parents were not entitled to counsel fees from non-probate assets.

The appellate court reversed the order for counsel fees, ruling that the parents were not entitled to fees from non-probate assets such as life insurance and pension proceeds.

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