- An executor and beneficiary may agree to modify and change a signed Last Will or Trust
- NJ Law requires certain formalities be followed before an agreement to amend a Last Will can be recognized
- This article discusses NJ Law on modifications and changes to a signed Last Will or Trust
When Can a Probated Last Will Be Modified
In a recent case our office represented a client in a family dispute over the validity of a Codicil to a previously signed Last Will. To keep some semblance of family harmony and to avoid lengthy and expensive litigation, the plaintiff proposed a Settlement Agreement pursuant to N.J.S.A. 3B 23-9 stipulating that a previously signed 2010 Will would be probated and that the interests of certain beneficiaries under the Codicil would be fully satisfied by assignment of their mother’s inheritance under the 2010 Will.
All parties in interest approved and signed the Settlement Agreement except for one beneficiary. He refused even though he would be made fully whole by its terms.
N.J.S.A. 3B 23-9 provides:
Subject to the rights of creditors and taxing authorities, competent successors may agree amount themselves to alter the interest, shares, or amounts to which they are entitled under the Will of the decedent, or under the laws of intestacy, in any way that they provide in a written contract executed by all who are affected by its provisions. The personal representative shall abide by the terms of the agreement subject to his obligation to administer the estate for the benefit of creditors, to pay all taxes and costs of administration, and to carry out the responsibilities of his office for the benefit of any success of the decedent who are not parties …..
Implicit in this basic common-law principle is that heirs of an estate may by agreement modify and alter their interests in an estate and the statute only codifies this right. A further discussion of this issue is addressed more widely in NJ Practice series entitled “Estates and Interests” Ch 5 Section 417 p. 306 to 311. It reads,
Where a testator is dead, the beneficiaries under his Will may validly agree to divide up his estate or a part of it contrary to the terms of the Will provided they are of age and the agreement is supported by consideration. However, the representative of the estate cannot assume to make such an agreement on their behalf, either on the settlement of a Will contest or otherwise, unless the Agreement operates in their favor or the court interfering because some of them are under age, conceives it to be to their advantage and approves the settlement. Although family settlements of a doubtful question over a decedent’s estate cannot be established by merely uncorroborated oral testimony, they are always looked upon “with high favor”. Consideration for such settlements often is furnished by a forbearance to sue on a disputed claim, provided the claim is honestly asserted under the belief that it is substantial, and perhaps subject to further proviso that the claimant has some ground for so believing, sufficient to satisfy a reasonable man position. When all but one of seven beneficiaries sign an agreement in the six received their full consideration the agreement may be binding upon the six even though it has been contemplated that all seven with sign it.
A New Jersey court interpreted this statutory language in a recent case. Here the Executor challenged the right of beneficiaries to alter their distributions which included charities. The settlement was approved by all parties including the Attorney General of this state. In holding that no parties’ interests to the settlement were affected by it, the Executor could not object to the settlement. Said the court:
The question of the Executor’s standing in these proceedings must be considered in light of this legislation. It is evident that he may appear to protect the interest of creditors, taxing authorities and successors (sic. Beneficiaries) who are not parties to the agreement, and to insure the costs of administration are paid. However, since there is no suggestion that the proposed agreement fails to protect those interests and since, in fact, all such interests are fully protected, it is equally evident that the Executor is not an aggrieved party, and that he has no standing to resist that complies with the statutes but violates the testator’s intent may have greater standing.
Family Members Who Want and Agree That a Change to a Last Will is Appropriate
In most of the cases involving a Family Agreement concerning a Will or the estate of the testator, a controversy has arisen and a contract is made to terminate or avoid the controversy. Often there has been a threat of litigation, and in such cases the agreement has as one of its purposes the termination of the danger of litigation. The termination of a bona fide dispute or controversy among members of family concerning an estate is sufficient consideration to support a family settlement.
An heir or beneficiary is not a necessary party to a family settlement of a testator’s estate where the settlement does not impair or affect his or her rights.
In another New Jersey case, where, to avoid litigation threatened by a daughter of the testator concerning a contingent remainder of her gift in trust, six of the seven remaindermen signed an agreement surrendering their interest in the legacy, but the seventh remainderman did not sign. The contract was found to be valid as against the six without the joinder of the seventh, where the litigation was avoided.
Family settlements of a decedent’s estate in which not everyone participates can be binding on the signing parties and may thereafter be enforced by the nonparticipating heir or beneficiary.
To discuss your NJ Estate Administration and Probate matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Estate Administration and Probate Attorney