Holographic Wills in Virginia: Schilling v. Schilling

Wills (or, more broadly, testamentary instruments) are special: they are governed by a different set of rules than other legal documents. This reality was highlighted in Schilling v. Schilling (June 10, 2010), in which the Supreme Court of Virginia (a) examined the General Assembly's amended statute regarding holographic wills and (b) reiterated the rule that a will "speaks" (or takes legal effect) on the date of the testator's death, not the date of the will's execution. Most legal documents, on the other hand, become effective upon the date of their execution by the party or parties.

You can read Justice Mims's opinion in Schilling, here.

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First, some background on holographic wills:
 
Generally, Virginia law requires that for a will to be valid, it must be signed in the presence of two competent witnesses, who also must sign the will in the presence of the testator (the requirement of witnesses is in addition to other requirements including those governing the age and competence of the testator).
 
There is an exception for a will that is entirely in the testator's own handwriting.  Such a will is known as a holographic will and is valid even without any witnesses (though there is a requirement that two witnesses who are familiar with the testator's handwriting testify that the alleged will is authentic).
 
Until 2007, the Virginia statute governing holographic wills, Code of Virginia Section 64.1-49 (you can read the text here), mandated that a holographic will be "wholly" in the testator's handwriting.  If the testator's relative or friend had added certain words or sentences to the document, those "extra" words or sentences were not deemed to be part of the will -- they were excluded by Section 64.1-49.
 
In 2007, however, Section 64.1-49.1 (the text is here) modified the rule slightly, so that additions by others are now permitted (and read as part of the will), if a proponent of the will can establish by clear and convincing evidence that the testator intended the document - including the extra words - to constitute his or her will.

 

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The question arose in Schilling of how to interpret a holographic will that was signed prior to the 2007 law but not probated (because the testator did not die) until after enactment of the 2007 law. 
 
In particular, Ms. Schilling's son had added certain important words to the will that was otherwise entirely in her handwriting (and which left her entire estate to the same son!), and certain of her other heirs argued that those portions of the will should be invalidated, since it was signed prior to the 2007 law.

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The Supreme Court of Virginia reversed the Circuit Court for the City of Hampton (which had granted the protesting heirs' demurrer), holding that Ms. Schilling's will did not take legal effect until her death on September 23, 2008.

The Supreme Court's decision in Schilling illustrates the rule that makes wills special among legal documents:  whereas most documents are governed by the laws in effect at the time they are signed, wills are governed by the laws that are effective as of the date of death.

A Birthday Celebration at Richmond & Fishburne

Yesterday at the office we had a super fun "Birthday and Best Senior Partner in the World" celebration for Rick. 

Marcelle put together an absolutely fantastic party.  She and Ken prepared homemade barbecue, fresh-caught catfish dip, and tasty cucumbers a la Jinx.  She also baked the cruise-ship cake shown above, to celebrate Rick's passion for traveling the Seven Seas.

And in an unprecedented surprise, the office's waiting area became home to an inflatable bouncy-house in which the grandkids (and even an unnamed Senior Partner!) were thrilled to jump and play.

Happy Birthday Rick and thank you Marcelle for such a FUN event!

Electronic Recording of Deeds

Virginia Lawyers Weekly recently reported (here) that the Rockingham County Circuit Court has implemented a system for electronic recording of deeds and other land records. 

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I was vaguely aware of electronic recording, but I had not previously heard of any local jurisdictions adopting it. 

After reading the news about Rockingham County, I did a little research.

CSC's website has this diagram of the electronic recording process.

I gather that there are several companies that offer electronic recording services.  The larger firms include Simplifile (here), eDocs Solutions (here), and Ingeo (here). 

Interestingly, Corporation Service Company (the leading provider of registered agent and corporate maintenance services) recently purchased Ingeo, so I assume that CSC has identified electronic recording as a growth industry.

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The e-recording companies provide software that enables law firms and settlement companies to electronically transmit deeds, deeds of trust, etc., to the Clerk's Office.  The original document remains in the transmitter's possession. 

Upon receipt, the staff at the Clerk's Office reviews the electronic copy prior to uploading it to the land records system. My understanding is that there are a number of safeguards against fraud or the recording of invalid documents.

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In Virginia, at least ten jurisdictions have adopted e-recording systems, including the aforementioned Rockingham County as well as Loudoun County, Prince William County, and the cities of Virginia Beach and Norfolk. 

I haven't spoken with any attorneys who use electronic recording, so I do not know whether the reception in Rockingham and other places has been positive. 

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I certainly can imagine the benefits of electronic recording: convenience, efficiency, and cost-savings, to name a few.

On the other hand, if Charlottesville and/or Albemarle were to adopt electronic recording, I worry about the human interaction that would probably be lost -- gone the way of the phone conversations and face-to-face meetings that have largely been replaced by e-mails.

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One of my favorite parts about practicing law in a small town has been walking over to the Courthouses to review or record documents.  It gives me the chance to get away from my computer screen and to catch my breath.

I enjoy seeing Bruce Maxa and Phillip from Blue Ridge, hard at work in the records room, and it is fun to chat with Margaret when I record in Albemarle.  I look forward to the changing arrangements of the flower beds in Jackson Park.

Sometimes when I cross the Park, I imagine my grandfather and Juni Fishburne taking a similar stroll in the 1950's; or when I look through the deed books I picture my dad and Rick Carter, circa 1977, running into each other at the Clerk's Office and talking about the latest Redskins game.

Technology can be a good thing, and I am probably sentimentalizing a process that can often be stressful or mundane.  But I do worry about what will be left if we reduce everything to an image on a computer screen.

Some days I even like the musty smell of the Deed Books...

Favorite Tree in Charlottesville

It blossomed later than last year, but the cherry tree in Lee Park (across the street from our office) looks as beautiful as ever right now.  I love the way that the happy pink petals frame the stern grey statue.

Wherever There is a Human Being, There is an Opportunity for a Kindness

 

In January we wrote about the case of Zaug v. Virginia State Bar (here).  Today, a follow-up.

 

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First, a brief summary of the facts: After speaking on the telephone for less than 60 seconds with a plaintiff in a medical malpractice case in which Zaug's firm represented the defendant, the Virginia State Bar (and an appellate court) determined that attorney Zaug had violated the Rules of Professional Conduct. 

In particular, the Bar said that Zaug violated Rule 4.2:

In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so.

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Zaug appealed to the Supreme Court, and the Court reversed the appellate court's finding of misconduct.  You can read Justice Mims's decision here.

 

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The Supreme Court has gotten this decision right. Justice Mims emphasizes that lawyers in Virginia are governed both by the ethical canons and by a duty of courtesy to all.

Our society does not put enough emphasis on politeness. I was heartened that Justice Mims bucked the trend. His opinion includes a reminder that the oath taken by Virginia attorneys includes a promise to "courteously demean oneself". 

Here is an excerpt from the decision:

In the course of being admitted to the Bar of this Court, every attorney swears the following oath: 

Do you solemnly swear or affirm that you will support the Constitution of the United States and the Constitution of the Commonwealth of Virginia, and that you will faithfully, honestly, professionally, and courteously demean yourself in the practice of law and execute your office of attorney at law to the best of your ability, so help you God? (Emphasis added). See also Code § 54.1-3903.  

Further, the State Bar publishes principles of professionalism on its website. The preamble states, 

From Thomas Jefferson to Oliver Hill, Virginia lawyers have epitomized our profession’s highest ideals. Without losing sight of what lawyers do for their clients and for the public, lawyers should also focus on how they perform their duties. In their very first professional act, all Virginia lawyers pledge to demean themselves "professionally and courteously."  

Virginia State Bar, Principles of Professionalism. The principles state that, "In my conduct toward everyone with whom I deal, I should [r]emember that I am part of a self-governing profession, and that my actions and demeanor reflect upon my profession," and "I should [t]reat everyone as I want to be treated —with respect and courtesy." Id. 

The Virginia Rules of Professional Conduct are precisely what they are described by their title to be: rules of professional conduct. They exist to further, not to obstruct, the professionalism of Virginia attorneys. Professionalism embraces common courtesy and good manners, and it informs the Rules and defines their scope. Accordingly, we will not construe the Rule to penalize an attorney for an act that is simultaneously non-malicious and polite.

Happy St. Patrick's Day! 

Albemarle County's "Life After High School" Conference

On Saturday, Albemarle County's Commonwealth's Attorney Denise Lunsford and I spoke at Albemarle County's "Life After High School" conference for students with special needs.  The conference was held at CATEC.  The turnout this year was great.

Denise and I led a discussion about the legal rights and responsibilities of adulthood.  As the basis for our presentation, we used the Virginia State Bar's resource, So You're 18: A Handbook on Your Legal Rights and Responsibilities.

You can download a free copy of So You're 18, here.  This is an excellent book, and I enjoyed reading through it again while preparing for the conference. The book summarizes various legal issues including employment, contracts, jury duty, and criminal charges. It focuses on how a person's rights and duties change when he or she turns 18-years old.

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The "Life After High School" conference included a series of presentations related to completing high school and then transitioning into adulthood.  Other sessions included "Transition from Pediatric to Adult Medicine", "Employer Expectations", and "Alternatives to Guardianship." My sense was that parents and students alike found the presentations informative and valuable.

Conservation Easements Circa 2013

This weekend's Wall Street Journal included an article about the inclusion, in the fiscal cliff compromise, of the generous federal tax benefit for conservation easement donors. Rachel Silverman's piece is here. 

 

The recently-passed legislation provides for a federal deduction equal to the easement's value up to 50% of adjusted gross income, with a carry forward of 15 years.

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The Journal article includes a cautionary note about the IRS's increased scrutiny of easements:

Beware that the Internal Revenue Service has been increasing the number of conservation-easement tax returns it audits, concerned with abuses in which donors have taken inflated deductions or have placed restrictions on land with little conservation value.

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At Richmond & Fishburne we have started work on 2013 easement donations (wow - there is some beautiful property in Albemarle County, and there's nothing better than getting away from this computer for a site visit to meet with a prospective easement donor).

Because of the lengthy review, revision and approval processes undertaken by the Virginia Outdoors Foundation, the Department of Forestry, and other donee organizations, it is important that easement donors start the process early in the calendar year for which they want to make their donation.

Trusts & Estates Downsized

Word has rustled through the lawyer grapevine for several years that a number of large law firms are down-sizing (or eliminating altogether) their trusts and estates practices. 

The explanation is that T&E work does not generate revenue commensurate with other "big firm" specialties, in particular corporate transactions and litigation.

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Now comes evidence of the trend in last week's New York Times.

Peter Lattman reports (here) that Debevoise & Plimpton is eliminating its entire T&E department. Previously, Weil, Gotshal and Gibson Dunn did the same.

Here is Lattman's explanation:

There are problems with trusts and estates within a big law firm model. The practice, to use the law firm management parlance, is not as leverageable as other areas. Corporate and litigation partners generate big fees by assigning armies of junior lawyers to megamergers and complex lawsuits. By comparison, trusts and estates work requires far less manpower, which mean far less profit. 

Another issue in sustaining these departments is that individual clients bristle at billable rates that now reach more than $1,000 an hour. While big corporations grudgingly pay those rates, wealthy families often resist them. 

As a result of these dynamics, firms’ trusts and estates practices have remained small and, in many cases, decreased. At the same time, firms have aggressively built up their corporate and litigation practices across the globe. They have also embraced hot, moneymaking practice areas like patent law and white-collar criminal defense. 

Richmond & Fishburne does a great deal of T&E work, and we think it's some of the most satisfying legal work there is. Helping families plan for the future may not be leverageable from a management perspective, but it is absolutely valuable from a people perspective.

Now let's go cheer for Joe Harris and those surprising Wahoos as they take on the Hokies at the JPJ this evening!

Short Sale Shenanigans = A Michigan Supreme Court Justice Pleads Guilty to Fraud

Individuals who sell their property short (that is, for less than the outstanding value of the mortgage) are required to disclose their other assets as part of the lending bank's approval process.

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Now comes a jaw-dropping story from Michigan about a former Supreme Court justice who pleaded guilty to bank fraud in connection with lying to her bank in order to obtain approval of her short sale.

Diane Hathaway faces a potential prison term of up to 18 months after her guilty plea.

According to the Associated Press (here), Hathaway and her husband owned property in Florida in addition to the house in Michigan that they were selling short.

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The AP reports that, in order to establish financial hardship, Hathaway and her husband transferred the Florida real estate to a relative -- and then the relative transferred the property back, after the short sale was approved and the Michigan transaction had closed.

When the Florida transfers were discovered, prosecutors pounced.

Wow. You can't make this stuff up. The practice points here practically slap you in the face:  

1. Records related to the ownership of real estate are public (and increasingly accessible, not just buried in the deed books).
2. Banks and federal prosecutors have the time and resources to investigate those records.
3. Tell the truth.

And, bonus pointer #4: Charlottesville has at least one resident expert on short sales, attorney Bill Tucker at Tucker Griffin Barnes.  If you are buying or selling in a short sale situation, you should be represented by Tucker or another experienced-hand.

The Charlottesville YMCA at the Supreme Court

For me, one of life's "mini disappointments" is learning that a court has decided an interesting legal question on procedural rather than substantive grounds.

To put it differently: sometimes I get bummed-out when a court resolves a dispute based on the procedural rules (which are often quite technical) rather than evaluating the underlying, substantive claims of the two parties.

(An aside: another mini disappointment, rooted in childhood snow-days, is a predicted snowstorm that fails to materialize.  We had one such "non-storm" last week in Charlottesville, and I felt like a disappointed 7-year old boy all over again.  My fingers are crossed that we get at least one heavy snow during the winter of 2013).

But back to the courts:

I have followed with curiosity the long-running effort to build a YMCA in Charlottesville's McIntire Park. 

(Aside #2: I belong to ACAC and rank it as one of my absolute favorite Charlottesville institutions (along with Bodo's, the Charlottesville Ten Miler, Timberlake's, and Mint Springs). I also think that our community would benefit significantly from a central YMCA facility. I'm uncertain at this point whether I think McIntire is the best location.)

When the YMCA was selected by the Charlottesville and Albemarle governments to build and lease a facility in McIntire Park in 2007, a group of for-profit health clubs filed a lawsuit against the local governments. 

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Essentially (and pardon the over-simplification), the other health clubs claimed that the YMCA received an unfair "leg up" from the City and County because of its non-profit status -- in particular, the clubs said that Charlottesville and Albemarle did not put the McIntire project out for competitive bids using the normal public procurement process.

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The case is Charlottesville Area Fitness Club Operators Association v. Albemarle County Board of Supervisors et als.

The Albemarle County Circuit Court dismissed the clubs' claims, and the clubs appealed to the Supreme Court of Virginia.

I was very curious to see how the SCV would evaluate the case. Alas, Justice Goodwyn's January 10 opinion (the text is here) was something of a let-down.

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The Court held that it could not evaluate the legal rights of the for-profit clubs vis á vis the McIntire Park project because the Fitness Club Operators Association did not have standing to bring a claim against the two local governments. The Fitness Club lacked standing under either Code Section 15.2-953 or the Virginia Public Procurement Act:

The Fitness Clubs are strangers to the Board's negotiations with the YMCA, including its decision to make a $2.03 million payment to the YMCA and enter into the Use Agreement.  

[The relevant Virginia statute] provides no right of action to a third party to challenge a locality's appropriation [under these circumstances].

I would paraphrase the Court's analysis this way: the Fitness Clubs do not have the right, under Virginia statutes, to a court determination of whether their rights were violated. 

Perhaps. But a more satisfying analysis would have reviewed the substance of their claims.

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The majority's analysis is particularly problematic with respect to the Virginia Public Procurement Act (the VPPA).

The majority says that the Fitness Club cannot bring a claim under the VPPA because they "do not allege that the VPPA provides a mechanism for them to protest an award of a public contract and they have no remedy independent of the VPPA."

This reasoning is conclusory (or circular): Charlottesville and Albemarle determined that the McIntire project was not subject to the Virginia Public Procurement Act (which would have mandated a different bid process), therefore the McIntire project was not subject to the Virginia Public Procurement Act.

Justice Mims has the better of it in his dissent:

The VPPA provides no internal procedures for determining whether it applies to a contract (emphasis in original). Yet the General Assembly clearly intended the VPPA to apply to those contracts defined in Cod Section 2.2-4303(A).  

The conclusion that the General Assembly provided no mechanism to adjudicate a dispute over whether the VPPA applied to a procurement action, simply because the VPPA does not contain any, leaves the VPPA unenforceable where a public body determines by fiat that the VPPA does not apply.   

That is an untenable result in face of the clear statutory expression of the legislature's intent that the VPPA's procurement procedures be mandatory, rather than voluntary.

Note that Justice Mims does not opine whether the for-profit clubs have a valid complaint -- merely that they have the right to their day in court on the substance, rather than just the rules. 

And now it's time to contemplate legal theories upon the treadmill...