In a case from our own backyard, Keul vs Hodges Boulevard Presbyterian Church, Mrs. Lampp and her late husband executed wills in 2009, several months before he died. Their estate plan provided that after Mrs. Lampp’s death, the entire estate would go to Hodges Boulevard Presbyterian Church. When she died, Mrs. Lampp had $333,000 in Navy Federal Credit Union accounts that she had jointly owned with her husband before he died. Her “friendly” neighbor provided a “payable on death” form from the credit union that gave her (the neighbor!) 75% of the credit union accounts, 10% each to her son and daughter and the remaining 5% to her former daughter-in-law. Nothing was left to the church.
After a lengthy trial, the court ruled that because the neighbor obtained Mrs. Lampp’s signature on the “payable on death” form only days before her death under suspicious circumstances, she had unduly influenced Mrs. Lampp to sign the form. Several disinterested witnesses testified that it was always Mrs. Lampp’s intent to leave the money to the church.
The neighbor had herself appointed personal representative of Mrs. Lampp’s estate, and already had disbursed the “payable on death” amounts to herself and her children. The court ruled that she must reimburse the estate the entire amount that was disbursed. She argued that a “payable on death” account distribution cannot legally be invalidated for “undue influence.” But the court said, oh yes it can!
The appellate court also said that the trial judge was correct in ordering the neighbor to return the funds to the estate. She failed to do so, and the trial court found her in contempt of court. The judge imposed a monetary fine. It remains open whether the neighbor will be cited for criminal contempt and face jail time if she does not fully repay the estate the monies she improperly took for herself and her family.
Bad things can and do happen, so this case is a welcome reminder that no matter what form thievery might take, the court is available to remedy such misdeeds. It also illustrates the importance of not only having a well thought out estate plan, but also making sure that the title to the estate’s assets is not so easily changeable.