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Why the “Lucid Moment” Needs to End

There’s a case I read a couple years ago that bothers me and that I’ve been wanting to comment on it since.  It is an unpublished decision in which the trial court held that a trust amendment was invalid due to lack of capacity and undue influence.  The Court of Appeals reversed the trial court. It is called Estate of Edward E. Lerg, COA case 293012, January 27, 2011.  Click here to read it.

What bothers me about the case is what bothers me about the legal concept called the “lucid moment.”  The problem I have with the lucid moment is twofold:

(1) It is out of touch with the modern understanding of dementing illnesses.  That is, we’ve come a long way toward understanding cognitive impairment.  One thing we know for sure is that people with dementing diseases don’t get better – only worse.

(2) It supports that concept that the scope of relevant/admissible evidence in capacity contests is limited to the moment of execution.  Again, I would suggest that this is completely inconsistent with the way dementing conditions work, and would, if adhered to, negate most of the best evidence available in these cases.

Mr. Lerg was diagnosed with dementia in 2005 as determined by a medical professional with a high level of expertise in such matters.  The doctor found that he had moderate to severe dementia and that the dementia was then to the point that Mr. Lerg had poor insight and judgment.  Mr. Lerg executed a trust amendment in 2006.  He was evaluated again by the same expert in 2007 and was found to have substantially declined.

While I agree that a well presented case with significant counterbalancing evidence could have been presented to overcome the medical evidence, that’s not how this case played out or how this opinion reads.  Rather, the Court of Appeals reversed the trial court by severely discounting the doctor’s opinion, stating that such evidence (the Doctor’s findings) is of “very little probative value.”  That statement is incredible to me and is, I would suggest, attributable to the archaic concept of a “lucid moment” (although that language was not expressly used by the Court). What’s more, the Court of Appeals cited a 1965 case for the scary proposition that: testamentary capacity “is judged as of the time of the execution of the instrument, and not before or after, except as the condition before or after is competently related to the time of execution.”

At least in the context of dementing illnesses (as opposed, for instance, to mental illness or alcoholism), it is time for the law to catch up with science and for Court’s to recognize that although persons with dementia may be better some days than others, they don’t improve over time, they only get worse.  Evidence of where they were in terms of cognitive impairment a year before they executed the document in question, and where they were a year after, should be extremely probative of the question of their capacity at the time of execution.  Further, if someone is significantly impaired and has a “good day” or “good hour” that “good day” or “good hour” must be seen in the context of their impairments.  That is, if I don’t recall what I did yesterday and won’t remember tomorrow what I am doing today, how can it be said that I fully understand the implications of my actions today?

Family Dysfunction Part V: The Wake of the High Achiever

It is a curious reality of probate litigation that the qualities common to people who create wealth are also qualities of people who create family dysfunction.

What I see is that high achievers (whether they be business people, cutting edge doctors, successful lawyers, or esteemed college professors) tend to be driven people, people who put their passion ahead of their families, and more to the subject of this post, people who were/are overly critical of those they love.  In many families where Dad (that is the most common scenario, although it could be Mom) is highly successful, the kids are screwed up.  The problem typically centers on the inability (or obliviousness) of Dad to the need for him to validate his children.  The children spend their lives feeling like they never measured up to Dad, his high standards or what he expected of them.  As long as he is alive, they live in his shadow, intimidated but at the same time anxious to obtain his approval.

Because of their unique qualities and driven nature, when these high achievers become incompetent, they are difficult to deal with and create special challenges (as discussed in the “Fall of the High Achiever” below); and when they die, their money is often the subject of litigation (the related, but distinct topic of this post). 

It is a dynamic that often extends to multiple generations, as does the wealth.  The kids are impacted, suffering from self-esteem issues and competitive as between them (who did Dad favor or disfavor?), and so they become unstable, often alcoholism is involved; and then their kids (the grandkids) have their own set of issues. 

All parents screw up their children, and (I’ve probably mentioned this before) the hardest thing in life is putting down the baggage that our parents hand to us.  For the children of the high achievers, this task is especially monumental. This reality is the source of much probate litigation: The very families in which there is enough money to justify protracted litigation have the dynamics/dysfunction to drive it.

Attorney-Client Relationship Part III: Client Control

Litigation is a lot of things: expensive, slow, volatile and unpredictable (FYI, some of the things that from the lawyer’s perspective make it fun).  Clients would love to know from the beginning, What will this cost?, How long will it take?, and most of all: How will it come out? At that first meeting, the lawyer can’t answer any of these questions.  As the case progresses, the lawyer should be able to provide more definition –  but their answers are never without exceptions and disclaimers.  Accordingly, in litigation matters, the relationship between the client and lawyer is always a challenge.

From the lawyer’s perspective what really happens in that first meeting is that the lawyer begins to establish the ground rules of client control and client expectations.  These are the two dynamics that will ultimately determine how the case is resolved, and whether the client is satisfied with that result.

Client control is key.  It provides the lawyer with the ability to negotiate settlement discussions – not just settlement of the entire case, but resolution of the numerous interim issues that arise while the case proceeds.

Lawyers who lack client control end up going to court to fight over interim issues that should not require court involvement.  But because they can’t convince their client that this side issue isn’t worth going to court over, they end up in front of the court arguing about things that make them look unreasonable.  This doesn’t just drive up everyone’s costs, but more critically, it begins to paint a picture in the mind of the judge about which side of the case is unreasonable – and that is huge.  Judge’s don’t like unreasonable clients.

Successful lawyers don’t let themselves get suckered into these types of sideshows.  They maintain  the trust of their clients, and accordingly, the client lets the lawyer make decisions about case strategies.

Closely related to the concept of client control is the concept of client expectations.  If a lawyer promises the moon, the only two possible results in the client’s mind: I got what I deserved, or my lawyer screwed up.  Lawyers who ineffectively manage client expectations rarely have happy clients.

Successful lawyers don’t overpromise.  I always look at cases from the perspective of the other side.  What would I argue if I represented that client?  Where are the weaknesses in my own case?  With that perspective, as the case unfolds, the successful lawyer helps the client understand the risks of their case, and what might be a reasonable resolution – which is rarely (if ever) that they are going to get everything they think they deserve.

Managing clients and their expectations is a big part of handling a case.  The relationship with the client should never be allowed to get too hot, or too cold.  As the case develops, as evidence is revealed, and when the client’s expectations start to stray from reasonableness, clear and direct conversations occur to rein them back in.  These periodic adjustments are central to the ability of the client to maintain trust in the attorney, and to be prepared for a result which, although it may not be all they had hoped for, they can understand and accept.

The Attorney-Client Relationship Part II: Arc of the Love Affair

We love our lawyers the day we hire them.  They seem smart and focused (or we would not have signed up).  But as time goes on, doubts and concerns slip in.  They don’t return our calls as fast as we would like, they misspell a name, in talking to them they don’t recall an important fact that we previously advised them about.

So here’s the deal:

If your lawyer is good, they have a lot of other things going on, a lot of other clients, and they are not necessarily preparing everything that goes out (they have staff/associates for that).  This isn’t what you should be focused on.  From the lawyer’s perspective, what matters is that they are staying on top of the case, and that you and they will be ready to peak when the critical events occur (mediation, trial, etc).

From the lawyer’s perspective, maintaining a comfortable attorney-client relationship is part of the challenge of handling the case.  For the lawyer, this is about maintaining an even keel.  Part of this has to do with client expectations (discussed below), but part of it is just staying in touch enough so that the client doesn’t feel (and in fact, isn’t being) neglected during those slow periods.

Cases go on and on.  Most major litigation matters continue for a least a year, often two or three years.   This means that there are times when the lawyer will be focussed on other matters s/he is handling.

At the end, the relationship should come together again.  When the case is mediated and/or tried, the lawyer should be everything you expect of them: focused, knowledgeable and confident.  They should be able to explain what is going on and why they are making the decisions that are being made.  They should have a well-conceived plan/a strategy.

And hopefully the result is consistent with your expectations, which is not necessarily everything you want, but at least close to what your attorney told you to expect.

Attorney-Client Relationship Part I: Reputation

Among lawyers, reputation is a big deal.  At least initially, clients don’t always understand or appreciate how important their attorney’s reputation (and the reputation of the opposing party’s attorney) is in a case.

Attorneys who have good (or even exceptional) reputations – that is, they are reputed to know (or to be experts in) the area of the law they are practicing in, are at an advantage when it comes to litigation.  This is because their reputation influences both the judge and the opposing counsel.

When an attorney with a reputation for being skilled files an appearance in a case, the opposing counsel knows:  This person knows what they are doing and I won’t be able to bully them or trick them.  I better have my act together or I could end up looking stupid in front of my client and the judge.

When an attorney with a reputation for being skilled enters a courtroom the judge knows: This is someone who knows what they are doing.  That means I can rely on their research and their representations about the law and facts. I can trust that they know the likely outcome of the case and will work to settle the case in a reasonable manner.  The judge also knows that a skilled attorney will always be thinking about the next phase – the appeal – and the decision the judge makes will be made with more caution when they think an appeal could be pending.

There are a lot of lawyers out there.  Some would say (and I would agree) too many.  Because of this, clients can always find someone to handle their cases less expensively.  Lawyers who have no focus to their practice or who do sloppy work, have little to offer to the client who simply wants something done cheaply – except: I will do it cheaper than the next guy/gal.

Lawyers with a reputation can say: you can get it done cheaper somewhere else, but if it is results that you want, you might want to consider paying more to hire me.

Lawyers who have established reputations understand the added value that their reputation provides, and jealously guard that reputation.  These lawyers won’t compromise their reputation for a client who wants them to advocate unreasonable positions.  Doing so is just going to hurt their reputation, which will negatively influence them in this case, and in cases to come.

Lawyers without reputations to protect will allow themselves to be controlled by clients with unreasonable objectives, because they can’t afford to lose the client.  This of course just erodes their reputation in the eyes of the judge and opposing counsel (and, in case you were wondering, attorneys talk about this kind of thing among themselves).

The New Terror Clause Case

An unpublished Court of Appeals opinion out of Kent County offers some interesting issues regarding the scope of no contest clauses.

Decedent had three children, one of whom was developmentally disabled.  Decedent was that child’s plenary guardian.  Daughter A was the standby plenary guardian.

Decedent left a will that said that Daughter A would receive a 1/3 interest in the residue of the estate, but that her share would be forfeited if she acted as guardian for disabled sibling.

After Decedent’s death, Daughter A took steps to obtain her appointment as guardian over her disabled sibling, obtaining the appointment based on her position as standby guardian.

Personal Representative petitioned the Court to affirm the enforcement of the terror clause, and prevailed on summary disposition, which decision was upheld by the Court of Appeals in Estate of Rudy Jauw, September 13, 2012.

It is notable that in this case the terror clause was used to cause a beneficiary to lose her share of the estate for something other than challenging the validity of the instrument.  Rather, the penalty was imposed for behavior unrelated to the validity of the document itself.  Planners may want to consider other applications for this type of expanded terror clause.

Litigation Strategies Part IV: Getting Homered

Here’s a concern clients often face when deciding to hire me for matters outside the counties in which we have offices: Will it hurt their case that I am not a local attorney?

In the legal world we have a term for those situations where we travel to a distant court and are treated shabbily while our opposition, local counsel, seems to get all the breaks. We call it “being homered.”

I have been homered – but the truth is that rarely happens for several reasons:

Been There.  I have now appeared in most of the counties in Michigan (43 and counting).  My practice is statewide.  I have appeared in all of the big counties in the state, and am a “regular” in most of them.  I have appeared in probate courts from Houghton to Monroe, Grand Rapids to Port Huron.

Probate is specialized.  Because the work in probate court is limited in scope, as compared for instance to circuit courts; probate judges understand that they are likely to interact with specialized attorneys in the more complex matters that come before them.

Reputation.  Typically when I, or someone from our firm, appears in a distant Court the Judge is welcoming.  Not to be arrogant, but we are a high-profile probate firm.  Probate judges throughout the state would likely recognize the firm name and would be at least somewhat familiar with the names of at least 4-5 of our most prominent lawyers.  Many would look forward to interacting with attorneys they recognize are leaders in probate law.

Small County Judges like action.  Michigan has a probate judge in nearly every county.  The amount and type of cases that come through the smaller counties can seem routine and at times, I suspect, boring.  When our firm appears in a matter it would suggest something interesting and complex is going on, and accordingly, that there will be interesting new issues to decide.  Most judges would welcome that.

When being homered appears to be a risk in a case, one easy answer is to retain local co-counsel.  This can be a good strategy in cases even where there is no concern about being homered, just so there is someone close by to handle filings and more routine hearings.

The decision the client has to make is whether a concern about being homered is offset by the benefit of having en expert. For complex matters and matters involving significant assets, my experience would suggest that is almost always best to go with the expert.

Litigation Strategies Part III: Bulldog Lawyers

Clients are funny.  When they need representation in litigation, some of them (especially ones who are new to litigation) believe that they want a “bulldog” – a lawyer with a lot of bark and bite.

That’s not me.  Further, when client’s come in with that perspective, my warning light goes off about whether I want them as a client or not.  Let me explain.

Bulldog lawyers are a bad idea for all sorts of reasons:

1. Bark and bite doesn’t provide any benefit.  Unless the attorney on the other side is completely inexperienced and wimpy, bark and bite are just annoyances.  They make the whole, already unpleasant, process of settling disputes more unpleasant than they otherwise need to be.   They add no value to their client’s case by doing so.

Litigation is about money and risk.  How much money is at issue here, and how much is my client going to end up with (net of legal fees)?  All the stuff about who did this and who did that is interesting, in that it may lead to admissible evidence that helps tell the case story, but all the lawyer sees is money and risk.  Good lawyers don’t really care who is right or wrong, they know the truth is probably in the middle, and they understand that litigation is merely about creating and selling risk. The more risk I create that the other side will lose the case, the more the other side has to pay me to settle (make the case go away), and vice versa.

2. Bark and bite means that the bulldog attorney’s client is looking for show, and expecting something from the legal process that doesn’t exist.

I tell clients at the outset, if you’re waiting for the day that you emotionally crush the opposing party and the judge stands up in his/her seat and gives them a good tongue lashing, save your money, it isn’t going to happen.  I explain: litigation goes on way longer than you think it should, costs way more than you think it should, and the result is rarely all that you wanted and hoped for.  Settlement is good, and the day will likely come when I will tell you that in my opinion settlement on terms you find less than fulfilling is better than a costly trial.  I don’t know what the terms of a “good settlement” are now – but some day I will have an opinion on that issue.

3. Judges don’t like bulldog attorneys because it means that they aren’t being reasonable, don’t have good client control, and therefore, if the matter doesn’t settle it’s probably because of bulldog.  Judges listen to people bicker all day.  They don’t like it.  They will always favor the party that doesn’t engage in the bickering and who acts reasonably to settle the case.  That isn’t to say a good lawyer is never going to throw out incendiary allegations, but s/he only makes such allegations as needed and where completely justified, recognizing and factoring in the negative consequences of doing so.

I explain all this to my clients because I want them to have reasonable expectations.  Attorney-client relationships go badly when clients believe that the attorney isn’t delivering on what they were promised.  Bulldog attorneys who promise to “crush” the opposing side and “win” the case, can only look like failures when the other side isn’t crushed and they face a trial that they may not win.  Typically their case and their relationship with their client fall apart at critical times – and that is just more good news for the other side.

I understand why some clients want bulldogs.  They watch TV and movies that portray litigation as much more dramatic and sexier than is the reality.  They may have had experience with weak and inexperienced attorneys who in fact allowed themselves to be taken advantage of by stronger, more experienced, opposing counsel, and as a result are fearful about engaging another attorney who may have weaknesses.  People looking for representation in litigation should look for strong attorneys (experienced and knowledgeable) but not bulldogs.

Bulldog attorneys are rarely strong lawyers, just lawyers who need the work so that they can to pay their bills. Because they need to land the case, they tell clients what the client wants to hear (“I’m going to crush the other side” etc.), when they should be helping them understand the realities of what they are getting into.

In the end, I almost always enjoy my clients.  That’s because at this stage of my career I have good client control, and that is true because I try to be realistic and honest with them from the get go.  And I am fortunate to be busy.  If a client thinks they need a “bulldog,” they can keep looking.  If I think their expectations are unreasonable, I can say “no thanks.”

Litigation Strategies Part II: Telling Stories

Financial exploitation of vulnerable adults takes place in the shadows.

When these cases finally get to court, the object of the exploitation is either dead or too demented to explain what happened.  So the trial becomes a process of trying to recreate an event to which the alleged perpetrator is probably the only witness.

Was it a gift or a grab?

What I find most interesting and enjoyable about these cases is that, as much as any other type of litigation, the result (who wins) is often a function who has the better lawyer – and more precisely, which lawyer is better able to take the admissible evidence and shape it into a believable story.

Was this the good daughter who took care of Mom when the other children wanted nothing to do with her and who Mom understandably wanted to financially benefit more than those others?; or The bad daughter who, left alone with her demented mother took advantage of her position of trust and her mother’s cognitive impairments to benefit herself?

The discoverable facts could support either story.  The better lawyer will control the story line of scrimmage and force the case to be developed along those themes that support their version of the case.

The end game is the trial.  At that point it’s about admissible evidence, fact and innuendo. Forget about the law and jury instructions, the fact finder (judge or jury) is going to apply an old-fashioned smell test, and whichever party can tell a story that passes that test is the party that will prevail.

Litigation Strategies Part I: I Love You But…

Litigation clients often misunderstand the likelihood of recovering legal fees.

They believe, understandably so, that because the other party (whoever that may be) did something bad so as to cause the litigation to be necessary, that someday the Court is going to order that the other side must reimburse them for the thousands (tens of thousands) of dollars they have spent or are spending for legal fees in their case.

In so many words, I say to them: “I love you but don’t ask me about getting your legal fees paid by the other side again. I will see what we can do, but the likelihood that you will recover any significant amount of your fees is slim.”

It’s just the way it is.

The American legal system is built on the idea that each party pays their own fees.  Pretty much all other legal systems operate on the idea that the losing party pays the legal fees for the prevailing party.  I won’t get into the relative merits or demerits of each system, but I think the American rule is best.

While there are fee shifting devices built into the process, those opportunities are generally limited, and my experience with Courts is that they are very hesitant to exercise their authority to shift costs in any meaningful way.  A lot of that has to do, again, with the American rule.

The truth is that outspending an opposing party is a valid and often useful litigation strategy that has to be considered at the start of each case.  Can you keep up with the other side, can you outspend them, or can they wear you down simply by keeping the litigation going and outspending you?

An important variation on this calculation that comes up in many probate litigation cases is that the party in control of the estate (personal representative, trustee, conservator, as the case may be) has access to the community pot to finance their case.  At the outset of many cases, this issue is raised, and the party not in control will seek to obtain an order preventing the party in control from using those funds to finance their legal costs.  There are several theories which may apply, but in the end, the general rule is that the party in control can use the estate funds to pay their legal bills.