(Dow Jones) Add Alaska to the short list of states that let people guard their wills against challenges after death. And take note: It lets non-residents take advantage.
Trust advisors in Alaska are hoping that clients who fear a relative may challenge their intentions after they die will take advantage of a law signed last week by Alaska Governor Sean Parnell. It allows people to "prove" a will in probate before their death, rather than letting that process occur afterwards. The law also allows them to get a trust declared valid.
Jonathan Blattmachr, a retired partner at law firm Millbank, Tweed, Hadley & McCloy in New York, and an architect of the Alaska statute, said a New York client of his will be one of the first to take advantage of it. The man, he said, is disinheriting an older daughter from a prior marriage and knows the woman "will hire a big gunslinger" attorney to challenge the will.
North Dakota, Arkansas and Ohio also allow what is known as pre-mortem probate of wills. New York has considered doing so, but the move has been opposed by the New York City Bar and others. Delaware has allowed people to validate trusts before they die since 2000.
Many wills and trusts are challenged each year by beneficiaries or would-be beneficiaries, though statistics are scarce on how often these contests occur. Battles after death give rise to a huge problem: The person who left the legacy is no longer there to testify that the document actually says what he intended.
No-contest clauses avert some attacks, but have drawbacks. First, the potential contestant generally must be given something in exchange for keeping quiet. And they aren't enforceable in some states, including Florida. Also, in some states they have no effect if the contestant shows he has a reasonable argument for believing the will is invalid.
Trust advisors in Delaware, known for its progressive trust laws, watched the Alaska development with interest. Richard W. Nenno, managing director and trust counsel at Wilmington Trust Co., said he thinks the new law is a good idea, but that it may turn out to be more effective for trusts than wills. He questioned whether a New Jersey court, for example, would uphold decisions by an Alaska court in the case of a resident from the former state who went to Alaska for pre-mortem probate.
In Delaware, pre-mortem validation of trusts has worked well, according to Peter Gordon, director at Gordon, Fournaris & Mammarella, P.A. a law firm in Wilmington, Del. Most people of means in the state put their wealth into trusts and make a simple, so-called "pour-over" will, that funnels the estate back into a trust that includes an estate plan.
Using the pre-mortem process, the person who makes the will or trust notifies friends and relatives of its contents. In Delaware, these people have 120 days to challenge. If they don't do it within that period, they are blocked from any further contests.
Sometimes a person may "call and threaten to make Dad's life miserable," but no one has actually ever followed through on threats like that, said Gordon.