The Failure to Coordinate the Provisions of Your Current Will with Documents Referenced in that Will Can Have Costly Consequences

A recent decision of the New Jersey Superior Court, Chancery Division, highlights the importance of reviewing your estate plan to ensure that it meets your current objectives and that lifetime trusts or charitable foundation documents referenced in your estate plan remain in force. In a decision entitled In the Matter of the Estate of Muhammed Belal Hussain, deceased, members of a decedent’s family sought to invalidate a charitable bequest to a foundation that was identified in the decedent’s last will and testament. The heirs argued that the bequest to the charity lapsed because the referenced foundation was never established. The decedent’s Will was signed in December, 2008, almost five years before the testator died in 2013. The court ruled that the charitable bequest failed because the charitable foundation did not exist at the time of the decedent’s death.

Although in certain instances a court can invoke the cy pres doctrine or the doctrine of probable intent to save an intended charitable bequest, the chancery judge refused to do so in this instance. The decision noted that the executor of the estate attempted to create a foundation after the testator’s death. The court rejected this post-mortem tactic and declined to permit the testamentary bequest to a foundation that never existed.

The decision highlights the importance of reviewing your estate plan to ensure that it meets your current objectives and that any trust or charitable foundation referenced in your most current Will is in full force and effect. In the decision summarized here, the decedent’s failure to establish the charitable foundation in the five years after signing the Will led to the delay, expense and uncertainty of a probate litigation.

An estate plan is not a boilerplate Will or trust that a client signs and stores in a file. On the contrary, a coordinated estate plan is necessary so as to ensure that you preserve your assets and business interests for those beneficiaries or charities you presently intend to benefit. It is essential to have your estate plan reviewed periodically to ensure that your plan is coordinated with the titling of your assets, your beneficiary designations and the documents referenced in your Will. Equally important, the plan should be reviewed to confirm that it addresses current estate and inheritance tax laws.