On November 17, 2020 the NC Court of Appeals decided Taylor v. Vaughan in an unpublished, unanimous opinion that reminds lawyers of the need for specificity in drafting Wills, and the ever-present risk of treating children differently.
Issue: competing devises to decedent’s two children: (A) a 50/50 devise to both children of proceeds from a ground lease on Blackacre, but (B) fee simple devise of Blackacre and Greenacre to only one of the children. Did the fee simple devise defeat the lease proceeds devise?
Holding: the four corners of the Will clearly evidenced testamentary intent to devise lease proceeds 50/50, and this intent violated no rule of law or public policy. The child inheriting the real property does so subject to the other sibling’s right to 50% of the ground lease proceeds.
Analysis: This is a “Will construction” case, i.e., asking the Court to pronounce the true meaning of a Will when parties cannot agree. Standard common law analyses were conducted by the court: (1) testamentary intent is the “polar star” that guides the court; (2) intent is to first be drawn from the “4-corners” of the Will, giving effect to “every word and clause”; and (3) even if clear, the intent must not run contrary to a rule of law or public policy. (Plaintiff/Appellant—who inherited the real property—also raised a creative argument regarding reversionary interests in land in their brief, but the Court resolved the case on other grounds.)
Takeaways: (1) clarity in drafting is critical; (2) thought should always be given to the possibility of a devisee’s challenge; (3) disparate treatment of children is a red flag estate planning decision, which is not to say it is “wrong” but rather that it invariably raises the likelihood of a challenge/dispute. In such cases where additionally clarifying information cannot be wisely included in the Will, a drafter may consider retaining from the client a letter that more substantively details the thought processes supporting the disparate disposition. While such a letter would only be admissible under certain circumstances at a formal trial, its early discovery and production by the drafter can have far-reaching practical effects in nipping a costly dispute in the bud.
*Counsel for all parties were contacted prior to this blog post for an invitation to comment. A discussion was had with counsel for Plaintiff/Appellant. The opinion can be read here. Briefs can be electronically viewed here.
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