Skirting the Will Contest: Will Two Decisions Change the Landscape of Inheritance-Related Litigation in South Carolina?

Introduction

In what many financial experts are calling the “great wealth transfer,” the Silent and Baby Boomer generations are expected to transfer roughly USD84.4 trillion in wealth to younger generations through 2045, with over USD72 trillion passing directly to heirs. One inevitable side effect will be an increase in inheritance-related litigation. The most familiar type of inheritance-related dispute is the will contest. However, outside of South Carolina, another type of inheritance-related dispute has grown in popularity over the past few decades – namely, the tort claim for intentional interference with inheritance (IIWI). In 2015, the South Carolina District Court predicted that, if given the opportunity, the South Carolina Supreme Court would recognise the tort of IIWI (See Wellin v Wellin, 135 F. Supp. 3d 502, 511-19 (D.S.C. 2015)), and the South Carolina Supreme Court has already recognised another inheritance-related tort outside of a will contest in Fabian v Lindsay, when it held that a beneficiary may recover damages from a testator’s attorney whose malpractice in the drafting of a will or estate planning document “defeats or diminishes” the testator’s intent. These torts, if utilised by plaintiffs, could change the landscape of inheritance-related litigation in South Carolina, providing a more plaintiff-friendly environment for such disputes.

This article addresses several questions relating to IIWI and third-party estate planning malpractice, including: how the tort claims are different from will contests; what a plaintiff needs to show to prevail on each theory; whether the South Carolina Supreme Court is, in fact, likely to adopt the tort of IIWI, as the South Carolina District Court has predicted; and, what developments have occurred since the South Carolina decisions in which these torts were recognised.

Comparing will contests with IIWI and third-party estate planning malpractice

The most common scenario giving rise to inheritance-related litigation is where a testator’s estate plan initially includes a bequest to a family member, but the testator amends their estate-planning documents – often shortly before death when the testator’s health is in decline – to reduce or eliminate the bequest to such family member. After the testator’s death, the disfavoured family member may challenge the validity of the amended will or trust on various grounds, including “undue influence, fraud, duress, mistake, revocation, or lack of testamentary intent or capacity”, and seek to probate an earlier version of the will or enforce an earlier version of the trust. Of course, while this is a common fact pattern, a wide variety of alternative scenarios – including those involving inter vivos gifts, the destruction of a will or trust, or a family member interfering with a testator’s ability to make a planned amendment to their estate plan – also may give rise to inheritance-related litigation.

Will contests are governed by the South Carolina Probate Code, which is Title 62 of the South Carolina Code. Although South Carolina law (unlike the law of some other states) does provide a right to a jury trial for will contests, the law governing these disputes is generally unfavourable to the party challenging the will (the “contestant”). The most common grounds for challenging a will are lack of testamentary capacity and undue influence. A contestant seeking to prove a testator lacked testamentary capacity has the high burden of demonstrating that the testator not only did not know, but also lacked the capacity to know, the nature of their assets, the natural objects of their affection (ie, their family members), or to whom they wished to leave their assets. Further, South Carolina law emphasises that a testator does not lack testamentary capacity merely because they lack a reasonable basis on which to found their like or dislike of their family members. A contestant seeking to invalidate a will on undue influence grounds also has a high burden: they must present evidence which “unmistakenly and convincingly shows the [testator’s] will was overborne by the defendant or someone acting on his behalf.”

Meeting the high burdens of demonstrating lack of testamentary capacity or undue influence is especially difficult because, among other things, (i) the testator, who typically is the most important witness regarding capacity and undue influence, is dead at the time of litigation (a problem scholars refer to as the “worst evidence” problem); and (ii) South Carolina’s Dead Man’s Statute, with certain important exceptions, prohibits witnesses who are interested in the outcome of the litigation from testifying about communications or transactions with the testator.

Moreover, a contestant who brings a will or trust contest will be adverse to the personal representative or trustee, and South Carolina law authorises personal representatives and trustees to pay their legal fees out of the estate or trust. Thus, in a will or trust contest, the contestant is typically dissipating the estate (thereby reducing any potential recovery) and coming out of pocket for his attorneys’ fees, whereas his adversary is relying on the estate to fund his defence. This asymmetry makes will contests even less favourable to the contestant.

Inheritance litigation outside of the will contest generally sheds these plaintiff-harsh dynamics. IIWI, for example, is an entirely different animal. Rather than challenging the validity of estate planning documents, an IIWI plaintiff sues the alleged “interferer” for damages. The plaintiff must prove the elements of IIWI – which are more plaintiff-friendly than the will contest standards discussed above – and must do so pursuant to the plaintiff-friendly preponderance of the evidence standard. Notably, the law governing IIWI places more emphasis on the alleged wrongdoer, whereas the law governing will contests places more emphasis on the capacity or “free will” of the deceased testator.

Also, unlike in a will contest, punitive damages may be available to a plaintiff who successfully asserts IIWI. Because inheritance-related litigation is almost always emotional and has the potential to incite a jury’s anger toward the alleged wrongdoer, the potential for the plaintiff to recover punitive damages and pain and suffering damages can change the defendant’s exposure – and the dynamic of the litigation – dramatically. Critically, a defendant sued for IIWI typically is unable to pay their attorneys’ fees out of the estate, increasing pressure on the defendant to settle, and eliminating any concern on the part of the plaintiff that the litigation is dissipating the estate. Finally, while will contests must be brought in Probate Court (and can be removed to South Carolina Circuit Court), a plaintiff may be able to pursue a claim for IIWI in federal court if diversity exists.

A third-party malpractice claim against a testator’s estate planning attorney provides some of the same benefits for plaintiffs as IIWI. Punitive damages and damages for pain and suffering are available, and the defendant is generally unable to pay attorneys’ fees out of the estate. As with IIWI, the focus of the inquiry is on the defendant’s actions – not the testator’s capacity.

However, third-party malpractice claims are more likely to be impacted by the “worst evidence problem” since it is necessary to establish the testator’s intent in order to prove that the defendant “defeated or diminished” that intent. The burden of proof is also less advantageous to plaintiffs, as the majority in Fabian required such claims to be proven by clear and convincing evidence.

IIWI: Elements

When the South Carolina District Court predicted that the South Carolina Supreme Court would adopt the tort of IIWI, it also predicted that it would adopt the following elements for the tort: “(i) the existence of an expectancy (ii) an intentional interference with that expectancy through tortious conduct (iii) a reasonable certainty that the expectancy would have been realised but for the interference and (iv) damages.” While the elements of IIWI vary slightly from jurisdiction to jurisdiction, these variations are typically minor.

If the South Carolina Supreme Court does recognise IIWI, perhaps the most important questions the Court will need to answer are: (i) whether a plaintiff pursuing IIWI must first establish that they lack an “adequate remedy at probate,” and (ii) if so, what constitutes an “adequate remedy at probate”? The South Carolina District Court predicted that the South Carolina Supreme Court would adopt this prerequisite, though it deemed this to be a “closer question” than the question of whether the Supreme Court would adopt the tort itself. The District Court did not, however, discuss how it expected the South Carolina Supreme Court to apply this prerequisite. 

IIWI: Will the South Carolina Supreme Court adopt the tort?

In its 2015 opinion predicting that the South Carolina Supreme Court would adopt IIWI as a tort, the South Carolina District Court relies on several considerations.

• Dicta from the South Carolina Supreme Court in a footnote of Douglass ex rel. Louthian v Boyce, 344 S.C. 5, 10, 542 S.E.2d 715, 717 n.4 (2001), in which the court notes that it has “adopted the closely analogous tort of intentional interference with prospective contractual relations”, and then cites to several cases that have (and no cases that have not) adopted the tort.
• The majority of jurisdictions which have considered whether to adopt IIWI have done so.
• The Restatement (Second) of Torts and other treatises recognise the tort, and the South Carolina Supreme Court has relied on these treatises in other contexts.
• The policies that undergird the Supreme Court’s holding in Fabian likewise support recognising IIWI.

Moreover, some scholars have argued – and some courts have found – that IIWI serves an important role in deterring wrongdoing and in protecting beneficiaries who otherwise would not have a remedy in a probate proceeding. For example, if an intestate heir unduly influences a testator to increase their inheritance, a successful will contest may not even eliminate this wrongdoer’s inheritance, much less punish the wrongdoer. Likewise, if a family member unduly influences a testator to transfer assets to the family member during the testator’s lifetime, a will contest will not provide the testator’s heirs with a remedy.

Nevertheless, there is reason to question whether the South Carolina Supreme Court would, in fact, recognise the tort of IIWI if presented with the question today. As the Supreme Court of Iowa noted in an opinion issued in 2020, “enthusiasm for the tort appears to be waning in the most recent decisions from other jurisdictions”. For example, in September 2015, the same month the South Carolina District Court issued its opinion, the Supreme Court of Nebraska refused to recognise the tort. In 2018, in a lengthy, carefully reasoned opinion, the Texas Supreme Court refused to recognise the tort, and the South Dakota Supreme Court, the Kentucky Court of Appeals, and the Supreme Court of Idaho have followed suit. Some recent state Supreme Court decisions have embraced a more measured approached: in 2020, the Supreme Court of Iowa held that a plaintiff must join a claim for IWII with a traditional will contest under Iowa’s Probate Code, and the Supreme Courts of Utah and Maryland recently recognised IWII only to the extent the state’s Probate Codes do not provide relief.

The trend against recognising IIWI appears to be based in part on the arguments made in an influential law review article published in 2013 – an article that the South Carolina District Court cited, but did not discuss, in its opinion. In this article, Harvard Law Professors John C P Goldberg and Robert H Sitkoff argue that will contests, when complemented with the availability of restitution actions seeking a constructive trust, provide adequate protection to injured beneficiaries, rendering the tort of IIWI unnecessary. (See John C P Goldberg & Robert H Sitkoff, Torts and Estates: Remedying Wrongful Interference with Inheritance, 65 Stan. L. Rev. 335 (2013)). Moreover, Goldberg and Sitkoff argue that will contests and restitution actions, unlike tort claims for IIWI, are “governed by specialized rules and procedures that reflect principled (if contestable) policy judgments about how best to address” the unique challenges of inheritance-related disputes, including “the worst evidence problem, the plasticity of undue influence, or posthumous reconstruction of relationships pertaining to wealth.”

For example, South Carolina, like other states, has adopted a scheme of inferences, presumptions, burden shifting, and statutes of limitations that applies in the context of will contests. According to Goldberg and Sitkoff, courts adopting IIWI are allowing beneficiaries to circumvent these specialised rules and procedures applicable in will contests and restitution actions without analysing whether doing so is desirable on policy grounds, and are usurping the role of the legislature, which is better suited to address any deficiencies in traditional probate remedies.

Thus, when the South Carolina Supreme Court decides whether to recognise IIWI as a tort, it will need to consider whether traditional probate remedies fail to provide adequate protection to beneficiaries and adequate deterrence to wrongdoing. It will also need to consider whether the judiciary or the legislature is the most appropriate branch of government to address any perceived deficiencies in traditional probate remedies. 

Third-party malpractice: Elements

In Fabian, the court held that the beneficiary of a will or estate document can bring an action against the testator’s attorney whose “drafting error” undermines the testator’s intent. While a plaintiff ordinarily must prove the existence of an attorney-client relationship to bring a legal malpractice claim, the court recognised that errors made in the drafting of estate documents were unlikely to be discovered until after the client’s death. The court reasoned that it was necessary to relax the traditional privity requirement under such circumstance; otherwise, the intended beneficiaries of the estate would be left without a remedy and an entire subset of attorneys would be “improperly immunize[d]” from liability. The court specified, however, that this cause of action was limited to beneficiaries who are either named in the estate document or otherwise identified by their status. Thus, to prove a third-party malpractice claim under Fabian, a plaintiff must demonstrate (i) their status as a beneficiary under the estate document in question, (ii) a breach of duty owed by the attorney to the testator in the drafting of that document, (iii) damages, and (iv) that the breach was the proximate cause of the damages.

The Fabian decision also held that these third-party malpractice claims may be brought under either a tort or contract theory, and where both could apply, the plaintiff may elect his theory of recovery. In theory, this provides the plaintiff some strategic advantage, though it is difficult to imagine a scenario where recovery in tort would not be preferable, given the availability of punitive damages and damages for pain and suffering. 

Conclusion

The stakes of inheritance-related litigation, and the frequency with which such litigation is filed, will almost certainly rise in the coming decades. If Plaintiffs utilise claims outside of the traditional will contest, and if the South Carolina Supreme Court indeed adopts IIWI as the District Court has predicted, then the landscape of these disputes will shift considerably, and in favour of the challenger.