Court Decides Issue Of First Impression Regarding Irrevocable Will Agreements
In a case of first impression in Pennsylvania, the York County Orphans’ Court recently clarified the law regarding irrevocable will agreements. Irrevocable will agreements are an estate planning tool through which an individual who makes a will also signs an agreement that the will cannot be subsequently revoked or altered in any respect.
In the case of In re: Estate of Charlotte M. Bankert, a husband and wife executed wills leaving the property to nine surviving children, four of whom were children from the husband’s prior marriage and the five children that the husband and wife had together. Subsequent to the husband’s death, the wife made financial gifts to her five children. Following the wife’s death, the four stepchildren challenged the gifts by the wife to her five children as being in violation of the irrevocable will agreement.
The Court reviewed the irrevocable will agreement and noted that it did not obtain any prohibition on the use or transfer of assets by the surviving spouse during her lifetime. However, after observing that no Pennsylvania appellate courts had addressed the issue, the Court adopted the standard set forth in the classic treatise Page on the Law of Wills and held that even in the absence of an express restriction on inter vivos transfers, inter vivos gifts could be challenged as violative of the irrevocable will agreement under certain circumstances. Specifically, the Court held that to prevail on their claim, the stepchildren would have to establish by clear and convincing evidence that the wife’s gifts to her children were made to evade performance of the irrevocable will agreement and were in fraud of the husband’s rights. Also, the stepchildren would be required to prove that the gifts were (a) unreasonable in amount or represented a considerable part of the wife’s estate or were substantial gifts made to only some beneficiaries who were to receive equal shares under the will; (b) were received gratuitously; and (c) received by children of the wife who had notice of the contents of the irrevocable will agreement. The Court’s decision is published in the York Legal Record in Volume 125, page 37-41.
