Asking for a Friend

 

Transcript

Jeb Butler:

Today on Asking For A Friend, we’ll talk with Adam Hoipkemier, a partner at Epps, Holloway, DeLoach & Hoipkemier, and a long time friend of mine. We were in law school together, worked on the law review together, and spent a good bit of time working together over the years. But what Adam does that I don’t is estate litigation. That is to say, if someone dies and suspiciously all the money and the will got left to the housekeeper at the last minute, or if there’s a life insurance policy that needs to be paid out and it doesn’t seem to be going to the right place, that’s estate litigation, and that’s what Adam handles. I think you’ll enjoy it, I learned a lot in the interview and hope you will too.

Welcome to Asking For A Friend, The Law You Need to Know, I’m here with Adam Hoipkemier.

Adam Hoipkemier:

Hi, everyone.

Jeb Butler:

Long time friend of mine, who’s an estate litigator. As you know, we do personal injury and wrongful death cases in my firm, so this is not something I know a lot about, but we about to learn some more. So tell us the name of your firm, and what it is you do.

Adam Hoipkemier:

Sure. It’s kind of a tongue twister… It’s Epps, Holloway, DeLoach & Hoipkemier. We have offices in Athens and Atlanta, and I handle estate litigation, which generally involves claims related to situations where someone has taken assets from someone that died.

Jeb Butler:

Okay. I feel like we’ve all heard the pretend story of the grandfather who was in his nineties, and then all of a sudden he passes and everything goes to the housekeeper that he hired two weeks before his death. Is that the kind of thing that we’re talking about?

Adam Hoipkemier:

That’s one classic example of this type of case. There’s a few others… Most of them involve a deathbed will, or a power of attorney, that a family member or close friend has used to transfer money or assets, or just a situation where bank accounts, or life insurance, or property has been transferred to one person and cut other family members out of grandpa’s estate plan.

Jeb Butler:

Okay. Well, as you know, we’ve brought some props, or obtained them around the office… So, we have the owl, that can be grandpa… And then-

Adam Hoipkemier:

Very wise.

Jeb Butler:

Yeah, very wise. This suspicious looking elephant can be the interloper, trying to squeeze in there. And our cute squirrel can be our person who is supposed to receive the assets. So, if we use these as an example, so the archetype I talked about is, grandpa is so old, there’s this new housekeeper shows up, and suddenly squirrel isn’t getting any of grandpa’s assets, while the squirrel’s been a great-grandson for a real long time, because it’s all going to the housekeeper. As we were talking about this, you mentioned something called TOD accounts, is that right? Or POD accounts?

Adam Hoipkemier:

Yeah, POD-

Jeb Butler:

So tell us about that, what does that mean?

Adam Hoipkemier:

Sure. POD means payable on death, and that is how a lot of financial accounts are set up, it’s the default. So when you go to-

Jeb Butler:

Financial accounts, what does that mean?

Adam Hoipkemier:

Right. Bank accounts, brokerage accounts, money markets, savings accounts, any kind of account that you’ll have with a bank.

Jeb Butler:

Yeah. So it’d be like the bank or Fidelity or E-trade…

Adam Hoipkemier:

Yep. Any of that, any kind of brokerage house, bank, or financial institution. They’re set up, so when you, either set up that account, or you always have the option to change it, so when you go there you’ll be able to set it up, and it’ll say, who do you want these assets to go to when you die? And so, that’s payable on death. And those assets do not become part of your estate. So even if you have a will, if you have bank accounts or other financial accounts that are POD, those are not transferred under your will. So even if grandpa has a will leaving everything to the squirrel, if Ellie the elephant convinces him to make his POD accounts, make her the sole beneficiary of those, the will doesn’t have any effect, so Mr. Squirrel gets nothing.

Jeb Butler:

Okay. So what Ellie convinced the owl to tell the bank, controls no matter what the will says?

Adam Hoipkemier:

Correct.

Jeb Butler:

Okay.

Adam Hoipkemier:

And that usually happens in a situation where the owl kind of needs some help writing checks, or has some other reason to need help with their daily affairs, if they’re getting older, and so as a matter of convenience… And it is typically, the elephant may be instate or live nearby, and our friendly squirrel will be out of state or not able to keep an eye on things. And so Mr. Owl will make these changes to the POD, not fully understanding that the will and his intent to leave everything to the squirrel, no longer applies.

Jeb Butler:

Okay, I got it. That makes sense. You mentioned another type of account, so POD, payable on death, I get how that goes around the will. But you mentioned another one, a joint account, I think. Have you seen abuse in that circumstance?

Adam Hoipkemier:

Sure, it’s similar to the POD. So, rather than making it so that the account passes on Mr Owl’s death, a joint account allows somebody else to write checks directly on the account, while Mr. Owl is living. And so, again, the same example where they need help paying the bills or things, rather than using a power of attorney, they may make Ellie a joint owner of the account, to give him joint check writing authority. And they may not fully understand that means that rather than the money in the account going into the estate, it then goes to Ellie when Mr. Owl passes away.

Jeb Butler:

And what about this? So let’s say that Ellie is like, look, Mr. Owl, I could help you pay your power bill, you can barely read the thing anymore… All of a sudden Ellie isn’t just paying Owl’s power bill, Ellie’s also using that joint account for other things, like maybe Ellie’s own groceries. Is that allowed, or can you do something about that, or how’s that work?

Adam Hoipkemier:

So that is allowed under the rules for the account, as a joint signer, all the money in the account technically belongs to Ellie. So if no one else is monitoring things, that is something that we will see happen. Where it becomes improper is if Mr. Owl didn’t understand or know that Ellie was using the money for this purpose.

Jeb Butler:

Okay. So if Own says, all right, Ellie, you can use this to help pay my account, but it doesn’t give Ellie permission to go, I don’t know… Buy a new car with it for herself.

Adam Hoipkemier:

Exactly. That would be a situation that we would see, that’s wrongful, and the squirrel can then come back when this… And many times this is very hard to uncover because of bank privacy laws… So the little squirrel will not know what Mr. Owl is doing with his account. You don’t know exactly what’s going on, unless you’re the joint owner. So this may go on for months or years until Mr. Owl passes away and the estate is set up, and squirrel becomes appointed as what’s called the executor or executrix of Mr. Owl’s estate, and then has the power to go in and find out what happened.

Jeb Butler:

So squirrel’s often kind of late figuring it all out?

Adam Hoipkemier:

Late to figure it out… A lot of the money’s gone, and it becomes challenging to go back and track these assets down.

Jeb Butler:

I wanted to ask you about that too. You’re talking about money being gone or tracking assets… Tell us kind of what you’ve seen with regard to the transfer of property, before death, or improper transfers outside the context of financial accounts.

Adam Hoipkemier:

So there’s a couple ways that property transfers happen. One way is if Mr. Owl had a power of attorney that gave Ellie the authority to sign legal documents on his behalf. So a power of attorney will usually allow you to transfer real estate, write checks, do other things on Mr. Owl’s behalf. So they’ll have the authority to do that, but then, what we have seen… I saw a case, for example, we had a case in Pennsylvania, and there was a grandfather and he made one of his nephews the power of attorney for him. Shortly thereafter, the nephew began writing large checks to himself to fund a massive renovation on his house, to buy a new car, all of this… None of the other family members had any idea what was going on. So we had to go back, track all these assets, put liens on them, get a court order to freeze everything, in order to be able to pursue these claims and to recover that money back.

Jeb Butler:

Okay. So, one of the questions I had is what happens to the assets in question while the litigation is going on? You mentioned liens or something like that?

Adam Hoipkemier:

Yeah, you have to go to court in order to try to freeze these assets while the case is going on. Many times, if you have somebody that’s willing to take assets that belong to a family member or a close friend or acquaintance, they also quickly spend them, or they’re willing to hide the assets. But you can go to court and get an order to either get a freeze on the assets, you can get a court order that the person not transfer them to anybody else. Banks will freeze them for you. So there’s things that you can do, but you usually have to act fairly quickly after you learn that this happened, because there’s no insurance coverage for claims like this. If the money’s gone, frequently, it’s gone for good.

Jeb Butler:

Yeah. Okay. So, I can’t remember, I think we mentioned this earlier but didn’t talk about it in great detail. Do a lot of your cases involve life insurance?

Adam Hoipkemier:

Several do involve life insurance, it’s similar to the payable on death claims that we talked about. So, with life insurance, there’ll be a beneficiary designation form that someone signs when they take out a policy on their life, and they select the folks that they want to have the money when they die. Well, that can be changed by simply submitting a form with new beneficiaries to the life insurance company. So, like you’ll see with a bank account, changing the owner, or the POD beneficiary, you will see situations where Ellie would come to Mr. Owl and get herself substituted in as the beneficiary on the life insurance policy.

Jeb Butler:

I see.

Adam Hoipkemier:

You won’t find that out, many times, until you’ve opened an estate… You may know that there was a policy out there, but if you aren’t named on the policy, the life insurance company can’t disclose any information to you, unless you have the legal authority to act on behalf of the estate. So you’ll have family members that don’t understand what has happened here, have no way to get any information about their loved one’s assets, until they either are appointed as an executor of the estate, or bring a court case and are able to conduct discovery into exactly what happened.

Jeb Butler:

Okay. So, you mentioned it was like the POD account, and that it goes outside the will. It doesn’t matter what Owl’s will said, if the beneficiary form with the life insurance company says everything goes to Ellie.

Adam Hoipkemier:

Yeah, that’s exactly right. So, POD accounts and the life insurance proceeds are assets that are not part of the estate. So even if the estate is divided equally among a group of family members, if those things are changed, the will has no effect for them.

Jeb Butler:

What about changing the will itself? You ever see people try to do that?

Adam Hoipkemier:

We do see that, and many times it’ll be shortly before someone passes away. There’s a couple scenarios… Either, they may sign it, even in the hospital or on their deathbed, and they use something like Legal Zoom to create a will. No lawyers involved, so it’s kind of a rough document, but if it’s witnessed, it can still be valid, at least on its face… And then you may have to go challenge that. And there’s two ways to challenge all of these different transactions.

Those two ways are lack of capacity, meaning the person that died did not have sufficient mental capacity to appreciate the effect of what they were doing, so they could not have intended to do it. So there’s lack of capacity, being dementia, Alzheimer’s, and other kind of mental deficiencies of that type. And then there’s undue influence, meaning that Ellie influenced Mr. Owl into doing something that he did not intend to do. So that can be undue pressure of various types, that may have been exerted on him. That frequently comes up when a family member has been isolated from other family members. You may have folks living out of state, one person close by, and they put a lot of pressure on a family member to make changes that benefit them at the expense of everybody else.

Jeb Butler:

Can you tell us a story? About either of these, a story from your own practice, a current case or old one, if you’re allowed to tell us, where you saw lack of capacity or undo influence?

Adam Hoipkemier:

Sure. It happens frequently, and this is all public record information, so I can tell you the story about it. We had one, and many of them also come up in a case where there’s a stepmother or a stepfather and children of the person that passed away. And there’s, as we all know from our own experiences, there can sometimes be some inherent conflict there, and that rises to the surface when you have money and assets at stake. So one case that we had recently involved a father that had very advanced cancer, he was in the hospital, I think two or three days before he passed away… His wife printed out a will on Legal Zoom, took it to him, and he signed it shortly before passing… Removing, or severely diminishing the assets that went to his two daughters. So we litigated that, we eventually settled it favorably for our clients. But that’s a kind of situation that you’ll see where there’s a will, there’s no lawyers involved… The person who gets all the assets, many times will write it up, fill it out, and then just have somebody sign it.

Jeb Butler:

You say, sign here.

Adam Hoipkemier:

Yep, exactly.

Jeb Butler:

Okay. Let’s talk about a couple of things that you don’t do. Do you write wills?

Adam Hoipkemier:

We don’t write any wills, we don’t do any estate planning. We handle cases that have already gone sideways, where everything’s already happened, and we try to come in and clean up the mess.

Jeb Butler:

So, on this podcast and videocast, we interviewed Kim, your wife, and she does the estate planning, and you’re the guy who comes in after things have all gone to hell.

Adam Hoipkemier:

That’s right.

Jeb Butler:

Okay. Okay. Let’s see… So, you talked about ways to set aside some sort of fraudulent or conveyance, undue influential or lack of capacity… If you’re a court, and you’re looking at this, what’s the bottom line, the simple thing you’re trying to figure out?

Adam Hoipkemier:

The bottom line is what the decedent intended to do.

Jeb Butler:

All right.

Adam Hoipkemier:

So, if they’ve signed documents, that’s some evidence of what they intended… And so you have to show, like we were talking about before, lack of capacity or undue influence, to show that this was not really their intent. They really intended that their accounts and their real estate and their assets were going to these family members, and as a result of something that someone else did, that didn’t happen. So it all comes back to what did they intend, what did they want to happen? And that’s usually established from evidence over the years of what they’ve told people they intended.

Jeb Butler:

Yeah, right.

Adam Hoipkemier:

So if they had a will that was in place for many years and there were no changes to that at the last minute, and you just don’t like what the will says, you usually won’t have a case in that situation. You have to have some sort of, either mental or cognitive deficiency, or you have to have some fairly egregious influence. Undue influence doesn’t mean that she went to daddy and convinced him to do this… That’s not undue influence.

Jeb Butler:

Persuasion is fine.

Adam Hoipkemier:

Right. Persuasion is fine, you can talk about it, you can ask them to do it… And if they were convinced to do it, and that’s what they wanted, then there’s no case there.

Jeb Butler:

Yeah. Okay. So let’s say, I’ve got a relative and I am pretty sure some stuff was going on that’s kind of unsavory, but I’m not sure if it’s that big a deal… I don’t really know if there’s anything I can do about it. How would I know whether it’s worth hiring you, going through the court system, and all that kind of thing?

Adam Hoipkemier:

Well, we get inquiries from clients all the time. So we’re happy to talk through situations and discuss whether the facts rise to the level of undue influence or lack of capacity. Lots of cases don’t. It also depends on what was at stake, how much money was it? Was it a piece of property? Many times if there’s real estate involved, it’s easier to challenge because typically the real estate is still there, titled one way… You still have a chance to go get a court order, freezing them from further transfer, and being able to collect that at the end of the day. Because if the money’s spent, like we said, it may not be worth you bringing a case… If we can only get a paper judgment that’s uncollectable against somebody, it doesn’t do us or the client a whole lot of good.

Jeb Butler:

Okay. And then if I decide to hire you and your firm, how are y’all paid?

Adam Hoipkemier:

We handle these cases on what’s called a contingency fee basis. So that means that if we’re able to recover money or assets from someone that’s done what we’ve been talking about, then we take a percentage of what we recover as our fee. So if we aren’t able to successfully challenge a will or successfully challenge these asset transfers, then we don’t get paid anything.

Jeb Butler:

All right. Well, on behalf of my friend squirrel, thank you for sitting down with me.

Adam Hoipkemier:

Thanks, it’s been fun.

Jeb Butler:

All right. Appreciate you.

Adam Hoipkemier:

Yeah.

Jeb Butler: