On June 12, 2020, the Supreme Court of Iowa issued a decision in the Harold Youngblut vs. Leonard Youngblut case.  The case involves two brothers, Harold and Leonard Youngblut.  Their parent were Earl and Agnes Youngblut.  Earl and Agnes were the parents of twelve children, three of whom predeceased them.  Earl and Agnes formed a corporation, Youngblut Farmland Ltd. in 1980 and transferred most of their farm assets into the corporation with the exception of farm ground in Tama County known as the “South Farm”.  Both Harold and Leonard worked for the corporation until Leonard left in 1988 over a dispute with Harold.

probate law case iowa supreme courtDuring the 1980’s, Earl and Agnes regularly transferred shares in the corporation to their children.  Earl and Agnes planned that Harold would ultimately control the corporation and that the other children would have their shares redeemed in cash.  In 2011 Earl and Agnes executed new mirror wills which left their property to each other.  Upon the last to die, the shares of the corporation and the South Farm was bequeathed to Harold and the residue of the estate was divided equally among Leonard and the other children.  In 2010, one of the daughters passed away and her shares were redeemed by the corporation.  In 2013, the shares of the corporation owned by the remaining seven daughters were redeemed.  After the redemptions, Earl owned 30.28% of the corporation, Agnes owned 30.28% of the corporation, Harold owned 15.21% of the corporation, Leonard owned 13.15% of the corporation, and other relatives owned the remaining 11.08% of the corporation.

In January 2014, Earl and Agnes moved to an assisted living home.  Shortly thereafter Earl suffered a stroke.  At the same time Agnes continued to battle terminal cancer.  On February 22, 2014, Harold had his parents sign a four-year lease to rent the South Farm to him.  In early March of 2014, Earl and Agnes deeded the house, which they had recently vacated to Harold.  Two days later, on March 7, Earl and Agnes executed new mirror wills.  Like the 2011 mirror wills, the 2014 mirror wills bequeathed all the parents’ shares of the corporation to Harold.  However, the South Farm was changed to be bequeathed to Leonard provided that Leonard tendered his stock in the corporation to Harold for one dollar.  The residue of the estate was to be divided among the seven daughters.  Each of the wills contained an in terrorem clause which provided that if any beneficiary contested the wills, any provisions made for said person under the Wills would lapse and the person would be treated as if he or she had predeceased the testator, leaving no issue.

On June 1, 2014, Earl passed away and Agnes passed away on the following day.  Both of their wills were admitted to probate.  The statutory deadline to contest the will of Agnes, who was the last to die, was October 20, 2014.  Harold, upon consulting an attorney, made the decision not to contest the will.  In March 2015, Leonard tendered his shares in the corporation to Harold for one dollar and received title to the South Farm.

Eight days after receiving Leonard’s shares in the Corporation, Harold sued Leonard and three of his sisters for tortious interference with an inheritance.  He claimed that the defendants exerted undue influence on the parents to change their estate plan and that the defendants intentionally, improperly, and maliciously interfered with the wills and bequests of their parents. The three sisters reached settlements with Harold totaling $80,000 and were dismissed before trial.  At trial the jury returned a verdict in favor of Harold in the amount of $396,086.88 plus punitive damages of $200,000.  Leonard moved for a new trial and asked the district court to offset the $80,000 in prior settlements. The district court denied both motions and Leonard appealed to the Iowa Supreme Court.

The Iowa Supreme Court held that a party alleging that a decedent’s will was procured in full or in part by tortious interference must join such claim together with a timely will contest under Iowa Code Section 633.308. The Court noted that in doing such, the Court honors the legislature’s goal of prompt and effective estate administration.  The Court stated that it respects the directive in Iowa Code Section 633.487 that the distribution coming out of probate should be a final and conclusive distribution unless a specific exception such as reopening applies.

The Court went on to state that the decision is limited to claims that a party tortuously interfered with an inheritance by inducing the decedent to execute a will through wrongful means.  The Court went on to state that the decision does not foreclose a plaintiff from pursuing additional remedies via a tortious interference claim.  It simply holds that the claim for tortious interference must be joined with a timely will contest.

The Court concluded that Harold’s claim for interference with inheritance was barred because it was not brought in conjunction with a timely will contest.  The Supreme Court reversed the judgment and remanded the case for further proceedings consistent with the opinion.

A dissent of Justice Appel pointed out that plaintiff’s attorney fees and punitive damages are available in tort and not in probate proceedings.  A recent blog post by attorney Paul P. Morf points out that Justice Appel’s concerns about attorney fees are less applicable in revocable trust contests than will contests for the reason that Iowa Code Section 633A.4507 of the Iowa Trust Code allows a court to award costs and expenses, including reasonable attorney fees, to any party, to be paid by another party or from the trust.

If you have questions about probate law or need assistance with arranging and managing your will and/or estate, please contact us at 515-225-1100, or reach out to us through the contact page in our Web site.

– By James D. Beatty