On January 21, 2021, the Iowa Supreme Court issued an opinion in the case of In The Matter of the Guardianship and Conservatorship of Vernon D. Radda v. Washington State Bank, as Conservator for Vernon D. Radda. The issue in the case was whether a prospective heir can bring a declaratory judgment action under Section 633.637 (2019) of the Iowa Code, to determine the validity of wills before the testator dies. The Ward executed wills in 1992 and 2015 while he was under a voluntary Conservatorship and without any judicial determination of his testamentary capacity. The sister of the Ward and her husband brought the declaratory action in 2019 to determine if said wills were valid. The Conservator, Washington State Bank, moved to dismiss the action claiming that the petitioner lacked standing to challenge the wills while the testator remained alive. The district court denied the motion to dismiss and limited the scope of the action to determine the Ward’s present testamentary capacity and required the petitioners to pay the attorney fees of the Conservator.
The record of the case showed that the Ward was 59 years old and suffered from schizoaffective disorder and severe autism spectrum disorder. The 1992 will was deposited with the court and was later replaced by the 2015 will. The Conservator’s 2018 annual report indicated that the Ward had investments and real property exceeding $1.9 million.
The Supreme Court held in reviewing Section 633.637 of the Iowa Code that a putative beneficiary or other third party does not have the right to challenge the validity of a Ward’s will before the Ward dies. The Court declared that the plain language of the statute requires a judicial determination to preapprove only for inter vivos transfers and not for transfers by will. The Court concluded that the fact the Ward had been in a voluntary Conservatorship since 1991, did not raise a presumption that he lacked testamentary capacity in 1992 or 2015 or now. The Court went on to cite a Law Review article which stated that “courts have often stated that the imposition of a Conservatorship over a person’s assets is not a determination that the individual lacks testamentary capacity, because the capacity required to manage one’s assets is greater than that required to devise them”. The Court went on to note that no provision of the Iowa Probate Code allows an action to set aside a will while the testator is alive. The Court found that Section 633.637 does not allow family members to bring a declaratory judgment action to determine the Ward’s current testamentary capacity. The Court directed the district court to dismiss the action on remand.
The Court went on to review the district court order that required the petitioner’s to pay the Conservator’s attorney fees. The Supreme Court found that the claims of the petitioners were not frivolous under the Iowa Rule of Civil Procedure 1.413(1) (which allows an award of fees as a sanction for frivolous pleadings). The Court held that the Conservator was not entitled to recover attorney fees from the petitioners and accordingly reversed the district court’s fee-shifting order.