SPEAK NOW OR FOREVER HOLD YOUR PEACE: A LEGISLATIVE PROPOSAL FOR COLLATERAL ESTOPPEL OF SUBSTITUTED JUDGMENT ORDERS

By David W. Baer^* and Kim T. Schoknecht^**

I. INTRODUCTION

Should a person who received proper notice of a substituted judgment petition during the conservatee’s lifetime be able to contest the court-approved estate plan after the conservatee’s death? The authors do not believe so and propose legislation that would help ensure the finality of substituted judgment orders.

Plainly, a trust or will executed pursuant to a substituted judgment order cannot be attacked on the grounds that the conservatee lacked testamentary capacity—the court, not the conservatee, determines that the instrument should be signed. Indeed, the fundamental purpose of the substituted judgment procedure is to provide a means to make inter vivos transfers and estate planning decisions on behalf of a conservatee precisely because he or she may no longer be competent to take these actions. But litigation is presently pending at the California trial court level in which wills and trusts executed by conservators pursuant to substituted judgment orders are being challenged on the grounds that the conservatee was subjected to fraud and undue influence, or that the conservatee was bound by contract to provide for a different distribution of the estate. The authors believe that the principle of finality of judgments—specifically, the collateral estoppel doctrine—should ordinarily bar such suits. However, no California opinions directly address the question of whether a substituted judgment order precludes subsequent litigation challenging the court-directed estate plan after a conservatee dies. There is also apparently no precedent deciding this question in the other jurisdictions that have enacted substituted judgment statutes.¹