When is an oral agreement enforceable in estate planning?

Verbal promises can be legally binding in estate planning under certain circumstances, but their enforceability is often limited and subject to strict legal scrutiny. Courts generally prefer written documentation when it comes to estate matters due to the clarity and certainty they provide. However, in some cases, oral agreements may be upheld if they meet specific criteria and can be proven with clear and convincing evidence.

In the realm of estate planning, several types of oral agreements are relatively common:

• Promises to leave specific assets to certain individuals.


• Agreements to provide care for the testator in exchange for inheritance.


• Verbal modifications to existing written wills or trusts.


• Promises to create or modify a will in a particular way.

While these agreements may occur frequently, their enforceability varies greatly depending on the circumstances and jurisdiction.

For an oral agreement to be enforceable in estate planning, several key elements must typically be present:

• Clear and definite terms. The agreement must have specific, unambiguous terms that both parties understood and agreed upon.


• Consideration. There must be an exchange of value between the parties, such as care provided in exchange for a promise of inheritance.


• Partial performance. In some cases, if one party has already partially fulfilled their end of the agreement, this can strengthen the case for enforcement.


• Corroborating evidence. In many jurisdictions, additional evidence beyond the testimony of the person claiming the agreement is often required under what is known as the “Dead Man's Statute.” This rule of evidence prevents interested parties from testifying about conversations or transactions with a deceased person when that testimony would be to the detriment of the deceased person's estate.


• No conflict with written documents. The oral agreement should not contradict valid, written estate planning documents.

A legal doctrine known as the Statute of Frauds requires that certain types of contracts must be in writing to be enforceable. This doctrine can significantly impact the enforceability of oral agreements in estate planning. In many jurisdictions, contracts involving the transfer of real estate or agreements that cannot be performed within one year must be in writing to be valid. However, the following exceptions may allow some oral agreements to be enforced:

• Partial performance. If one party has already partially fulfilled their obligations under the agreement, this may take the contract out of the Statute of Frauds doctrine.


• Promissory estoppel. If one party reasonably relied on the promise to their detriment, the court may enforce the agreement to prevent injustice.


• Admission by the other party. If the party against whom enforcement is sought admits to the existence of the agreement, it may be enforced despite the lack of writing.

While oral agreements can sometimes be enforced in estate planning, they present several significant risks challenges that can complicate the process and potentially lead to disputes. One of the primary issues is the lack of clear evidence. Without written documentation, it can be extremely difficult to prove the exact terms of the agreement, leaving room for interpretation and disagreement among involved parties.

Memory issues also pose a significant problem. As time passes, parties may forget or misremember the details of the agreement, leading to conflicting accounts of what was actually agreed upon. This can be particularly problematic in estate planning, where agreements may not come into question until years after they were made, often after one party has passed away.

The potential for fraud is another serious concern with oral agreements in estate planning. These verbal contracts can be more susceptible to fraudulent claims, especially after one party has died and is no longer able to refute false assertions. This vulnerability can lead to unintended beneficiaries attempting to claim a portion of the estate based on alleged verbal promises.

Conflicts with written documents present yet another challenge. If an oral agreement contradicts a valid written will or trust, courts will generally favor the written document. This preference for written evidence can render oral agreements effectively unenforceable, even if they represent the deceased's true final wishes.

Finally, the burden of proof in cases involving oral agreements is typically quite high. The party seeking to enforce an oral agreement bears the responsibility of establishing its existence and terms, often requiring substantial evidence to overcome the inherent skepticism courts have toward verbal contracts in estate matters.

In summary, relying on oral agreements in estate planning carries significant risks that include:

• Lack of evidence. Without written documentation, it's often one person's word against another's.


• Misinterpretation. Verbal agreements can be misunderstood or remembered differently by different parties.


• Legal challenges. Oral agreements are more likely to be contested in court, leading to costly and time-consuming litigation.


• Unintended outcomes. If an oral agreement can't be proven, the estate may be distributed in ways that don't align with the deceased's true intentions.

Proving the existence of an oral agreement in estate planning can be a challenging task, but there are several types of evidence that can be helpful in establishing the validity of such agreements. One of the most valuable forms of evidence is witness testimony. Statements from individuals who were present when the agreement was made or who heard about it directly from the deceased can provide crucial support for the existence and terms of the agreement.

Correspondence can also play a significant role in proving oral agreements. Letters, emails or text messages that reference the agreement can serve as tangible evidence of its existence and potentially its terms. These written communications, even if they don't constitute a formal contract, can corroborate claims about verbal promises or agreements.

Actions taken in reliance on the agreement can also be powerful evidence. If one party acted in a way that clearly suggests they believed an agreement existed, such as providing care for the deceased or making significant life changes based on promised inheritance, this can lend credibility to claims about the oral agreement.

Financial records can provide another form of concrete evidence. Documentation of payments or transfers that align with the alleged agreement can help substantiate claims about its existence and terms. For example, if someone claims they were promised a certain asset in exchange for providing care, financial records showing payments for care-related expenses could support this claim.

In addition, personal notes or diaries can be valuable in proving oral agreements. Written records made by the deceased that mention the agreement can serve as strong evidence of their intentions and the existence of a verbal contract. While these personal writings may not have the same legal weight as a formal will or trust, they can provide important insights into the deceased's wishes and any promises they may have made.

While oral agreements can sometimes be enforced in estate planning, written documents are strongly preferred for several reasons:

• Clarity and certainty. Written documents provide clear, unambiguous instructions for asset distribution.


• Legal validity. Properly executed written wills and trusts are more likely to be upheld in court.


• Reduced risk of disputes. Written documents minimize the potential for disagreements among beneficiaries.


• Easier to modify. Changes to written documents can be made through formal amendments or codicils.


• Protection against fraud. Written and properly witnessed documents are less susceptible to fraudulent claims.

The case involving the Michigan family of William Weigle provides a prime example of the paramount importance of having a clear, documented estate plan. According to court records, William Weigle, a widower whose wife and only child had predeceased him, had created an estate plan in 1994 and amended it several times. His estate primarily consisted of his house and a bank account worth approximately $2 million.

Weigle's neighbors provided care for him in his later years. Through amendments to his estate plan, Weigle made provisions for these neighbors. However, the final distribution of his assets became a subject of dispute after his death in 2012. Weigle’s neighbors claimed they had an oral agreement with Weigle, stating that in exchange for their personal care services, they were to receive a portion of his assets. In this case, the neighbors lost their lawsuit, as the only "proof" of the oral contract was their own statements.

The case shows that while oral contracts can sometimes be legally binding, they are far more challenging to prove in court compared to written agreements. In estate planning, courts generally give more weight to properly executed written documents.

In general, oral agreements cannot modify existing written estate plans. Most jurisdictions require that changes to wills and trusts be made in writing and executed with the same formalities as the original document. However, there are some limited circumstances where courts may consider evidence of oral statements to interpret ambiguous provisions in written documents or to address issues not covered by the written plan.

Working with an experienced estate planning attorney can help you avoid the pitfalls associated with oral agreements and create legally valid and properly executed documents that address all your concerns. Professional guidance can ensure your estate plan stays up-to-date with changes in your life circumstances and the law, prevent disputes among beneficiaries and reduce the likelihood of litigation.

While oral agreements can sometimes be enforced in estate planning, they present significant challenges and risks. Written estate planning documents provide greater certainty, clarity and legal protection for your wishes. By creating comprehensive written documents, you can ensure that your assets are distributed according to your desires and minimize the potential for disputes. Remember, when it comes to estate planning, clear written instructions are always preferable to oral agreements.