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Repeatedly, we have seen how basic principles of contract law often come into play in the context of estate planning cases. The reason for this is obvious: estate planning often involves the creation of agreements between parties, as well as the attestation of documents (such as wills) by parties. In these cases, Maryland courts avail themselves of established contract law principles rather than simply inventing new principles. This is strategically beneficial for all parties involved, including courts, as it makes preparation, interpretation and enforcement of estate planning matters much easier.
In some instances, contract law principles come into play in relatively unfamiliar and somewhat surprising estate planning scenarios. In the well-known case of In Re: Estate of Dinesh O. Parikh (2024), a court-ordered consent settlement agreement was created after certain asset transfers were made prior to the passing of a testator. This case has been in the Maryland court system for many years, and it has spawned numerous pieces of litigation. There was even a petition to the Supreme Court of the United States, but the Supreme Court declined to grant a writ of certiorari. In this post, we will just give a brief summary of the core issue of the case.
Facts of the Case
The testator at the center of this litigation, Dr. Dinesh O. Parikh, passed away in 2016. He executed a will in 2014 which disinherited his son, his daughter, and his wife, and left everything to his son’s ex-wife (Oxana). He also granted a power of attorney to Oxana, and she subsequently utilized this POA to make certain estate asset transfers prior to his passing.
Just months before he passed away, Mr. Parikh was deemed medically incapacitated with cancer. While he was incapacitated in this manner, Oxana used her POA status to transfer roughly $1.14 million from Parikh’s estate directly to her ex-husband, Parikh’s son. Oxana also initiated an uncontested divorce filing against Parikh’s wife. Parikh’s daughter challenged these estate asset transfers, arguing that Oxana lacked the power to make such transfers given Parikh’s condition and the fact that Parikh clearly intended to disinherit his son.
The dispute over the estate asset transfers ultimately led to a court-ordered consent settlement agreement between the parties, Oxana (and the son) and the daughter; the settlement agreement required that certain funds and certain corporate stock shares be distributed. Before that agreement could be fulfilled, however, Oxana and the son attempted to back out of the agreement, and this attempt to back out ultimately triggered the various pieces of litigation which followed.
Ruling & Analysis
Again, as mentioned, this case has been through many stages of litigation, but here we are just focusing on the core issue regarding the enforceability of the court-ordered consent settlement agreement. The basic issue was whether such an agreement, once entered into by the parties, was indeed binding and fully enforceable by the court. The answer was “yes,” the settlement agreement was fully enforceable, and so the court had the power to compel performance from Oxana and the son. Oxana and the son did not have the legal authority to unilaterally repudiate the agreement or interfere with its completion, as they apparently attempted to do at some point after the agreement was already signed.
The key takeaway, for our purposes today, is to know that basic contract law principles applied to the settlement agreement developed in the context of this litigation. This is a critical guiding point which should assist readers in many ways as they go about their estate planning efforts.
Contact the Murphy Law Firm for Additional Resources
Readers who would like to learn more about contract law in the context of estate planning, developing an enforceable will, powers of attorney, establishing a revocable trust, or any other related estate planning matter, contact one of the estate planning attorneys at the Murphy Law Firm today by calling 240-219-1187.
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