California Trust, Estate & Probate Litigation

It takes knowledge and experience in two district areas, trust and wills and litigation/trial, to make a California trust and will litigation lawyer complete.

From time to time we have clients come to our office upset that the attorney who drafted their parents’ California estate plan (i.e., living trust, will, and durable powers of attorney) got it wrong or perhaps failed to properly implement the parents’ estate plan.

In a recent case we handled an attorney drafted an amendment to a Trust for a mother. The mother intended the amendment to change the distribution scheme between her children. The original trust called for an equal division amongst the children, and now the amendment called for a different division. The mother signed the amendment, and believed that the distribution changes under the amendment would be followed after she died.

After the mother’s death, it was found that the drafting attorney did not properly draft the amendment. Due to the drafting attorney’s mistake, several of the children were significantly damaged; these children would not receive what their mother intended under the amendment because it was invalidly created.

That unfortunately led to a malpractice lawsuit being filed against the drafting attorney. The balance of this blog article outlines how we communicated with the attorney’s malpractice insurance carrier to settle the lawsuit prior to going to trial.

We want to make it clear that insurance companies do not settle lawsuits for fair value—if they settle at all. The insurance industry has taken the position that they will vigorously litigate all lawsuits even if meritorious allegations are made and liability and damages are clear. In response to this position, we needed a strategy for getting the drafting attorney’s insurance company to agree to settle for policy limits—before going all the way to trial.

To implement our strategy, we needed to know what the damages were to our clients—the children harmed by the drafting attorney’s mistake. We determined the damages were in excess of $1,000,000. Next, we needed to know how much insurance coverage the drafting attorney had for legal malpractice coverage. Through discovery we found out that the policy limit for this case was $500,000. That means that the insurance company was only required to pay the first $500,000 of any judgment for legal malpractice against the drafting attorney.

Once we determined damages and potential insurance coverage, we sent out the balance of our written discovery and took the depositions we needed to establish all the elements for legal malpractice. We were now in a position to force the insurance company to settle for $500,000 or risk being on the hook for the entire $1,000,000 in damages.

We spent a lot of time on a settlement demand letter to the opposing attorney, which we copied on the insurance adjuster. The letter set out the facts, the clear liability, and the clear damages. We gave the insurance company 30 days to think about whether they would accept or reject the offer. In this case, the insurance company ultimately accepted the settlement demand. If they had not, then we would have gone after them for bad faith for refusing to settle for a reasonable amount. In this case the $500,000 settlement amount was reasonable, because the total liability was easily in excess of $1,000,000.

As you can see, when you carefully plan your strategy in a case, you can obtain good outcomes for clients without exposing them to several years of litigation, which is exactly what the insurance company wants to do. But our proactive actions put the insurance company in a difficult position—either settle for a reasonable amount now, or likely end up paying a much larger amount for the damages sustained by the mother’s children. We (and our clients) were okay with the insurance company choosing either option.

If you would like a copy of the redacted letter I sent to the insurance company, please let me know.

One of the most obvious features of a revocable living Trust is that you can revoke it.  It’s right there in the name “revocable Trust.”  But you can also amend a revocable Trust because, for a long time, California courts have interpreted the power to revoke (which means to entirely do away with a Trust) as including the lesser power to also amend the Trust.  Sounds reasonable enough.

But that has now changed with the California Court of Appeal’s, Fifth District, ruling in King v. Lynch, which holds that the power to revoke may be different from the power to amend—at least in the way in which each is accomplished.

Prior to 1987, there was no statute that provided the manner in which a Trust revocation could be accomplished.  With the adoption of Probate Code Section 15401, that changed, and the law provided two distinct ways in which to revoke a California Trust: (1) revoke using the manner provided in the Trust instrument, or (2) revoke by any writing (other than a Will) signed by the Settlor and delivered to the trustee during the Settlor’s lifetime.  So if the Trust stated that a revocation required a writing signed and notarized by the Settlor, then you could follow that directive to revoke the Trust.  But you could also simply follow number 2 above and revoke by any writing (other than a Will).  In other words, either manner was available for revocation as long as the Trust did not expressly say that its manner was the exclusive way in which to revoke. 

And it was thought for quite some time that the same rules applied to amending a Trust because under Probate Code Section 15402, it said that the method of amendment is the same and the method of revocation contained in Section 15401.  So you could use the Trust terms to amend, or you could amend by any writing (other than a Will).  Each method was available for amendments as long as the Trust did not expressly say that its method was the only way in which to amend.

But now, Justice Levy has, for the first time, decided that amendment and revocations are not so similar after all.  He holds, under Section 15402 (the amendment language) that a Trust can ONLY be amended by the method specific in the Trust and NOT by any language in Section 15401 that allows any writing other than a Will.  He reaches this decision by quoting the following language of Section 15402:

“unless the trust instrument provides otherwise, if a trust is revocable by the settlor, the settlor may modify the trust by the procedure for revocation.”

He reasons that the term “unless the trust instrument provides otherwise” means that any Trust that has an amendment method stated in the Trust instrument does “provide otherwise” and therefore the statutory language for revocation under Section 15401 cannot be used for Trust amendments.

It seems like an odd ruling because there is no logical reason why the method of revocation should be any different from the methods available for amendments. 

Whatever may be in the Court’s mind, we now have a ruling that says the methods available to amend a Trust are different from the methods available to revoke.  Something good to keep in mind when amending a Trust…or when contesting an amendment to a Trust…food for thought.

Objection, hearsay!  We hear that term “hearsay” all the time—in the movies, on T.V., and in real life court proceedings.  The idea behind the “hearsay” rule, which prevents certain statements and documents from being admitted as evidence, is that not everything people say is reliable or even truthful (imagine that).  As straightforward as that rule may sound, it’s much harder to apply—and is the bane of all law students taking an evidence course for the first time.

Judge Noonan, writing for the United States Ninth Circuit Court of Appeals, just clarified an issue on hearsay, the so-called state of mind exception, in a case titled Wagner v. County of Maricopa (a case that originated in Phoenix, AZ).

In Wagner, the Plaintiff wanted to introduce various statements made by the decedent (prior to death obviously) about his impression of being imprisoned for a few days.  The decedent was diagnosed with various mental issues, including being disoriented, paranoid and psychotic.  He had wandered away from home and was arrested after being mistaken for a burglar and then resisting arrest.  In jail, he was placed in isolation, after psychological examination, and then forced to change from civilian clothes to jail-issue clothes, which included wearing pink underwear (?).  The decedent resisted the clothes change and was forcibly undressed, and then dressed in jail garb.  Due to his psychological condition, decedent thought that he was going to be raped by the officers and was traumatized by the experience.

Decedent’s mother bailed him out of prison after a few days and was later involved in a minor car accident with decedent in her car.  Decedent was told that the police would be called to the scene of the accident.  The decedent, in a state of panic, then ran for 4 or 5 miles away from the car accident where he collapsed and died of a heart attack.

The decedent’s family sued and wanted to have decedent’s sister testify to the statements decedent made about his impression of being imprisoned and being forced to change clothes.  The statements were meant to establish the decedent’s state-of-mind about being imprisoned.  The statements themselves, that decedent was being raped by the officers, was obviously false and not meant to prove they were true.

The trial court excluded the testimony on the theory that the statements were hearsay and could not be used to prove the truth of what was said.  The Ninth Circuit Court of Appeals reversed, saying that statements such as these made by the decedent, were not hearsay.  Why?  Because they are not used to prove they are true—no one was asserting the truth of the statements.  Rather the statements were being used to establish the decedent’s state of mind at that time.  And statements that would otherwise be hearsay are admissible into evidence when they go to the state of mind of a decedent.

This state-of-mind ruling provides a great exception to the hearsay rule, especially in the world of Trust and Will litigation, where a decedent’s state of mind is almost always a central issue to California Trust and Will contests.  As long as you aren’t using the decedent’s statements to prove what they said was truthful, only that is establishes their state-of-mind and explains their actions, then the exception applies.

California Trust and Will litigation is like building a puzzle.  There are a lot of moving parts in most cases and trying to figure out how and when to put the parts together can be confusing.

The Fourth District Court of Appeals recently set Trust litigators straight on how and when a Trustee can be sued by Trust beneficiaries, in a case titled “Estate of William A. Giraldin” (2011, No. G041811).  Associate Justice William W. Bedsworth authored the opinion that holds beneficiaries have no standing to sue a Trustee for alleged breaches of fiduciary duty that occurred while the Settlor (which is the Trust creator) is still alive and had the power to revoke the Trust.  My first reaction: What???

In Estate of Giraldin, the decedent, William Giraldin had created a revocable, living trust.  Although he was the “Settlor”, because he created the Trust, he appointed one of his five sons, Tim, as the successor Trustee.  The Trust was revocable by William Giraldin during his lifetime and, therefore, under Probate Code Section 15800, the Trustee, while acting as Trustee during William’s lifetime, only owed duties to William—not the named Trust beneficiaries (Williams’ other four sons)..  In other words, the Probate Code specifically states that the Trustee does not owe any fiduciary duties to the children of William (who are “contingent” beneficiaries so long as William is alive) until after William’s death.

The problem in Estate of Giraldin revolved around a large investment William made, over $4 million, into a start-up company owned, in part, by his son Tim.  After William created the Trust, and made his investment in Tim’s company, William stepped down as Trustee and allowed Tim to act as Trustee of his Trust.  But Tim was acting at William’s direction.

As might be expected, the start-up company William invested $4 million in did not survive, and William’s wealth plummeted as a result.  After William’s death, the other siblings were not happy that William invested so much of his money into Tim’s company only to have it disappear (I would imagine that had Tim’s company been successful, the other siblings would have been quite happy).  So Tim’s siblings sued Tim for breach of Trust claiming, among other things, that Tim never should have allowed William to invest in the company and lose his $4 million.

The Trial court agreed with Tim’s siblings and awarded a surcharge against Tim in excess of $4 million (yikes!).  Tim naturally chose to appeal that ruling and Justice Bedsworth gives us new law with a ground-breaking result for Trust litigation issues—he reversed the surcharge.  Tim owes nothing!

Before Estate of Giraldin, it was generally assumed that while beneficiaries could not sue a Trustee while the Settlor was alive, they could do so after the Settlor’s death.  The beneficiary could receive both an accounting of actions that took place before the Settlor’s death and even ask for a surcharge for any breach of Trust that occurred during that time.  This was based on Evangelho vs. Presoto (1998) 67 Cal. Appl. 4^th 615.  Not so fast, says Justice Bedsworth.  He overrules the concepts set down in Evangelho.

Instead, the Court states that when a Trust is revocable by a Settlor, the only duty a Trustee owes is to that Settlor.  Therefore, there is no basis, and even no standing(!), for beneficiaries to seek an accounting of Trust actions or assert a breach of Trust for actions taken during that time.  What about breaches that the Trustee incurs, but the Settlor could not assert due to the ill-health or lack of capacity of the Settlor?  The Court says that can be taken up by the Settlor’ successor’s-in-interest, which usually means his Executor or surviving heirs.  But that type of action must assert wrongs against the Settlor, which did not occur in this case.

In fact, in the Estate of Giraldin matter, the only wrongs asserted by the beneficiaries is that they should have had an extra $4 million to split among themselves.  Everyone agreed that the Settlor wanted to invest in Tim’s company and had the capacity to do so.  They merely asserted that Tim should have stopped William from investing how he liked.  The Court disagreed, saying that during the Settlor’s lifetime, since the Settlor has the power to revoke the trust, the Trustee must do as the Settlor directs.  This is true even if the investing decisions are foolish. 

Had the beneficiaries been asserting wrongs committed as against William, then it may have been a different story.  Or if the investing had occurred after William died, when the Trustee owned a duty to his siblings as vested trust beneficiaries, there would have been a different outcome.  But under these facts, the Trustee gets a free-pass because he based his actions on the directions of the Settlor.

Giraldin is a well-reasoned and well-written opinion and makes sense on the facts of that case.  But the downside of a case like this is that the new argument for every Trustee acting while the Settlor is alive is going to be “the Settlor made me do it”—no matter whether that is true or not.  It will then be up to the beneficiaries to show whether that is true. 

Shouldn't Trust administration be like a game of Simon says?  That's the old school yard game where one person gives an instruction, but you’re only supposed to follow the instruction if it is preceded by the phrase, "Simon says."  For example, Simon says, “Touch your nose.” Simon says, “Touch your toes.” Simon says, “Make proper Trust distributions when directed to do so by the Trust terms.”

A client of mine who was in a dispute with a Trustee pointed out that he received money from life insurance without any problem at all.  A claim was made to the insurance company, a death certificate was submitted, and full payment arrived within a week or two.  Shouldn’t the process of receiving assets from a Trust be similar? 

He makes a good point.  While there is a process that must be used to administer a Trust, the Trustee’s duties are simply to do as the Trust says.  Especially with the voluminous amount of instructions left behind for the Trustee to follow.  There are the Trust terms, which can be anywhere from 20 to 60 or so pages of material.  Then there are the directives in the California Probate Code, which specifies everything from investing, allocating assets between income and principal, and a whole host of other duties and responsibilities of the Trustee.  There couldn’t be much that is not written down for the Trustee to follow.

And yet, California Trust administrations drag on.  Setting aside cases where the Trust terms are being contested (that will take a few years on average to resolve), the typical California revocable, living trust set up by any person prior to death names a successor Trustee.  That successor is supposed to, “marshal” the Trust assets (which just means to gather them together—or take possession of the assets), pay the last debts, file tax returns and pay any taxes (this could take some time if an Estate Tax return is required), sell any Trust property that needs to be sold (such as real property and stocks), and then make the required distributions to the beneficiaries—sounds simple enough. 

All too often Trustees, especially individual Trustees, wander off-course and believe that what the Trust says does not apply to them.  It’s no longer a game of, “Simon says,” but one of “Trustee says.”  Having a position of power, which the Trustee has, does not equate to having the ability to do whatever the Trustee wants.  In fact, the Trustees’ powers are very limited by the Trust terms and the voluminous mandates of the California Probate Code. 

So if you want to be a good Trustee, then play along as the Trust requires.  It will keep the Trustee out of trouble and allow the beneficiaries to receive the benefits of the Trust that they are entitled to under the Trust terms.

Our latest video post provides a discussion of the challenges faced by a beneficiary in trying to remove a Trustee of a California Trust.  For those of you viewing this blog post by email subscription, you can click on the title for a link to the video.

Trust and Will litigation tears families apart.  It may be that family relationships aren't too good to begin with if litigation arises, but taking matters to Court doesn't help.  And as lawyers we have little to no ability to repair family relationships.

In one case, out of the many hundreds I have handled over my career, a client of mine chose to make a bold statement after a family dispute arose.

Her name is Sofia.  Sofia—who didn't have a lot of money—worked as a registered nurse.  While her mother was alive, Sofia helped her with her care.  While Sofia’s father was alive, Sofia sold her home and gave the proceeds of the sale to her parents because they were in need of money at that time.  Her parents, in turn, put Sofia on the deed to their home so that she could be repaid after their deaths.  Over 15 years later, both parents passed away and the house passed to Sofia.

Sofia's brothers and sisters were not too happy about the arrangement and a nasty dispute arose over the property.  But in the end Sofia won out because she had given a large sum to her parents and in return, they gave her their home when they were done with it.

The whole ugly affair did not sit well with Sofia.  So she decided to make a bold statement with the house she received from her parents, she gave the entire thing-100%-to charity.  This was a substantial gift for anyone, as it was for Sofia.  The house was worth around $350,000 and had no mortgage.  That is a large amount of money for a single working woman, something to tuck away for retirement and future care. 

Instead, Sofia gifted the entire home to the Ronald McDonald House charities, which provides housing free of charge to parents who have very sick children in the hospital.  Ronald McDonald House was planning on building a new home in Long Beach, California, and Sofia’s gift kicked-off their fund raising for the new Ronald McDonald house with an entirely unexpected gift.  The home was sold by the charity and now is being used for their charitable purpose.

Sofia's one requirement in making the gift was that it be dedicated to the memory of her parents, David and Teodora Pacheco, and their grandchildren, because they loved their many grandchildren unconditionally.  The kitchen of the new Ronald McDonald house charity will be dedicated to Sofia’s parents, primarily because her mother loved cooking and it was a central part of any family gathering.  A plaque will read “David and Teodora Pacheco Kitchen in honor of their grandchildren.”

Sofia had no obligation to make this gift.  The house was hers and she should have used it to provide for her retirement.  But for the first time in my 11 year career as a California Trust lawyer, Sofia demonstrated the power of personal sacrifice.  She did not have money to spare and could not afford such a generous gift, but she made the gift anyway.  It was important to her to turn a family dispute, one that she alone could not repair, into a lasting tribute to her parents.

Every beneficiary of a California Trust and Will has a basic right to information.  They have a right to see the Trust or Will document(s), they have a right to asset information, they have a right to full disclosure.  Yet not every Trustee or Executor complies with requests for information.  This video describes a beneficiary's basic right to information.  For those viewing this blog by email subscription, you can click on the title for a link to the video.

See Video Below:

Stewart R. Albertson discusses how undue influence is used to overturn a California Will or Trust.  There are two ways to prove undue influence in California, either directly or by shifting the burden of proof onto the opposing party.  Stewart describes the basic concepts.  For those viewing this blog by email subscription, you can click on the title for a link to the video.

Conservatorship is the Court process for taking control of an adult's finances and personal care in California when there is no other planning in place—such as a Trust or Will.  (Some states refer to it as "guardianship," but in California guardianship only applies to minors--conservatorship is for adults).

Conservatorships are supposed to “conserve” a person’s estate (as in “to keep in a safe or sound state…especially to avoid wasteful or destructive use of…” as defined by Merriam Webster).  Yet, even a routine conservatorship proceeding (one that is not contested by family members) is expensive to initiate, time-consuming to create, and burdensome to maintain. It hurts less to simply hit yourself in the head with a hammer than to go through a conservatorship proceeding.

But when a conservatorship proceeding is contested by dueling family members wanting to be conservator, now the pain really begins.  And the costs (both financially and emotionally) are downright excessive.

Conservatorship proceedings start with a petition filed by a family member reciting why the proposed “conservatee” (the person in need of help) can no longer manage his or her personal and financial decisions.  Then there are loads of other documents that go with the initial petition.

If other family members disagree with the conservatorship filing, or want a different person appointed as conservator, then they must make an objection to the original conservatorship petition and then file their own petition for conservatorship (referred to as a "competing" petition).  The Court appoints an attorney to represent the proposed conservatee, and the matter is ultimately set for trial and tried before the court to determine whose petition will win.

Sounds easy enough right?  But what this little overview fails to convey is the amount of time, money, and emotional toll that goes into a lawsuit of this nature.  Conservatorship cases are difficult to begin with because there is usually an elder adult caught in the middle; as opposed to Trust and Will contests, where the dispute revolves around a pile of assets.  The effort to conserve a person’s estate often results in the excessive waste of that estate instead. 

Of course, the Court acts as a safeguard to the estate and will refuse to reimburse the parties for their litigation fees and costs if they do not directly benefit the conservatorship estate (or even if they do benefit the estate, the reimbursement will be refused if the estate cannot afford it). 

The end result is that no good deed goes unpunished.  The parties bear the costs, the estate bears some too, and the family feels bruised, wounded and far worse from the wear of conservatorship litigation.  The alternative is to have some plans in place (such as a California Trust and related powers of attorney) so that conservatorship can be avoided.  All too often good planning is neglected and the penalty of such neglect is facing the excesses of conservatorship in California.

I’ve blogged before about using the concept of undue influence to overturn a California Will or Trust.  But knowing the definition of undue influence is only the first step.  To make the concept of undue influence useful, you have to know how to prove the existence of undue influence in a Court of law.  That can be trickier than it sounds.  Let’s walk though the primary options for proving undue influence in California: 

Under California law, undue influence consists of:

• John taking unfair advantage over Jane, who relies on John for her daily living needs; or
• John taking unfair advantage over Jane’s weakness of mind where Jane has Dementia, Alzheimer’s disease or some other type of mental deficit; or
• John taking unfair advantage of Jane’s distressful situation, whatever that may be. 

An Example of Undue Influence: 

It is usually easy to spot undue influence. For example, Jane has three children, namely, John, Jerry, and Jack. Jane is living with John at the end of her life, and relies on John for her daily living needs. John does not like his brothers Jerry and Jack. Six weeks before Jane dies, John drives his mother to an attorney to change her California Will or Trust, which disinherits Jerry and Jack. Now John goes from getting one-third of his mother’s Will or Trust to getting 100 percent. The question: Did John exercise undue influence over Jane? Most likely, yes. But how do you prove undue influence under California law? 

How to Prove Undue Influence under California Law: 

There are two primary ways to prove undue influence under California law—by either (i) shifting the burden of proof to John, in the example above, so he then has to prove an absence of undue influence, or (ii) by Jerry or Jack proving directly that John exercised undue influence over their mother. If at all possible, it is best to shift the burden to John to prove he did not exercise undue influence over Jane because it can be very difficult to prove the absence of something. If you don’t have facts that shift the burden of proof to John, then Jerry and Jack will have the burden of proving the existence of undue influence directly.

 How to Shift the Burden of Proof in an Undue Influence Case:

How do you shift the burden of proof to John so that he carries the burden to prove he did not exercise undue influence over Jane? Under California law there is a presumption of undue influence that arises if you can establish three facts:

• Confidential Relationship: Jerry and Jack must prove that John had a “confidential relationship” with Jane, which can consist of John being Jane’s trustee, or agent under a power of attorney, or conservator, or perhaps, simply being Jane’s son.
• Active Participation: John must have “actively participated” in the preparation or execution of the Will or Trust.
• Undue Benefit: John must receive an “undue benefit” by way of the new Will or Trust.  

You can prove each of these facts where John (i) is the Executor or Trustee of Jane’s Will or Trust, (ii) arranged to have an attorney draft the new Will or Trust for Jane to sign, and (iii) where John’s interest in the Jane’s Will or Trust increases from one-third to a higher amount. 

Once these facts are proven, there is a presumption that John exercised undue influence over Jane causing her to create the new Will or Trust; and the burden of proof shifts to John to prove the absence of undue influence, which is not easy for John to do under this fact scenario. Essentially John has to prove a negative—i.e. that undue influence did not occur. 

 How to Prove Undue Influence Directly:

If you can’t prove facts shifting the burden of proof to John, you must prove undue influence directly. Circumstantial evidence is enough to prove undue influence. Here are the most likely facts you need to prove undue influence directly:

 Disinheriting a child: Provisions that are unnatural, cutting off from any substantial bequests the natural objections of the decedent’s bounty. When Jane disinherits Jerry and Jack, that is disinheriting her children, an unnatural act, which can indicate undue influence.

 Contradicting decedent’s former estate plan: Dispositions at variance with the decedent’s intentions, expressed before the document’s execution. If Jane had a previous Will or Trust that treated her children equally, but a new Will or Trust (or Amendment) contradicts the former Will or Trust (or Amendment), this can add to the conclusion that Jane was unduly influenced.

 Opportunity to control decedent: Relations existing between the chief beneficiaries and the decedent that afforded the former an opportunity to control the testamentary act. If Jane relied on John for her daily living needs, this can add to the conclusion that Jane was unduly influenced.

 Poor mental and physical condition: A testator whose mental and physical conditions are such as to permit a subversion of her freedom of will; and if there is evidence the testator had a weakened state of mind it is easier to demonstrate the pressure from another overcame the testator’s free will.

 Sudden negative shift in attitude: Under California law, courts may infer that Jane’s sudden negative shift in attitude toward Jerry and Jack was caused by John’s poisoning Jane’s mind because the court can find no other rational explanation.

 Decedent’s advanced age: A Will or Trust creator of advanced age at the time a document is signed adds to the conclusion the testator was unduly influenced.

 History of mental deficits: A Will or Trust creator with a history of mental deficits adds to the conclusion the testator was unduly influenced. California Probate code section 811 outlines the likely areas of mental deficits.

 History of Dementia or Alzheimer’s disease: A Will or Trust creator with a history of Dementia or Alzheimer’s Disease adds to the conclusion the testator was unduly influenced.

Testator under conservatorship: A Will or Trust creator that is under a court ordered conservatorship adds to the conclusion the testator was unduly influenced. 

The more of these facts you can establish, the easier it is to prove undue influence directly.

There you have it—a big picture view of how to prove undue influence cases under California law. In future blog posts, I will treat in further detail (i) the burden shift for undue influence cases, and (ii) proving undue influence directly.

If you only knew what can happen in the life of a typical trust or will lawsuit—or civil lawsuit for that matter.  Bismark famously said that “Laws are like sausages, it is better not to see them being made.”  Add litigation to that list. 

But then again, every case is different.  Where some cases seem to proceed to trial quickly (by “quickly” I mean within a year or two), others dwell in the Court process for years and then seem to fade away or go to trial.  Either way, the financial and emotional costs of these cases can be substantial.

To provide some perspective on the life-cycle of a litigation matter, we have developed a “What to Expect” series of handouts for our clients and we have shared them on this blog before.  I now want to share them again because it is critically important for people to understand what to expect in litigation (see handouts here). 

Litigation moves at a snail’s pace.  It has many twists and turns and unexpected surprises along the way.  And the Court gives out what seems like an endless number of continuances when requested by one of the parties.  Of course, our system is built around the notion of Due Process of Law.  Due process is meant to ensure that everyone is treated equally and fairly and that each party has an opportunity to be heard.  But it can be frustrating to experience due process—and expensive too. 

As my partner is fond of saying “Litigation is a marathon, not a sprint.”  A marathon requires a slow steady pace designed to allow a runner to maintain a jog over long distances; as opposed to a quick sprint where you run as fast as you can for a short distance.  However, in litigation, where matters are stressful and potentially costly, most people would like to end the matter as quickly as possible.  I understand that sentiment and desire completely.  Unfortunately, I cannot end a case any sooner than the process will allow.

And so we trod along.  But we do so with our client’s purpose in mind.  We are here to help and to fight for justice and fairness.  As long as that is our goal, we have a great chance at reaching it…eventually.

One of the advantages of creating a revocable, living Trust is the ability of the successor Trustee to quickly and smoothly take control of the Trust assets after the Settlor (i.e., Trust creator) dies.  But this can also be a burden to a beneficiary, or a disinherited heir, who intends to contest the Trust terms.  It takes time to prepare, file, and have the Court hear a Trust contest.  In the meantime, the Trustee of the Trust is typically free to go about her business managing, and even distributing, Trust assets to the named beneficiaries—an alarming prospect to a contesting beneficiary.  The Trustee may even be able to empty the Trust of assets before the Trust contest is ever resolved.

Therefore, it is the contesting beneficiary’s duty to seek assistance from the Court to freeze the Trust assets, or at least put restraints on their transfer, pending the outcome of a Trust contest (many of the same methods also apply to Will contests, but a Will cannot be administered until after an Executor is appointed and the contest will prevent an Executor from being appointed—not so in Trust administrations).

What can a contesting beneficiary do in this situation? 

In California, the rules of general civil procedure apply to Trust and Will cases.  This allows a party to a Trust or Will matter to use civil discovery procedure, civil motions, and other forms of pre-judgment relief, such as Temporary Restraining Orders and Preliminary Injunctions (CCP 525 et seq.).  Here are a few actions a party can take to preserve Trust assets:

1.            Lien on Real Property– Notice of Pendency of Action (or “Lis Pendens”, I’ll refer to it as a lien in this post) is one of the easiest ways to secure real property pending the outcome of an underlying Trust and/or Will action.  But there’s a catch.  The underlying lawsuit must involve a Real Property Claim, which is defined as one that would affect title to, or the right to possession of, specific real property.  See California CCP 405.4.  In other words, the lawsuit must directly relate to who will possess title to the real property.  Thus, suing a Trust that has real property may or may not be enough to establish a Real Property Claim. 

For example, suing a Trustee for not managing rental property correctly is not a Real Property Claim because you would not be challenging who holds title, your just challenging the management of the real property by the Trustee.  Whereas, suing a Trust for exclusion of a beneficiary who would have had a right to receive title to real property had the Trust not been improperly amended shortly before death would qualify as a Real Property Claim because it affects who ultimately will hold title to the subject real property.

The advantage of using a Lis Pendens lien is that it is easy to prepare and record.  Once recorded it automatically secures the real property and prevents the property from being sold or refinanced until the lien is released.  The disadvantage of using a lien is that if you file one without a Real Property Claim at issue in the underlying suit, then you can be held liable for the opposing party’s attorneys’ fees and costs incurred to set aside the lien.  So this type of lien should only be used when there is a proper basis to do so.

2.            TRO and Preliminary Injunctions.  Trust and Will cases can be subject to Temporary Restraining Orders (TRO) and Preliminary Injunction to ensure that the Trust assets are not wasted.  But just as in civil matters, TRO’s and injunctions are not easy to obtain from the Court.  They are considered extraordinary remedies and you must establish (i) a likelihood of prevailing on your claim, and (ii) a right that cannot be adequately compensated by money damages.  The classic example is real property, which is considered unique under the law. 

However, it is possible, and I have had cases, where a TRO and injunction are ordered by the Court to ensure that a Trustee is not personally taking money from the Trust.  There has to be proof that the Trustee is taking money, but with that proof it is a possibility to obtain an injunction that will protect Trust assets until the underlying contest is resolved. 

My next post of this topic (Volume 2) will include:  (1) Petition for Instructions and Blocked Accounts, (2) Ex Parte Petition to Suspend Trustee and (3) Trustee’s Bond.

Trust and Will lawsuits often provide different paths to the same destination. My client, a trust beneficiary, recently filed a lawsuit against a trustee of a California trust for financial elder abuse, and at the same time sued for undue influence to set aside the Trust amendment created at the hands of the Trustee/Abuser. In this case the Trustee ended up with a significant portion of the Trust and my client was effectively disinherited.

The Trustee, hoping for an easy out, tried to convince the Court that the elder abuse claim should be dismissed summarily (called a demurrer) because the claim was based on a transfer by Trust, and in his opinion, the abuse of the elder did not actually occur until the trust creators died and their Trust became irrevocable (the “taking argument”). His claim was that the beneficiary cannot use the same undue influence facts to (1) overturn the Trust amendment, and (2) sue for financial elder abuse.  In other words, he may have been an undue influencer for purposes of the Trust amendment, but not for purposes of financial elder abuse.

But California law disagrees. Specifically, there are three different ways in which financial abuse may be pleaded under the Elder Abuse Act found at Welfare and Institutions Code section 15610.30(a), which states a person is guilty of financial elder abuse if they take property of an elder for wrongful use, or with intent to defraud, or by way of undue influence. (Welf. & Inst. Code, § 15610.30, subdivisions (a)(1), (a)(2), and (a)(3).) Thus, the act of undue influence used to overturn a California Trust (or in this case a Trust amendment) can also be used to establish a claim for financial elder abuse. Further, the Elder Abuse Act defines a “taking” to include the receipt of assets by a “testamentary instrument”, which includes California trusts and wills. (Welf. & Inst. Code, § 15610.30(c).)

Does this mean my client would get double damages, one with the Trust set aside and another in the amount of the property taken? No. But it does mean my client can proceed on both claims and take full damages under either one. For example, the elder abuse statute allows for punitive damages and attorneys’ fee whereas the Trust set aside claim does not.

The trial court heard oral argument on the demurrer on May 5, 2011. After hearing oral argument, the trial court was persuaded that the financial elder abuse claim could go forward based on undue influence as it was properly pleaded in my client’s lawsuit, and was supported by the Elder Abuse Act.

The next time you see facts showing a “garden-variety” trust or will contest, think about whether those facts also support a claim based on financial elder abuse.

In an earlier blog post, I shared a handout we give our clients so that they will know what to expect in their lawsuit.  All lawsuits are different, but there is one thing you can count on in every lawsuit: uncertainty.  A case can go from looking good, to looking bad, to looking good again all based on the facts and evidence discovered throughout the litigation process.

Thus, each case must be built, fact by fact, until the best case possible is assembled and rolled out for trial.  It’s a bit like making lasagna, it can only be done one layer at a time.

For example, in a typical Trust or Will contest, there are some facts known to the parties at the outset, such as the general condition of the decedent.  If they are challenging the Will or Trust based on a lack of capacity, they may know that the decedent suffered from dementia.  But did the dementia cause a lack of capacity at the time the contested document was signed?  This takes medical evidence and expert testimony to determine.  Once the medical evidence is received it can change the case--for better or worse. 

After every step of the discovery process (the process whereby we obtain facts and evidence) the view of a case can change.  Yet each stage provides us with another opportunity to layer in more facts and legal positions regarding the case.

And so we build, layer by layer, until we have the best case possible to take to trial.  Or the best case possible to take into a mediation for settlement purposes.  Either way, it takes a process, some patience, and ever increasing facts and evidence to blend a case together for just the right mix needed to prevail.

No one really wants to inherit their parents unmentionables after they die (at least I don't), but what about all the other personal items left behind?  From jewelry, furniture and antiques, to china, silverware, dishes and momentos, everything is an object over which a fight can ensue between siblings. 

The authority in the area of transferring personal items is a book, and now a website, called "Who Gets Grandma's Yellow Pie Plate."  It is a great example of how family discord can erupt over the smallest of items.  Of course, "smallest" in terms of value in a monetary sense, but not so small in terms of sentimental value-which is precisely why these fights can be so personal. 

Exactly who is entitled to a decedent's personal items (referred to as “tangible personal property” in legal jargon) and how is that property passed out after death?  Well there is a right way and a wrong way, and it’s hard to enforce the right way.

A few right ways.

Technically the property is supposed to be inventoried and then distributed according to the Trust or Will terms.  If the Trust or Will provides for specific items to go to specific people, then that must occur.  If not, then the beneficiaries can discuss who wants what and the Trustee or Executor must make a final decision in the event of a conflict.  Any property left over is sold and the proceeds from sale split evenly among the beneficiaries.

Or better yet, the parent or grandparent can give an item of personal property before death.  This is ideal because (1) it prevents any arguments relating to the parent's intent, and (2) it allows the parent or grandparent to enjoy the act of giving (and witness the excitement of receiving) the gift.  It also ensures that the gift will be made.

The Wrong Way.

Imagine the decedent's heirs going through his or her house and randomly taking personal objects without any authorization or direction.  They refuse to follow the terms of the Trust or Will and they fail to wait until a Trustee or Executor is in place to sort out the details.  Once a Trustee is in place, it is too late, the property is gone and trying to recover it is nearly impossible. 

The problem with the wrong way to pass personal items is that (1) it happens all the time, and (2) it’s hard to prevent.  It really depends on the people involved.  Will they wait to play by the rules or are they just going to do what they like?  And the costs involved in trying to recover personal property is far too high to justify doing it in most cases. 

At a minimum, a Trustee or Executor should try to secure the decedent's home as soon as possible and take possession of the personal items as quickly as possible.  Of course, it’s not always so easy to know which personal items people will want.  Sometimes it can be the least obvious item, such as a pie plate. 

One of my first litigation cases was against attorney Thomas W. Dominick in San Bernardino County Probate Court. Tom is one of the best estate and trust litigators in California. To say the least, I was scared. The issue in that case revolved around whether my client had a right to his girlfriend’s real property after her death. She promised my client the property during her lifetime and he had spent money on the property, but nothing was in writing and the two were never legally married. I remember being frustrated that I could not find a legal doctrine to support my client’s claim after his girlfriend died. I was shocked that there appeared to be no real protection for long-term nonmarital partners after the death of the other partner. I ended up alleging several causes of action that were weak at best (i.e. oral promise to enforce trust in real property, quiet title, specific performance, constructive trust, and unjust enrichment—known generally as Marvin claims based on a case of the same name). Unfortunately, these claims must be brought within one year of the decedent’s date of death or they are forever time barred under the statute of limitations applied to decedents' estates. And, the girlfriend’s family waited over eight years to file a petition for probate, knowing all the while that my client continued to live in what he believed was his house (the eight year time-frame made most of my client’s claims moot).

But I had equity on my side as my client had lived with his girlfriend for almost 30 years and he had invested his own money into the home over the years. Thankfully, the case settled after Thomas and I worked out a settlement, on behalf of our respective clients, which allowed my client to occupy the home for his lifetime.

A recent Court decision would have made my job much easier in the above-referenced case.  In McMackin v. Ehrheart (decided April 8, 2011) Presiding Justice Robert M. Mallano, writing for California’s Second Appellate District, Division One, discussed (as a matter of first impression) whether a Marvin claim based on a decedent’s promise to leave her nonmarital partner a life estate in real property requires the nonmarital partner to file a lawsuit within one year of her partners death, and if so, whether the doctrine of equitable estoppel can be applied to preclude assertion of the one year statute of limitations. The court concluded that the Marvin claim is governed by a one year statute of limitations, but that, depending on the circumstances of each case, the doctrine of equitable estoppel may be applied to preclude a party from asserting the one year statute of limitations. 

The pertinent facts of McMackin established that nonmarital partners—Hugh and Patricia—lived together in Patricia’s home from 1987 to 2004. Hugh was never on title to Patricia’s home, but continued to occupy her home after her death. More than three years after Patricia’s death, her children filed a petition for probate, which would effectively kick Hugh out of the home leaving him with no interest in Patricia’s estate. In reply, Hugh filed a lawsuit alleging that Patricia had promised him a life estate in the home upon her death in consideration for 17 years of his “love, affection, care and companionship.” Hugh argued that the one year statute of limitations did not apply. Of course Patricia’s daughters argued that the limitation statute applied (as three years had passed). In response, Hugh argued that even if the one year statute of limitations applies, the doctrine of equitable estoppel precluded Patricia’s daughters from using it against him. The court of appeal agreed, stating the one year statute of limitation applies, but that equitable estoppel may preclude the daughters from raising it as a defense. The court of appeal then sent the case back to the trial court for determination of these issues.

Overall, McMackin is a great case to review if you run into nonmarital partner estate issues. Justice Mallano did a great job in articulating the legal analysis pertaining to Code of Civil Procedure section 366.3 and the doctrine of equitable estoppel. I think this case will be used as more people choose to live together rather than get married. Of course all of the Marvin claim messes can be avoided by proper estate planning (i.e. creating California trusts and wills).

I’m still amazed when defense attorneys direct their clients not to answer my questions during a deposition where no privilege exists. In other words, the defense attorney simply assumes the role of judge and decides what questions their client will and will not answer. Of course, the defense attorney instructs their client not to answer any damaging questions, even where no privilege (i.e. attorney-client, etc.) applies.

When this happens in my depositions, I request the court reporter to mark the record in anticipation of bringing a motion to compel the deponent to answer my valid questions at a future deposition. For my motion to compel I rely primarily on Stewart v. Colonial Western Agency, Inc. (2001) 87 Cal.App.4th 1006.  

In Stewart, the defense attorney repeatedly directed his client not to answer questions at deposition on the ground that they were not calculated to lead to the discovery of admissible evidence. The plaintiff’s attorney, in response, filed a motion to compel further answers with the court. At the hearing, the judge remarked to the defense attorney, as follows:

So you’re the Mr. Wolfe that sat in the deposition and instructed the witness not to answer questions because you didn’t think they were relevant. Well that’s not your role. You are ordered not to instruct the witness not to answer a question during any deposition in this case unless the matter is privileged. The proper procedure is to adjourn the deposition and move for protective order. You don’t assume the role of judge and instruct the witness not to answer a question in a deposition. That is a huge no-no. (Stewart at p. 1101.)

The Court then ordered the defense attorney to pay sanctions to the plaintiff’s attorney in the amount of $2,400.

The defense attorney didn’t leave well enough alone. He appealed the trial court’s $2,400 sanction. The court of appeal quickly dispatched the defense attorney’s appeal holding that deponents are not to be prevented by their attorneys form answering a question unless it pertains to privileged matters or the deposing attorney’s conduct has reached a stage where suspension of the deposition is warranted. (Stewart at 1015.) The court of appeal affirmed the trial court’s ruling.

The next time any attorney orders their client not to answer a question at deposition where no privilege exists, point out the holding in Stewart on the record as a meet and confer, and then you’ll have a slam dunk motion to compel if the attorney continues to direct their client to not answer.

California Form Interrogatory 15.1 (an “interrogatory” is just a question) is the most important interrogatory to serve on your opposing party in a lawsuit. And the law requires they answer it fully and completely. Yet, so many attorneys refuse to answer the question properly.

A typical use of 15.1 follows:

You file a Trust Contest or a Will Contest (or any other type of lawsuit) alleging three causes of action: (1) Undue Influence, (2) Lack of Capacity, and (3) Financial Elder Abuse. The opposing party files an answer to the Trust Contest or Will Contest denying most, or all, of your allegations, and on top of that includes 15 affirmative defenses (an affirmative defense, if proven by the opposing party, operates to defeat your claims even if the facts supporting the claim are true).

The opposing party’s denials and affirmative defenses must ultimately be tried, which can make for a long, costly and confusing trial.  But what if the denials and affirmative defenses could be trimmed down before trial?  That’s the purpose of 15.1—you can narrow the issues, and force the opposing party to show their cards—factual cards—before trial. Once you narrow the issues in a case, you are able to clearly and forcefully present the true facts of the case at trial, which generally equals a win for you.

How does 15.1 do this? 15.1 requires the opposing party to provide all facts, all persons, and all documents that support (1) their denials, and (2) their affirmative defenses. In other words, for each denial of a material allegation in your lawsuit (i.e., Trust Contest or Will Contest) the opposing party must (1) identify all facts supporting each denial, (2) identify all witnesses (including their names, addresses, and phone numbers) who can testify about facts supporting each denial, and (3) identify all documents (or things) (including the name, address and phone number of the person who has each document) supporting each denial. Likewise, the opposing party must identify all facts, witnesses, and documents that support each and every affirmative defense (all 15 of them in the case presented above—that’s a lot of work).

To date, I have never received a proper response from an opposing party to 15.1. I generally follow up the opposing party’s response with a required “meet and confer” letter articulating how they must respond to 15.1. If the opposing party refuses to supplement their improper response I generally file a motion with the court requiring that they properly respond to 15.1. Any time I have filed a motion with the Court on 15.1, the Court has granted my motion and ordered the other side to respond. I have even received monetary sanctions against the opposing parties. So beware, when 15.1 comes your way, especially from my firm, it must be answered.

If you have questions, or would like to receive a form copy of my motion to compel for 15.1, please contact me.  

My law firm strongly believes in fighting for justice and fairness—so much so that we put it right on the first page of our website. But these two concepts, “justice” and “fairness”, are confusing at times, which makes it difficult for clients when attempting to understand how to obtain justice or fairness in a lawsuit. 

Let me first explain these two terms in my view. 

Justice:  Justice is the process of presenting evidence in Court before a judge or jury and having them decide in your favor after the evidence is reviewed. When you win in court you receive a public pronouncement that you are right and the other side is wrong, and you receive a just punishment or reward against the other side in the form of damages, i.e. usually money.

Fairness:  Fairness is a financial determination—w ill you receive more from the lawsuit financially than you put into it?  If you spend $20,000 on a lawsuit, you want to receive more than $20,000 out of that suit.  Otherwise, the lawsuit was not fair—meaning financially fair.

Justice pays no attention to the financial costs of a case.  If a person wants justice they must be willing to spend as much time, emotional capital and money as necessary to achieve that result, which can often be an unfair result from a financial viewpoint. And just because a case goes to trial does not mean that justice will be served;you could lose and thereby suffer an unjust result in the process. That’s one of the risks of fighting for justice—injustice.

For example, when we prosecute killers in court for capital murder, whichcarries the death penalty, it is very expensive.  The cost of trying death penalty cases far outweighs any financial gain we (society) will get back in return.  So do we decide not to prosecute murderers because it's just too expensive?  No, because we want justice and as a society we are willing to pay the price for justice.  Plus, it is society as a whole who pays--no one person is asked to pay for a death penalty trial.  But the death penalty trial is not fair from a financial standpoint because the financial costs outweigh the financial benefits—but it is just.

In a civil lawsuit, however, whether it be personal injury, breach of contract, will or trust contest, or breach of duty case, a single person or small group of people are paying the bill. And a vast majority of people want their case to be fair--meaning they will get more out of the case financially than what they put in.  Yet, people regularly want justice. 

But justice is not easy to obtain. Rarely is it handed out willingly. It must be fought for at any cost and there is no guarantee that a just cause will prevail--losing is always a possibility. It takes time, effort and an emotional toll to pursue justice. Nelson Mandella, Martin Luther King, Jr., our Founding Fathers all fought for justice, placing their lives and freedom on the line. They paid a high price for their just causes; it was not a fair result.

Sometimes, justice and fairness are both achieved such as when a personal injury suit is won with an appropriate award for damages (although one could argue that the damages should have been paid without having to pay an attorney a fee to go to trial—so maybe it’s not so fair after all). 

The next time you find yourself in a dispute ask whether you are fighting for justice or fairness.  If you really want justice, be prepared to pay the price.  And if you really want fairness, then take the opportunity to accept a fair result when and if one is presented.   

You work hard to create your Trust and your estate plan and you want the terms of your Trust carried out the way they were drafted.  But how can you be sure your named Trustee will perform as instructed after your death or upon incapacity?  Sure you may have chosen a trusted person to act as Trustee, but how will they actually perform?  And how will their performance be viewed by the Trust beneficiaries (i.e., usually your children and other family members)?

There are times when a Successor Trustee either violates their duties (whether it be intentional or unintentional--by not taking the proper actions), or the beneficiaries have the belief that a Trustee is not acting fairly (especially if the Trustee is also a beneficiary as when a single sibling acts as Trustee for his brothers and sisters). It does not much matter whether a breach of trust is actual or perceived because litigation (lawsuits) can result from either situation.

In comes the Trust Protector. A Trust protector is simply a special Trustee.  Someone appointed in the Trust document for a very limited and specific purpose. For example, the Protector could have the final say in when to make distributions from the Trust and how much should be distributed. This provides the appearance (and actuality) of a neutral third party making an important decision rather than a self-interested Trustee.

But the Trust Protector can be used for more than that. The Trust Protector can:

1. Make or consult on investment decisions,
2. Have veto power over certain (or all) decisions of the Trustee,
3. Have veto power over distributions to the Trustee,
4. Be a tie-breaker vote between two Co-Trustees,
5. Set compensation levels and advise on hiring professionals, and
6. Manage certain Trust assets.

In other words, the Trust Protector can be used however you like, the sky is the limit. In fact, each time I incorporate a Trust Protector into a Trust I am amazed at how versatile the concept is and how many different ways it can be used. It is a very personal device that can provide peace of mind, along with actual peace between the beneficiaries, when the time arrives.

So get creative and find ways to help protect your Trust for the benefit of your family and beneficiaries.

Listen to Keith A. Davidson summarize his blog post on the difference in contesting a California Trust and a California Will.

Which is better—A Trust or Will if a fight takes place for your assets after your death?   One of the primary reasons people create Living Trusts (also called Revocable Trusts and Revocable Living Trusts) is to avoid probate. And Trusts can also help in reducing or, in some cases, eliminating estate taxes. But can a Trust also help discourage a contest over an individual’s intended disposition of his or her assets at death?  The answer is a resounding “maybe.”  Let me explain.

Some people believe Trusts better protect against a contest because Trusts are not administered with court supervision. Once the person who created the Trust (referred to as the Settlor) dies, the Successor Trustee begins administering the assets, gathering them up and preparing these assets for distribution to the Trust’s beneficiaries (usually family members), without any need for court supervision. On the other hand, a California Will can only be administered in probate, which requires court supervision. In fact, an Executor is not even appointed to act under a Will until a Petition for Probate is filed with the court and the court appoints the person as executor. Once in court, anyone who wishes to challenge the Will has a ready forum in which to do so. In other words, a contestant normally does not need to open the court process pertaining to a Will—they merely need to show up and file an objection in the probate court.

In contrast, contesting (or challenging) the terms of a Trust is not quite so easy. Trusts can be challenged in court and trustees' actions can be challenged in court, but the person wishing to contest a trust, or its trustee, must take the initiative and bring the matter to court by filing an appropriate petition.  Thus, it is the contestant who has to take the initiative to start the court process when it comes to trusts—they can't just show up and object as in the probate of a California Will.

So back to the “which is better” question—is is a Trust better than a Will in warding off attacks by angry beneficiaries? It depends.  If an heir or beneficiary is set on contesting the document and if the heir has means to hire an attorney, then a Trust is just as vulnerable to attack as a Will—the fact that the heir or beneficiary must start the process will usually not prevent an attack. If, however, an heir or beneficiary does not have the means to hire an attorney and does not know how to bring a trust contest to the Court’s attention, then the trust may be better at preventing attack. A California Will, after all, is already filed in court, which allows a beneficiary to object to it much easier, sometimes without the help of a lawyer.

Therefore, a Trust may have some benefit over a California Will in preventing a contest by an angry heir or beneficiary, but the benefit is relatively small if the heir is ready, willing and able to take action to bring the matter to court.

The concept of “undue influence” can be used to invalidate a Will or Trust. What is undue influence? According to the California legislature “undue influence” is the taking of an unfair advantage of another’s weakness of mind. In a word: coercion. For example, a caretaker befriends an elderly person and takes over the elder’s financial affairs, such as writing checks, paying bills, etc. Even though the elderly person already has a Will and Trust leaving all of her property equally to her two children, the caretaker takes advantage of his position of trust and convinces the elderly person to create a Will and Trust leaving everything to the caretaker and disinheriting the children. The Will and Trust that the elderly person creates under these circumstances does not reflect the elder’s intent (because she wanted her assets to pass to her children), rather it reflects the intent of the caretaker. The children can then sue after the elderly person’s death and challenge the validity of the Will and Trust based on Undue Influence of the caretaker.

Generally, the objectors of a Will or Trust (such as the children in the above example) have the burden of proving by a preponderance of the evidence that the caretaker exercised undue influence over the decedent.  But that burden of proof can shift to the caretaker if certain facts are present.  Once shifted, the caretaker then has to prove that he did NOT unduly influence the elderly person, and he must likely prove this by clear and convincing evidence (which is a higher standard).  This is nearly impossible for the caretaker to prove because he must prove a negative—that undue influence was not present—a hard task to accomplish.  Therefore, shifting the burden is critical and nearly always fatal once accomplished.

To shift the burden of proof to caretaker, the children must prove the following three elements:

• Caretaker and Mom had a confidential relationship;
• Caretaker participated in the creation of the changed Trust and Will; and
• Caretaker unduly profited from the changed Trust and Will.

Under the above example, the burden would likely shift to the caretaker because there was a confidential relationship (since Mom was dependent on the caretaker for support and maintenance), we may have facts that he participated in the Will creation (we did not say that above, but it is a common occurrence), and the caretaker unduly profited by receiving all of the estate. 

What’s the likely outcome? More than likely, with the proper presentation at trial, the Probate Court will invalidate Mom’s Will and Trust and restore children’s inheritance.