California Trust, Estate & Probate Litigation

The probate process is probably one of the most archaic procedures we still have in our legal system.  Probate simply means to prove-up a Will—it’s the process where a Will is determined to be valid by the Court, it is then “admitted” to probate (as we say), an Executor is appointed and the administration of the decedent’s assets begins.

Probate also applies where there is no Will, then the Court determines that no valid Will exists, an Administrator is appointed, and the administration of the decedent’s assets begins.

Sounds pretty straightforward, until you run face-first into the procedural wall of probate.  There have been many times when I have been asked by non-lawyers “can I do the probate myself?”  My response is: yes.  This is America, anyone can represent themselves in Court—for the most part.  There are a few exceptions to that rule, but a simple, uncontested probate can be handled by the Executor.  All you need to do is know all the rules, procedures, and arcane terms of probate…well maybe its not so simple after all.

In fact, there are plenty of lawyers who have a hard time navigating the probate process.  The rules that have been established over many centuries (yes, some of our probate laws/rules are that old) are not intuitive to understand.  And if you don’t comply with the process, then your probate dies a slow death in Probate Court.

But still, it’s not impossible.  It just takes a good amount of homework and an extra large dose of patience.  And every probate can be broken down in three main parts (1) Starting the probate process, (2) administering the estate, and (3) closing the estate.

1.         Starting probate.  To start a California probate you have to file a petition with the Court.  A petition is just a way of asking the Court to do something—in this case it’s to open a probate.  There are other forms that go along with the petition too.  Once you prepare the petition, you file it with the Court and the Court will give you an initial hearing date for sometime in the future.  Once you have that date, you have to serve Notice of Hearing on all persons named in the Will AND all heirs at law.  You also have to publish notice of the probate in the newspaper before the hearing date. 

If all goes well and your papers are in order, then the Court will grant the petition, sign the Order opening probate, and issue Letters (either Letters Testamentary for an estate with a Will, or Letter of Administration for intestate estates (that’s estate’s with no Will)). 

See my video on how to prepare a Petition for Probate.  We also have a post with links to all necessary (well most necessary anyway) probate forms.   

2.         Administering the estate.  Once the California probate estate is opened all estate assets must be gathered and inventoried and appraised.  All cash can be appraised by the Executor, but any other assets, such as stocks, bonds, real estate, etc. must be appraised by the Court appointed probate referee.

Creditor’s of the decedent must be noticed, property sold or positioned for distribution, and any estate bills paid.  If someone claims to be a creditor, but the Executor believes the claim to be invalid, then there may be a lawsuit to determine which claims are appropriate to be paid.

Once all creditor’s are paid and assets are either sold or positioned for distribution, its time to close the estate.

3.         Closing the estate.  The final petition that must be filed in a California probate is a report by the Personal Representative, which usually includes an accounting of the estate assets and a request to distribute the estate assets to the appropriate heirs.

The estate accounting is the trickiest part of this equation because it must be prepared in a manner that complies with Probate Code Section 1060 et seq.  And an estate accounting is unlike any other type of accounting.  So you have to find someone who knows how to properly prepare this type of accounting.

The final petition also asks for compensation to be paid to the Executor and the estate’s attorney.  Both the Executor and the attorney are entitled to the same fee, which is a sliding scale percentage of the estate’s value.  The fee equals:

4% of the first $100,000 of value               $4,000

3% of the next $100,000 of value              $3,000

2% of the next $800,000 of value              $16,000

1% of all amounts up to $5 million             $50,000

Most probate estates are not $5 million in value.  However, a typical estate worth $500,000 would result in a fee to the Executor of $13,000.  The estate’s attorney would receive the same amount, $13,000.

Navigating your way through the California probate process is not impossible, its just time-consuming and, at times, frustrating.  But take a deep breath and see what you can do.  If all else fails, you can always hire an attorney to take the probate to the finish line.

How does your trust help you while you’re alive?  Many people think of trusts as death planning instruments--the type of thing that only operates upon your death.

But trusts have a critically important role to play while you are alive in the event you lose capacity.  People are living longer and the likelihood of being physically able, but mentally unfit is growing.

Without a trust plan in place, a person and his money cannot be easily cared for. In fact, a court supervised conservatorship is required to manage the person and estate of people who lose mental capacity, but have no other safeguards in place for the management of their money and personal care. 

Unfortunately, conservatorships are costly, time consuming and expose everything (and I mean everything) to ongoing court supervision.  In other words, your life becomes an open book and the court decides who will make decisions for you and then tries to oversee those decisions as best it can....yikes!

Since a conservatorship takes place in court, it provides a ready forum for lawsuits.  It's not uncommon for a person's children to fight over who should be named as the conservator.  And those types of lawsuits can be nasty business.

But a well planned trust can avoid all of that because under the trust terms, you appoint a successor to manage your money if you ever become incapacitated.  You should also have a Health Care Directive in place so that you can name someone to make your medical decisions.  With these two documents properly prepared, your personal care and your assets can be quietly and easily managed until you return to full mental capacity.

So the next time someone tells you that a trust isn't necessary because it only takes effect after you're dead and gone, think again.  That trust may save you a lot of time, money and public scrutiny while you’re still alive.

There is an old saying in the law that goes “first in time, first in right.”  For Wills, the opposite is true—last in time, last in right.  Typically the last valid Will wins.  But what if the last Will is not valid?  That could allow an earlier Will to apply instead.  And it is this dispute—last Will versus second-to-last Will—that is at the heart of nearly every Will contest lawsuit.

Of course, a Will cannot be overturned just because the heirs or beneficiaries don’t like the Will terms.  There has to be some legal basis to invalidate the Will (see our earlier blog post on invalidating a Will).  Once a legal basis is determined, it’s time to get down to business; actually filing the Will contest.

A Will contest lawsuit is unique in that it requires a few steps, and a few different filings, before the lawsuit is properly “before the Court” (which just means all the correct paperwork is filed so the Court can handle the matter).  Let’s walk through the steps for a properly filed Will contest lawsuit:

Step 1 – Petition for Probate: You have to open a probate estate.  In California, a Will is not is not a Will until it is admitted to probate.  The procedure of admitting a Will to probate is the Court’s method for proving that the Will is valid.  Before being admitted to probate, a Will is simply evidence of a potentially valid Will.  Once admitted to probate, a Will is, by law, a valid Will.

So whether you are trying to admit the last Will or an earlier Will, you must ask the Court to admit the Will to probate and that requires a Petition for Letters Testamentary (also referred to as a Petition for Probate).  Under the Petition for Probate, you recite the facts as they pertain to the Will you want admitted and then you must sign the Petition and file it with the Court. 

What if the opposing party has already filed their own Petition for Probate?  No problem, you file your own Petition for Probate as well (they are referred to as “competing petitions,” but you use the same form whether you’re filing first or second).  It makes no difference who files first, as long as you file before the opposing Will is admitted to probate.

Step 2—The Objection.  The next step is a separate filing called an objection to probate of Will as prescribed by Probate Code Section 8250. This is the actual Will contest filing where you explain why the other person’s Will is invalid and what legal basis (or bases) you are using to dislodge that Will.  A Will contest objection under Section 8250 is unique under the Probate Code in that it is the only probate filing that requires the issuance of a summons (like the ones used for civil complaints).  Both the objection and the summons must be personally served on everyone (and I mean everyone) mentioned in the Will you are trying to invalidate, along with all of the decedent’s heirs (if they are not otherwise mentioned in the contested Will). 

Step 3—Prove your case.  At trial, the proponent of the contested Will must first prove due execution of the Will (which means that it was properly executed as set forth under Section 6110).  Once execution is established, it is then the contestant’s burden to prove any of the legal grounds to invalidate the Will, including lack of capacity, undue influence, fraud, duress, or revocation.  Never forget what your burden is at trial because it will guide your actions in conducting discovery beforehand.

After taking the right steps, your Will contest is on its way through the Court system.  Now the work really begins….

The manner in which assets are titled govern how those assets pass at death.  And this can override a disposition contained in a Will or Trust. All the effort people take to prepare a Will or Trust can be wasted if assets are not titled properly.  This is what I call the asset puzzle.

The first part of the puzzle is knowing the possible pieces (i.e., the way in which assets can transfer at death).  There are differing ways in which assets pass at death and it can be downright confusing.

For exapmle, life insurance passes by beneficiary designation. Whoever is named as the beneficiary on the form in the files of the life insurance company takes at death. It does not matter what the decedent's Will or Trust state, the beneficiary designation controls. Therefore, even though a Will may be created that leaves assets equally to the decedent's children, if only one child is listed as a beneficiary of a life insurance policy, then that one child takes the life insurance proceeds and the other children get none.

Same applies to assets titled in joint tenancy. Bank accounts, brokerage accounts, real property and cars all have the ability to be held jointly with another person or persons. When one joint owner dies, the other joint owners receive the property automatically without the need for probate. But this also means that the assets pass without regard to a Will or Trust. All too often I see children unintentionally excluded because they are not included as a joint tenants on the assets.

For some reason people think that if they have a joint tenancy over their assets one of two things will occur. Either (1) the child who takes that asset will share with the other children (even though there is no legal obligation to do so), or (2) the Will or Trust will override the joint tenancy or beneficiary designation (which is false, the beneficiary or joint tenancy overrides the Will or Trust).

This is where planning comes into the picture. Planning is NOT the act of simply having a Will or Trust.  A Will or Trust is a required part of planning, but that is just the beginning. The most crucial part of planning is looking at all the assets in the estate and changing title to those assets to conform to the plan.  This means filing a new deed so the house is in the Trust, for example.  Changing the title on bank or brokerage accounts, ensuring any beneficiary designations go to either the Trust or the proper individuals.  In other words, looking at the entire, big picture and taking all necessary action.  That’s truly the definition of planning.

By the way, it's lack of planning that keeps lawyers fully employed because that is when litigation and probate ensue. And we lawyers make far more money on probate and litigation then we do on planning. So while people look at me skeptically when I plead with them to have an estate plan, I really should be pleading NOT to create a plan. So support your local lawyers, neglect your planning!

In an earlier post we described what probate is and that it only applies to assets titled in the name of the decedent at the time of her death.  Now we want to discuss how to start the probate process (it's just a court process after all).

Handling a California probate can be summed up in one word--procedure.  It is a procedural monster that requires strict compliance with the rules of probate.  Some of the rules are easy to find and others are not, but complying with the rules is the only way to successfully navigate a probate.

Probate starts with a “Petition for Probate”.  A Petition is just a document that starts the ball rolling by asking the court for relief.  Here, in California, the Petition for Probate (Form DE-111) is meant to ask the Court to accept the decedent's Will as being a good and valid Will and appoint an executor to act as the decedent's personal representative (if there is no Will then the personal representative is referred to as the Administrator rather than Executor). 

The good news is that the Petition for Probate is a form document. The bad news is that it's not as easy to prepare correctly as one might think when first looking it over. But it's not too difficult either once you understand the process a bit better.  The key to the initial petition is to read each section carefully and mark all sections that apply.

And you will need a few other forms as well: such as the Duties and Liability of the Personal Representative, Letters, Order, Notice of Petition to Administer Estate, and Confidential Supplement.  (See our prior post listing many probate forms.)  There may be a local form or two that each local court of a particular California county requires.  This varies by location and you should check with your local court for any filing instructions—or check the court’s website where they typically list local forms. 

DISCLAIMER: We are not intending to provide you with legal advice in this blog, we are only presenting general information relating to probate procedure.  Every case may vary based on the facts and circumstances of your particular case.  You should always discuss your case with a California lawyer before filing a probate in California.

When creating a California Will there are a few basic steps that must be met from a legal perspective in order for that Will to be legally valid.  In their simplest form, the two areas required for a valid California Will are the necessary “Intentionalities” and the required “Formalities.”

Intentionalities:

Intentionalities  evidence a person’s intent to create a Will.  Will creation requires intent—the person creating the Will (referred to as the “Testator” ) must intend to make a Will.  And there are a number of things that can undermine the necessary intent to make a valid Will.  A short list of such items include: lack of mental capacity, undue influence, fraud, and duress and menace.  The full list of intentionalitiesfollows:

       Intentionalities:

• Intent to create a will
• Capacity
• Undue influence
• Fraud
• Duress and menace.

Formalities:

Formalities refer to the formal requirements for California Will creation.  For example, a Will must be in writing (no oral Wills are allowed), signed by the testator, and witnessed by two disinterested witnesses.  Alternatively, a hand-written Will can be valid if the material provisions are written in the testator’s own handwriting and signed—no witnesses needed (this is referred to as a “Holographic” Will).

       Formalities:

• Written Will
• Signed by testator
• Witnessed by two disinterested witnesses or holographic.

Using these two areas of legal requirements, you can go down the list of Intentionalities and Formalities to determine if a Will is valid or not.  The lack of any one item may result in an invalid Will.  For example, a Will with all the necessary Intentionalities, that is printed from a computer and signed by the testator could still be invalid if it lacks the required two witnesses.  Conversely, a properly executed and witnessed Will could be invalid if the testator lacks mental capacity or if the testator is unduly influenced in making the Will. 

Does that mean Wills are easy to attack?  Not necessarily.  In fact, a vast majority of Will contests that make it to trial fail to succeed.  Of course, this could be due in part to the fact that many of the cases with troubling facts settle before trial.

Keep this list of Intentionalities and Formalities in mind as we submit further blog posts on the component areas—such as undue influence, capacity, fraud, etc.