If you find your inheritance being reduced or eliminated and you want to take action to protect yourself in court, you may want to first consider California No Contest clauses. California Trusts and Wills often contain a no contest clause that states you will be disinherited if you challenge the terms of the Trust or Will. And while California no contest clauses have been severely limited in recent years under California law, they still can apply to certain actions you take to challenge a Trust or Will.
In this course, we discuss the application of California no contest clauses in more detail and offer our views on how best to deal with this difficult issue. If you would prefer to read about this topic, you can find our written blog post here.
In this video we cover the basic ground rules for California no contest clauses and provide the factual scenario we will use for the next two video lessons.
Partner Stewart Albertson provides his professional opinion on how to deal with California no contest clauses found in California Trusts and Wills.
Partners Stewart Albertson and Keith A. Davidson discuss their views of how to deal with California no contest clauses.
If you are the victim of a poorly drafted Trust or Will that prevents you from inheriting the property your parents wanted you to have, you may have an attorney malpractice claim on your hands. In this course, we discuss the rights and options you have to recoup the harms and losses you suffer from attorney malpractice.
In this video we cover the basic rules for attorney malpractice claims and present the factual scenario we will use in the next two videos.
Partner Stewart Albertson discusses his professional opinion of how the law of attorney malpractice applies to the facts presented in Lesson 1.
Partners Keith A. Davidson and Stewart Albertson discuss their views of how attorney malpractice is used to recoup harms and losses suffered by attorney malpractice.
If you are contesting a Trust or Will, or filing a California financial elder abuse action, you have to know about undue influence. In a majority of cases, undue influence is alleged as the basis to overturn a California Trust or Will. And the same concept can be the basis to file and win a California financial elder abuse claim.
In course 3, we cover the facts, the law, and the talk for California undue influence claims.
In this video we cover the basic rules for undue influence claims; and then present the factual scenario we will use in the next two videos.
Partner Keith A. Davidson discusses his professional opinion of how the law of undue influence applies to the facts presented in Lesson 1.
Partners Stewart Albertson and Keith A. Davidson discuss their views of how undue influence is used and applied in Trust and Will lawsuits.
California Trustees have a lot of duties and responsibilities, but none are more important than the top three Trustee duties discussed in course 2 of our video series. You can find an in-depth written discussion of this topic here.
In this video we discuss a basic factual scenario that we will use in the next two videos.
In this video, partner Stewart Albertson gives his professional opinion on Trustee duties.
In this video, partners Stewart Albertson and Keith A. Davidson give their views on Trustee duties.
It’s time for something new. We developed a new course called The Beneficiary’s Corner. This course will allow us to delve more deeply into a California Trust or Will topic. The first lesson of each course is The Facts, where we set out a hypothetical scenario drawn from our experience in actual cases. We then provide you with our professional opinion in The Law section. And finally, we have our partners conduct a roundhouse discussion of the topic in The Talk.
Below are the videos from our first course focusing on Trustee investing. Each month we plan to release a new course in the same format. You can find all of our courses here. You can also find an in-depth written text for this course here.
What we suggest to people is to be comfortable with the person you are meeting with before hiring a lawyer. Lawyers have a fairly bad reputation, but that reputation does not apply to all lawyers. You need to meet with several lawyers and make sure you are comfortable with the lawyer you select.
A few questions we recommend asking include: does the lawyer sound like they know what they are talking about? Do they have an interest in your case? If they are interested in your case, what are they interested in? Is it an interesting fact situation, legal situation, or something they feel compelled to address?
After asking a few questions, sit and see what your comfort level is with the person. If you are comfortable with the person and they sound like they know what they are talking about—and are interested in the case—then you probably found the right lawyer for you.
The most important thing is the relationship between the attorney and the client. There will always be ups and downs in every litigation case ad you need to be able to work together and trust each other in good times and in bad. If you feel comfortable in all this, then generally you have found the right attorney for you.
Occasionally we are asked about fighting against a big firm. Maybe your Trustee decides to hire a big firm in Los Angeles, New York, Chicago, Boston, or some other big city. How are you going to fight your Trustee when he or she is represented by a big law firm? That’s a fair question.
Many people think that large law firms have unlimited resources and can crush a small firm in litigation. But in Trust and Will litigation that tends to be false. First, large law firms tend to be far more expensive—meaning their client will feel the financial pressure of litigation before you do.
Second, large firms have a hard time doing anything “outside of the box” because of the many partners to which each lawyer must answer. That means if anyone does anything novel they may be questioned or challenged for it later by the higher-ups. As a result, most big firms engage in a traditional style of litigation, which is fairly predictable.
Third, the California Code of Civil Procedure applies to everyone in California—big firms and small firms alike. Yes, it takes work to enforce the rules, but after having done it many times against big firms, we can easily attest that the rules are applied against big firms just as well as small firms.
A specialist, boutique firm is smaller, more nimble, and can react appropriately and more strategically than most large law firms in Trust and Will litigation. As a result, a specialty firm can develop and employ a unique strategy that better fits your case.
There are times when a Trust settlor names a successor Trustee who is not a beneficiary of the Trust. This is often a great idea because naming a child as Trustee can be disastrous. And naming two or more children as Co-Trustees is a fantastic idea if you want to keep lawyers fully employed (and who doesn’t want that???).
The problem, however, is when the non-beneficiary Trustee is challenged by a Trust beneficiary. For instance, if a warring beneficiary is determined to exert control over the Trust, he or she may challenge the appointment of the successor Trustee when the time comes for that Trustee to act. What incentive does a third-party have to fight to be Trustee when there’s nothing in it for them?
Fighting to block a named successor Trustee from acting is not an easy thing to do depending on the Trust terms. Most Trust terms do not allow a beneficiary to remove and appoint a new Trustee. That means a Trustee has a right to act provided there are no “skeletons” in the Trustee’s closet. What type of skeletons would block the appointment of a Trustee?
Probate Code section 15642 provides the grounds for Trustee removal, which can be used at times to block a named successor Trustee from acting in the first instance. The grounds include things like insolvency of the Trustee, unfit to act (whatever “unfit” means), where the Trustee committed a breach of trust, where the person cannot resist fraud or undue influence, and the like.
The problem arises where a named successor Trustee has not yet taken control of the Trust assets, but is challenged by a beneficiary from acting. The named successor may not be able to access and use Trust funds to fight the beneficiary over appointment as Trustee. And a non-beneficiary Trustee has no financial stake in the outcome of his or her appointment. In other words, the named Trustee is put in the unusual position of paying out of her own pocket for the right to take on a thankless job with an unruly beneficiary to deal with.
So why would anyone take on such a fight? It comes down to principal. Sometimes standing up for what the Settlor wanted is more important than the personal sacrifices incurred in such a fight.
The better approach for all concerned is to have an easy way out—a safety valve that will allow someone to step in and cure the problem without excessive fighting. And that brings us to the unique, and rarely used, idea of a “special” Trustee or a Trust protector. For our discussion here, both terms can do the same function; namely exercise the power to remove and appoint Trustees.
If a beneficiary insists on fighting against a named successor, then give the power to remove and appoint to a neutral third-party (called a Trust protector or special Trustee) who can choose an alternate Trustee. This approach satisfies the beneficiary by preventing the named Trustee from acting, but it also prevents the beneficiary from effectively controlling the Trust by appointing a pliable lackey as Trustee. Instead, the Trust protector can independently choose a competent person to act as Trustee who is NOT beholden to the beneficiary for his or her job.
Just another example of how well laid plans can help avoid disaster.
Will your estate be subject to estate taxes at the time of your death? That may not be so clear. After all, Congress seems intent to keep changing the estate tax laws. In recent years, the estate tax has been set to apply only to estates that exceed $5 million in value, with an inflationary adjustment that makes the estate tax limit $5.45 million in 2016. But Democrats want to lower the estate tax limit and Republicans want to repeal it altogether. Who knows what the future holds.
That’s where Discretionary Trusts come in. If you have an estate that potentially could be above the estate tax limit when you die (and who knows what that limit will be), then you may benefit from a Disclaimer Trust.
A disclaimer is simply a declaration by the recipient of an inheritance that they don’t want the property. There are a number of rules that apply to disclaimer, but the two you should know is that (1) a disclaimer must be made in writing within nine months of the decedent’s death, and (2) you cannot control where the property goes after you disclaim it.
Legally speaking, you are not obligated to accept a gift. And if you disclaim that gift, you are saying you do not want it and will not take any control over it. By doing so, the gift will pass according to the Trust terms as if you died before the Trust settlor. That means you wash your hands of the gift and you have nothing more to do with it.
In tax planning, we use the disclaimer to our advantage by providing Trust terms that direct the disclaimed assets to a trust (aptly named the Disclaimer Trust), where the assets are held for the benefit of the surviving spouse. This allows the surviving spouse to disclaim assets for tax planning purposes, and then have the assets pass into a Disclaimer Trust to be held for the survivor’s benefit.
If you have ever heard of a Bypass Trust, then you already know what a Disclaimer Trust is. A Disclaimer Trust is just a voluntary Bypass Trust that the surviving spouse can elect to create after the first spouse’s death. Whereas Bypass Trusts are mandatory and must be created after the first spouse’s death.
In other words, a Disclaimer Trust is merely a safety valve that allows the survivor to disclaim whatever portion of the estate would be over the $5.45 million mark after the surviving spouse’s death. Once that determination is made, the assets can be disclaimed, and the Disclaimer Trust is created.
So even though Congress has no idea what it will do with the estate tax limit, you can rest assured that any future estate tax can be properly dealt with and planned for simply by including a Disclaimer Trust in your revocable living trust.
I have seen many lawyers argue themselves OUT of a win by talking too much in court. The first rule of oral argument in court is that if you do not need to say anything because the judge is agreeing with you, then SHUT UP. You do yourself no service by re-hashing a point the court already accepts, and you run the risk of changing the court’s mind against you.
In those cases where the court is not going your way, then you do need to speak up. And here is the best advice I can give anyone speaking with a judge in court: listen to the judge and answer his or her question. Sounds simple enough, but again it is rarely practiced.
So often people come to court prepared to argue what they think the issue is, or what they fear the weak point is. But the court often sees the issue a little differently. You have to understand your legal arguments and be prepared to speak, but arguing a point the judge is not asking about is a waste of time and effort. More importantly, you can frustrate the judge and lose the argument altogether.
The best oral arguments I have had in court come from entering into a conversation with the court. The judge raises an issue or question, I listen to what he or she is asking about, and I formulate my response to address that concern. You must always remember that you are engaging in a conversation with the court. Coming into court with a pre-packaged argument and then not varying from your script is a sure recipe for disaster.
And when the court agrees with you and starts peppering the opposing party with questions, shut up. At times, your best argument can be silence.