CA Trust, Estate & Probate Litigation

CA Trust, Estate & Probate Litigation

The Beneficiary’s Corner — Course 4 California Attorney Malpractice Claims

Posted in Beneficiary's Corner, Videos

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.

The Facts

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.

The Law

Partner Stewart Albertson discusses his professional opinion of how the law of attorney malpractice applies to the facts presented in Lesson 1.

The Talk

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.

 

The Beneficiary’s Corner — Course 3 California Undue Influence Claims

Posted in Beneficiary's Corner, Videos

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.

The Facts

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.

The Law

Partner Keith A. Davidson discusses his professional opinion of how the law of undue influence applies to the facts presented in Lesson 1.

The Talk

Partners Stewart Albertson and Keith A. Davidson discuss their views of how undue influence is used and applied in Trust and Will lawsuits.

The Beneficiary’s Corner — Course 2 The Top 3 Trustee Duties

Posted in Beneficiary's Corner, Videos

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.

The Facts.

In this video we discuss a basic factual scenario that we will use in the next two videos.

The Law.

In this video, partner Stewart Albertson gives his professional opinion on Trustee duties.

The Talk.

In this video, partners Stewart Albertson and Keith A. Davidson give their views on Trustee duties.

The Beneficiary’s Corner — A new course for abused California beneficaries

Posted in Beneficiary's Corner, Videos

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.

Selecting your Trust or Will litigation lawyer

Posted in Litigation, Videos

Finding the right key for your case

How do you select a lawyer to represent you in a Trust or Will litigation matter? It can be a frustrating process.

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.

How to fight against the Big Dogs: Fighting big law firms in Trust and Will litigation lawsuits

Posted in Litigation, Videos

Ya Wanna Fight???

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.

Would you pay money to take on a thankless job? Fighting to be Trustee of a California Trust

Posted in Planning, Trustees & Beneficiaries, Videos

Would you

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.

Undue Influence: Convincing a Person NOT To Act

Posted in Capacity & Undue Influence, Trust Contests, Undue Influence, Videos, Will Contests

Can you unduly influence someone NOT to take action?-2

Can you unduly influence someone NOT to take an action?  In nearly all Trust and Will disputes, an undue influence claim is brought to overturn a Trust or Will that was executed while the elder was unduly influenced.  But not every Trust and Will case turns on action, sometimes inaction can be just as damaging.

For example, sometimes parents get mad at their children (sometimes you ask?  Okay it happens all the time).  And to punish the child, a parent will rush to the lawyer’s office and amend the Trust or Will to reduce that child’s share or disinherit them altogether.

A few years go by, the parent and child make amends, and the parent wants to change the Trust and Will again to return the child to his full share of the estate.  But then, another child gets wind of this intent and tries to prevent it.  Maybe the other children had no problem with this one “trouble maker” getting booted out of the estate and thereby increasing everyone else’s share.

Undue influence is the use of severe pressure that causes the elder to replace his or her own intent with that of the wrongdoer.  Influence (of the undue variety) is not illegal.  Everyone is influenced every day by the people around them.  But undue influence is more sinister in that is supplants the intent of the elder completely.

Undue influence can be used to cause a person to act, or refrain from acting, in a way that overcomes the person’s free will.  (See Welfare and Institutions Code section 15610.70).

As a result, where a parent is kept from changing a Trust to add a disinherited child back into the estate, undue influence could be used to overcome the resulting distribution.

It is not just what a parent does, but what a parent does not do, that could form the basis of a Trust or Will lawsuit.

Where Do You…Go To Sue? Do You Know Where to Sue Your California Trustee?

Posted in Litigation, Trustee Breach of Trust, Trustee Removal, Videos

Where in the World do I file my Lawsuit?

Where do you sue your Trustee?  If you want to sue a Trustee in California, there are two issues you need to consider: (1) jurisdiction, and (2) venue. Jurisdiction is the big question—can this Trustee be sued in California? Venue is the smaller question—where in California must this Trustee be sued?

Jurisdiction — The Big Question

Under Probate Code section 17300, any person who accepts trusteeship of a Trust having its principal place of administration in California submits personally to the jurisdiction of the California courts. In other words, if you choose to become Trustee of a Trust that is being administered in California at the time you take over, then you agree to come to court in California if there is ever a problem in the future.

That is a pretty broad standard. But it gets broader still under Probate Code section 17004, which allows the court to exercise jurisdiction under any basis that can be used for civil lawsuits under Code of Civil Procedure section 410.10. Section 410.10 is California’s so-called Long Arm Statute that allows jurisdiction where people have sufficient minimum contacts with this state. This includes concepts like “in-rem” jurisdiction that allows California to hear cases involving California real property in this state. In short, if you are Trustee of a California Trust or a Trust that has California real property, pack your toothbrush because you’re coming to California if you are ever sued.

Venue — The Small Question

Once jurisdiction is established, you then have to consider where to sue—that’s a matter of venue. Under Probate Code section 17005, the proper county in which to sue a Trustee is where the place of Trust administration is located. The place of administration is where the Trustee resides or where they do business. If you have more than one Trustee, then it is where either of the two Trustees reside or do business. If there is no Trustee, then venue is proper where any assets of the Trust are located. This standard is different from probate estates—where the proper venue is where the decedent resided at the time of death. For Trusts, you go where the Trustee is in order to file suit. If the Trustee is out of state, then follow the Trust assets for filing suit.

We seem to be seeing more instances of people moving out of state after accepting to act as Trustee of a California Trust. Now you know that just because the Trustee is no longer in California, California courts may still be the correct jurisdiction and venue in which to file a lawsuit.

How To Handle Bad Trustees: Obtaining Trust Documents

Posted in Trustee Breach of Trust, Trustees & Beneficiaries, Videos

Trust

You will never know for certain what your rights are under a California Trust or a California estate without first seeing the Trust or Will documents.  But how do you obtain those documents when a Trustee refuses to provide them to you?  In this video, partner Stewart Albertson describes the process of obtaining Trust and Will documents.

Must a California Trustee Report Financial Elder Abuse?

Posted in Abuse & Fraud, Elder Abuse, Videos

Must a Trustee Report Elder Abuse?

 

There are certain categories of people who are required by law to report any suspected elder abuse. That includes both physical elder abuse, and financial elder abuse. Under California Welfare and Institutions Code section 15630, any private or public facility that takes on the care and custody (meaning housing) of an elder (elder is defined as anyone aged 65 or older) is a “mandatory reporter”—meaning they must report any suspected physical or financial elder abuse.

Additionally, any financial institution such as a bank or credit union is a mandatory reporter for suspected financial elder abuse. While not every financial institution is good at exercising this requirement, many have become far more sophisticated in spotting and reporting suspected financial elder abuse.

Trustees of private Trusts on the other hand are not mandatory reporters. And since most Trusts created by people during life are private Trust (meaning revocable, living Trusts), most Trustee are not under a legal duty to report any type of physical or financial elder abuse.

But even if a legal duty does not attach to a Trustee, there is a strong argument that a Trustee is under a moral obligation to report elder abuse. And nearly anyone can make a complaint to the Adult Protective Services in the county where the elder is located when suspected elder abuse is present.  The Trustee also may have the right to bring a civil Financial Elder Abuse claim under the Welfare and Institutions Code, which can include a restraining order to protect the interests (and physical well-being) of the elder.

Often financial elder abuse is present when you least suspect it.  Most abusers don’t broadcast their wrongs.  Thus, any suspected elder abuse should be reported and acted upon as quickly as possible.

How to Handle Bad Trustees–Tangible Personal Property

Posted in Litigation, Trustee Breach of Trust, Uncategorized, Videos

Where's My Share of Mom's Stuff???

Fairly often California Trust and Will lawsuits come down to the tangible personal property–things like photos, family heirlooms, and antiques.  But once one party takes off with these items how do you get them back?  Or how do you force the Trustee to give you the personal items you deserve?  In this video, partner Keith Davidson describes the process of forcing distribution of tangible personal property.

Now You See It, Now You Don’t: Can assets be transferred to a new Trustee without telling the old Trustee?

Posted in Trustee Removal, Trustees & Beneficiaries, Videos

Does the Trustee Have to Know???

 

Can a new Trust be created and assets transferred without telling the Trustee?

Once a Trust has assets titled in the name of the Trustee, that named Trustee becomes the legal owner of the assets. The beneficial owner of the assets is whoever is named as beneficiary. In the case of revocable trust (also called living trusts), the Settlors are also the beneficiaries. Settlors are often the Trustees too, but there are instances when a different person or Trust company is named as Trustee.

Since the Trustee is the legal owner of Trust assets, the Trustee technically is the one who has to transfer assets out of the Trust. But what should happen, and what does happen, can be two different things.

We have often seen assets taken out of a Trust by the Trust Settlors without telling a Trustee. Those assets are then transferred to a new Trust naming a new Trustee. This can occur because (1) the Trust allows the Settlor to do so, (2) the assets are not held in the Trust to begin with, or (3) the financial institution simply allows the Settlor to make the transfer.

Technically speaking, most Trusts require that a Trust revocation be served on a Trustee. And removing assets from a Trust is the equivalent to revoking the Trusts as to those assets. As for a distribution of assets from the Trust, that is usually done by the actions of the Trustee.

So is there anything wrong with a Settlor taking assets out of a revocable Trust? Generally, no there is not. Most Settlors retain the right to revoke the Trust. Taking assets out of the Trust, even if not done with technical correctness, is “no harm, no foul.”

That does not apply, however, if only one Settlor takes assets belonging to both Settlors (such as community property). That can be a problem. Or where a Settlor takes assets from a part of a revocable Trust that has become irrevocable due to the death of one spouse. That is also a problem. But absent a special problem, the act of taking assets out of a revocable Trust is perfectly acceptable.

Do California Estate Plans Really Protect You When You need Them To?

Posted in Litigation, Planning, Videos

Do Estate Plans Really Protect You From

 

Do estate plans really protect you when you need them to? Yes and no.

In a perfect world, an estate plan is all you need to provide for your care and well-being when you lose the capacity or ability to care for your own finances. And for some people, this works great because they have loving (and non-manipulative) family members who all get along and agree on the correct course to take.

And then there’s the other side of the coin, where an estate plan does not work so well because family members do not agree. Or worse, a family member is manipulative or making decisions and changing documents to protect his or her own financial interests rather than caring for the elder’s well-being.

While things like revocable Trusts, durable powers of attorneys, and health care directives work great when all is well, they are not as useful when someone is taking advantage of an elder. In fact, an abuser often will have new documents signed that give them the power to control the health or finances of an elder.

When confronted with disaster, the only way to protect an elder is to file for conservatorship.  A conservator is a court appointed person who steps into the elder’s shoes and becomes the only person with the legal authority to make health and finance decisions on behalf of an elder.

But wait, isn’t an estate plan created to avoid conservatorships? Yes, but when someone is being manipulative or abusive, the court process is the only way to protect an elder. Once a conservator is appointed, he or she can take steps to protect the elder, provide proper medical and health services, and look over the finances. Also, in the context of a conservatorship action, the Court can invalidate any health care directives or durable powers of attorney that harm the elder.

Is estate planning still worthwhile? Yes, absolutely because without a plan you will most definitely end up in court. And a majority of estate plans work well to avoid court intervention. But when estate plans go awry, the court system is the only answer to protect an elder from abuse.

How Accurate Must a California Trust Accounting Have to Be?

Posted in Trust Administration, Trustees & Beneficiaries, Videos

Finding Balance...

How accurate does a Trust accounting have to be in order to be approved by the Court? I always say that every accounting balances, it is just a matter of finding the right information. Still, it can be frustrating to put together a year or two (or three or four) of information and not have the accounting balance.

A Trust accounting is a very unique thing. It is unlike any other type of accounting (and very much unlike a corporate accounting). But Trust accountings are also easy to understand—in theory.

Trust Accountings start with the charges—those are the list of things that come into the Trustee’s possession (what the Trustee is charged with possessing). The first charge includes all the assets on hand when the accounting begins. Then you add in all income received and any gains on the sale of assets. Each of these items has a separate schedule showing the detailed information. You then total all these amounts and that gives you the total charges.

Next you look at the total credits. Credits start with disbursements, amounts that are paid out by the Trustee for bills and expenses; then distributions to beneficiaries and losses on sale. The final piece is a list of the assets on hand at the end of the accounting period. Again, each of these items has a corresponding schedule that details the information. You add up the total for each of these items and that gives you the total credits.

For a Trust accounting to balance the charges must equal the credits. The summary of charges and credits typically looks like this:

Charges

Assets on Hand at Beginning of Accounting (Schedule A)……………… $1,000,000

Income Received (Schedule B)…………………………………………………………………………….. $100,000

Gains of Sale (Schedule C)…………………………………………………………………………………………. $50,000

Total Charges……………………………………………………………. $1,150,000

Credits

Disbursements (Schedule D)…………………………………………………………………………………… $75,000

Distributions (Schedule E)……………………………………………………………………………………… $500,000

Losses of Sale (Schedule F)……………………………………………………………………………………….. $25,000

Assets on Hand at End of Accounting (Schedule G)……………………………….. $550,000

Total Credits…………………………………………………………….. $1,150,000

As long as the total charges match the total credits, the accounting balances. If those two numbers are off, then there may be a problem.

But how far off does an accounting have to be in order to have a real problem? Typically small discrepancies will be allowed. For example, a $40 or $50 discrepancy is not enough of a problem to warrant any type of court order. Of course, it really depends on the size of the estate and the judge who is passing judgment on the accounting.

There is always an answer somewhere as to why any accounting is off. Accountings are just a collection of numbers. Usually the problem lies in a missing bank statement that has some bank charges or fees listed on them. Once all the information is located, it can be properly entered and the accounting should balance.

It is not a hard job to prepare an accounting, it just takes a lot of time, patience, and perseverance. Good luck!

Being Threatened by the Trustee? The empty threat of no-contest clauses

Posted in Beneficiary, Litigation, Trustee Breach of Trust, Trustee Removal, Videos

Are You Being Threatened with a Trust

Nearly everyday I hear from a Trust or Will beneficiary that they have been threatened with the No-Contest clause by their Trustee or Executor.  In today’s legal world, no-contest clauses are rarely enforceable.  And yet, the threat is made.  Learn what you have to fear, if anything, about your Trust or Will no-contest clause.

Just the Fees Please: How Much Should Your California Trustee Charge?

Posted in Trustee Breach of Trust, Trustees & Beneficiaries, Videos

Most Trusts allow Trustees to pay themselves “reasonable” fees for the work they do, but what is reasonable?  That depends on the type of Trustee you have.  In this video, Keith Davidson discusses some of the issues relating to reasonable Trustee fees that can be charged by your Trustee.

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