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.
The law of no-contest clauses in California has steadily eroded over the past decade. With each change in the law, no-contest clauses become less applicable to beneficiaries. In this video, partner Keith Davidson describes the affect of no-contest clauses on your beneficial interests.
If you are the beneficiary of a California Trust, there are a few things you ought to know to help you understand and protect your rights as a Trust beneficiary. Here’s the Top 10 things you must know as a Trust beneficiary:
1. Know your Trust.
Read it and then read it again. If you don’t understand it (and who really does?) have a consult with a lawyer to go over the Trust terms. If you don’t know what your rights are, you won’t be well armed to protect those rights.
2. Know your rights as a beneficiary.
Not all beneficial interests are the same. Some beneficiaries have superior rights than others. Sometimes you are entitled to a distribution now, sometime you have to wait. You must know what your beneficial rights are as soon as possible.
3. Ask for information in writing, follow-up often.
All beneficiaries are entitled to information. Ask for as much as you want, such as copies of bank statements, checks, trustee’s fees, costs, etc. Better yet, ask for the information in writing. It does not take much to send an email or a letter listing what you want to see. It does NOT need to be sent by certified mail, just get it to the Trustee in writing as soon as you can.
4. Ask for an accounting in writing, after six months or one year.
Unlike information described in number three above, not every beneficiary is entitled to an accounting. In fact, only current income and principal beneficiaries can demand an accounting, unless the Trust specifies otherwise (and they usually don’t). If you are a current income or principal beneficiary, then you will have to wait at least six month to get an accounting. But once the time comes, request an accounting in writing. Again, you need not send anything by certified mail, just get it out in writing as soon as you can.
5. Know your income tax consequences.
The good news: most of the assets you receive by way of an inheritance are NOT subject to income tax (except for things like 401(k)’s and IRA’s which have a built in income tax when you receive them because the decedent put the money away tax free during life). The bad news: if the Trust generates income, such as from rental property or investment accounts, you may be on the hook for a portion of the income tax generated by the Trust assets regardless of whether you receive any money from the Trust. so it pays to learn what income tax consequences you can expect from your beneficial interests.
6. You have the right to question and challenge your Trustee without fear of the no-contest clause.
If you start questioning the actions of your Trustee, or you need to go to Court to enforce your rights as a beneficiary, you have nothing to fear from a Trust no-contest clause. But yet, Trustees (especially private individual Trustees) continually threaten disinheritance under a no-contest clause if their actions are challenged. Well Trustees can say what they want, it simply is not true.
7. Discretion is not absolute.
Many times a Trust will give the Trustee “discretion” to make distributions to a Trust beneficiary. While Trustee’s have wide latitude in exercising discretion, it is not absolute. That means a Trustee must act reasonably under the circumstances and make distributions when they are needed. A Trustee cannot refuse to make a distribution just for the sake of saying no.
8. Communicate often.
Wonder what’s going on with your Trust? Ask about it. Don’t get a satisfying answer? Ask again, and then follow-up with the Trustee, and then keep asking. A lack of communication is a bad thing for a beneficiary. And your Trustee has a duty under California law to communicate with you. So ask away, the earlier the better.
9. Investments matter.
Every California Trustee has a heavy burden to invest Trust assets under the rules of the Prudent Investor Rule. The rules requires Trustees to act reasonably and responsibly in investing. Trustees are not allowed to make risky investments. But not every Trustee knows or implements their duties to invest properly, so know the investment rules and ask your Trustee if he or she is following the rules.
10. Trustees are not all powerful, they have duties, obligations, and responsibilities.
The number one problem with private people acting as Trustees is that they think they can do whatever they like. The common misconception is that the Trustee is “in charge now” and can act as though they are the Trust creator. Not true. In fact, Trustee’s have far more duties and obligations than they can even imagine. But if no one informs them of their duties, then they may continue to act under this misconception, which can do a lot of damage to you as a beneficiary. Trustee’s are not all powerful, and sometimes they need to be told as much.
Another year almost down means it’s time to reflect on what took place this year before looking forward to a happy and hopefully prosperous 2015 (that sounds weird). Here is our pick of top 14 posts for 2014 based on the amount of feedback we received from each post. Thank you all for reading our posts and we wish each of you an happy, health and prosperous 2015!
1. California Trust Amendment vs. Trust Revocation–What’s the difference? There are different ways in which you can amend a Trust versus revoking a Trust in California. It pays to know the differnce between the two.
2. A Better Standard for Undue Influence in California Trust and Will Cases. This is a four part series detailing the newly enacted rule for proving Undue Influence in court. The four parts include (1) vulnerability, (2) apparent authority, (3) actions and tactics, and (4) equity.
3. Mickey Rooney’s Estate — Separate fact from fiction. Whenever a big name celebrity dies there is always speculation about his or her estate. The first news we hear is what their Will says. Since all original Wills are required to be filed with the court, they become public documents after death. But the Will only tells a portion of the story, and sometimes it is a very small portion. Since so many assets pass now by Trust, joint tenancy, beneficiary designation and the like, the Will may have nothing to do with the overall value of a person’s estate. But the speculation continues…
4. When Planning Fails: Casey Kasem’s Lessons for California Trust and Wills. Here’s another celebrity story in the news, this one describing an all to familiar scenario: new spouse vs. old kids. Anytime a new spouse is in the picture, the time is ripe for a disagreement. And when an elder loses the ability to manage themselves, the fight heats up over who controls the elder. This tragic story was played out on a public stage in the case of Mr. Kasum.
5. Abused Trust Beneficiaries in California Trusts and Wills. Every year we hear from hundreds of abused Trust and Will beneficiaries. The need to hold fiduciaries accountable and insist that they follow their fiduciary duties is growing year by year. But first, you have to know if you are being abused.
6. Broken Promises: Are Oral Promises to Make a California Trust or Will Enforceable? Spoiler alert: the answer is a definite yes. But you have to act fast if you want to enforce that promise because the statute of limitations runs within a year of a decedent’s death. The clock is ticking, time to understand, and assert, your rights.
7. Casey Kasem’s Missing Body…Who has the right to control your body after death? Unfortunately, the saga of Mr. Kasem continued after his death as the new spouse and kids fight over the disposition of Mr. Kasem’s remains. It is an ugly case faced by many people every year. It pays to know who has control of your body after you’re gone.
8. Money, Family, Love, and Wills: Where does it all end for Anna Nicole Smith’s estate? You think your legal case has lasted too long, try going 19 years in litigation. This year another part of the Anna Nicole Smith case came to an end, but not the entire case. Even though all of the principal parties are dead, the case lives on.
9. How to Use a Financial Elder Abuse Claim in Your California Trust or Will Contest. The law of Financial Elder Abuse took a big leap forward in Trust and Will actions with the unification of Undue Influence. The same definition for undue influence now applies to both Trust and Will actions and Financial Elder Abuse claims. That means in a majority of cases you can now bring both claims in one lawsuit.
10. Trustee Surcharges: Holding Trustee’s Liable for Bad Acts. When a Trustee breaches his duty of Trust, he can be held personally liable for the damage caused. This is referring to as a Trustee surcharge. In this video we hear Stewart Albertson discuss some of the interesting points of a Trustee surcharge.
11. From A to Zeal: What it takes to win your California Trust or Will lawsuit. I must admit this is my personal favorite. The idea of handling a client’s case with energy and enthusiasm is what gets us up out of bed every morning. And it just happens to increase the chances for success. It works for everyone.
12. How Long Will it Last? A California Trust or Will contest can take some time…. Welcome to our court system. What used to be a slow system got even slower with the recent budget crunch, which took over $500 million (yes, that’s half a billion dollars) out of the court system. Why does it take so long? A little constitutional requirement of undue influence.
13. Whatever Happened to “You Broke It, You Buy It?” Why California Trust law won’t give you no satisfaction…. While a Trustee might be liable for any money damages caused to a Trust, there is no concept to reimburse you for your emotional damage, pain and suffering, or any other type of related damage. Might be surprising, but better to know beforehand what damages you can get.
14. Can You Ex-Spouse Inherit Your Property in California? Maybe. Sounds disturbing to know your ex may be able to inherit your property? You should know the law, and then plan accordingly. Especially when it comes to life insurance: CHANGE YOUR BENEFICIARY DESIGNATIONS! It takes so little time to plan properly, yet it makes a world of difference if done properly.
There you have it our top 14 blog post for 2014. Hope you enjoy them and all of our posts. We look forward to bringing you more usefully and interests Trust and Will litigation information next year.
Happy New Year!!
One of the biggest benefits of creating a revocable, living Trust is that it allows your successor Trustee to manage your affairs if you lose capacity. Sounds good, but who decides when your capacity is kaput?
That will be the question for the Court to decide on Monday, July 7th when a Los Angeles County Superior Court judge will decide if Shelly Sterling has the right to act as sole Trustee.
Mr. Sterling’s problem comes from the family Trust he and his wife created to hold their interests in the Los Angeles Clippers Basketball franchise. The Trust apparently has a provision common to nearly every revocable, living Trust that allows Mrs. Sterling to act as sole Trustee (meaning the sole Trust manager) if Donald Sterling is “incapacitated.” Most Trusts provisions state that incapacity can be determined by the diagnosis of a single physician. In Mr. Sterling’s case, he was evaluated by a neurologist who determined that he was suffering from mild cognitive impairment due to mild dementia (as reported in the media). That was enough for the physician to declare Mr. Sterling incompetent to act as Co-Trustee.
If the physician’s diagnosis controls, then Mrs. Sterling, as sole Trustee, can sell the Clippers to whomever she likes. If the physician’s diagnosis is refuted by a competing neurologist, then Mr. Sterling may still be able to act as Co-Trustee—and thereby block the Clippers sale.
So why have an incapacity clause in a Trust at all? It is meant to prevent people from having to go to Court to declare a Trustee incapacitated. And the only way to “safely” determine incapacity is to have a mental exam completed by a competent physician. But that procedure has its problems and limitations—especially where the elder refuses to cooperate. The problem with mild dementia is that people often won’t, or can’t, admit they have a problem. That results in a dispute as to capacity.
The irony is that the Sterlings are now in Court over a provision designed to keep them out of court.
It’s official–we have a new office in San Diego County. We are excited to announce that we have opened our newest office in Carlsbad, California (located in North County San Diego: 2175 Salk Avenue, Suite 180, Carlsbad, CA 92008 (760) 804-2711). From this office we are able to service clients throughout San Diego County.
This has been a great addition to our Firm, since we have already been representing clients in San Diego County Superior Court for a few years now. Our goal with this new office is to reach out and be available for as many San Diego based clients who need help with their Trust and Will matters.
Have Trust or Will questions? Being abused as a Trust or Will beneficiary? Need to contest a Trust or Will? Have a parent who has been subjected to Financial Elder Abuse? We are here to help you. We have successfully handled these types of cases, and more, for clients throughout California. Feel free to contact us if you need help with your San Diego based Trust or Will lawsuit.
Our Carlsbad office is headed up by our newest partner, Mark D. Perryman, an experience Trust and Will trial attorney.
Our newest paralegal, Lauren Rhodes assists Mark at the office, along with associate attorneys Kevin Yee and Nick Felahi. Together, our new Carlsbad team is going to make a name for itself helping people resolve their problems and fighting hard for our clients in San Diego County, just as the rest of us have done out of our Ontario office for the past six years. Feel free to stop by and say hello!
Several weeks ago we announced we were offering to draft California Wills for free to members of our community. We were worried that we would be inundated with requests for the free Wills. But we were wrong. We only received one e-mail accepting our offer to draft a free California Will.
So, we’ve decided to try this again. Albertson & Davidson is pleased to announce it will draft California Wills for free (at no cost) to the first 20 individuals who email us the following information:
- E-mail Requirement: Send an e-mail to firstname.lastname@example.org and email@example.com.
- Subject Line Requirement: The subject line of the e-mail should state “Free Will”.
- First Come, First Serve to 20: The first 20 e-mails received will get one of the free 20 California Wills. All individuals who e-mail us will be notified whether or not they made it into the top 20 e-mails.
- Contents of Your E-mail: Your e-mail should contain the following information:
- Your full name.
- Your spouse’s full name (if married).
- Your children’s full names (if you have children).
- Your date of birth.
- Your spouse’s date of birth (if married).
- Your children’s date of birth (if you have children).
- Your mailing address.
- Your e-mail address.
- Your website (if you have a website).
- Your occupation.
- Your spouse’s occupation (if married).
- What You Get: We will draft a stand-alone California Will for you and your spouse (if married). We will also draft Durable Powers of Attorney for Health and Assets for you and your spouse (if married). Finally, we will draft a Guardianship Nomination for you and your spouse (if married) designating who you wish to take care of your minor children should something happen to you. We will also advise you on whether you should implement a revocable living trust as part of your plan (the trust is not part of the free services, but our consultation with you on a trust is free). All these services are at no cost to you.
- Reservation of Rights: We reserve the right to decline to draft any documents for any individuals for any reason at any time. For example, if there is a potential or actual conflict of interest that precludes us from representing you, we will decline to draft any documents on your behalf. Of course, there may be other reasons as well why we cannot draft a California Will for you and/or your spouse that will be discussed and disclosed to you on a case by case basis. We also reserve the right to discontinue these free services at any time. This offer is open only to California residents.
Stewart R. Albertson and Keith A. Davidson, attorneys in Riverside, California