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Hi, this is Stewart Albertson with Albertson & Davidson.  And I want to talk to you about how do you sue a trustee in California?  So, if there’s a trustee of your trust and the trustee has breached the terms of the trust; in other words, not following the terms of the trust, not making distributions to you as a rightful beneficiary.  What you can do is you can file a Petition in the Probate Court under Probate Code Section 17200.

Probate Code 17200 is the gateway to the Probate Court and it gives a litany of issues that you can bring to the Probate Court and ask it to help you as a beneficiary of the trust.

One of those things is to surcharge a trustee who’s done inappropriate actions, to remove a trustee who’s been inappropriate in the way that they’re administrating the trust.  So, ultimately, the short answer to this question is if you have a trustee who’s not following the terms of the trust, is being abusive to you as a beneficiary, is not standing up for your interest in the trust, is not making the trust property productive, is refusing to disclose information to you; any of the above, you should file a petition with the Probate Code under Probate Code Section 17200 and ask the Probate Court to step in and either admonish the trustee, remove the trustee, order the trustee to follow the terms of the trust.

Those are the things you can do to sue a trustee in California.

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Hi, this is Stewart Albertson with Albertson & Davidson.  The question is can a trustee be changed after the trust is irrevocable?  In other words, after mom and dad are passed on and the trustee’s accepted office, can you change out that trustee for another trustee?  And the answer is yes, you can, if the trust terms allow it.  In fact, most trust terms do allow the trustee to change from the original trustee to a successor trustee, if everyone is in agreement.  So as long as everyone is in agreement, you can change from one trustee to another.

Now, in practicality, most trustees don’t want to give up their office as trustee.  And in those cases, you’ll have to try to remove them, which is a much more difficult thing to do.

But for the purposes of this video, certainly, if a trustee, original trustee is ready to step down and it wants a successor trustee to take over, and the trust terms allow it, it’s perfectly acceptable.

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Hi, this is Stewart Albertson with Albertson & Davidson.  We do get the question from time to time can my brother who is the trustee of our parents’ trust, can he also be a beneficiary of the trust?  And the short answer is yes, there’s no problem with that.  In fact, most trustees are also beneficiaries of the trust.  Most parents will name one or more of their children to be the trustee and that trustee will also be a beneficiary.

This normally doesn’t cause too many problems, especially where there’s just liquid cash to distribute.  Because, let’s say there’s a trustee and two other beneficiaries, for a total of three beneficiaries including the trustee.  You would simply just take the liquid assets and distribute them, one-third each.  And that’s not a problem.

Where we see the problem happen is where the trustee, who is also a beneficiary, is the last one taking care of mom or dad before their death and they get a house, for instance, that comes out of the trust as their beneficial interest, and the other two kids get cash.

What we see in some of those cases, is the trustee taking the cash before mom and dad dies and fixing up the home, putting a lot of money and improvements in the home.  Well, that’s not fair, because they’re essentially using the other beneficiaries’ money.  The trustee is using the other beneficiaries’ money to improve the house that they’re ultimately going to receive.

So, while there’s nothing wrong with a brother or sister acting as trustee who’s also a beneficiary, we do want to make sure that they provide an accounting so we can see their actions as trustee, to make sure that they didn’t do anything to benefit themselves at the cost of the other trust beneficiaries.

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Hi, this is Keith Davidson from Albertson & Davidson.  In this video, I want to discuss the difference between a trustee and executor?  What’s the difference between those two different titles?  And both trustees and executors are fiduciaries.  And a fiduciary is somebody who’s put in charge of somebody else’s money.  And the trustee is a fiduciary over the trust and an executor is a fiduciary over a probate estate.  A trustee is named as the manager of the trust in the trust document.  Whereas an executor is named as the manager of the probate estate in a will.  If somebody dies without a will, then the person who’s appointed is called an administrator.  But it’s really the same thing.  They’re the person who’s managing the probate estate.

Now in a trust estate, that’s created typically during somebody’s lifetime, which is why it’s called the living trust, or in legal jargon, we call them inter vivos trust.  And whoever creates that trust is going to name the successor trustee who’s going to take over and manage those assets, make sure that everything’s handled properly, and ultimately distribute those assets out to the trust beneficiaries

With an executor, they’re named in a will.  And so after somebody dies, the executor has to go to the probate court and admit that will into the probate system, into probate process, which is really just a court process where the court oversees the management of the state.  And ultimately, the court oversees the distribution of that estate out to the beneficiaries of the will.

And so in many ways, an executor and a trustee serve the same function, they both manage and ultimately distribute the estates that they’re in charge of.  The only difference is that a trustee acts under a trust and can start acting once the prior trustee passes away or stops acting for any reason.  You don’t have to go to court for a successor trustee to act.  Whereas, for an executor, the only way that an executor can start acting is after you go to court and get the court permission to appoint the executor in that position

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Hi, this is Stewart Albertson with Albertson & Davidson.  And I want to talk to you about when you, as a beneficiary, should get your trust distribution under the trust.  We get beneficiaries asking us quite often, “Hey, Mom and Dad has passed away.  It’s been about a year.  When should I get my trust distribution?

Most trusts are the kind of trust that can be distributed generally within one year to eighteen months.  Rarely will a trustee or trust administration need to go further than two years.  So somewhere along the lines of one year to eighteen months, you should see a trust distribution.

You can also get a preliminary distribution which is a distribution that comes early on in a case.  Let’s say that there’s a three million dollar trust and we know the expenses of doing the trust administration are going to be well less than a hundred thousand dollars.  In that case, the trustee should make a preliminary distribution to the trust beneficiaries, finish up the trust administration, and then make a final trust distribution of whatever is left over.

There are some estates that are subject to the estate and gift tax.  And while that’s rare these days because the applicable exclusion amount is so high for estate taxes, if that’s the case, the ultimate distribution of that trust is probably going to be two years.  Because the trustee is going to wait for the IRS to review the estate tax return and get a closing letter back from the IRS.  But, again, that’s the minority of cases.

The majority of trusts can get a preliminary distribution maybe within several months after Mom and Dad’s deaths, and then ultimately it should be about one year to eighteen months to get the final distribution.

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Hi, this is Stewart Albertson with Albertson & Davidson.  I want to talk to you about trustee’s fees.  It’s an issue that comes up quite often and beneficiaries are concerned and want to know how much should a trustee be paid, when should they be paid, should they be paid at all?  And those are all very good questions.

The first question has to be should a trustee be paid?  If a trustee’s not following the terms of the trust, if the trustee refuses to communicate with you, if the trustee uses the trust assets as if they’re their own assets and not your assets that they’re taking care of, if the trustee refuses to make distributions to you.  Well, maybe we have a trustee that doesn’t deserve much of a trustee’s fee.  Maybe not any trustee’s fee.  So that’s the first question.

Second question.  Let’s say that we do have a trustee that’s deserving of being paid.  Are they a family member or is it a bank, a private fiduciary we call these, a professional fiduciary.  And there’s a little distinction there.  The private professional fiduciaries are going to get a little bit more than a family member whose being a trustee.  So if it’s a family member whose a trustee, generally you’re looking at anywhere between $30 and hour and $80 an hour, just depending on what county you’re in, the complexity of the trust, what is the background of the trustee.  If the trustee is a certified public accountant and they’re doing a bunch of accounting functions for the trust, the court may grant them a little bit more for fees.

But what we do see that’s wrong in our opinion is a family member who’s a trustee paying themselves as if they’re a private fiduciary, a private professional fiduciary.  Private professional fiduciaries generally take about 1% of the trust estate per year for their trustee’s fees.  And most courts will approve that request by that professional trustee.  But that doesn’t mean your family member who’s a trustee also gets to take 1% of the trust estate.

And we see, many times, family members who are trustees who are nonprofessionals, trying to take 1% in trustee’s fees.  That is inappropriate.  We think that most probate courts are going to require the trustee, in that case, to take an hourly fee somewhere between $30 an hour and $80 an hour; maybe $100 an hour if you really find somebody’s that’s qualified and they’re going to have to line item and keep a journal and keep track of all the hours that they’ve worked on the trust and in what capacity they were working in the trust.  Were they working for your benefit as a trust beneficiary, or were they working to protect themselves from liability down the road?  Those are two different analyses.  One would be appropriate for trustee’s fees, the other would not.

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Hi, this is Stewart Albertson and we’re going to address an issue – the issue of No Contest Clauses one more time.  We’ve addressed this several times in our videos in the past, but we think it’s an important issue to keep people aware of what the legislation is, in California, pertaining to No Contest Clauses.

So, a No Contest Clause is generally included in a trust, will, or both, and many people are familiar with them.  They say that if you contest your parents’ wishes under the trust or will, that you are to be treated as you’re disinherited.  The parent doesn’t want you contesting their wishes – what they intend to happen to their estate after they die – so these include these No Contest Clauses.

Generally speaking, No Contest Clauses do not apply.  Except in one of three circumstances.  The first circumstance is, if you challenge the terms of the trust based on undue influence, lack of capacity, duress, fraud, any of those type of doctrines, and you do so without probable cause, changes are that you’re going to be disinherited under the trust.

This is the first way that the legislation allows the No Contest Clause to be used against you but it does have a special caveat and that’s the Probable Cause exception.  What that means is if you brought your trust contest based on undue influence, lack of capacity, fraud, duress, you brought that and you are reasonable in bringing that, and other people standing outside, looking at what you were doing at the time you brought the contest, as long as you look reasonable to the court, there’s a fairly good chance that the court will not hold the No Contest Clause against you.

But you’ve got to keep in mind, judges are people.  Some judges, they may hold the No Contest Clause against you, where another judge, under the same set of facts, same set of circumstances, would not hold the No Contest clause against you.

So this is something you have to be careful of, if you’re going to file a trust contest under this first prong where you’re trying to invalidate a trust document based on undue influence, lack of capacity, fraud or duress.

There’s also two other ways that the No Contest Clause can be used against you.  The second way is if you file a Creditor’s Claim against your parents’ trust or estate.  And the No Contest Clause says that if you file a Creditor’s Claim, you’re hereby disinherited.  So you do have to have the special language in the trust terms, in the No Contest Clause, before that would be used against you.  So you want to make sure you pay attention to that.  If you think you’re going to file a Creditor’s Claim against a trust or a will, because you believe your Mom or Dad owed you money, they promised they were going to pay you, and now you’re going to file a Creditor’s Claim?  You better take a look at the No Contest Clause to make sure it doesn’t say if you file a Creditor’s Claim against the trust or estate, you’re hereby disinherited.  Please note, that under this prong of the No Contest Clause, there is no probable cause exception.  In other words, if you file a Creditor’s Claim, you’re done!  It doesn’t matter how reasonable you were in bringing that Creditor’s Claim.

The third way you can get the No Contest Clause to disinherit you – and we’re seeing this one more and more – is where you allege, in some pleading with the court, that your Mom or Dad didn’t have the authority or control or ownership of property to actually transfer that property to their trust.  I’ll give you an example.  Let’s say that there’s a husband and wife and the wife is completely demented, she has Alzheimer’s, she’s still alive, but she no longer has decision-making authority or testamentary capacity.  And Dad decides to revoke all of their old trust, which has all community property in it, and create a new trust that he creates and he moves all of that property into the new trust, which includes his one-half of the community and his wife’s one-half of the community.  And he puts it all in a new trust and in that new trust, he only gives all of those assets to one sibling.  If you’re one of the siblings that’s not getting, you have to be careful.  Or, if you’re getting something of that trust, say $100- or $200,000, you want to seriously consider whether you want to file your Petition saying that Dad did not have the power or ownership or authority to transfer Mom’s one-half of the community into his new trust.  You want to seriously consider that because once you’ve done it, you’ve triggered the No Contest Clause.  And, under this prong, you also do not have a Probable Cause exception.  Meaning, it doesn’t matter how reasonable you were in filing your pleading with the court, challenging the transfer of the property to the trust, saying that Dad didn’t own this property, you’re more than likely going have triggered that No Contest Clause and be disinherited.

But, keep in mind, these No Contest Clauses are real.  Many lawyers think they don’t apply any more.  But the truth is, they don’t apply under most circumstances, but they do under the three circumstances I just described.  So you want to take a careful look at them and make sure they don’t turn around and bite you in the rear.

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Hi, this is Stewart Albertson with Albertson & Davidson.  And I want to talk to you about what your options are when you have one of your siblings isolating either one or both of your parents from you.  They don’t want you around their parents, around your parents.  What do you do in a case like that?

Well, you have two options.  The first option is to file for conservatorship.  And the second option is to do nothing.  And sometimes that second option is the best option to take.  But let’s talk about the first option first.

If you truly believe your parents are in a position where they’re being abused by one of your siblings and that sibling is precluding you and your other siblings from seeing them, filing of a Motion for Conservatorship is a very good tool which will get the court process involved and will also get your parent what we call an independent lawyer to come in and represent them in that conservatorship proceeding.  That’s the good things that came from filing a Conservatorship Petition.

The bad things that can come from it is your parent can be confused by what it is you’re trying to do.  The sibling that is the bad acting sibling in this case may turn your parent against you, suggesting to your parent that you are trying to control their money, you’re trying to control their parent, you’re trying to take their ability to make decisions away.  And if the parent is already confused to some degree with a little bit of dementia or Alzheimer’s, the parent might turn against you.  So, even though you’re trying to do something good by filing for conservatorship, it ends up hurting you because now mom or dad ends up writing you completely out of the trust or will because they believe you’re attacking them, based upon what your bad sibling is telling them.

That’s why you should consider doing nothing with the courts.  If you have any access to your parent at all, you should take that access.  You should continue to see your parent.  You should continue to send cards and notes to your parent.  You should continue to try to communicate with phone calls and document all of this.  But don’t go to your parent and start talking to them about everything that your bad sibling is doing to them.  Don’t go to your parent and start talking about their trust and will.  Where is it?  Because now, you look like you’re a greedy heir even though you aren’t.  You’re just simply trying to protect mom or dad from the bad sibling.

So what I tell people is in a fact and circumstance like this, give mom or dad the bad sunset years or months that they have left on the planet.  Treat them well.  Love them.  Care for them.  Document things for yourself.  And then, when they pass away, you’ll be in a position where you can file something against the wrongdoing sibling and chances are you’re going to be able to hold them accountable for the things they did to harm your mom or dad during their lifetime.

I will say you have to be patient and this is a hard choice to stand by and do nothing when you see this happening.  But it, sometimes, is the better option than filing for a conservatorship which ends up hurting you in the long run.

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Hi, this is Stewart Albertson with Albertson & Davidson.  I want to talk to you about Motions to Compel.  Nobody likes Motions to Compel.  We don’t like Motions to Compel.  Judges don’t like them, and either do the opposing parties we bring them against.  But they are, sometimes, required to be brought in cases where you need information to make sure you know what facts, witnesses and documents are in a case, prior to going to going to trial.

Here’s how Motions to Compel generally arise.  We sent a first set of written discovery to an opposing side, which includes Form Interrogatories, Special Interrogatories, Document Demands, Requests for Admissions, and they get thirty days to respond to those.  They, generally, will ask for a thirty day extension, so now they’re sixty days out from when we first sent the discovery, to when we’re finally going to get some answers back.  Those answers come in sixty days later and they’re terrible.  They don’t answer any of the questions, they’re just a bunch of boilerplate objections.  It’s really just a bunch of garbage.  And, unfortunately, California, the way that the law is set up, requires us to do what is called a Meet and Confer with the other side, the opposing counsel who just gave you the nasty garbage, nasty responses, didn’t give you anything meaningful in their discovery responses – after having sixty days to do so.  You have to do a Meet and Confer with that person.  You have to try to work it out between the two parties.

Federal Court is so much better than this, but that’s for another day.  Here, we’re in State Court in California.  So we do the Meet and Confer process.  Generally, that requires the opposing counsel to agree to give you a supplemental response to the really bad work they did in giving you their first responses.  They generally will get another two or three weeks, sometimes a month, to do that.  The second set of responses comes in.  These are what we called supplemental responses to the first responses and they’re just as bad as the first responses.   You have to do another Meet and Confer.  You’ve got to work with the opposing counsel, usually by letters, it’s not done very well over the phone, because people get heated in the phone conversations about what we’re entitled to, or what they think we’re not entitled to.  But, generally, you’re going to give them one more shot at getting you valid discovery responses.

Yet again, third response comes in, you’re like four or five months into the case, and the opposing counsel still gives you really crappy responses.  At that time, you’re going to be forced to do a Motion to Compel.  You’re going to have to file a motion with the court saying to the court, I have a right to this discovery, here is what I asked them, here’s how they’ve answered in three different supplements and how they have not answered the discovery, and they need to be giving us this information so we know how to prepare for trial in this case.  That Motion to Compel will be heard.  In our experience, we win most of these Motions to Compel, because we only ask for items that we are entitled to, and sometimes sanctions are awarded, monetary sanctions are awarded against the opposing counsel.

This is a long, drawn out process. It’s expensive.  It’s time-consuming.  It’s not fun.  But it’s something that has to be done.

One procedural device that we’ve just learned about that started in January 1 of 2018 are what we call IDCs.  These are Informal Discovery Conferences.  That’s outside the scope of this particular video dealing with Motions to Compel.  But IDCs are going to hopefully come in and help so that we don’t have to bring so many Motions to Compel.  We’ll be doing another video on IDCs in the near future.

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Hi, this is Keith Davidson from Albertson & Davidson.  In this video, I want to talk about how do you handle a bad trustee who refuses to communicate with you.

One of the biggest problems we see for trust beneficiaries is that their trustee simply doesn’t communicate with them.  The trustee may not tell you what the assets of the trust are, may not explain what the investments are, may refuse to talk to you about a sale of the assets, sale of real property or even sale of stocks, and may refuse to talk to you about when assets will be distributed.  Even when the trust terms require distributions, a lot of times a bad trustee refuses to talk to you about those issues.

Unfortunately, a lot of individual private people who act as trustee of these trusts, they think they can do whatever they want to do.  They think that they’re in charge and they have the right to do whatever they want.  But that’s not true.  There’s actually a whole set of laws under our California Probate Code,  not to mention all the rules under most trust documents, that require a trustee to do a lot of different things for a beneficiary.  And top on that list is communicating.  A trustee simply must communicate with the beneficiaries.  It doesn’t matter if the beneficiaries are hard to deal with or they get angry or they yell, or whatever the situation is, a trustee still must communicate with the beneficiaries and keep the beneficiaries reasonably informed of all the actions that the trustee is taking on behalf of the trust.

And they certainly should be keeping beneficiaries informed about distributions from the trust because that is an important part of the entire trust administration process.  So the next time you’re in a situation where you have a bad trustee who refuses to communicate with you, you need to take action and that’s what our California Probate Courts are for is to help you get the answers and the communication and the information that you’re entitled to as a trust beneficiary.