THE FOLLOWING IS A TRANSCRIPT OF THIS VIDEO. FOR MORE INFORMATION, CLICK HERE

Hi, this is Keith Davidson at Albertson & Davidson.  And in this video, I want to discuss step-parents.  And I don’t mean to disparage step-parents, there’s a lot of very good step-parent and step-child relationships out there.  But, there’s also some bad ones.  And a lot of times we’re asked, “Can my step-mom or step-dad, can they change the estate plan after my parent dies?”  So, typically, in this scenario, maybe you have a father who married somebody new and that’s your step-mom.  And then your father passes away and you always thought you had a good relationship with your step-mom, but after your dad passes, things start to get a little strained and awkward and you start to wonder can she actually change the estate?

In some cases, it might actually get downright hostile and maybe the step-mom actually tells you, “I’m changing the estate and I’m leaving it all to my kids and I’m not going to leave your father’s share to you after all.”  And you wonder, can she do that?  And the answer is maybe.  And that’s a typical lawyer answer, right?  But it depends; it depends on what your father did when he planned out his estate.  Or, if he didn’t have any planning at all, that could be a real problem.

So the best case scenario would be if your father had created a trust prior to his death, he has the right to leave assets to step-mom and that’s fine.  But, typically, what you’d want to see is that he left money to step-mom in a trust.  So she can use that money for her care and support during her lifetime, but she can’t change the ultimate distribution of it.  Whatever’s leftover after step-mom passes, has to go to you.  But that only works if your dad created a trust and if he had a trust created that had those type of terms in it that allowed the step-mom to use the assets but not control them.  That required that the assets go to you after death.

If your father didn’t do that, then you probably are not going to be entitled to his share of the estate.  And so what happens a lot of times is, either your father leaves everything to the step-mom, in which case she can do whatever she wants after your father dies, and she can cut you out.  Or, he just doesn’t plan at all and things just pass to the step-mom because it’s in joint tenancy or she’s the beneficiary on life insurance, or whatever the case may be.

So when these things are not planned out and if the assets actually pass to step-mom after your father passes away, then you’re really in trouble, because the step-mom can do whatever she likes.  She becomes the owner of those assets and she can do whatever she wants with them as the owner.

The fact that your father may have had a family home that you grew up in and lived in and has been in the family for decades, the law doesn’t care about that – if your father didn’t plan it out property.  And so that’s really the big question.

So anytime somebody approaches us and says, “Can step-mom change the estate after my father passes away?”  The first question we’re going to have is, “Well, what did your dad have in place?  Did he have a trust?  Did he have a will?  Did he have something that we can look at to see if you, as a child, have any rights to any of those assets?” And if you were to tell us that no, he didn’t have any of those things, then chances are, you’re out of luck.  And that’s a little something about the downfalls of step-parent and step-children relationships when it comes to passing assets.

 

THE FOLLOWING IS A TRANSCRIPT OF THIS VIDEO. FOR MORE INFORMATION, CLICK HERE

This is Stewart Albertson with Albertson and Davidson, and I want to talk to you about an issue that we do see from time to time called advances on inheritance. Advances on inheritance are essentially a loan that mom or dad makes to one child. They don’t want to be unfair in giving that loan to one of their children when they have several other children. So they basically tell the person they made the loan to, well that is an advance on your inheritance so that when I die, you’re going to have to take that into account based upon whatever your share of my estate is.

There’s a real problem with advances on inheritance though because the probate code has some technical requirements that must be met to qualify as an advance on inheritance. Otherwise, that payment of money from a parent to a child will be looked at as a gift.  If it’s a gift that makes a big difference because when the estate is distributed after mom and dad have passed away it’ll be distributed equally between all of the children without taking into account the “loan” that was made to one of the children during lifetime.

So how can you tell the difference between an advance on inheritance and a gift? The advance on inheritance can be proven in three primary ways. There’s actually a fourth way, but that gets a little complicated. If you really want to look into this, you can go to Probate Code section 21135, and you can read how you establish an advance on inheritance there.

Generally, the way you prove an advance on inheritance is:

  1. The trust or will terms themselves have in there saying, I’m giving $100,000 loan to my son Johnny, and when I die, this counts as part of his inheritance at the time he receives his ultimate distribution. That’s the first way that an advance on inheritance can be included and be supported by the evidence.
  2. The next way you can establish an advance on inheritance is did your mom or dad have a writing outside the trust or will that simply says: I hereby am making a loan to Johnny and after I die, that should be considered as part of his inheritance for distribution purposes. That would be the second way that you can establish an advance on inheritance.
  3. The third way is you have Johnny acknowledged in a writing that he’s already receiving some of his inheritance by way of a loan prior to mom and dad passing.

If you have any of those three, chances are you can establish an advance on inheritance.

As you can see, this is not always easy to do. If there is money that is given to one child, a lot of money, say several hundreds of thousands of dollars to one child and not to the other, and there’s nothing to establish an advance on inheritance, what is the argument the child makes who received the money during the parents’ lifetime? And that is, it was a gift. If it’s a gift, it won’t be chargeable against their share of the estate. It won’t be an advance on inheritance.

 

Casey Kasem’s passing is a sober reminder of how people with estate plans can still be subject to bitter Court disputes in their golden years.  Prior to Mr. Kasem’s death his wife and children (from a prior marriage) were involved in a bitter conservatorship dispute.  Mr. Kasem had apparently prepared a healthcare directive naming his daughter and her husband as agents to make health care decisions (according to news reports).  But Kasem’s wife

had other ideas.  She refused to allow Kasem’s daughter and husband to act.  When faced with the possible appointment of a conservator over Kasem, she fled the state and went to Washington state where the battle over Kasem continued.  Kasem’s passing ends the conservatorship dispute, but my guess is that there is an estate fight in the works.

Kasem’s plight prompts the question: what are family members to do when planning documents fail them?

Healthcare Directive Issues

In Kasem’s case, he had the right planning document in place—a healthcare directive—but it did him little good because his wife did not honor it, and the document cannot enforce itself.  Since Kasim’s wife had possession of him, she was able to circumvent his wishes as stated in the Healthcare Directive apparently.  So what good is a Healthcare Directive?

As with most planning, it is great to have and will work most of the time, but not all of the time.  When you have warring family members who do not get along and work at cross-purposes to each other, then a piece of paper is not going to help much.

The key, is working together with family members to develop a workable plan that works for everyone.  Easier said than done in some cases.  But still, even in tough family situations communication is key.

Having a clear plan on who will make decisions, what the future plans will be for financial management and caregiving (either at home or at a facility), and as much about future medical decisions, or philosophies, is all helpful information.  And the more that is written down, the better.  If nothing else, it will help a Court make a good decision if ever a Court has to get involved in your future care.  Don’t leave it up to chance, as chances are, you will be sadly disappointed by what occurs.

Convincing a Parent to Step Down as Sole Trustee

A similar problem is when a parent no longer has the ability to manage his or her financial affairs, but refuses to admit it.  How does a child step in as successor Trustee when a parent refuses to step aside?  While most Trust documents have a procedure to find a parent “incapacitated” to act, that procedure typically requires a note from one or two physicians—what if your parent refuses to go to the doctor, or refuses to have a mental exam done?

This is a tough problem with no good solution.  If you cannot convince a parent to either step down or see a physician for a mental exam, you have few good choices.

Of course, you can file to obtain a conservatorship over your parent, which would then establish (in a very forcible, expensive, and public way) that your parent no longer has capacity (that’s what happens in a conservatorship, before being awarded the Court must make a finding that the elder lacks mental capacity).  But that is not a good option, as it tends to make a mess of the entire situation (not to mention royally piss-off your parent—and you thought staying out past curfew was bad…).

Alternatively, I have had children act as a Co-Trustee as a means to provide help to a parent without pushing the parent aside altogether.  Co-Trustees work together to jointly manage the Trust estate and pay bills.  The Co-Trustee idea allows you to approach your parent and ask to help them in their role as Trustee, rather than replacing them in that role.  A parent can remain as Co-Trustee with you, and you can take the laboring oar in managing Trust assets and paying bills.  It can be a real win-win for everyone involved.  And it is much easier to talk to a parent about helping them—not replacing them.

Estate planning is not perfect.  There are challenges and issues that we must face.  There’s no doubt that planning is important to avoid being dragged into Court, and a majority of the time good planning will avoid a trip to the courthouse, but not always.

 

 

If you’re going to do battle in Probate Court do you need to know more about Trusts and Wills or more about litigation?  The obvious answer is you need to know about both.  And while knowing about Trusts and Wills is critical, knowing a thing or two about civil litigation is also a must.

For example, under California Probate Code section 1000, the rules of civil procedure apply to actions filed in probate court (meaning all Trust, Will, and estate lawsuits).  This includes general civil procedure, civil discovery and the rules of evidence.

That sounds important, but what does it mean?  Let’s break it down into three general categories:

  • Civil procedure—things like motions and demurrers
  • Civil discovery—written discovery, depositions, and expert designations
  • Rules of evidence—including foundation, hearsay, relevance, etc.

In this post, we’ll discuss the first category—civil procedure.  The next two posts will explore the use of civil discovery and the rules of evidence in probate court matters.

Civil Procedure.

While it’s true that the rules of civil procedure apply to probate court matters, there is an exception where a different rule is stated in the Probate Code.  For example, in a civil lawsuit the defendant has 30 days after being personally served with a complaint and summons to file an answer with the Court.  In Trust and Will matters, however, an interested party has the right to appear and object for the first time at the first hearing (see Probate Code section 1043).  And in civil lawsuits a complaint does not need to be “verified” (which means signed under penalty of perjury); whereas in probate court verification is required (see Probate Code section 1021).

Demurrers and Motions.

While some of the rules are different under the Probate Code, other rules are not. For example, demurrers.  A demurrer is a funny word to describe what essentially is a motion to determine if the Plaintiff (or “Petitioner” in the probate world) has stated enough in the initial petition to make a legal claim against the defendant (or “Respondent” in probate court).  Every lawsuit has some basic information that must be stated in order to continue with the suit.  When a suit fails to state the basics, the opposing party can ask the court to dismiss the suit.  The Court, if it agrees, will usually dismiss the suit with “leave to amend” meaning the lawsuit can be re-filed with the correct information stated.

A demurrer does not test the truthfulness of the claims made in the petition, it merely determines if the factual allegations are enough to form the basis of a claim.  Demurrers aren’t always that useful in litigation, but they serve a purpose in some cases and can be used in probate court where appropriate.

The same applies to other procedures such as Motions to Strike, Motions for Summary Judgment and Motions for Judgment on the Pleadings.  All are fair game in probate court matters, although their usefulness may or may not apply in probate. 

Motions for Summary Judgment.

Take motions for summary judgment (“MSJ”), they tend to be used a lot in civil actions.  An MSJ is designed to allow the Court to decide an issue, or sometimes an entire lawsuit, where there are no factual issues in dispute.  Most of the time, MSJ’s are not granted by the Court because there’s always at least some factual issue that must be decided in a lawsuit, which can only be resolved at trial before a judge or jury.  If two people are fighting over the existence of a contract, then the facts of whether a contract was created or not can only be decided at trial.  Whereas, if the contract creation is not in dispute (everyone agrees a contract exists), then interpretation of the contract terms may only involve legal issues—not factual determinations—allowing the Court to rule on a properly filed MSJ.

In most probate court actions, however, almost everything is a factual dispute.  For example, if a Trustee is being accused of mismanaging the Trust assets, that’s a factual dispute.  The Court must hold a trial and hear evidence to determine whether or not the Trustee acted appropriately.  For this reason, most of the time MSJ’s are not useful in probate court.  But they are available and can be used in the right situation.

The bottom line is that if you are going to battle in Probate Court you must arm yourself with knowledge of civil procedure if you hope to be victorious.

Every beneficiary of a California Trust and Will has a basic right to information.  They have a right to see the Trust or Will document(s), they have a right to asset information, they have a right to full disclosure.  Yet not every Trustee or Executor complies with requests for information.  This video describes a beneficiary’s basic right to information.  For those viewing this blog by email subscription, you can click on the title for a link to the video.

This video post is our informal discussion of why we practice law.  It is important for us to know our purpose in practicing law.  In fact, we put our purpose on the first page of our website, and we talk about it constantly.  For those viewing this blog by email subscription, you can click on the title for a link to the video.

Albertson & Davidson, LLP has created a new private foundation to help support children’s causes. Listen to partner Keith A. Davidson announce the creation of our new foundation.

Albertson & Davidson, LLP, Riverside County’s fastest growing boutique law firm, is pleased to announce the creation of the “Albertson & Davidson Children’s Foundation”, which will contribute money each year to deserving charitable and governmental organizations that support children in our community.

“Our firm has, and continues to, represent members of our community that have been harmed by the actions of irresponsible individuals and companies” says named partner, Stewart R. Albertson. “We require these irresponsible actors to take full responsibility for the harms and losses they cause to members of our community. We also represent individuals in trust and estate matters who have spent their lives participating in our local communities.” 

Now Albertson & Davidson, LLP has chosen to take action more directly to help support a segment of the community that is underrepresented—namely, children. Children do not have the power to vote, do not have money to hire attorneys, and their unique causes are not fought for by high paid lobbyists in Washington, D.C. As a result, many at-risk children are not properly represented. “Our hope is that the Albertson & Davidson Children’s Foundation will help fill the gap and provide funding for the support of children’s care, medical treatment, and education” says Mr. Albertson.

The Albertson & Davidson Children’s Foundation will soon be a qualified 501(c)(3).  Albertson & Davidson, LLP will contribute a portion of its legal fees to the foundation, including a portion of the verdicts and settlements the firm wins on behalf of community members who have been injured by irresponsible actors. They will also encourage others to help fund the Albertson & Davidson Children’s Foundation, such as other law firms, entities, and individuals.

“We are excited about this new chapter in our community involvement and encourage every member of our community to take action to help those in need among us” says Keith A. Davidson, partner at Albertson & Davidson, LLP.