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

Hi, this is Stewart Albertson with Albertson & Davidson and I want to talk to you about one of more difficult set of cases we come across and I call these the “Difficult Don’t Miss Undue Influence Cases”.  Let me say that one more time – the Difficult Don’t Miss Undue Influence Case.

What is the difficult don’t miss undue influence case?  That’s where someone has exercised undue influence over your mom or dad while they are still living and mom and dad have not passed away.  And so the question is, what can we do to invalidate the trust or the will that the wrongdoer got created using – exercising undue influence over mom and dad?

These are very difficult cases and the reason they are is because it comes down to California law and capacity and where mom and dad fits in that capacity determination.  So, you can file what we call a conservatorship proceeding where you ask the court to put someone else in charge of mom or dad’s estate.  But, as you can probably imagine, if mom or dad has any capacity whatsoever, they don’t like being told that they don’t have capacity and they certainly aren’t going to like that you’re the one who is asking the court to find that they are not capacitated.  So mom and dad can become upset by this.

The person who’s the wrongdoer who is already unduly influencing your mom or dad, they’re going to take advantage of this situation and they’re going to point out to your mom or dad, that look, your son not only doesn’t love you and doesn’t like you, your son wants to take your capacity away.  You son’s trying to get access to your estate before you’re even gone.  This son of yours is a greedy heir and we see this again time and time in these cases where mom and dad are still living and somebody is exercising undue influence over them.

So what are you to do in these type of difficult cases?  Do you file for conservatorship and that’s why we call these the Difficult Don’t Miss Undue Influence Cases.  Because if you’re going to file for conservatorship, you have to win it.  If you don’t win it and mom and dad is capacitated – are still capacitated and a court finds that they’re capacitated.  Chances are if you were in their trust or will, you’re certainly not going to be in it now by way of an amendment or a codicil to the will.  And then you’re going to have a much higher hill to climb after your mom and dad die when you do bring a trust contest or a will contest.

So, what is a better option, perhaps?  And it’s hard, because, sometimes you have to sit back and do nothing while mom and dad are living.  And what we suggest to many clients is just focus on mom or dad in their sunset years of their live, give them comfort, give them care, give them compassion, spend time with them.  Don’t talk to them about their trust or their will.  Don’t talk to them about their assets – as difficult as that may be.  Because the person who is exercising undue influence over them will turn that against you and make it seem like YOU’RE the one that’s trying to get their assets.  YOU’RE the one that’s the greedy heir.  YOU’RE THE problem, not them.

So if you can, stay disciplined.  Focus on your parents.  Care for them in the sunset years, however many months or years they have left.  Then, once they pass away, there are remedies available to you, such as a trust contest, a hill contest, and financial elder abuse that you can file to remedy the undue influence that took place against your parents during their lifetime.

These are very difficult cases.  It’s very difficult to determine the best route to take.  Our advice is generally to err on the side of caution and that is wait till your mom or dad pass and then you can address the undue influence.

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

Hi, this is Stewart Albertson with Albertson & Davidson and I want to talk to you about undue influence cases.  What makes a good undue influence case and what makes a not-so-good undue influence case?  And let me just set this out as we meet with lots of people that come into our office saying, “Hey, I want to contest my mom or dad’s trust or their will because I know that my brother Bob exercised undue influence over my parents and I’ve been written out of the will or the trust and I will receive no inheritance and I’ve got the best evidence you’ve ever seen Mr. Albertson, or Mr. Davidson, and we’re going to come in here and we’re just, this is going to be a slam-dunk.  You’re going to have no problem winning this case!”

The type of evidence you need to have a good undue influence case, it’s a high bar.  The burden of proof that’s required for you is high.  It’s not easy to invalidate a trust or a will.  So that begs the question, “OK, well then what makes a good undue influence cases versus a not-so-good undue influence case?”

Well, let’s talk about some of the elements that you need to meet to prove that undue influence did, in fact, take place.  One of the first things we have to show is we have to show that the decedent, your parent in this case, was a vulnerable individual.  We can show that several ways.  The most easy way to show that is that they’re over the age of 65 or they’re a dependent adult.  So if they’re over 65, chances are, you could show that they have some vulnerable to them.  The State of California has addressed financial elder abuse and said, “Look, we see a lot of financial elder abuse happening in our state, so we want to stop that.  And so what we’ve done is we’ve set out some criteria for people to look at.  This, these are the elements that we look to to prove an undue influence claim.”

The other way you can look to see if a person is vulnerable is what if they have some type of a medical issue?  What if they have some diagnosis for dementia or Alzheimer’s or anything of the like that affects their mental cognition?  That is something that also will support the element of the decedent being vulnerable.

We also want to look to other elements.  What about the actions or the tactics of the wrongdoer?  The wrongdoer is the person that exercised undue influence over the decedent.  And a lot of times this is not something that you see that’s nefarious or evil or somebody yelling or screaming at the decedent, it’s actually done in a very nice manner.  And it happens like this:  The wrongdoer comes to the decedent while they’re still living and says, “How come your son, Johnny, doesn’t come visit you anymore?  Oh, you know, I don’t think Johnny cares about you.  It’s too bad that Johnny’s not here to take care of you like I’m taking care of you.”  And it’s just done over time.  And, of course, this person already – the decedent already is vulnerable, because they’re older, over 65 or older, they may have a health issue, and so now you have this person who is doing deceitful actions and tactics to influence the elder that their son Johnny really doesn’t care about them and we see this element time and again in a good undue influence case.

We also want to look to another element and that is what type of authority did the wrongdoer have over the decedent?  And authority can come in many forms.  Authority can be that this is the person’s agent, under their durable power of attorney, or maybe they’re already the trustee of the trust.  They can also be somebody that the decedent relies on for their necessaries of live, such as daily medication.  Somebody to drive them to doctor’s offices.  Somebody to help change their diaper in bed.  Somebody that makes sure that hospice is taking care of them.  Here we see the decedent, the elder, is being very reliable on this person who has this apparent authority over them.

The last element that you want to flush out in a good undue influence case is there is an inequitable result.  This is most easily shown in cases where the decedent had a preexisting estate plan that gave everything equally to all of their children.  And we see this time and again.  And then just before they die, they make a change to that trust that did give everything equally to all their children, and they give everything to one person, either one of their children or the wrongdoer who has come into their life and has now exercised undue influence over them.

So in order to have a good undue influence case, where you can meet the burden of proof which is a high bar in the State of California, you’re going to have to show that the victim was vulnerable, that the wrongdoer used actions or tactics that were deceitful, that the wrongdoer had apparent authority over the decedent, and the results that the wrongdoer got was inequitable.  If you can pull all of those elements together through a totality of the circumstances and showing the evidence, you probably have a good undue influence case.

Another year is in the books and it’s time to look back at the best of our law blog for the year.  We have had another great year and great feedback from people who read (and apparently enjoy) this blog.  We love giving out good information, so your comments and feedback are always welcome.  In fact, if you ever have any topics you would like more information on, feel free to email me at keith@aldavlaw.com and I will try to include it in a future blog post.

Happy New Year 2014!

As for 2013, here are the best posts of the year based on your feedback:

  1. Pardon our Probate Fees: Written Fees Agreements not required in probate estates.  This has been a big year for appellate decisions dealing with California Trust and Will issues.  In this case the appellate court held that lawyers do NOT need a written fee agreement to be paid probate fees (contrary to any other type of attorneys fees where a written agreement is mandatory).  Buyer (or executor) beware of this one!!
  2. The Settlor Made Me Do It Part 2.  The age old defense—the Settlor made me do it—is challenged in this California Supreme Court decision.  Wait, did I say Supreme Court—they never hand down opinions on trust and will matters?  Yes, the highest Court in California weighs in on a California Trust dispute (very exciting).
  3. In Trusts We Trust.  This post discusses why you should do some basic estate planning.  I can’t tell you how many times people argue with me about doing basic estate planning, so I have stopped arguing back (you can lead a horse to water, but you can’t make him sign a revocable, living trust).  Heck, lawyers make far more money on estates that are not properly planned, so no planning is fine with me.  But if you are still interested in estate planning, then this post gives you an idea of the process.
  4. Abused Trust Beneficiaries.  A few years back we started using the term “abused trust beneficiaries” because that is what we saw in our practice—Trustees running roughshod over beneficiaries.  And since the Trustees have all the money, and the beneficiaries don’t, it’s all too easy to abuse beneficiaries.  Well we don’t like it, so we made it a part of our practice to defend abused beneficiaries.
  5. A Family Affair.  There is not a week that goes by that someone does not ask me about how the law pertains to their family and their assets.  This post was designed to explain how the law sees your family…very different from how you may see your family.  This is a must read for anyone about to enter the Trust and Will litigation world.
  6. Time to Account: How to obtain a Trust accounting.  If you are a Trust beneficiary and you want an accounting, why don’t you have one in hand?  Because the Trustee won’t give you an accounting?  It happens all the time.  This post describes how to go about obtaining a Trust accounting when the Trustee refuses to do so voluntarily.
  7. The Difficult Path of Trustee Removal.  There are good Trustees and then there are bad Trustees—how do you remove a bad one?  Not so easy, but not impossible either.  This video gives some idea of that process.
  8. The Eyes are the Window to the Diagnosis for Alzheimer’s Disease.  This is fascinating research that indicates it may be possible to diagnose Alzheimer’s disease by looking into someone’s eyes.  This has huge ramifications in the Trust and Will world where incapacity due to Alzheimer’s is critically important in Trust and Will contest cases.
  9. Good Lawyers Sometimes Lose Tough Cases, And Great Lawyers Lose More Often.  If you are going to stand up and fight for people (as lawyers are supposed to do) you have to expect to get a bloody nose every now and then.  Fighting is not easy, if it were they wouldn’t call it a fight.  This post describes how the more you stand up and fight, the more you can lose.  But the more you can win too—so let’s fight on!
  10. When is Your Capacity Kaput?  Many people who lack capacity simply don’t know it.  That makes sense, but what do you do about it if you are a family member who wants to help?  This popular post discusses some ideas on how to proceed.
  11. The Crazy World of Trust and Will Capacity in California.  There are different levels of capacity in California, and they get a bit confusing as the Court’s vacillates back and forth on which capacity standard to use in different scenarios.  This video describes some of the finer points of Trust and Will capacity.
  12. California Financial Elder Abuse.  This is a growing problem that is likely to get worse before it gets better.  The physical and financial abuse of elders is an epidemic.  You have to be on guard for this type of activity.

There it is, our top 13 articles for 2013.  Now it’s time to look forward to a happy and productive 2014.

Happy New Year!!

Did you know that there are different levels of capacity for creating a California Trust versus a California Will–at least sometimes there are.  There are times, however, when the capacity standard is the same.  In this video, Stewart Albertson describes the different levels of capacity required for a California Trust versus a California Will, and when the same standard is used for both.

 

 

For our email subscribers: click on the title to view this video on our website.

Last week the San Bernardino County Sherriff’s office announced that they have arrested a caretaker for alleged forgery and identity theft of a family’s living trust.  This is big deal because wrongdoers are so rarely arrested and charged for their criminal actions in Trust and Will cases. 

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According to the San Bernardino County Sherriff’s office, Stephanie Danna was arrested and charged with perjury, forgery and identify theft for allegedly forging a decedent’s signature on a Trust and falsifying notary signatures and fingerprints.  The decedent was Ernest Vilmos, who died in 2011.  After his death, Mr. Vilmos’ daughters, Julie Denges and Cheri Romano, filed a Trust contest action in San Bernardino Superior Court seeking to set aside the false documents.  That action is still pending. 

After nearly two years of civil litigation, the Sherriff’s office conducted a criminal investigation, executed search warrants, and put together a criminal case against Stephanie Danna.

“Julie and Cheri knew in their hearts that their father’s purported Trust was forged,” says Attorney Damian Garcia, of Banks, Garcia and Janis in Rancho Cucamonga, California—he represents Julie and Cheri.  “Very rarely do I see criminal action taken on a Trust matter like this because law enforcement usually views these as ‘civil cases’ even when they involve criminal financial activity,” said Garcia.

I agree with Mr. Garcia.  What Ms. Danna is accused of doing in this case is not uncommon.  Bad caretakers can be found in a surprising number of cases, and some have become sophisticated in siphoning off assets of a dependent elder.  But the criminal investigation and prosecution of these crimes is rare.  In my experience, I have seen wrongdoers steal in excess of $1 million and still not be investigated or prosecuted criminally.  Clients of mine have reported wrongdoers to law enforcement many times with no action being taken in most cases.

“The real difference maker here seems to be the forged signature and forged thumb print in the notary journal.  It seems to have peaked the interest of law enforcement and was most likely the deciding factor in their decision to conduct a criminal investigation,” said Damian Garcia. 

Hopefully, this case can be an example of how law enforcement can target and prosecute criminal wrongdoers in the Trust and Will field.  Those wrongdoers are out there and their actions wreak havoc in many estates. 

It’s an exciting time to be a Trust and Will litigation lawyer.  Our California Supreme Court recently handed down an opinion on a very pivotal area of Trust litigation—Trustee liability.  Last October we wrote about the case entitled Estate of William Giraldin, where the Fourth District Court of Appeal held that beneficiaries of a revocable trust did NOT have standing to sue a Trustee for acts that occurred while the Trust settlor (the Trust creator) was still alive.

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Generally speaking, so long as the settlor is living, the Trustee owes duties ONLY to the settlor and not to any other beneficiaries.  Once the settlor dies, the revocable trust then becomes irrevocable and the beneficiaries’ interest in the Trust vest—making them actual beneficiaries with actual rights as against the Trustee. 

The question raised by the Giraldin case was whether beneficiaries could sue a Trustee for acts that the Trustee undertook while the settlor was still living.  The Appellate Court concluded that beneficiaries can NOT sue a Trustee for pre-death acts because the beneficiaries interests in the trust were not vested at that time.  But the Trustee’s wrong acts that take place before the settlor dies can have serious ramifications and damages to the beneficiaries’ interests after the Settlor dies.  For example, if the Trustee loses $1 million while the settlor is alive (and the settlor does nothing about it), that’s $1 million less for the beneficiaries after the settlor’s death. 

The California Supreme Court has overturned the Appealate Court’s ruling in Giraldin, and instead held that beneficiaries do have the right to sue a Trustee for acts that occurred before the settlor died.  But there’s a catch, the suit must be brought to correct any breaches as against the settlor only.  In other words, the beneficiaries have no vested rights while the settlor is alive, so the Trustee, by definition, cannot breach any duty to the beneficiaries during the settlor’s lifetime.  But the Trustee could potentially breach his or her duties as against the settlor, and for that, the Trustee can be sued by the beneficiaries.

For example (these examples are taken from the Supreme Court’s opinion), let’s say a settlor tells the Trustee during the settlor’s lifetime that he wants to withdraw a substantial sum of money to take a final trip around the world.  The Trustee follows the settlor’s direction and the Trust is reduced by the withdrawal.  This act may not be in the best interests of the beneficiaries because it lessens their interest in the Trust, but because the settlor is alive they have no standing to sue.  And since the Trustee would NOT have breached his or her duty to the settlor by following the settlor’s direction to make the withdrawal, there would be no liability as against the Trustee.

In contrast, if the Trustee were to withdraw a large sum of money from the Trust during the settlor’s lifetime and then spend the money on a world trip for the Trustee—not the settlor—that would be a breach of Trust as against the settlor.  And the beneficiaries could sue the Trustsee for that breach even after the settlor dies.

In the end, this is a good result for future cases because under the Appellate Court’s view of the world, a Trustee could have breached his duties and looted a Trust once the settlor was incompetent or just before the settlor’s death and there would be nothing the beneficiaries could do about it.  Now, under the Supreme Court’s ruling, the beneficiaries could assert an action for the breaches the Trustee incurred as against the settlor.  It will help to ensure that last minute breaches that occur when the settlor cannot defend himself or herself will not go uncorrected.