PROBATE

Published on: July 30, 2016

How Elder Abuse and Undue Influence Affect California Estate Planning

Elder abuse remains a major problem in California estate planning. Relatives, caregivers, and other parties often exploit their relationship with someone who is ill or dying in order to obtain an inheritance from their estate. Such undue influence is against the law, and an interested party may ask a probate court to nullify any provision in a will or trust that benefits the abuser.

Court Holds Disclaimer Does Not End Elder Abuse Petition

A California appeals court in Santa Clara recently emphasized the public policy importance of discouraging elder abuse in a recent decision involving an ongoing contest to a revocable living trust. The trust was originally created by a married couple in 1990. Upon the wife’s death, the trust was subdivided into two trusts, one of which remained subject to amendment or revocation at the husband’s discretion.

Published on: July 29, 2016

When Should I Specify Conditions on Distributing Income From a Trust?

by Scott C. Soady

A revocable living trust is a useful estate planning tool when you want to make provisions for your family members beyond your death. A trust need not distribute all of its assets upon your death. You may instruct your trustee to retain the trust principal and distribute only the income at periodic intervals to your designated beneficiaries. This can ensure your beneficiaries receive a steady stream of income for many years.

Ex-Wife Continues to Collect From Late Father-in-Law’s Trust

It is important to be as specific as possible when spelling out the conditions for any income distributions under a revocable living trust. A recent California probate case offers a useful cautionary example. In this case, a man created a revocable living trust in 1977 just before he died. The trust became irrevocable on his death and remains in force today.

Published on: July 22, 2016

Is a Creditor’s Judgment Enforceable Against My Estate?

by Scott C. Soady

Death does not automatically void any debts owed by the deceased. In the normal course of administering an estate, the personal representative named in the decedent’s last will and testament is responsible for paying any valid creditor claims presented. Indeed, once a person has died, a creditor may only enforce a debt through the probate courts. This includes debtors who obtain a civil court judgment against the decedent prior to death.

Claimant Waits Too Long to Challenge Illegal Creditor’s Lien

A recent case from Los Angeles illustrates the complications that can arise when creditors seek to enforce their judgments against a deceased debtor. In this case, a civil plaintiff obtained a $2 million judgment against the decedent in January 2012. The decedent passed away in August of that same year. Approximately two weeks after his death, the civil plaintiff filed a lien against a piece of real estate that the decedent owned in Malibu.

Published on: July 14, 2016

How Can My Divorce Settlement Affect My California Estate Planning?

by Scott C. Soady

There are many legal events that may affect your estate planning. For example, if you get divorced, the terms of your property settlement may require you to alter the terms of your will or trust. It is therefore important to resolve any potential legal question about your estate plan prior to your death, as any ambiguity may lead to costly and unnecessary probate litigation afterwards.

Children, Stepmother Spend Years Fighting Over Retirement Account

A long-running probate case from here in San Diego offers a helpful example. This case involves the estate of a man who died in 1998. The decedent’s prior marriage ended in divorce in 1977. The divorce included a property settlement, approved by an Illinois court, that required the decedent to make provisions in his estate planning such that the couple’s two children would receive one-half of his “net estate” upon his death.

Published on: July 13, 2016

Will Medi-Cal Take My House After I Die?

by Scott C. Soady

Paying for end-of-life care and final medical expenses can be a major problem for many California residents. California does offer federal Medicaid benefits for poor and disabled residents through the state’s Medi-Cal program. But Medi-Cal has a catch: once a recipient dies, the state is legally obligated (under federal Medicaid rules) to “seek reimbursement” from the person’s estate for any benefits paid.

This means Medi-Cal can go after the property in a deceased beneficiary’s probate estate or living trust. In many cases this includes the decedent’s home. When determining the eligibility of Medi-Cal benefits over the age of 55, the value of a person’s primary residence is excluded from income calculations. But after the beneficiary dies, the house becomes fair game for Medi-Cal officials seeking reimbursement.

However, there are a number of possible exemptions that heirs of a decedent may seek in order to avoid losing assets to a Medi-Cal claim. For example, if enforcing a lien against a property “would result in substantial hardship to other dependents, heirs, or survivors” of the decedent, Medi-Cal must waive its claim. Such “hardship waivers” are not automatically granted. The affected dependent or heir must apply for a waiver, and if it is denied, he or she may seek judicial review.

Published on: July 10, 2016

Taking Proper Inventory of a Probate Estate

by Scott C. Soady

An essential function of the personal representative of a probate estate is to identify and inventory the estate’s assets. Keep in mind, an estate’s assets at death may not be limited to property and funds in possession of the decedent at the time of death. If the decedent was a party (or potential party) to any civil lawsuit, any future proceeds from such a case may also be considered an estate asset.

Lawyer’s Statement Does Not Prove Intent to Disclaim Share of Judgment

A recent California case illustrates this point. This case is discussed here for informational purposes only and should not be treated as a complete statement of California law on this subject.

Published on: July 7, 2016

How Does Estate Planning Work With Unmarried Partners?

by Scott C. Soady

Marriage is not for everyone. Many couples are happy in long-term relationships that do not result in marriage or even a legally recognized domestic partnership. But if you are in such a relationship, you and your partner should consider the estate planning implications if one of you passes away. California law does not treat married and unmarried partners in the same way. A spouse has certain automatic community property and inheritance rights that an unmarried partner does not.

Partner’s Settlement Ends Up Hurting Her

That is not to say unmarried partners are completely unprotected. Since the 1970s, California courts have accepted and enforced contracts between unmarried partners. This can include oral promises to treat property acquired by either partner during the relationship similarly to community property. In these types of cases, commonly known as “Marvin petitions,” the surviving partner may seek to enforce these promises.

Published on: June 26, 2016

Should My Estate Plan Be Digital?

by Scott C. Soady

For many of us the “paperless office” is a reality. Our personal and professional lives reside online through our laptops, smart phones, and cloud storage. But what does this mean for our estate planning?

Recently, an article on CNBC.com discussed the growing popularity of “digital document archives,” which offer specialized cloud storage for estate planning materials including wills, powers of attorney, and health care directives. The idea behind such services is to make it easier for family members or other fiduciaries to locate important estate planning documents. For example, if a person dies, his or her executor could go to a digital archive and promptly download a copy of the will.

Are “Digital Wills” Admissible in California?

Published on: June 25, 2016

What Happens if the Beneficiaries Named in My Will Die Before I Do?

by Scott C. Soady

When making a last will and testament, you may assume that the beneficiaries you name will outlive you. Of course, that is not always the case. So what happens, for example, if you leave your brother $10,000 in your will and he dies before you?

The Anti-Lapse Statute

Like many states, California has what is known as an “anti-lapse” statute. Under California’s version, if a named beneficiary is dead at the time a will is probated, the “issue of the deceased transferee” may inherit the gift in his place. So, to apply the anti-lapse statute to the above hypothetical, your brother’s children would receive the $10,000 gift you left him in your will.

Published on: June 24, 2016

Using Your Bank Account to Avoid Probate

by Scott C. Soady

Estate planning can seem like an unnecessarily complicated process. But there are ways to simplify matters. After all, the whole point of estate planning is to facilitate the transfer of assets from the deceased person to the chosen beneficiaries—and this does not always require a will or formal trust document.

Totten Trust vs. Payable-on-Death Account

In the early 20th century, courts began to recognize something known as a “Totten trust.” Also called a “bank account trust” or sometimes a “poor man’s trust,” a Totten trust is nothing more than a bank account opened by a depositor in his or her own name as trustee for a beneficiary. The depositor is free to withdraw funds or even close the account during his or her lifetime. Any funds remaining in the account at the time of the depositor’s death are then paid over to the beneficiary.