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How You Can Avoid a Family Feud

Posted on | May 31, 2010 | No Comments

The following quote sums up estate planning quite well:

“Family, money and death are a combustible combination,” said Toronto-based attorney Les Kotzer, who has co-authored a new book — “Where There’s an Inheritance ” — a compilation of 80 real-life vignettes taken from his law practice and radio show callers.

Having no estate plan is a recipe for disaster – your mother or father, wife, or child could end up in costly probate litigation if they do not have an advance health care directive and financial power of attorney in place. The government substitute is called a conservatorship (see What is a Conservatorship?) or guardianship (see What is a Guardianship?) . They are expensive to put in place and expensive to maintain.

But that is just one piece of the puzzle. You also have to make decisions about who should get what – and when they should get it. The Portland Press Herald has four tips  to keep things under control: let your family know what you want to do with your personal effects, name a good family member as trustee or executor, watch for pitfalls in how you allocate money in your estate, and think it through from the beginning.

Category: Estate Planning - Generally
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Trust Mills, Trust Scams, and Trust Lies - “Estate Planners” Unlicensed to Practice Law & Elder Abuse

Posted on | March 31, 2010 | No Comments

I am often approached by people who have been in contact in one form or another with trust mills. Trust mills operate by doing estate planning on a large scale and by threatening elderly (and even middle aged) people with scare tactics if they do not use the estate planner’s often formulaic trusts. Although the use of a trust can in fact save your family money and time (See “What are the Pros of a Living Trust“), it will not allow you to prequalify for Medi-Cal or other public benefits (”What Are the Cons of a Living Trust“).

Nevertheless, that was precisely the alleged claim of two men (who were unlicensed to practice law) in San Jose who convinced some elderly residents that the use of their services would prequalify them for public benefits. The problem is that most of the seniors already qualified, and those did not would have to “spend down” their earnings which would incur heavy penalties.

What are the types of costs that are incurred if an elderly citizen is caught in a trust mill? Often the trust will have inconsistent and ambiguous distributive provisions that must be interpreted by a probate judge before the family can receive anything. The petition to do that is very costly and time consuming – it often takes months before the court order is finally signed and attorney’s fees will total in the thousands of dollars. Never mind the risk that the trust mill will take the private information of seniors and pass it off to others who will try to exploit them for gain. An attorney who breaches attorney-client privilege by releasing such information is subject to serious sanction – which is why estate planning should only be done by licensed members of the bar.

If you know someone who has been ripped off by a trust mill, do not hesitate in getting the plan corrected now. I offer discounts on repairing or restating plans that have been prepared under those circumstances, and I am sure other attorneys would offer the same deal as well.

Category: Probate Litigation
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8 Steps To Avoid Estate Litigation

Posted on | November 30, 2009 | No Comments

An article by the US News and World Report gives “8 Tips to Avoid Nasty Estate Surprises.”  I agree with most of the points, and add my critique after each tip below:

1. Get a good lawyer. I would add that your lawyer should concentrate exclusively in this area.
2. Pick the right executor and trustees. The right trustee will be solid and will react neutrally to avoid disputes over the estate’s property.
3. Talk about it now. This seems obvious, but most people will not let their intentions be known ahead of time. Unfair surprise is one surefire way to start a contest.
4. Know state laws. In California, as the Tax Professor adds, probate can be avoided entirely through the use of a trust.
5. Make your intentions known early and often. Making repeated modifications to the will or trust will make it harder to invalidate later.
6. Make sure title to your assets is clear. Circumventing the estate distribution by retitling assets later in life is another way to encourage litigation.
7. Consider including a “no contest” clause. Then give the beneficiary an amount that they would rather not sacrifice if they lost the contest.
8. Don’t try to manage your estate from the grave. Although I am not sure that I entirely agree with this one, in theory giving discretion to your beneficiaries may stop them from fighting over items to which they are personally attached. I agree that not every item need be listed in the instrument, but sometimes a person who writes a will or trust can avoid disputes ahead of time by simply making the right decision.

Category: Probate Litigation
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Legal Fights Over Wills - No Contest Clauses Hit the Public Spotlight

Posted on | October 31, 2009 | No Comments

With the death of Michael Jackson and other celebrities, no contest clauses have come to the fore of the public’s attention. No contest clauses are an attempt to keep brothers and sisters, aunts and uncles, and everyone else from suing in probate court every time someone writes an unfair will. There are quite a few benefits to discouraging litigation – as well as some detriment where there is a legitimate cause for concern. In fact, the California law on the subject is complex and will change in 2010. As it stands now, there are multiple statutory exceptions to no-contest clauses that everyone must follow. It is even possible to set aside a no-contest clause if the contest is brought with “reasonable” cause on the grounds of forgery, revocation, or an action to establish the invalidity of any transfer. So at least for now, would-be litigants can take heart that there may be a remedy when a relative makes a move to steal through influence or lack of capacity, as long as there is a solid reason to pursue it.

Category: Estate Planning - Generally
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10 Odd Bequests; Or How to Disinherit With Style

Posted on | July 31, 2009 | No Comments

The law regarding wills and trusts has changed greatly over the years. New law makes it difficult to precondition a devise by will or trust on an act that would violate public policy. For instance, California Probate Code § 710 prohibits imposing a condition or restraint on marriages under certain circumstances. In other words, you can’t place a restriction that discourages your son or daughter from marrying a certain person or encouraging their divorce. Likewise, “[i]f a condition precedent requires the performance of an act wrong of itself, the instrument containing it is so far void, and the right cannot exist. If it requires the performance of an act not wrong of itself, but otherwise unlawful, the instrument takes effect and the condition is void.” California Probate Code § 709. In other words, be careful what you wish for in a will or trust.

The link at the end of this paragraph gives ten examples of odd bequests that may or may not be enforceable in a court of law – but are entertaining nonetheless. Consider the man who preconditioned his wife’s receipt of £330,000 by devising that she could only receive it if she smoked 5 cigars a day (she refused to allow him to smoke). Or the woman who gave her husband $2.00 provided he spend half the money on rope to hang himself. Check out the full list here.

Category: Wills and Trusts
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Michael Jackson “Disinherited” Father in Last Will and Trust

Posted on | June 30, 2009 | No Comments

In a case that will surely be publicized to no end, the first of possibly multiple wills (see “What Will Happen if I Die Without a Will?“) executed by Michael Jackson have been submitted to the Los Angeles Probate Court. The will apparently refers to a trust (see “What is a Revocable Trust?“) in which Jackson titled all of his assets. It appears initially that Michael disinherited his father, Joe Jackson, leaving everything to his mother. The court granted temporary custody of Jackson’s children to Katherine Jackson via a guardianship proceeding (see “What is a Guardianship?“). If this probate is anything like Jackson’s life, there will be plenty of drama in the coming weeks.

Category: Current Events
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California Probate Guardianships - No Contest Clauses in a Will or Trust May Not Apply to Minors

Posted on | October 9, 2008 | No Comments

A minor who nominated his mother as guardian ad litem (See What is a California Guardianship?) does not voluntarily participate in a probate proceeding triggering a no contest clause provision in a will or trust. Safai v. Safai, 164 Cal.App.4th 233 (2008).

“The Trust (What is a Revocable Living Trust?) and the will both included ‘no contest’ clauses, with the Trust’s clause stating, as follows: ‘Any beneficiary who directly or indirectly voluntarily participates in any proceeding or action in which such person seeks to void, nullify, or set aside (1) any provision of this instrument; (2) any provision of the Settlor’s will; or (3) any amendment of this instrument or codicil of the Settlor’s will shall be considered to have predeceased the execution of this instrument without surviving descendants[.] The provisions of this paragraph shall not apply to any disclaimer by any person of any benefit under this instrument. The Trustee is authorized to defend any contest or other attack of any nature on this instrument or any of its provisions.’”

The court reasoned that the settlor did not intend “to disinherit his only son in the event that [the son] contested the Trust while still a minor,” even though a “guardian or guardian ad litem is not a party to the action; instead, he or she is a representative of record of a party who lacks capacity to sue.” Thanks to Professor Beyer for bringing this case to my attention.

Category: Probate, Probate Litigation, Trusts, Will Contests, Wills, Wills and Trusts
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Heath Ledger’s Daughter Will Inherit His Entire Estate

Posted on | October 2, 2008 | No Comments

Heath Ledger’s daughter Matilda will apparently inherit his entire $16.3 million estate. The actor executed a will (What Are the Advantages of a Will?) that left nothing to his daughter, but left everything to his parents and three sisters. Those family members have allegedly gifted those distributions to Matilda.

Category: Current Events, Estate Planning of the Rich and Famous, Probate, Probate Litigation
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How Much Does Probate Cost In California?

Posted on | September 23, 2008 | No Comments

Probate is an expensive proposition in California. The cost will vary depending upon the size of the estate, but one thing is guaranteed – your estate will pay much more than the cost of a living trust. San Diego probate fees include the cost of filing, notice of publication in the San Diego Union Tribune, real property appraisal by the probate referee, a probate bond, attorney’s fees, and executor’s fees. The TLD legal blog estimates that the probate of a $500,000 estate will generate $28,035 in costs and fees.

Category: Uncategorized
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Jury Finds San Diego Probate Agent Murdered By Beneficiary of Will

Posted on | September 11, 2008 | No Comments

Michael Ray Jennison was found guilty of second degree murder of a real estate agent hired by a local San Diego probate lawyer. [See the first report here and the second report here.] Jennison inherited part of a condominium from his grandmother (see “What Will Happen If I Die Without A Will?“). Probate agent James Magot was hired to handle the sale of the property, but placed a competing bid against Jennison for its purchase (the forced sale was truly one “Disadvantage of Probate“). The agent and Jennison were involved in an altercation witnessed by a neighbor, after which Jennison shot the probate agent twice in the head. Jennison faces a life sentence.

Category: Current Events
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