Court in California Trust Contest Invalidates Transfer to Drafting Attorney


Hand in the Money Jar

“An ethical estate planning attorney will plan for his client, not for himself.” With those words, the California Court of Appeal recently ripped Southern California attorney John LeBouef for taking advantage “of an elderly and mentally infirm person to enrich himself.” 

In Butler v. LeBouef (2016) 248 Cal.App.4th 198, the appellate court affirmed the invalidation of John Patton’s will and trust, which purportedly left Patton’s $5 million estate to LeBouef.  The ruling illustrates the Probate Code’s prohibition of donative transfers to categories of persons who, because of their relationship with the creator of a trust, might exercise undue influence. The law, in particular, presumes that an attorney who drafts a trust in which the attorney is named as a beneficiary does so without the client’s knowledge and consent. The opinion also shows how contestants can use evidence of other “bad acts” to bolster their cases if those other acts show a common plan or scheme. Continue Reading

Watch Out for SLAPPs in California Trust and Estate Litigation

Anti SLAPPIn heated California trust and estate litigation, one party’s petition to the probate court often leads the other side to file a retaliatory petition. If Sally petitions in Sacramento County Superior Court to contest Mom’s trust amendment on the ground that Mom had Alzheimer’s disease and lacked sufficient mental capacity to reduce Sally’s share, brother Bob may file a petition to enforce the no contest clause in the trust against Sally and thus seek to intimidate her.

Yet retaliatory claims can be radioactive for those who assert them given California’s “anti-SLAPP” statute, codified at Code of Civil Procedure section 425.16. “SLAPP” is an acronym for “Strategic Lawsuit Against Public Participation.” The statute creates a “special motion to strike” frivolous claims that aim to chill the valid exercise of speech and petition rights. A petitioner faced with an anti-SLAPP motion quickly finds himself on the hot seat. If he lacks evidence to substantiate his claims, the court will dismiss them and require him to pay his opponent’s legal expenses. Continue Reading

Til Death Do Us Part: California’s New Transfer on Death Deeds

Deed TransferCalifornia’s new transfer on death deeds (“ToD deeds”) allow for the transfer of real estate upon the occurrence of death without the need for costly estate planning or probate administration. Codified at California Probate Code section 5600 – 5696, the new mechanism may fill a void in the array of estate planning options, but it is not likely to catch on with traditional estate planning attorneys for the reasons discussed below.

Fresno attorney Mark Poochigian presented a thoughtful and at times critical assessment of ToD Deeds at a Sacramento County Bar Association luncheon in June. At the Summer Education Conference of the California State Bar Trusts and Estate section, only one of the more than one hundred attorneys in attendance acknowledged having prepared one of these new deeds since the law went into effect on January 1, 2016. Continue Reading

Parent Custody Battles Leave Everyone Bruised

Siblings arguingMost California trust and estate disputes are emotionally intense, and none more so than sibling conflicts over the care of an aging parent. Like a child custody fight in the family law context, siblings battle over whether Mom will remain in the home where she lives, move in with one of them, or move to an assisted living facility. They fight over who will manage Mom’s finances and interact with her doctors.

California courts have the tools to resolve these disputes, but struggle to evaluate competing claims of siblings and have a limited attention span to parse through them. Very often, when siblings cannot find middle ground, Mom’s care and finances will end up in the hands of a third party conservator and trustee, after many thousands of dollars in legal fees. Continue Reading

Where Credit Is Due – California Creditor Claims Against An Estate

Money TargetSpeak promptly or forever lose your rights. Creditor claims are an intricate area of California probate law that fills chapters in legal treatises. Fail to comply with the nuanced rules and you lose your claim against a decedent’s estate even if liability is otherwise rock solid. But what is a creditor claim and when is it required?

A creditor claim is a demand for payment that must be filed with the probate court and served on the personal representative (e.g., executor) of a decedent’s estate within a specified timeframe. Presentment of a creditor claim (and its rejection) is required before a lawsuit may be filed against the decedent’s estate. Moreover, if there is no pending probate case in the Superior Court, the creditor may have to take the initiative by opening a probate proceeding so as to create a case within which to present a claim. Continue Reading

“Stronger” Now – California Conservatorships Can Provide a Helping Hand to Young Adults

Silhouette of Helping HandsGuest author Karina Stanhope, a Downey Brand associate, contributes today’s post.

A recent New York Times article shined new light on Britney Spears’ conservatorship. Well known for her instant rise to stardom as a Disney Mouseketeer, Ms. Spears’ fame as a young, up-and-coming pop star in the 1990s was boundless. Little less than a decade later, however, media outlets and tabloids provided a darker view of what Ms. Spears’ life had become. The more famous Ms. Spears became, the less control she appeared to hold over both her private and public life. Ms. Spears’ escapades worried fans and family alike, and in 2008, her father, James Spears, took legal action. A Los Angeles court appointed Mr. Spears conservator over Ms. Spears’ person and estate, with a lawyer aptly named Andrew Wallet serving as co-conservator over her estate. Continue Reading

“You Don’t Have to Be Rich” to Need a Plan

CrownPrince died in April 2016 without a will or trust, according to documents recently filed by his sister in the Carver County District Court in Minnesota. Perhaps a will or trust will surface eventually, as occurred with Michael Jackson’s estate. However, the revelation in “The Morning Papers” that Prince died intestate (legalese for no will or trust) provides an occasion to muse on the “Controversy” that can erupt in California courts when a person of even moderate means lacks an estate plan, while recalling several song titles along the way. Continue Reading

Alzheimer’s Disease Requires a Close Look in California Trust Litigation

Alzheimer's Word Cloud_RevisedFor a richly-detailed profile of a woman’s experience with Alzheimer’s disease, read “Fraying at the Edges,” an article by N. R. Kleinfield that appeared on May 1, 2016 in the New York Times. The author follows Geri Taylor, who was first diagnosed with Mild Cognitive Impairment in 2012 at age 69, and introduces us to her husband and other family members, friends, and participants in support groups.

Although the article does not discuss any conflict over Ms. Taylor’s finances or estate plan, the vivid descriptions of her experience with Alzheimer’s disease illuminate the complexity of its effects on mental function. When an elder with Alzheimer’s disease makes a controversial estate planning change, the variable impact of the disease leads to challenges in assessing the elder’s mental capacity and vulnerability to undue influence, and thus substantial uncertainty in the outcome of a trust contest, will contest, financial elder abuse claim or contested conservatorship. Continue Reading

Stepmother Prevails on Accounting Issues at Court of Appeal

Financial Audit

Sometimes stepmothers are just misunderstood.

The Babbitt case decided by the California Court of Appeal last Monday, April 25, 2016 involves one of the fact patterns that we often see in California trust litigation: children from a decedent’s prior marriage have conflict with their biological parent’s surviving spouse. In other words, after dad passes away, stepmom and the kids do not play nicely. Continue Reading

Fund Your California Trust Now to Avoid the “Lost and Found” Later

Suitcase on BeachA trust is a vehicle for managing and disposing of property. Just as you don’t want to leave your suitcase on the beach when you return from vacation, you should ensure that your assets are securely loaded into the trust you have created. If you don’t, your assets may end up held in the legal equivalent of a “lost and found” with the competing claims resolved only by adjudication in a California courthouse. Disputes over property ownership are all too common in California trust litigation.

A case published last week by the California Court of Appeal illustrates this point. In Carne v. Worthington, the court considered whether Kenneth Liebler had transferred certain real estate from a trust he created in 1985 to a trust he created in 2009. Liebler stated in the 2009 trust instrument “I transfer to my Trustee the property listed in Schedule A, attached to this agreement” and listed the real estate in the attached schedule. Liebler could have avoided litigation simply by signing and recording a deed transferring the property from himself as trustee of the 1985 trust to the trustees of the newly-created 2009 trust.

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