“Inheritance Forgery” Podcast – Theft from Tigers Averted

Fort Hayes State University in Kansas, home of the Tigers, almost lost a $20 million donation because of a forged codicil (amendment) to the will of Earl Field. Earl was a World War II pilot, successful businessperson, and booster of FHSU. He died in 2013 at the age of 98. The forgery was proven only after a murder-suicide of two key witnesses and a lengthy trial followed by an appeal. In 2019, FHSU was able to roar in celebration of the largest gift in its 117-year history.

Hear the story of Earl’s will, and the broader problem of inheritance forgery, in a podcast episode that I hosted, released today.

Will California SB 315 Improve Revocable Transfer on Death Deeds?

By Lauren Murvihill on July 15, 2021 Posted in Asset Distribution, Beneficiaries, Estate Administration, Estate Planning, Financial Elder Abuse, Inheritance Disputes, Legislation, Non-Probate Transfers, Undue Influence

(Editor’s Note: Lauren Murvihill is a summer associate at Downey Brand. She is a student at UC Davis School of Law.)

The thrifty do-it-yourselfers among us might jump at the opportunity to transfer their family home to their kids while avoiding probate and the expense of creating a trust. Revocable Transfer on Death Deeds, or RTODDs, have allowed for this type of non-probate transfer in California since 2016.

SB 315, now in the California Assembly having already passed in the Senate, will modify the Probate Code provisions that govern RTODDs. The bill aims to protect transferors from vulnerabilities and uncertainties when executing an RTODD. Will SB 315 change California law for the better by hindering fraud and financial elder abuse?

Ethics Opinion Guides Lawyers on Counseling Clients with Diminished Capacity

By Jeffrey S. Galvin on July 6, 2021 Posted in Attorney-Client Privilege, Conservatorships, Estate Planning, Ethical Duties, Mental Capacity, Undue Influence

What are the ethical obligations of a California lawyer for a client with diminished mental capacity? The ethics committee of the State Bar of California answers this key question in draft Formal Opinion No. 13-0002, with public comment due by August 24, 2021.

While all lawyers may represent clients who have questionable capacity, the situation arises with frequency and urgency for estate planning attorneys. The opinion interprets the California Rules of Professional Conduct as amended in 2018. Along with the updated ethics guide recently published by the Trusts and Estates Section of the California Lawyers Association, the opinion will provide key guidance to lawyers navigating their ethical duties.

Steps to Follow with a Difficult Co-Trustee

By Jeffrey S. Galvin on June 21, 2021 Posted in Attorney-Client Privilege, Conflict Avoidance, Legal Expenses, Mediation, Trust Administration, Trustee Removal

Disgruntled man standing with his arms crossed against a grey background We’ve written about how co-trustee conflict fuels California trust litigation and the problem seems to be growing. Trust administration grinds to a halt because a co-trustee (or two or three) is hostile, stubborn, self-serving and/or apathetic. While trusts are supposed to provide a streamlined alternative to a court-supervised probate proceeding, the efficiency may be is quickly lost when co-trustees are unable to work together.

How to deal with an uncooperative co-trustee? The answer will depend on variables such as the wording of the trust instruments, the nature and value of the assets held in the trust, and the personalities of the trustees, beneficiaries and counsel. Here we offer general thoughts on steps forward. Continue Reading

No Bad Faith Required – Trustee of Spendthrift Trust May Be Compelled to Pay Attorney Fees Under Family Code Section 2030

By Sean McKissick on May 17, 2021 Posted in Divorce, Family Law, Legal Expenses, Nevada County Superior Court, Spouses, Trust Administration

Gavel resting on top of money

Section 2030 of California’s Family Code provides an important safeguard to ensure the fairness of marriage dissolution proceedings. It allows the Court to order a more financially well-off party to pay some or all of the other party’s attorney fees, beginning as early as the start of the proceedings. Section 2030 was enacted to put divorcing parties on equal footing.

The protections of Section 2030 extend beyond spouses: where a third party has been joined to a dissolution proceeding, the statute allows the court to order that third party to pay the attorney fees of one of the spouses to the extent such fees were incurred in connection with the third party. This provision furthers California’s public policy in favor of egalitarian dissolution proceedings.

But what happens when that public policy collides with California trust law? Specifically, what occurs when one spouse is a beneficiary of a “spendthrift trust” designed to keep assets away from the beneficiary’s creditors? The California Court of Appeal’s recent decision in In re Marriage of Wendt (2021) ___ Cal.App.5th ___, addressed this question.

Britney Spears and “Marla Grayson” May Propel Tightened Oversight Over California Conservators

By Wiemond Wu on May 10, 2021 Posted in Conservatorships, Financial Elder Abuse, Legal Expenses, Legislation, Private Professional Fiduciaries, Undue Influence

When a California probate court establishes a conservatorship, the conservator is charged with managing the conservatee’s person and/or estate in the conservatee’s best interests. The large majority of professional fiduciaries and family members who become conservators discharge their duties faithfully. Occasionally, however, a conservator may exploit the relationship for personal gain.

Over the past year, conservatorships increasingly have been in the spotlight. Perhaps responding to the hype, the California Legislature is considering legislation, Assembly Bill 1194, that aims to strengthen protections against abuse. In this blog post, we provide a summary of some key features of AB 1194 and how the bill, if enacted, may affect California conservatorships.

Immortal Right — Income Beneficiary’s Entitlement to Accounting Continues After Death

By Jeffrey S. Galvin on May 3, 2021 Posted in Accounting, Evidence, Probate, San Diego County Superior Court, Trust Administration

Many California trusts confer a lifetime right to income on a person (often the surviving spouse) with the remainder passing to designated survivors upon the income beneficiary’s death. When the income beneficiary dies, is it too late for the executor of the beneficiary’s estate to request an accounting for the purpose of evaluating whether the deceased beneficiary received all income to which he or she was entitled?

No, says the California Court of Appeal in Dunlap v. Mayer (2021) ___ Cal.App.5th ___. A decedent’s successor in interest, such as an executor, can hold the trustee to account. In addition to clarifying this point of law, the court held that a probate court cannot dismiss a petition at a case management conference when disputed factual issues require an evidentiary hearing, extending case law in this area.

California Appellate Courts Doubly Divided Over Probate Code Section 859

By Jeffrey S. Galvin on April 19, 2021 Posted in Financial Elder Abuse, Inheritance Disputes, Stanislaus County Superior Court, Undue Influence

We blogged recently about Keading v. Keading (2021) 60 Cal.App.5th 1115, which addresses whether a trial court can impose damages under California Probate Code section 859, without a finding of bad faith, if the court finds that a person has taken, concealed or disposed of property by committing elder or dependent adult financial abuse.

There is another split of appellate authority as to the interpretation of section 859. Last year, the Court of Appeal, in Estate of Ashlock (2020) 45 Cal.App.5th 1066, held that a prevailing party is entitled to double damages under section 859, in addition to the recovery of wrongfully transferred property, resulting in an aggregate award of triple the amount taken. The court disagreed with Conservatorship of Ribal (2019) 31 Cal.App.5th 519, blogged about here, in which the court limited the aggregate award to double the amount taken.

We thus have two substantial disagreements over the interpretation of Probate Code section 859, leaving California probate judges to navigate two forks in the road.

“Mental Health Disorder” Must Be Proven Along with Delusion

By Jeffrey S. Galvin on March 29, 2021 Posted in Evidence, Inheritance Disputes, Mental Capacity, Napa County Superior Court, Will/Trust Contests

When are delusions enough to invalidate an estate plan? The California Court of Appeal addressed that issue earlier this month in Eyford v. Nord (2021) 62 Cal.App.5th 112.

The case involves a 90-year-old woman who favored a charity and disinherited the two grandchildren with whom she had been close. The appellate court found that California Probate Code section 6100.5(a)(2) requires proof of a “mental health disorder” in addition to a delusion that caused the questioned testamentary disposition. The opinion provides a guidepost for California lawyers who litigate contests arising from alleged delusions.

When Can California Trustees Use Trust Funds to Hire Lawyers?

By Jeffrey S. Galvin on March 22, 2021 Posted in Attorney-Client Privilege, Legal Expenses, Trust Administration, Trustee Removal

Many family member trustees are uncertain about whether and to what extent they can use trust assets to obtain legal representation. For example, when two parents choose their daughter, upon their incapacity or death, to administer their trust as the successor trustee, the daughter may be unsure whether she can use trust money to hire a lawyer to help her deal with demands and complaints from her brother.

In this post, we’ll review basic principles of California law with respect to when a trustee can pay a lawyer at the trust’s expense. Spoiler alert: it may be best to take the Buick and leave the Rolls at home.

Trust on Trial