Who Can Oversee Revocable Charitable Trusts?

Narcotics Anonymous established a revocable trust to manage its literature and other intellectual property assets for the benefit of its many members.  A “regional delegate group” filed a petition in Los Angeles probate court claiming that the trustee was breaching its fiduciary duties.

The California Court of Appeal, in Autonomous Region of Narcotics Anonymous v. Narcotics Anonymous World Services, Inc. (2022) 77 Cal.App.5th 950, explored the question of who has standing to bring claims against the trustee of a revocable charitable trust.  Because the settlor, i.e., creator, of a revocable trust may oversee and take action against an errant trustee, the court declined to extend the “special interest” standing doctrine to other interested parties.

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See No Evil? Premarital Agreement May Cause Spouse to Lose Inheritance and Role as Administrator of Estate

We write today about probate law, premarital agreements and the importance of doing your homework.

In Estate of Eskra (2022) ___ Cal.App.5th.____, the First District Court of Appeal upheld a Humboldt County Superior Court decision to enforce as valid a premarital agreement that a surviving spouse signed without reading.  How did the surviving spouse get here, and what are the consequences?

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RCFEs Can’t Get Out of the Rain – California Court Finds Another Arbitration Agreement Unenforceable

Another day, another decision by the California Court of Appeal making it more difficult for residential care facilities for the elderly (“RCFEs”) to enforce their arbitration agreements.

Upon admission to virtually any RCFE, a new resident will be asked to sign a stack of documents including an agreement to submit any future dispute to arbitration.  Most RCFEs, understandably, would prefer to resolve their disputes in the relatively controlled environs of arbitration rather than take their chances on the unpredictable nature of courtroom litigation.

Notwithstanding that preference, a series of recent decisions have complicated matters for California RCFEs by curtailing the enforcement of arbitration agreements.  The courts have held that arbitration agreements signed on a resident’s behalf by family members, conservators, and even attorneys-in-fact may not be enforceable against the resident.

Now, in Rogers v. Roseville SH, LLC (2022) 75 Cal.App.5th 1065, the Court of Appeal has examined the issue from a common law agency perspective, and held that, absent some affirmative conduct by the resident to indicate that an agency relationship exists, a family member signing an arbitration agreement on the resident’s behalf is not acting as the resident’s agent, and the arbitration agreement is unenforceable.

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Who Protects the Interests of Children in Trust Disputes?

California trust disputes often involve the interests of parents and their minor children.  Sometimes those interests conflict.  When disputes are settled, who looks out for the interests of children under 18 years of age?  Who checks that no child is left behind?

Probate judges, as explained in a prior post, may appoint a guardian ad litem to advocate for the interests of a minor.  A recent decision from the California Court of Appeal, in Chui v. Chui (2022) 75 Cal.App.5th 873, sheds light on how the beneficial interests of children may be compromised under court supervision even when the parent objects.

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Elder Abuse Restraining Orders May Prevent Estate Planning Changes

Can a California court stop others from changing an elder’s estate plan?  Yes, in extreme circumstances, suggests a case arising from conflict in a blended family over which side would benefit from an elder’s trust.

In White v. Wear (2022) ___ Cal.App.5th ___, the Court of Appeal reviewed the issuance of an elder abuse restraining order that precluded the respondent from making or facilitating any change to the estate plan of her 94-year-old stepfather.  Such an order might preempt an estate planning change and thereby avoid a future contest over a will or trust.

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Schism Deepens on California Trust Modification

The First District Court of Appeal recently joined the widening chasm amongst California appellate courts concerning trust modification procedure. Probate Code section 15402 is seemingly straightforward, consisting of a lone sentence: “Unless the trust instrument provides otherwise, if a trust is revocable by the settlor, the settlor may modify the trust by the procedure for revocation.” As noted in prior posts, these 25 words have led to a robust split of appellate authority.

On the one hand, the Third District Court of Appeal, in Pena v. Dey (2019) 39 Cal.App.5th 546, and the Fifth District Court of Appeal, in King v. Lynch (2012) 139 Cal.App.4th 1186, have united under one banner. They have followed a restrictive approach, limiting amendment to the method set forth in the instrument, regardless of whether that method is explicitly exclusive. On the other hand, the Fourth District Court of Appeal, in Haggerty v. Thornton (2021) 68 Cal.App.5th 1003, stitched its own flag. It has followed a permissive approach, allowing amendment by the statutory method of section 15401(a)(2) unless the amendment procedure is explicitly exclusive.

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Are an Estate Planner’s Notes Protected by the Attorney Work Product Doctrine?

California law is surprisingly unclear as to whether the notes of an estate planning attorney are protected from discovery by the attorney work product doctrine.  This can become a big issue in a will or trust contest when the attorney’s files may contain pivotal evidence as to the client’s intent, mental capacity and/or vulnerability to undue influence.

In a recent article in California Trusts and Estates Quarterly, attorneys Ciarán O’Sullivan and Andrew Verriere opine that an estate planner’s notes and other internal file materials likely qualify as work product under the California Code of Civil Procedure such that a court would decline to compel their production.  The authors advocate for a statutory change to facilitate the production of an estate planner’s entire file when the client is deceased.

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Final Ethics Opinion Guides Lawyers on Clients with Diminished Capacity

We wrote last July about a draft California ethics opinion regarding clients who may have diminished mental capacity.

After receiving public comment, the State Bar’s Standing Committee on Professional Responsibility and Conduct has now finalized Formal Opinion Number 2021-207, which is close in content to the earlier opinion.

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California Court Gives RCFEs More To Keep Them Up At Night

Recent decisions by the California Court of Appeal have heaped stress on the owners/operators of residential care facilities for the elderly (“RCFEs”).

RCFEs, like other businesses, would prefer to avoid the court system and jury trials by obtaining residents’ consent to the arbitration of any disputes that might arise. But as California appellate courts are making ever more clear, it’s one thing to obtain a signature on an arbitration agreement, and quite another to enforce it.

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“Predatory Marriage” Podcast

Vulnerable elders too often fall victim to predators who marry them for financial gain. But how should we balance the fundamental right to marry and enjoy companionship with protecting elders from financial abuse?

Attorney Ellen McKissock, a California thought leader on predatory marriage, spoke with me on Trust Me!, the podcast of the Trusts and Estates Section of the California Lawyers Association.

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