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

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.

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California Appellate Courts Doubly Divided Over Probate Code Section 859

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.

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“Mental Health Disorder” Must Be Proven Along with Delusion

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.

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When Can California Trustees Use Trust Funds to Hire Lawyers?

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.

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California Trusts Cannot Hold Title to Real Estate

A common misperception of trusts is that they are legal entities that, like corporations, can hold title to real estate and other property.  A new California appellate decision, Boshernitsan v. Bach (2021) 61 Cal.App.5th 883, addresses that misunderstanding.

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Is “Bad Faith” Needed for Double Damages Under Probate Code Section 859?

A recent decision from the California Court of Appeal shows a continued split of authority as to the meaning of California Probate Code section 859, which allows doubles damages for the wrongful taking of property under specified circumstances.

In Keading v. Keading (2021) 60 Cal.App.5th 1115, the Court of Appeal ruled that a trial court can impose double damages, 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.  The Keading court disagreed with a recent decision of another Court of Appeal, leaving a conflict (akin to conflicting road signs) that may not be clarified until the Supreme Court or the Legislature wades into the fray. Continue Reading

Court May Compel Mediation of California Trust Disputes

(Editor’s Note: This post has been updated following the Court of Appeal’s opinion after rehearing.)

Trust and estate litigators, and mediators, are buzzing over a recent decision from the California Court of Appeal that validates mandatory mediation of trust disputes.

In Breslin v. Breslin (2021) ___ Cal.App.5th ___, the appellate court by a 2-1 majority held that a California probate judge may order the private mediation of trust disputes and then disallow the objections of any nonparticipating parties to a settlement agreement reached in mediation.

The upshot of the case, assuming the opinion becomes final, is that probate judges may be more inclined to require pre-trial mediation and parties will need to participate to avoid waiving their beneficial interests. Continue Reading

Judge Joginder Dhillon to Preside, by Zoom, in Sacramento County Probate Department

The probate unit of the Sacramento County Superior Court (Department 129) will have a new judge in February 2021.  Judge Joginder Dhillon will become the probate judge, replacing Judge Kevin R. Culhane who has served in that role since January 2020. Continue Reading

Lights, Cabin, Action! A Showdown Over Jurisdiction and Venue

One of the first steps before filing a lawsuit is to decide which court has jurisdiction over it and where it is properly venued.  It’s a significant choice – not only for strategic reasons, but also because a poor selection may prove fatal to the lawsuit.  Such a hefty decision is not always an easy one.  The concepts of “jurisdiction” and “venue” can often be confused and tangled, even by experienced lawyers and judges.  In the probate context, there can moreover exist extra layers of complexity that can torment a plaintiff who simply wants to vindicate his or her rights.

In Capra v. Capra (2020) __ Cal.App.5th __, the Third District Court of Appeal in Sacramento wrestled with the interrelationship between the concepts of “jurisdiction” and “venue,” particularly in the probate context.  The court endeavored to slice through this Gordian knot, adding more clarity for plaintiffs who just want to commence their lawsuit on the right foot – or, in this case, courtroom. Continue Reading

Take a Fire Prevention Approach to Your Estate Plan

As we enter the New Year, it’s a good time to revisit your estate plan.  The big question is whether your will, trust, power of attorney, and advance health care directive accomplish your personal objectives.  Guidance from an estate planner will help you review your plan in light of tax and other changes in the legal landscape, as well your evolving personal circumstances.

Consider also the possibility of family conflict, upon your incapacity or death, over the administration of your trust and estate.  A “fire danger” sign provides the perfect illustration.  What’s the risk of fire, i.e., litigation in a California probate court, involving your estate plan?  To further embrace the metaphor, what might you do, as a “fire prevention approach,” to reduce the possibility of divisive and expensive conflict? Continue Reading

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