En Garde! A Trust’s Revocation Method May Not Be Enforced Unless It Explicitly States It’s the Exclusive Means of Revocation

Creators of trusts (also known as settlors or trustors) usually think long and hard about how their property should pass when they die.  It’s therefore common for trustors, or their lawyers, to incorporate protective safeguards into their trust instruments to shield trustors from their own whim and indecision, and ensure nobody trifles with their wishes should they become vulnerable to undue influence.  Among these safeguards are revocation procedures, which may require that a revocation document be signed by a particular person and/or delivered to the trustee.

The California Legislature has, however, codified its own “default” method of revocation, allowing – under Probate Code section 15401(a)(2) – a trust to be revoked by a writing signed by the trustor and delivered to the trustee during the trustor’s lifetime.  But what happens when the trustor’s chosen revocation procedure is stricter than that permitted under section 15401(a)(2)?  Must the trustor follow his chosen revocation procedure, or is he or she permitted to simply comply with the Legislature’s default method?  In Cundall v. Mitchell-Clyde (2020) __ Cal.App.5th __, the Second District Court of Appeal held that for a trust’s revocation procedure to be the exclusive revocation method, it must expressly specify that it is the only such method. Continue Reading

Home Sweet Home – California Legislature Aims to Safeguard Conservatee Residences

Effective January, 1, 2020, the Legislature changed California conservatorship law with respect to the personal residences of conservatees.  Senate Bill 303 attempts to protect conservatees by making it harder to relocate them from and sell their residences.  Proponents argued that existing law made it too easy for conservators to liquidate the homes of conservatees.  The Judicial Council of California unsuccessfully requested a veto, raising competing policy concerns.

Since many California conservatorships involve an elder who lives at home, or who potentially could return home, the new law has become an important part of the conservatorship landscape. Continue Reading

Guardian of the Galaxy – What is the Role of a Guardian Ad Litem in Trust and Estate Disputes?

Most California trust and estate disputes involve adults who can make their own choices about what to seek and how hard to litigate, such as the common scenario of siblings competing for assets.  But many disputes, or at least potential disagreements, involve people who can’t fend for themselves, such as mentally incapacitated adults, children, or even unborn potential beneficiaries who are a glimmer in the mind’s eye.

In such a situation, a probate judge may need to appoint a guardian ad litem or “GAL” to act as a surrogate decision maker.  In prior posts, we’ve touched on situations where appointment of a GAL may be helpful or required.  Here we aim to hit the nail on the head. Continue Reading

How Does Amended California Emergency Rule 9 Affect Probate Proceedings?

(Editor’s Note: The example in the post below has been revised.)

California causes of action are subject to various statutes of limitation.  Unless a plaintiff or petitioner files a complaint or other document asserting a cause of action within the applicable limitations period, the filing will be deemed time barred and subject to dismissal.  Under some circumstances, however, statutes of limitation may be tolled or suspended so as to extend the filing period.

When the COVID-19 pandemic caused court closures, the California Judicial Council responded with Emergency Rule 9, which tolled the statutes of limitation for civil actions from March 6, 2020 until 90 days after the Governor lifts the state of emergency, which will not occur until an unknown future date.

The initial emergency rule, issued April 6, has now been revised and partially clarified.  As California courts began to reopen in May, the Judicial Council chose to put a clearer endpoint on the tolling of limitations periods.  A memorandum from the Judicial Council provides background on the amended rule. Continue Reading

California Powers of Appointment: Follow Instructions When Exercising

In California, a trustor (person who creates a trust) can confer a “power of appointment” on trust beneficiaries, empowering them to designate to whom they want to give their shares of the trust.  The trustor can require trust beneficiaries to specifically exercise and refer to the power of appointment in any will they create to designate who should get their shares of the trust.

What happens if a trust beneficiary creates a will that gives away his or her trust shares without specifically referring to the power of appointment as required by the trust?  Can a California probate court fix the defect by amending or reforming the will to include a specific reference to the power?

The California Court of Appeal answered this question in the negative in Estate of Eimers (2020) ___ Cal.App.5th ___.   The court held that, although reforming a will is permissible if extrinsic evidence establishes a testator’s intent, a will cannot be reformed if it would achieve a work-around of the power of appointment requirements in the Probate Code.  In short, a court cannot reform a will when the testator fails to follow the directions for exercising a power of appointment. Continue Reading

What California Trust and Estate Litigation Will Arise from the Economic Downturn?

The COVID-19 pandemic has idled workers and the coming weeks will bring more news of business closures and bankruptcies.  After a decade of sustained growth, we are facing a recession of uncertain depth and duration.  The New York Times recently reported that some Americans are turning (or perhaps returning) to “financial therapy” for support.

In the trust and estate world, how dark are the approaching storm clouds?  More specifically, how might the economic downturn cause California trust and estate litigation?  From this blogger’s perspective, claims are likely to increase as a result of declining asset values, growing demands for trust distributions, and anxiety associated with economic insecurity.  As always, however, allegations are easier to make than to prove. Continue Reading

Helping Families and Solving Problems – A Conversation with Trust Officer Alysia Corell from Exchange Bank

Bank trust departments, also referred to as corporate trustees, provide professional management to the administration of California trusts.  People may choose to name a bank to act as successor trustee when they can no longer manage their own assets, either because they don’t have family members they can count on to handle assets or because they don’t want to burden family members with the role. Sometimes family members or a court may appoint a bank to take the place of an acting trustee as a means to resolve disharmony amongst the parties.

Alysia Corell joins us here to share her experiences as a trust officer.  Alysia grew up in the Mt. Shasta area of Northern California and traveled south to attend San Diego State University where she majored in communications.  She began to work in a bank trust department in 2003 and became a Certified Trust and Financial Advisor in 2008.  She is a past president and current member of the Sacramento Estate Planning Council and a member of the South Placer Estate Planning Council.  In 2018 Alysia joined the trust department of Exchange Bank. Continue Reading

California Court May Award Attorney’s Fees to Financial Elder Abuse Plaintiff Who Does Not Prove Damages

A new case from the Court of Appeal once again illustrates the robust nature of claims under California’s Elder Abuse and Dependent Adult Civil Protection Act, also known as the Elder Abuse Act.

In Arace v. Medico Investments, LLC (2020) 48 Cal.App.5th 977, a San Bernardino County jury found the owner of a residential care facility for the elderly liable for the financial elder abuse of a resident, but did not award any damages on that claim.  Nonetheless, the court properly awarded legal expenses to the plaintiff as the prevailing party.  This broad view of a plaintiff’s entitlement to legal expenses shows the bite of the Elder Abuse Act and will encourage elders and their advocates to pursue financial elder abuse claims. Continue Reading

Trustees May Not Need Lawyers to Seek Instructions from California Courts, But the Do-It-Yourself Approach Remains Hazardous

While California trustees hope for smooth sailing, they must navigate waters that can be choppy depending on the assets, trust instruments and personalities involved.  As fiduciaries, trustees must honor the trustors’ intent as expressed in the trust instruments.  Sometimes the language is unclear and the trustee needs instruction from a court as to how to proceed.

If they are not already working with an attorney, most trustees will (and should) seek guidance from counsel when uncertain about what to do.  An attorney, generally at the expense of the trust, can help the trustee decide whether to file a petition for instructions, draft the necessary paperwork, serve it on parties entitled to notice, and then appear in the probate department of the court on behalf of the trustee.  Some DIY-minded trustees, however, may be inclined to proceed without paying an attorney.  Business & Professions Code section 6125 provides that a person can’t practice law unless he/she is an active member of the State Bar of California.  When can a trustee represent himself or herself in court without engaging in unauthorized practice of law?

Earlier this month, the Court of Appeal held in Donkin v. Donkin, Jr. (2020) 47 Cal.App.5th 469 that individuals acting as trustees may represent themselves when seeking instructions from a California court.  Yet, like an inexperienced sailor who attempts a solo ocean journey, a trustee who proceeds without counsel risks serious missteps such that self-representation may end up being far more costly in the long run. Continue Reading

New California Statutes Change Spousal Undue Influence Presumptions

California trust and estate disputes often involve allegations that a surviving spouse took advantage of a deceased spouse so as to get more of the latter’s assets.  Often the “spousal financial abuse” charges are leveled by the deceased spouse’s biological children against their step-parent, as discussed in a prior post.  Sometimes care custodians who are hired to care for vulnerable elders marry them to achieve financial gain, much to the surprise and consternation of surviving family members.

Assembly Bill 327 and Assembly Bill 328, passed by the California Legislature last year and effective on January 1, 2020, adjust the statutory presumptions of undue influence that apply to spouses with respect to estate planning.  The legislation was sponsored by the Trusts and Estates Section of the California Lawyers Association.  On March 24, 2020, attorney Ellen McKissock explained AB 327 and 328 in a webinar entitled “Care Custodians and Spouses: New Legislation Affecting Their Rights.”  Ms. McKissock is Vice Chair of the Executive Committee of the Trusts and Estates Section. Continue Reading

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