Hands of Elderly Parent and DaughterMost will and trust contests in California start several months after the death of the person who created the document. Such litigation has a forensic quality: did Mom have sufficient mental capacity back when she signed the will/trust, or was she the victim of undue influence? Mom is not around to testify as to what she thought and wanted, nor can expert witnesses meet her to evaluate her capacity. If the documents were executed many years ago, the trail of evidentiary breadcrumbs may be faint. A lawyer who contests old estate planning documents may find inspiration in Sherlock Holmes.

Increasingly, however, the fight over Mom’s trust will flare during her lifetime. For example, if Mom has moderate Alzheimer’s disease and a family member petitions the court to appoint a conservator over her estate (i.e., financial affairs), the court may review Mom’s estate plan and modify its terms if appropriate. Through the “substituted judgment” process laid out in the California Probate Code, the court for example might cancel a recent trust amendment on the ground that Mom did not sign it of her own free will, thereby restoring the prior version of the trust. In the conservatorship setting, the court need not wait for Mom’s death to evaluate the validity of the trust documents, and an earlier review may lead to a better result if evidence presently available, such as the testimony of a key witness, may be lost with the passage of time.

A few years ago, the California Court of Appeal rocked the trust and estate litigation world by publishing Drake v. Pinkham (2013) 217 Cal.App.4th 400. In Drake, the court considered trust amendments that Josephine executed favoring daughter Janice over daughter Gina. Several years before, when Josephine was alive, Gina had filed a petition asking the court to confirm Gina’s status as co-trustee due to Josephine’s alleged inability to care for herself and act as trustee, and also due to Janice’s supposed undue influence over Josephine. The family members entered into a settlement agreement that resolved the litigation without deciding the validity of the trust amendments. Gina waited until after Josephine died to challenge them.

Applying the equitable doctrine of “laches,” the appellate court ruled that Gina had waited too long to challenge the amendments. Since she had alleged in her first lawsuit that Josephine was mentally incompetent (and thus had lost the ability to revoke or modify her trust), Gina had standing before Josephine died to contest the amendments. As the court explained, a plaintiff cannot proceed if she unreasonably delays in pursuing her claim and the delay causes prejudice. The court determined that Gina’s challenges to the amendments revolved around Josephine’s mental capacity and Janice’s influence over Josephine, such that Josephine’s death meant the absence of an important witness.

The key lesson of Drake is that beneficiaries cannot simply wait until Mom is deceased to contest trust amendments that disfavor them if they know (or should know) of the amendments and also know (or should know) of Mom’s incapacity. Thus, if Mom has dementia and her children seek a conservatorship over her estate on the ground that her new “friend” got her to sign a trust amendment favoring him, the children may have to press forward with a contest of that amendment so as to avoid losing the right to do so in the future. This may discourage the children from pursuing the conservatorship or make the conservatorship litigation more complex than it would otherwise need to be.

Indeed, pre-death contests require the court to consider the perspective of the creator of the challenged trust amendment. Yet, if Mom has dementia and is under the sway of “friend,” to what extent should Mom and her court-appointed lawyer participate in the litigation? If Mom tells her lawyer to oppose the contest, should the lawyer zealously do so at Mom’s expense? Or should the lawyer instead take a neutral role and let the favored “friend” and the disfavored family members hash out the validity of the amendment? There are no easy answers to these questions and California appellate courts have yet to provide guidance.

While there is logic behind Drake v. Pinkham, it will tend to accelerate litigation in California. Beneficiaries who know of questionable estate planning changes will need to evaluate whether to proceed with contests before Mom is gone, and the prospect of attacking Mom’s trust amendment while also caring for her may be profoundly uncomfortable.