“An ethical estate planning attorney will plan for his client, not for himself.” With those words, the California Court of Appeal recently ripped Southern California attorney John LeBouef for taking advantage “of an elderly and mentally infirm person to enrich himself.”
In Butler v. LeBouef (2016) 248 Cal.App.4th 198, the appellate court affirmed the invalidation of John Patton’s will and trust, which purportedly left Patton’s $5 million estate to LeBouef. The ruling illustrates the Probate Code’s prohibition of donative transfers to categories of persons who, because of their relationship with the creator of a trust, might exercise undue influence. The law, in particular, presumes that an attorney who drafts a trust in which the attorney is named as a beneficiary does so without the client’s knowledge and consent. The opinion also shows how contestants can use evidence of other “bad acts” to bolster their cases if those other acts show a common plan or scheme.
Patton was a renowned interior designer and LeBouef was his acquaintance. After Patton’s domestic partner died in 2004, LeBouef frequently drove up from Los Angeles to Santa Barbara to visit and stay the night. In 2006, Patton allegedly changed his will and created a trust that named LeBouef as principal beneficiary and LeBouef’s friend as recipient of a vintage car. In prior wills, Patton had favored his two nieces and a longtime friend.
When Patton died, the nieces filed a trust contest, claiming that LeBouef had either drafted or transcribed Patton’s will and trust to benefit himself. LeBouef defended on the theory that another attorney, whose identity was unknown, had drafted the will/trust.
Donative Transfer Statute Can Zap Gifts to Drafters/Transcribers
The identity of the drafter was the central issue because of California’s donative transfer statute, principally codified at Probate Code section 21380. This law presumes that written donative transfers, including distributions contained in trust instruments, are presumptively invalid if the recipient is a person who drafted the document, or (where a fiduciary relationship exists) transcribed the document or caused its transcription. The logic here is that drafters and transcribers are uniquely situated to favor themselves when documents are created. With respect to drafters, the presumption of undue influence is conclusive.
LeBouef could not take advantage of two exceptions that often avoid the statutory presumption of undue influence. Under California Probate Code section 21382, he was not a relative of Patton by blood or affinity within the fourth degree. This exception, for example, permits an attorney to draft an estate plan for a parent, uncle or first cousin that names the attorney as a beneficiary without triggering the presumption of invalidity. Likewise, LeBouef could not come up with a “certificate of independent review,” defined by Probate Code section 21384, which would require another independent attorney to have reviewed the will/trust, counseled Patton outside of LeBouef’s presence, and concluded that the transfers to LeBouef were not the product of fraud or undue influence.
Without these safe harbors, LeBouef had to persuade the trial judge, over the course of the five week trial, that he had nothing to do with drafting Patton’s 2006 will/trust.
Evidence of “Prior Bad Acts” Can Be Powerful
California Evidence Code section 1101 limits the circumstances under which a party can offer evidence of the opposing party’s “prior bad acts.” While evidence of a person’s character is generally inadmissible to show his conduct on a specified occasion, “bad acts” are admissible under section 1101(b) to show a common plan or scheme if the probative value of the evidence outweighs the potential for prejudice.
Here, the contestants apparently had a treasure trove of evidence relating to LeBouef. They offered evidence of eight other incidents in which he supposedly befriended an elderly person and then drafted a will or trust naming himself or his domestic partner as principal beneficiary. The trial court limited the prior bad acts evidence to two of the eight incidents. In the first of those incidents, LeBouef helped Irene Grant, a caretaker of Walter Pick, inherit $2.5 million from him by drafting Pick’s will. LeBouef then married Grant, who was 20 years his senior, and wrote a trust by which he became Grant’s principal beneficiary. In the other incident, LeBouef befriended Audrey Cook, an elderly widow, and wrote amendments to her trust that left most of her estate to LeBouef’s partner.
At trial, the contestants persuaded the court that the probative value of the Grant and Cook incidents substantially outweighed the potential for prejudice. A forensic document examiner testified that the same misspelled words, unusual sentence structure, grammatical errors and font irregularities were in the Cook and Patton trust instruments, such that it was “virtually certain” they were produced by the same person.
The trial judge found that LeBouef had staged the theft of the original trust document to thwart its forensic examination based on the timing of the alleged theft and the fact that the thief left behind expensive watches and artwork that were in plain sight.
Court Drops “Le Hammer” on LeBouef
The appellate court upheld the invalidation of the 2006 trust that favored LeBouef, affirmed the award of $1,256,971 in attorney’s fees against him, and rejected his requests for a trustee’s fee and payment/reimbursement of legal and other expenses. In a nod to the importance of recordkeeping, the court observed that doubts arising from a trustee’s failure to keep or produce records relating to trust administration are to be resolved against the trustee. And this may not be the end of the story for LeBouef: the court sent its published opinion to the State Bar of California for possible disciplinary proceedings and also to the Santa Barbara District Attorney.
Butler v. LeBouef, in short, shows the robust nature of the donative transfer statute in blocking transfers to non-family member attorneys who participate in estate planning.