Beneficiaries

Subscribe to Beneficiaries

It has become more common for trustors to select someone who is not a beneficiary of the trust estate, often a close relative, to serve as trustee. While the “crown” of trusteeship imbues that trustee with tempting powers – including over that mound of “gold” sitting in the trust – it also comes with duties that must be followed. As Uncle Ben cautioned Peter Parker, “With great power comes great responsibility.”

A trustee generally has a duty to remain neutral in a dispute over who is the rightful beneficiary under a trust that involves no attack on the validity or assets of the trust itself. As the courts held in Whittlesey v. Aiello (2002) 104 Cal.App.4th 1221 and Terry v. Conlan (2005) 131 Cal.App.4th 1445, this duty means that a trustee cannot spend from a trust to favor one side over another. But does this duty not to meddle in beneficiary clashes apply even when a trustee is not a beneficiary, with nothing to gain?

In a prior post, we explained how this was one of the questions that Whittlesey and Terry left unresolved. Enter Zahnleuter v. Mueller (2023) 88 Cal.App.5th 1294, an appeal that Downey Brand LLP successfully defended. The Court of Appeal has now held that, yes, the duty to remain neutral applies to all trustees regardless of beneficial interest.…

When does a California estate planning attorney owe a duty of care to people other than the client?  Planners can breathe easier after a recent appellate ruling. The court clarified the limits on legal malpractice claims brought by nonclients.

In Gordon v. Ervin, Cohen & Jessup LLP (2023) 88 Cal.App.5th 543, the court explained that a client’s intent to benefit a nonclient must be clear, certain and undisputed in order for the lawyer to owe a duty to the nonclient. If the facts are ambiguous, the nonclient cannot sue the lawyer for malpractice.…

Who’s your father for inheritance purposes in California? Family Code section 7540(a) states that “the child of spouses who cohabited at the time of conception and birth is conclusively presumed to be a child of the marriage.” A child covered by this marital presumption is not an heir of a deceased third person even if genetic testing proves a parent-child relationship.

In Estate of Franco (2023) 87 Cal.App.5th 1270, the Court of Appeal clarified that, in order for the marital presumption to be applied, there must be a clear showing of cohabitation (living together) at the time of conception and birth.…

California probate courts may appoint guardians ad litem (“GALs”) to represent the interests of those who cannot speak for themselves, including minors. While Probate Code section 1003 provides for the appointment of GALs, it does not speak to their removal. A recently published opinion, Chui v. Chui (2022) ___Cal. App. 5th ___ (“Chui II”)…

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

In Estate of Eskra (2022) 78 Cal.App.5th 209, 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…

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…

We begin the year with a case, Riverside County Public Guardian v. Snukst (2022) ___ Cal.App.5th ___, involving an elder with dementia who received Medi-Cal benefits.

The case, a blast from the past, illustrates how the State of California, under the law in effect until several years ago, could recoup the cost of such…

Daniel Spector has litigated trust and estate cases in Northern California since the early 1990s. He is now focusing his practice on mediating trust and estate disputes across California, working with Judicate West. Dan is a colleague on the Executive Committee of the Trusts and Estates Section of the California Lawyers Association, and I…

While Disneyland may be the “Happiest Place on Earth,” a California probate court may be the opposite for a Disney heir, mused the U.S. Court of Appeals in Lund v. Cowan (9th Cir. 2021) 5 F.4th 964. Bradford Lund, a 50 year-old grandson of Walt Disney, sued the probate judge who rejected a settlement…

(Editor’s Notes: Lauren Murvihill is a summer associate at Downey Brand. She is a student at UC Davis School of Law.  In September 2021, after publication of this post, the Governor approved Senate Bill 315.)

The thrifty do-it-yourselfers among us might jump at the opportunity to transfer their family home to their kids while avoiding…