Estate Planning

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Pint of Craft BeerA primary purpose of estate planning is to determine what a child will inherit (if anything) upon a parent’s death.  But what about a gift given during the parent’s life?  Is it an advance on the child’s inheritance, like putting it on the child’s tab until the trust is cashed out?  Or is the gift in addition to anything the child will get upon the parent’s death?  The answer in California depends on the parent’s intent when the gift was made – more specifically, whether the parent wanted it to be an advance.  The problem is determining the parent’s intent after death.

California Probate Code section 21135 describes the circumstances under which a lifetime gift will be considered an advancement against a beneficiary’s inheritance.  In Sachs v. Sachs (2020) 44 Cal.App.5th 59, the Court of Appeal examined Section 21135 and concluded that a parent’s written records of lifetime gifts established them as an advancement against a child’s inheritance.  This opinion provides guidance to parents who make gifts and to siblings in conflict over them.

Senior woman and caregiverAs our population ages, more of our seniors are moving into assisted living facilities.  The number of such facilities has nearly tripled over the past two decades, with construction of memory care units the fastest-growing segment of senior care.  Half of assisted living residents are age 85 and older, and over 40 percent have some form of dementia.

In “How Not to Grow Old in America,” an article by Geeta Anand in the New York Times last year, the author discusses caring for her parents, notes the above trends, and argues that if assisted living “is to be a long-term solution for seniors who need substantial care, then it needs serious reform, including requirements for higher staffing levels and substantial training.”  She cites examples of deaths and injuries that have befallen seniors at assisted living facilities in California and elsewhere.

While Ms. Anand’s focus is on the physical care of seniors in assisted living, the transition from a home environment to an assisted living environment also can lead to serious financial elder abuse.

A recent California appellate case, Stewart v. Superior Court (2017) 16 Cal.App.5th 87, validates the primacy of medical powers of attorney and (as they are more currently known) advance health care directives.  Medical providers who disregard the instructions of duly-appointed health care agents by providing unauthorized treatment may be liable in California for elder abuse in addition to medical malpractice.

We focus our blog on the financial aspects of California trust and estate disputes.  But, as we increasingly become involved in “parent custody” fights and other conflicts over the care of elder and dependent adults, it is important to understand the authority vested in an agent under a health directive.

No contest clauses are an ever-evolving area of the probate law in California.  The Court of Appeal further refined the rules governing no contest clauses in a decision issued last week, Aviles v. Swearingen (2017) 16 Cal.App.5th 485.  In brief, in order for a no contest clause to apply to a trust amendment, the no contest clause must be stated in the amendment or the amendment must expressly reference the no contest clause set forth in a prior document.

The takeaway from the case for estate planners is that if your client wants a no contest clause, then you must mention the no contest clause in every trust amendment that you draft for the client.  It is not good enough to simply include a no contest clause in the client’s trust and then refer back to that trust, generally, in later amendments.  Each subsequent amendment must either contain its own no contest clause or must expressly reference the no contest clause of the original trust instrument.

Although much wealth passes today through trusts and beneficiary designations, we occasionally handle California probate disputes that turn on the validity of wills, sometimes involving high value estates.

The standard practice in California estate planning is for wills to be typewritten and prepared by attorneys, but those steps are not necessary.  A holographic, i.e., handwritten, will can have just the same effect.

One of the most dramatic areas of California trust and estate litigation is no contest clauses.  No contest clauses bring a made-for-tv excitement to the practice of trust and estate law because of the risk of disinheritance.  Yet such clauses are widely misunderstood, even among attorneys.

FAQsIn our Sacramento trust and estate litigation practice there are several questions that come up over and over again.  In many instances, these questions are the building blocks of our practice that lead to more complicated questions that sometimes require the filing of a lawsuit to answer.  As a starting place, below are some of the more common questions we receive from trustees and from beneficiaries.

Digital AssetsNext time you schedule an appointment with Downey Brand’s Sacramento office to revise your estate plan you will have a new question to consider: who will manage your Facebook account when you’re gone?

Assembly Bill No. 691, which became effective on January 1, 2017, attempts to aid in that process.  It is commonly called the Revised Uniform Fiduciary Access to Digital Assets Act (the “Act”), and it establishes a scheme for designating who is entitled to access your online accounts (and what portions of those accounts) after your death.  The Act has been added to the California Probate Code at sections 870 to 884.

Deed TransferCalifornia’s new transfer on death deeds (“ToD deeds”) allow for the transfer of real estate upon the occurrence of death without the need for costly estate planning or probate administration. Codified at California Probate Code section 5600 – 5696, the new mechanism may fill a void in the array of estate planning options, but it is not likely to catch on with traditional estate planning attorneys for the reasons discussed below.

Fresno attorney Mark Poochigian presented a thoughtful and at times critical assessment of ToD Deeds at a Sacramento County Bar Association luncheon in June. At the Summer Education Conference of the California State Bar Trusts and Estate section, only one of the more than one hundred attorneys in attendance acknowledged having prepared one of these new deeds since the law went into effect on January 1, 2016.