Inheritance Disputes

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Anti SLAPPIn heated California trust and estate litigation, one party’s petition to the probate court often leads the other side to file a retaliatory petition. If Sally petitions in Sacramento County Superior Court to contest Mom’s trust amendment on the ground that Mom had Alzheimer’s disease and lacked sufficient mental capacity to reduce Sally’s share, brother Bob may file a petition to enforce the no contest clause in the trust against Sally and thus seek to intimidate her.

Yet retaliatory claims can be radioactive for those who assert them given California’s “anti-SLAPP” statute, codified at Code of Civil Procedure section 425.16. “SLAPP” is an acronym for “Strategic Lawsuit Against Public Participation.” The statute creates a “special motion to strike” frivolous claims that aim to chill the valid exercise of speech and petition rights. A petitioner faced with an anti-SLAPP motion quickly finds himself on the hot seat. If he lacks evidence to substantiate his claims, the court will dismiss them and require him to pay his opponent’s legal expenses.

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.

CrownPrince died in April 2016 without a will or trust, according to documents recently filed by his sister in the Carver County District Court in Minnesota. Perhaps a will or trust will surface eventually, as occurred with Michael Jackson’s estate. However, the revelation in “The Morning Papers” that Prince died intestate (legalese for no will or trust) provides an occasion to muse on the “Controversy” that can erupt in California courts when a person of even moderate means lacks an estate plan, while recalling several song titles along the way.

Alzheimer's Word Cloud_RevisedFor a richly-detailed profile of a woman’s experience with Alzheimer’s disease, read “Fraying at the Edges,” an article by N. R. Kleinfield that appeared on May 1, 2016 in the New York Times. The author follows Geri Taylor, who was first diagnosed with Mild Cognitive Impairment in 2012 at age 69, and introduces us to her husband and other family members, friends, and participants in support groups.

Although the article does not discuss any conflict over Ms. Taylor’s finances or estate plan, the vivid descriptions of her experience with Alzheimer’s disease illuminate the complexity of its effects on mental function. When an elder with Alzheimer’s disease makes a controversial estate planning change, the variable impact of the disease leads to challenges in assessing the elder’s mental capacity and vulnerability to undue influence, and thus substantial uncertainty in the outcome of a trust contest, will contest, financial elder abuse claim or contested conservatorship.

IcebergSpotting undue influence is no easy task for estate planning attorneys. When Mom wants to change her trust to favor Sally over Johnny, Mom presumably is making her own choice for her own reasons. But it’s also possible that Sally, behind the scenes, is pushing Mom to make the change.

An estate planner is like a mariner viewing an iceberg. The top 10 percent of an iceberg is visible above the ocean’s surface while the bottom 90 percent is unseen and potentially hazardous. A planning attorney typically interacts with the client for a relatively brief period of time outside of the client’s home, and is unfamiliar with the events that led up to the client’s arrival. So what can the attorney do to look out for undue influence?

Woman reading bookOn a road trip over the holidays, I listened to John Grisham’s Sycamore Row, as artfully read by Michael Beck. Published in 2013, it’s a sequel to Grisham’s first novel, A Time to Kill, and again features young country lawyer Jake Brigance. This time, instead of an accused man, he’s defending the handwritten will of Seth Hubbard. Hubbard, a shrewd businessman, had a terminal illness and near the end of his life wrote a new will to favor his housekeeper over this two children.

Are will contests in California like the contest featured in John Grisham’s legal thriller? Yes and no.

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.

Sound estate planning requires a clear description of how property will pass upon death – in other words, who gets what. So what happens when the written terms differ from what the will’s creator actually wanted?

Earlier this year, the California Supreme Court ruled in Estate of Duke (2015) 61 Cal.4th 871 that courts may correct a mistake in the wording of a will even if the language in question is not ambiguous. The proponent of the correction (also known as reformation) must provide clear and convincing evidence of both (1) a mistake in the expression of intent and (2) the actual specific intent of the maker when the will was written. The decision opens the door in California to a new kind of trust and estate litigation.

Inheritance fights are nothing new, nor is public fascination with them. Charles Dickens published Bleak House in 1853, satirizing the English legal system in the context of the fictional case of Jarndyce v. Jarndyce. More recently, John Grisham’s Sycamore Row, released in 2013, was at the top of the New York Times best seller list.

Are trust and estate disputes on the rise in California? I haven’t seen hard evidence on one side or the other, but it seems that a confluence of factors creates a rising tide.