Trust Administration

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When attorneys advise errant trustees, how vulnerable are they to breach of trust claims by injured beneficiaries?  A case published last week by the California Court of Appeal provides a defensive roadmap to attorneys who are sued for such claims, along with an occasion for golf metaphors.

In Cortese v. Sherwood (2018) 26 Cal.App.5th 445, the appellate court ruled that attorney John Sherwood was protected by California Civil Code section 1714.10, which was enacted in 1988 to combat the use of frivolous conspiracy claims brought as a tactical ploy against attorneys and their clients.  Since the plaintiff failed to obtain the court’s approval before suing the attorney, as the statute required, she could not bring her claim against him.  She could not get off the first tee.

The attorney-client privilege in California belongs to the office of trustee, not to the incumbent in that office, thus generally allowing successor trustees to obtain confidential communications that their predecessors had with counsel.  We blogged last year about an appellate opinion that reinforced this concept.

Last month, in Morgan v. Superior Court (2018) 23 Cal.App.5th 1026, the Court of Appeal found that a clause in a trust instrument expressly allowing a trustee to withhold attorney-client communications violates public policy and is unenforceable.  California estate planning attorneys take note: there is no way to draft around the rule that the attorney-client privilege stays with the office of trustee.

Stepmothers are frequent characters in California trust and estate litigation, as they are in fairy tales and Disney movies.  With about half of all marriages ending in divorce, there are many stepmother/stepchild relationships.  Mostly they work out fine, but some go south.

After blogging on sibling conflicts as a driver of trust and estate disputes, I offer thoughts today about the litigation I see between stepmothers and stepchildren.  In Family Feud parlance, my personal survey says that step-parent relationships are a close second to sibling relationships as the setting of trust and estate litigation.  I’ll focus on stepmothers here, though of course stepfathers also often clash with their stepchildren.

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.

California’s anti-SLAPP statute has generated another published case for trust and estate lawyers to ponder.  Last week, in Urick v. Urick (2017) 15 Cal.App.5th 1182, the California Court of Appeal confirmed that anti-SLAPP motions can be used to attack petitions to enforce no contest clauses.

The opinion reminds California trust and estate counsel to be cautious when using petitions to attack the court filings of other parties.  At the same time, the opinion demonstrates that a well-conceived attack on an adversary’s filing ultimately should not fall to an anti-SLAPP motion, even if it takes an appellate court to set things right.

SLAPP is an acronym for “Strategic Lawsuits Against Public Participation.”  To discourage and weed out such suits, the Legislature created a special procedure to challenge them.  Last year we wrote about the use of anti-SLAPP motions as a defensive tool in trust and estate litigation.   We discussed the use of such motions to challenge efforts to enforce no contest clauses, using an unpublished appellate case as an example.  With Urick, we now have published authority in California for guidance.

I’m a sibling lawyer.  My career started early, as a middle child, and now continues as a Sacramento-based trust and estate litigation attorney.  Most of my clients are grappling with sisters or brothers over the care and finances of aging or deceased parents.  In Family Feud parlance, my “survey says” that sibling versus sibling is the top category of matchups in California trust and estate disputes.

Will this happen in your family?  What leads siblings to litigate?  In many of my cases, cracks in family relationships were evident long before anyone filed papers at the courthouse.  But I’ve had many clients tell me they were always close to their siblings and “never saw it coming.”

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.

California trust and estate disputes may be avoided or resolved with the appointment of a private professional fiduciary to act in an oversight role with respect to an elder’s care and/or finances.  In a recent post, we suggested the use of professional fiduciaries or bank trust departments to resolve conflicts among family member co-trustees.

Here we’ll focus on professional fiduciaries as an option, drawing on our experience as trust and estate litigation attorneys.  We usually represent family members in conflicts.  Sometimes we represent professional fiduciaries.

Hands TiedCalifornia trust litigation often stems from disagreements and hostility among family member co-trustees.  Rather than picking one of their kids to serve as sole successor trustee when they die or become incapacitated, Mom and Dad often appoint two or more of their children to act together as successor co-trustees.

Having more than one child serve as co-trustee can work out well or turn into a nightmare.  In this post we’ll discuss the challenges associated with sibling co-trustees and how controversy might be avoided.

Businessman running with butterfly net chasing money which is flying in the air. Finance business concept.

Trustees in California trust disputes should not overlook the power of the constructive trust remedy as a way to recover errant trust assets.  That’s a takeaway from Higgins v. Higgins (2017) 11 Cal.App.5th 648, an opinion in a trust litigation case published last week by the California Court of Appeal.

A Los Angeles Superior Court trial judge found a “clear moral obligation” on the part of Lupe Higgins to return several hundred thousand dollars to the Higgins Family Trust, but could not find a legal obligation, so the judge apologized to the Higgins family for being powerless to restore the funds.  The appellate court did not like the sound of that music and came to the rescue, ruling that the trial court had discretion to compel Lupe to transfer the money to the trustee of the Trust.