ESTATE PLANNING

Published on: December 14, 2015

Simpsons Co-Creator’s Trust Faces $140,000 Bill for Dog Care

Many people are animal lovers, but few could match the dedication of the late Hollywood comedy writer Sam Simon. Simon, best known as one of the original developers of “The Simpsons,” died in March of 2015. His trust, reportedly worth “several hundred million dollars,” according to a recent story in The Hollywood Reporter, is expected to benefit a host of animal welfare causes, including Simon’s own eponymous foundation that helps rescue dogs.

The couple charged with caring for Simon’s own dog told the Hollywood Reporter that the trust has balked at continuing to pay for his care. Simon reportedly spent over $140,000 per year on the dog’s care. While that sounds like a staggering amount to most people, the Reporter noted the dog has a host of aggression and behavior problems requiring an extensive “medical and therapeutic care regimen.”

Simon’s will named a longtime friend who is also an experienced “canine-aggression trainer” as the dog’s caregiver. The trainer said that several years before his death Simon verbally promised he was “taking care of everything” with respect to the dog’s care. The trainer understood this to mean the Simon trust would continue footing the $140,000 per year bill for ongoing care. Simon’s trustee told the Reporter the trainer demanded a “ludicrous” lump-sum payment of $1.7 million but said she was still looking into the matter.

Published on: December 7, 2015

Not Leaving a Will Can Leave Your Heirs Confused

by Scott C. Soady

It is never a good idea to avoid estate planning. While California law does provide for the distribution of estates without a will—that is, persons who die intestate—this often ends up costing your estate (and heirs) additional time and money. In addition, if you do not make a will, you forfeit any say over who will take responsibility for your assets as executor, which can lead to further delays in settling your affairs.

Lack of Will, Grandson’s Litigation Delays Distribution of Oakland Woman’s Estate

Intestate estate distributions can also be more complicated than you might think. Consider this recent California case, which is provided here merely as an illustration and not a complete statement of the law. The deceased in this case was an elderly woman who died without a will. She left one “significant asset,” her home in Oakland. One of the deceased’s granddaughters was named her personal representative of the estate. She apparently failed to perform her duties as personal representative, however, and four years later, the court named her attorney—who said he was “unable to reach his client”—as special administrator just to get a formal accounting of the estate filed.

Published on: November 8, 2015

Joint Estate Planning Can Still Lead to Complications

by Scott C. Soady

Many spouses choose to execute a joint estate plan. For example, they may sign wills at the same time and promise to distribute property a certain way after the first spouse dies. Such agreements may be enforceable under California law, but it is important to follow certain procedures in the event the surviving spouse deviates from the plan. Things can get especially complicated when different family members in different states are involved.

Stepchildren Unsuccessfully Challenge Stepmother’s Trust

Here is a recent example. This case involves the application of California law to a complaint made before a federal court in New York. A husband and wife executed a joint estate plan in 1995. They agreed the surviving spouse would inherit all of the deceased spouse’s property, and upon the surviving spouse’s death, any remaining property would go to the husband’s two children from his first marriage. At the time of this agreement, the husband’s property included two apartments in New York City.

The husband died in 1998. The wife probated her husband’s will and, according to its terms, received all of his property, including the two apartments. Four years later, the wife created a revocable trust under New York law and transferred both apartments into it. She served as co-trustee together with her attorney. Unlike her will, which left her probate estate to her stepchildren, the trust provided a university located in New York would receive all of the trust assets upon her death.

Published on: November 6, 2015

California Laws Governing Assisted Suicide Remain in Limbo

by Scott C. Soady

A major part of estate planning is deciding how you wish to address quality-of-life issues if and when you suffer a terminal illness. Under current California law, a person has the “right to control the decisions relating to his or her own health care, including the decision to have life-sustaining treatment withheld or withdrawn.” The most common means of exercising this control is through a California Advance Health Care Directive.

While a doctor must honor your decision not to receive life-sustaining treatment, he or she may not assist you in ending your life, such as by providing prescriptions drugs designed to hasten death. Existing California law expressly disapproves of “mercy killing, assisted suicide, or euthanasia.” Indeed, a physician may be held criminally liable for assisting a patient’s death.

The End of Life Option Act

However, the law in this area is in flux. On October 5, California Gov. Jerry Brown signed the End of Life Option Act, a law permitting terminally ill patients to request a physician prescribe an “aid-in-dying drug” to enable them to die “in a humane and dignified manner.” The California legislature passed the Act during its ongoing special session to address healthcare issues. In a signing statement, Gov. Brown noted the ongoing political and ethical controversy over assisted suicide, but noted if he was dying and in extreme pain, “it would be a comfort to be able to consider the options afforded by this bill,” and he could deny the same right to other California residents.

Published on: October 19, 2015

Why Your Will Needs to Be Witnessed

by Scott C. Soady

Although you often hear stories about people contesting a will, it is not a simple process. Under California law, a person contesting a will has the burden of proving “lack of testamentary intent or capacity, undue influence, fraud, duress, mistake, or revocation.” In contrast, the person offering the will for probate only has the burden of proving “due execution,” that is, that the purported will meets the formal requirements of California law. So in most cases, proper estate planning can thwart a will contest.

Surviving Witness Proves Will 14 Years Later

Like most states, California law requires a will be signed by the person making it (the testator) and two witnesses. The witnesses need not read the will or understand its contents. Their role is simply to witness the testator declare the document in question is, in fact, his or her will. The witnesses must then sign the will in the presence of the testator and each other.

One reason wills must be witnessed by two people is that in the event of a contest, at least one of them will hopefully be available to testify in court as to the authenticity of the document. Here is an illustration from a recent case in San Diego which is discussed here for informational purposes only and should not be taken as an accurate statement of the law. This actually involved a contest to a will nearly 14 years after the testator’s death.

Published on: October 7, 2015

What Happens When Children Fight Over a Parent’s Estate?

by Scott C. Soady

You may think estate planning is unnecessary because California intestacy law automatically provides for the distribution of assets to your heirs, but intestacy law does not eliminate the need for an estate. Someone must still take responsibility for administering those assets and ensuring your heirs receive their fair share. Even when dealing with family members, this can fail to happen, leading to years of costly and unnecessary litigation.

Brothers Attempt to Exclude Sister from Father’s Estate

Here is a recent example from here in California. This case involves a man who died nearly 24 years ago without a will. Under California intestacy law, his three surviving children-two sons and a daughter-were entitled to equal shares of his estate. The estate itself included over 760 acres of timber property.

In the absence of a will nominating an executor, the probate court appointed one of the sons as administrator of the estate. Rather than sell the land and distribute the proceeds to his siblings, he decided instead to continue managing the property through the estate. According to court records, during this time he “did not communicate with his sister [], failed to file an accounting, failed to cooperate with or contact his attorney, and evaded service of citations to appear in court.” Seven years after his father’s death, the probate court suspended the son as administrator.

Published on: September 17, 2015

Why Is It Important to Make Your Estate Plan As Soon as Possible?

by Scott C. Soady

It is never advisable to wait until you are on your deathbed to finish (or start) your estate planning. This is especially true if there are potential complications with your estate, such as a pending bankruptcy, divorce or other issues that might affect the distribution of your property. By waiting until the last minute, your estate plan may lead to confusion-and litigation-among your heirs.

Bankruptcy, Last Minute Estate Planning Leads to Litigation

Here is a recent example from here in California. This case involves a man who suffered a stroke in July 2011 and died in the hospital a few weeks later. While hospitalized, the deceased signed a will and revocable trust, as well as a quitclaim deed purporting to transfer 22.5 acres of land to the trust, with his sister serving as trustee. The will, meanwhile, named the deceased’s daughter as executor. Complicating matters somewhat was the decedent’s Chapter 13 bankruptcy petition, which was still pending at the time of his death but later discharged at the daughter’s request.

Following the bankruptcy discharge, the decedent’s son recorded the quitclaim deed transferring the land to the trust. The daughter, acting as executor of the probate estate, asked the probate court to determine whether the deed was valid; if it was not, the land would pass to the estate and not the trust. She further argued the quitclaim deed did not accurately reflect her father’s wishes and conflicted with the terms of his bankruptcy discharge.

Published on: September 16, 2015

How Multiple Trusts May Complicate an Estate Plan

by Scott C. Soady

Although living trusts are a common estate planning tool, they can be quite complex. In fact, many estate plans include several trusts. Some of these trusts help with tax planning. Others keep a married couple’s individual and community property separate. It is therefore important when creating multiple trusts to understand what each one involves and the appropriate use of any assets contained therein.

Judge Cites Spouse for Mismanaging Community Property Trust

Here is a recent California case that illustrates the difficulties which can arise when administering multiple trusts as part of a single estate plan. The case revolves around a man who passed away in 2014. While married to his first wife, they executed an estate plan which included no fewer than five separate trusts. Things became more complicated after the wife died in 1999 and the husband remarried. This added two more trusts to the estate plan-one for the second wife’s separate property and another including the new couple’s community property.

By 2005, the husband was diagnosed with Alzheimer’s disease. The following year, the second wife told a California probate court her husband could no longer take care of himself or make financial decisions. At some point in 2007, the second wife took over as sole trustee of the couple’s community property trust. Wells Fargo assumed control of the husband’s other trusts.

Published on: August 19, 2015

Is an Adopted Adult Child a Person’s Legal “Issue”?

by Scott C. Soady

Words matter when making a will or trust. Any ambiguity in the meaning of your estate planning documents may lead to protracted litigation among your family members or other designated beneficiaries. And even in cases where you think you are being clear, different courts may look at the meaning of certain words differently. This is especially true when your estate plan is enforced in more than one state.

For example, a California appeals court recently had to determine the meaning of the phrase “adopted children” in a trust. On the surface this does not sound too difficult, yet probate courts in California and Texas disagreed as to how to define this term.

The case centered around a 1975 will executed by a woman then residing in California. She had one daughter with her then-husband. Upon the woman’s death, which occurred in 1976, most of her property went into a testamentary trust. The trust’s income goes to the daughter during her lifetime. Upon the daughter’s death, the trust would terminate and its remaining assets distributed among her “then living issue.” The trustee may also make payments out of the trust’s principal during the daughter’s life for the benefit of her or “any issue.”

Published on: August 14, 2015

Late Actor’s Estate Prompts Litigation Between Sister, Biological Daughter

by Scott C. Soady

Many people avoid making a will because they assume they will die without leaving a probate estate. And while estate planning can help keep many assets out of probate, you should always prepare for unexpected claims that may arise after your death. For example, if your death is the result of medical malpractice or a defective product, a probate estate may be necessary to pursue civil litigation against the responsible parties. Recently a California appeals court addressed such a case involving the estate of a one-time Hollywood star whose death prompted an extended legal fight between his sister and a biological child he later acknowledged as his own.

In re Estate of Johnson

Troy Donahue was a well-known Hollywood actor during the 1950s and 1960s best remembered for co-starring in the 1959 film A Summer Place with Sandra Dee. Although married four times, Donahue died unmarried in 2001. In 1987, Donahue met a woman who claimed to be his biological daughter. She was adopted at birth in 1964. Donahue nevertheless accepted the daughter as his own and maintained a relationship with her and her children until his death.

Donahue, whose real name was Merle Johnson, died without a will. Donahue’s obituary reported the cause of death was a heart attack. But the daughter later received information suggesting the use of the prescription drug Vioxx caused her father’s death. In 2005, the daughter hired a lawyer to join a class action against Vioxx’s manufacturer. But this required opening a probate estate for her father in California.