ESTATE PLANNING

Published on: January 16, 2014

Executor Recovers $1.25 Million from Caregiver Who Took Advantage of 100-Year-Old Woman

Proper estate planning is key to protecting your assets from those who might take advantage of you, both during and after your lifetime. One all-too-common situation faced by individuals is the presence of home caregivers who might take advantage of their elderly charges. In some cases, it may fall to the executor or trustee named in the person’s estate planning documents to recover money improperly obtained by such caregivers and their associates.

Lintz v. Ramirez

A recent California case dealt with just such a situation. This case is discussed here as an illustration only and should not be considered a definitive statement of California law. The deceased in this case was Ruth Moynes, who died in 2006 at the age of 100. Moynes did not appear to have any blood relatives, but she was close with the family of Lynn Lintz. In 1994, Moynes executed an estate plan that included a living trust and what’s known as a “pour-over” will. Upon her death, any assets remaining in Moynes’ probate estate would be automatically transferred to the trust. Lintz was named executor of the will and successor trustee and sole beneficiary of the trust.

Published on: January 14, 2014

Dealing With Litigation After Your Death

by Scott C. Soady

After your death, the executor of your estate is responsible for paying any valid claims made by your creditors. California probate law governs how and when such claims must be presented to your executor. For instance, if a lawsuit is pending against you at the time of your death, the other party may only continue the case if he or she presents a claim against your estate, your executor rejects that claim, and the other party then moves to substitute the executor as a party in the lawsuit. If these conditions are not met, the lawsuit dies with you.

There are cases where the issue is not so cut-and-dry, however. One recent decision by the California Court of Appeals demonstrates how a judgment against a deceased individual may survive even when the aggrieved party failed to make a proper claim against the estate. This case is not considered binding precedent by the California courts and is only discussed here to illustrate the underlying legal principles.

Hammer v. Hammer

Published on: January 1, 2014

Complications May Arise When Providing “Equally” For Children

by Scott C. Soady

If you have multiple children, preparing your estate plan involves answering a not-so-simple question: How should I divide my estate among them? There may be cases where an equal division of assets is not your wish. You may be estranged from one child, operate a business with another, or simply favor some children over others. In those cases your estate plan can be tailored to reflect the circumstances. Especially if all of your children are adults, there is no legal requirement you treat them equally in your will or trust (or that you provide for them at all).

But even if you decide all of your children should inherit equally, that’s not the end of the matter. An “equal” division of assets may sound simple on paper, but in practice that can prove difficult, particularly when your estate includes a large number of non-liquid assets like real estate. It’s important your estate plan contemplates these execution issues, because failure to do so can lead to time-consuming and costly litigation between your children.

Four Executors, No Easy Resolution

Published on: December 30, 2013

Disney Heiress Case Spotlights the Importance of Conservatorships

by Scott C. Soady

Estate planning is not limited to providing for your affairs after your death. Unexpected health problems may leave you unable to manage your affairs during your lifetime. In such cases, a court may name a conservator for your person or estate unless you have provided for such appointments in advance through a document such as a durable power of attorney.

A properly executed conservatorship can protect your interests from unscrupulous relatives or other third parties who might try and take advantage of your situation. A recent California case illustrates how the law governing conservatorships can apply in a given situation. In this particular case, a woman voluntarily asked a court to appoint a conservator, then later opposed attempts by hostile family members to keep the conservatorship going.

Lund v. Lund

Published on: December 28, 2013

“Resulting Trusts” May Result In Spousal Confusion

by Scott C. Soady

In estate planning, trusts are a common device used to transfer property from a settlor to a beneficiary. Not all trusts are explicit or in writing, however. California recognizes resulting trusts, which exist when a person takes title to property that is intended for the use or benefit of another. The person holding title has a duty, inferred from the parties’ intent, to transfer the property to the beneficiary.

If this sounds confusing, a recent California probate case may help explain. This case is discussed here for illustration only and should not be construed as legal advice or a binding statement of California law on the subject of resulting trusts.

Estate of Aniceto Reyes Alva

Published on: December 26, 2013

Widow Ordered to Pay Restitution to Estate of Murdered Husband

by Scott C. Soady

Most of us don’t make an estate plan on the assumption we’ll die as the result of murder or other criminal behavior. But when such unexpected events do occur, an estate plan becomes even more valuable in assuring your interests are represented. Untimely death often means litigation where your estate becomes the central player.

No matter what your will or trust may provide, a person cannot inherit anything from your estate if he or she is responsible for killing you. Under California law, a person who “feloniously and intentionally” kills another is legally presumed to have predceased the victim, thereby eliminating any bequest under a will or trust. This is not limited to persons convicted of murder in a criminal trial; a probate judge may make a separate finding in a civil proceeding by a “preponderance of the evidence.” However, it should go without saying that a criminal conviction automatically negates a person’s right to inherit from the victim. A recent California appeals decision, discussed here for illustrative purposes only, demonstrates how an estate may recover from the person responsible for its creation.

People v. Jessee

Published on: December 20, 2013

The Risks of Naming an Heir as Personal Representative or Trustee

by Scott C. Soady

In an ideal world, estate planning would prevent disputes among your family members after your death. But even the best-laid estate plans can fall victim to squabbling heirs who use the court system to air their grievances over a period of months, if not years. In extreme situations, litigation can deplete the very estate you hope to leave to those same fighting heirs.

A recent California appeals court decision-actually, the third such decision arising from the same disagreement-provides a cautionary tale in estate planning gone wrong. This case is discussed here for informational purposes only and should not be construed as legal advice or a comprehensive statement of California law.

Trumble v. Schooler

Published on: December 13, 2013

The Dangers of Not Naming a Personal Representative for Your Estate

by Scott C. Soady

Naming an executor or personal representative is a critical element of preparing your last will and testament. If you die without leaving a will, California law authorizes a probate judge to appoint an “administrator” for your estate, who functions the same as an executor or personal representative. In theory, any person can petition the court for appointment as administrator of an estate where there’s no will, but state law establishes a priority for such claims. That does not mean, however, that disputes don’t arise, as one recent decision by the California Court of Appeals illustrates.

Tice v. Noroski

This case is discussed here for informational purposes only and should not be construed as legal advice. Ulrike Schenider died in 2009 without a will. Schneider’s next-of-kin was her mother, Erika Schneider. Under California probate law, Erika Schneider heir to her daughter’s estate. She would also be entitled to priority appointment as administrator of the estate except for the fact she was a resident of Germany. California, like most states, does not permit non-U.S. residents to serve as administrators or personal representatives of estates.

Published on: December 6, 2013

Same-Sex Spouses Now Treated Equally Under Federal Estate Tax Laws

by Scott C. Soady

The U.S. Supreme Court’s June 26 decisions in United States v. Windsor and Hollingsworth v. Perry significantly altered the legal and estate planning landscape with respect to same-sex couples. In Windsor, the justices invalidated the key provision of the Defense of Marriage Act, which previously barred federal agencies from recognizing any same-sex marriages, even those that were legal under state law. Perry ended litigation over Proposition 8, a California voter initiative that attempted to ban same-sex marriages in the state. California officials resumed issuing marriage licenses to same-sex couples shortly after the court’s decision.

The IRS Responds

In August, the Internal Revenue Service announced same-sex couples could henceforth be treated as “married” for purposes of federal tax law, provided the couple was legally married in a state or foreign country that recognized such unions. The key is that the marriage need only be legal in the state where it took place, not where the couple presently lives. So, for example, if a same-sex couple legally married in California later moved to Virginia-where such marriages remain illegal under the state constitution-the IRS would still treat the couple as married for purposes of determining any federal taxes.

Published on: November 28, 2013

When Is a Surviving Spouse Responsible for a Deceased Spouse’s Debts?

by Scott C. Soady

When a person dies, his or her estate is liable for any valid debts incurred before death. But what if there is no estate as such? In California, an estate need not be opened-or administered-if the deceased person’s property passes to a spouse. Can the deceased person’s creditors then demand the spouse pay off the debt?

Yes, actually. California law treats such situations as if the deceased person never died. As with any other debt incurred by a married individual, the creditors may claim (1) the community property belonging to both spouses and (2) any separate property of the deceased spouse, even though such property has now passed to the surviving spouse.

The California Court of Appeals recently addressed a case involving this principle. The case is discussed here for informational purposes only and should not be treated as a binding statement of law. As with any question of probate law, you should speak with an experienced California estate planning attorney.