NEWS AND COMMENTARY

Published on: February 8, 2014

California Appeals Court Dismisses Lawsuit Against Attorney Over Unsigned Will

It’s never a good idea to wait until the last minute to complete an important task. This is especially true when talking about making (or revising) your estate plan. There is nothing you can do about your will or trust after you’re dead, and if you are contemplating a new or amended estate plan, it is imperative you speak right away with an experienced California estate planning attorney.

Don’t Blame the Estate Planning Attorney

Recently, the California Court of Appeals dealt with a lawsuit arising from the failure of a dying woman to complete revisions to her estate plan before her death. This case is not a binding statement of California law, but it provides a useful illustration of the perils of waiting until it is too late. In this case, the deceased woman’s relatives attempted, unsuccessfully, to blame her attorney for the failure.

Published on: February 6, 2014

Jahi McMath Case Raises Concerns Over Definition of Legal Death

by Scott C. Soady

The recent case of Jahi McMath has renewed the media and ethical debate over the question of when an individual can truly be declared deceased. McMath was a 13-year-old girl declared legally brain dead on December 12th, 2013, in Alameda County. The family contested this diagnosis, claiming she still had heart and lung function. Although an Alameda County judge confirmed the hospital’s determination that McMath was dead, the family filed a federal lawsuit, arguing this violated their religious beliefs, as protected by the First Amendment, which hold that McMath is still alive.

Defining “Legally Dead”

A majority of U.S. states, including California, have adopted the Uniform Determination of Death Act, a model law developed at the behest of the White House and the medical community in the early 1980s. California incorporated the uniform act into its Health and Safety Code. The Act defines death as either “(1) irreversible cessation of circulatory and respiratory functions, or (2) irreversible cessation of all functions of the entire brain, including the brain stem.”

Published on: January 30, 2014

California Supreme Court Rejects Application of “No-Contest” Clause in Trust

by Scott C. Soady

A “no-contest clause” is a common California estate planning device used in wills and trusts to discourage litigation over a person’s estate. The basic idea is simple: If a beneficiary named in a will or trust files a lawsuit challenging that document’s validity, that beneficiary is effectively disinherited. What’s not so simple, however, is California’s approach to no-contest clauses. Such clauses have long been recognized under the common law in California, but the state legislature has adopted numerous restrictions on their enforcement over the years.

The most recent law, which took effect in 2010, limits enforcement of no-contest clauses to three types of claims: (1) “A direct contest that is brought without probable cause”; (2) a creditor’s claim; and (3) a beneficiary’s claim to trust property (also known as a “forced election”). These latter two case types must be expressly mentioned in the no-contest clause in order to have effect.

Prior to 2010, California law allowed beneficiaries to file “safe harbor” proceedings, which allowed them access to the courts without invoking a no-contest clause. The 2010 law eliminated such proceedings. But what about safe harbor applications still pending as of 2010? Recently, the California Supreme Court considered just such a case.

Published on: January 26, 2014

How Do You Define “One Acre of Land”?

by Scott C. Soady

When leaving real estate to someone under a trust or last will and testament, it’s important to describe the property in precise enough detail so as to avoid conflicting interpretations. California courts try to construct wills and trusts strictly in conformance with the maker’s wishes. The clearer your wishes, the easier it will be for a court to determine them-and, ideally, the less chance anyone will seek a judge’s interpretation in the first place.

Smith v. Smith

Here’s a recent example-a case from Alabama-where imprecise language in a will spurred litigation between family members. The deceased in this case is Billy Ernest Smith, a horse trainer, who married his second wife Elizabeth in 1996. Smith had two adult children from a prior marriage. When Smith died in 2009, his will gave Elizabeth Smith a life estate in his “house and the one acre of land on which same is situated.” This meant she could continue to live in the house until she left voluntarily, died or remarried. A separate paragraph in the will also allowed Elizabeth to have “her pick of all my horses.”

Published on: January 24, 2014

The Future of Same-Sex Marriage & Estate Planning

by Scott C. Soady

The movement towards legal recognition of same-sex marriage continues unabated. In December 2013, the New Mexico Supreme Court declared that “civil marriage” in that state must be open to couples of the same gender. A day later, a federal judge in Utah held the state’s definition of marriage as “one man-one woman” violated the United States Constitution.

In California, of course, state officials resumed recognizing same-sex marriages following the United States Supreme Court’s June 2013 decision in Hollingsworth v. Perry, a case that defeated an anti-same sex marriage amendment to the state’s constitution. The Supreme Court simultaneously held in a separate case that the Defense of Marriage Act-defining marriage as applying only to opposite-sex couples for purposes of federal law-was unconstitutional. That decision meant federal agencies could no longer deny recognition to same-sex marriages performed in a state where the practice was legal.

On the international front, the Parliament of the United Kingdom approved legislation in July 2013 permitting same-sex marriages in England and Wales, which will take effect in March 2014. (Scotland, which has a separate parliament, is presently considering same-sex marriage legislation for that country.) Similarly, New Zealand’s House of Representatives voted in April 2013 to alter the legal definition of marriage in that country to include same-sex couples. That law took effect this past August.

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 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 18, 2013

New York Appeals Court Orders Estate to Return Artifact Stolen from German Museum

by Scott C. Soady

An important part of estate planning is taking stock of what you own. After your death, your executor will have to prepare an official inventory and account of your property. You can facilitate that process by keeping an updated list of your assets with your will, trust and other estate planning documents.

It’s equally important to have some idea of what your property is worth. Under California law, most probate estates must have its assets valued by a probate referee, a person authorized by the state to conduct appraisals. (Trusts can also use a probate referee, but are not required to.) The probate referee’s appraisal then becomes the official valuation for probate and federal estate tax purposes.

As part of your estate planning, you might wish to engage private appraisers who specialize in real property or personal property like jewelry. These appraisals won’t be official for later probate purposes, but they can give you an approximate value to help you determine how best to distribute your estate. If nothing else, the appraisal process will encourage you to take stock of your assets.

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.