NEWS AND COMMENTARY

Published on: May 20, 2016

Conservatorships Often Lead to Intra-Family Litigation

A conservatorship is designed to protect the health and finances of a person who is no longer capable of acting for themselves. A conservator is someone appointed by a California probate court to oversee the disabled person’s estate or person. Once appointed, the conservator is accountable to the court, and a judge may issue additional orders to ensure the conservatorship is handled properly.

Judge Erred in Ordering Premature Division of Couple’s Community Property

Judges are not always right. In a recent case from Santa Ana, a California appeals court overruled a probate court’s order against the spouse of a man under a conservatorship. The probate judge said the spouse disobeyed an order related to the conservatorship.

Published on: May 12, 2016

Prince Estate Raises Questions About Intestacy Laws

by Scott C. Soady

The recent death of Prince Rogers Nelson sparked a great deal of interest in estate planning circles when it became known that the famous musician, commonly known by just his first name of “Prince,” apparently did not leave a last will and testament. Nelson was also unmarried and had no surviving children at the time of his death. This has led to concerns that his siblings—and perhaps individuals claiming to be his siblings—will fight over the final disposal of Nelson’s sizable estate in a Minnesota probate court.

What Happens When You Die Without a Will?

In legal terms, a person who dies without a will is said to die intestate. When this happens, the probate law of the state where the estate is opened—generally the residence of the deceased—dictates the order of inheritance. For example, under California’s intestacy law, if a person dies without a spouse, child, or surviving parent, his entire estate would be equally divided among his siblings.

Published on: May 2, 2016

California Now Allows Transfer-on-Death Deeds

by Scott C. Soady

On September 21, 2015, California Gov. Jerry Brown signed legislation authorizing the use of “Revocable Transfer on Death Deeds” as an estate planning option for residential property owners. As of this year, owners may use these instruments to bypass the normal probate process when disposing of their homes after death. Several states already permit these types of deeds, although there are concerns about the potential for abuse.

What is a Transfer-on-Death Deed?

Under the new California law, a homeowner may file a deed naming a beneficiary who will automatically inherit the property upon the owner’s death. (The deed may also name multiple beneficiaries.) This means the property will not pass through the deceased owner’s probate estate. A transfer-on-death deed may only be used for residential properties, including condominiums, parcels with four or fewer dwellings, or farms containing 40 acres or less and a single-family home.

Published on: May 1, 2016

Disposing of Household Effects in Your Estate Plan

by Scott C. Soady

Something to consider when you are making an estate plan is taking stock of just how much stuff you own. While we generally discuss an estate in terms of major assets (real estate, bank accounts, brokerage portfolios, etc.) there is also quite a bit of tangible personal property or household effects included. Some personal property can be quite valuable, such as artwork or antique furniture. But much of your tangible property has primarily personal or sentimental value—think of family photographs, books, and various mementos scattered throughout your house. Upon your death, someone must take responsibility for all of these items.

Your estate plan should specify how to distribute your tangible personal property. For example, you might direct your children to divide all household effects between themselves, with your executor settling any disagreements and disposing of any unwanted items. Similarly, if you place your assets in a living trust, you may authorize your trustee to decide the best means of disposing of the contents of your house.

Failure to Clean Out House Drains Trust Assets

Published on: April 25, 2016

How a California Power of Attorney Works

by Scott C. Soady

A power of attorney is a document authorizing someone to act on your behalf with respect to financial and contractual matters. Among other acts, a person holding your power of attorney may sell your house, write checks from your bank account, or access your safe deposit box. A power of attorney is “durable,” meaning it continues in effect until you revoke it. Your death would also terminate any outstanding power of attorney.

Daughter Improperly Delegates Father’s Power of Attorney

There are limits to what a person may do under a power of attorney. Here is one illustration from a recent California appeals court decision. This is only an example and should not be construed as a complete statement of California law on the subject of powers of attorney.

Published on: April 24, 2016

How the Estate Tax Works in 2016

by Scott C. Soady

The new year is a good opportunity to reconsider your estate planning needs. You should periodically review, and if necessary revise, your will, trust, and other estate planning documents such as a durable power of attorney, to keep your affairs current. Among other things, changes in the law may alter your estate planning needs.

What is the Estate Tax?

One of the most important laws affecting estate planning is the estate tax. This is a federal tax levied against the total value of a person’s assets upon their death. A handful of states also levy their own estate tax, although California does not. However, if you own property in a state where such a tax is still assessed, you will need to account for that in your estate planning.

Published on: April 16, 2016

Court Resolves Family Fight Over Marie Callender Heir’s Trust

by Scott C. Soady

When you create a revocable living trust, your trustee has a legal duty to ensure your wishes, as expressed in the language of the trust document, are carried out. There may be pressure from family members or other interested parties to alter the trust’s meaning for their benefit, but at the end of the day, a California court will always look at the intentions of the person making the trust. Since most trust disputes occur after the settlor’s death, it is therefore important to seek the assistance of a qualified California estate planning attorney in drafting any trust instrument.

San Diego Court Rejects Unusual Trust Calculation Method

Recently the California Fourth District Court of Appeal, which has jurisdiction over San Diego and surrounding counties, decided a major case involving trust interpretation. The settlor was the late Donald Callender, the son of Marie Callender, the famous California restauranteur. Although the family’s namesake restaurant chain was sold in the 1990s, Donald Callender retained an interest in the licensing of the Marie Callender’s name, which combined with his other assets left a trust worth over $143 million at the time of his death in 2009.

Published on: April 11, 2016

How “Toxic Succession” May Affect Your Estate Planning

by Scott C. Soady

Many of us want to leave our home or other real property to our loved ones. But keeping property “in the family” can prove costly. For example, if a the land you own is contaminated by any type of environmental hazard, your heirs may end up footing the cleanup bill. Proper estate planning can help avoid these situations.

Heirs Stuck With Cleanup Costs of Parents’ Land

The New York Times recently reported on this subject of “toxic succession.” The Times discussed the case of a Los Angeles woman who “inherited a few pieces of property when her mother died in 1999.” The property was heavily polluted and ended up costing the woman $2 million between the cleanup and lost rent.

Published on: April 10, 2016

The Uses and Limits of “Dead Hand Control” in an Estate Plan

by Scott C. Soady

As a general rule, you have the right to dispose of your property in a last will and testament as you see fit. For example, you could choose to disinherit one or all of your adult children. You can also make gifts to individuals and institutions subject to certain conditions, such as requiring a college to use your bequest for a certain program. Such conditional gifts are sometimes referred to as “Dead Hand Control,” as the person making the will is effectively trying to exercise ongoing control of his or her property even after death.

Canadian Court Rejects Racist, Homophobic Gifts

But there are limits on Dead Hand Control. Courts can refuse to enforce a conditional gift or bequest in a will if it violates “public policy.” What exactly does that mean? For one thing, you cannot condition a gift on the beneficiary committing an illegal act.

Published on: March 31, 2016

What Happens to My Fiancée If I Die Before We Marry?

by Scott C. Soady

Although a last will and testament remains valid indefinitely, you should still review your estate planning every few years to account for changes in your life. Leaving a will unchanged for many years may lead to a situation where someone close to you is unintentionally omitted from receiving a share of your estate. Conversely, there may be situations in which you wish to exclude someone provided for in an earlier will.

Ex-Mayor’s Fiancée Left Out of Will

Earlier this year the longtime former mayor of Providence, Rhode Island, Vincent A. “Buddy” Cianci, passed away at the age of 74. Cianci held the mayor’s office for more than 20 years before he was convicted of federal corruption charges in 2002 and sentenced to 10 years in prison. Just before entering prison, Cianci signed a last will and testament.