PROBATE

Published on: February 10, 2014

Unmarried Couples May Face Unique Estate Planning Issues

Estate planning is an important subject for all married couples. It is also an issue though for unmarried couples in long-term relationships. If you are living with a non-spouse partner-and especially if you own property or enter into a business venture with that partner-your estate planning should provide for an orderly distribution of any assets acquired in the course of the partnership.

Married and unmarried couples are treated quite differently under the law. In California, married couples may own community property, or property acquired in the course of the marriage and jointly held by both spouses. Upon the death of one spouse, his or her estate plan may only dispose of up to 50 percent of any community property, with the remainder staying in the possession of the other spouse.

Unmarried couples cannot own community property, but they can hold property as joint owners. For example, they could co-own a home as joint tenants (or tenants in common) or open a joint bank account, but these assets are not community property. Typically, when one co-owner dies, the survivor automatically inherits the deceased partner’s interest. This can be a useful estate-planning tool, as such assets are generally not considered part of a probate estate. For example, if you and your unmarried partner open a joint checking account, you would automatically assume sole title upon your partner’s death without having to go through a formal estate.

Published on: January 31, 2014

Distinguishing Between a Conservatorship and a Probate Estate

by Scott C. Soady

A conservatorship is a court-ordered relationship whereby one adult assumes responsibility for the finances and/or personal care of another adult. In California, conservatorships fall under the same law as probate estates, that is, the estates of deceased individuals. Indeed, the same branch of California’s superior courts hear probate and conservatorship matters.

Once a person under a conservatorship dies, the conservatorship also terminates, and a separate probate estate must be established. This may lead to some confusion, as a recent decision by the California Court of Appeals illustrates. This case is discussed here for informational purposes only and should not be treated as a comprehensive statement of California law on the subject.

Borden v. Dise

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 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 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 22, 2013

Taking Care When Revoking or Amending a Living Trust

by Scott C. Soady

A living trust provides a flexible estate planning tool that can shield many assets from the probate process. Most living trusts used in estate planning are revocable, meaning the person (or persons) making the trust can modify or revoke the trust at any point during his or her lifetime. The trust document itself should specify a procedure for amending or revoking the trust; in the absence of such provisions, California law may apply.

Frelo v. Opfer

It’s important to be clear in modifying or revoking a trust. A recent California appeals case provides one example of what can happen when there’s ambiguity. This case is merely an illustration of one trust and should not be construed as a general statement of California law on the subject.

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 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 5, 2013

First or Second Wife? How Divorce and Remarriage Can Affect Estate Planning

by Scott C. Soady

Divorce complicates estate planning, especially when one or both former spouses decide to re-marry. If questions over community property linger from the first marriage, they can spill over into probate court should either party die. A recent case from the California Court of Appeal, discussed here for informational purposes only, shows just how complicated remarriage can be with respect to probate and estate planning.

Burwell v. Burwell

Gary Burwell purchased a term life insurance policy in 1996 on his own life, naming his then-wife, Becky Burwell, as the beneficiary. In 2004, Becky Burwell sued her husband for divorce. In serving her husband, a number of restraining orders took effect, including one preventing Gary Burwell from changing his life insurance policy or disposing of any property via will or trust. These orders were meant to conserve the Burwells’ community property until their divorce became final.