PROBATE

Published on: November 28, 2013

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

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.

Published on: November 26, 2013

How a Joint Tenancy Can Affect Your Estate

by Scott C. Soady

Joint tenancy is a form of property ownership that often factors into estate planning. If two people own a piece of real estate, for example, they can either be joint tenants or tenants in common. Under the latter, a tenancy in common, each person separately owns his or her share of the property. Thus, when one co-owner dies, his share passes through his estate like any other property. But under a joint tenancy, when a co-owner dies, his or her share simply ceases to exist; the surviving co-owner (or co-owners) acquire full title immediately upon the deceased co-owner’s death. Nothing passes through a will, trust or probate process.

A joint tenancy requires four conditions, known as the “four unities”: (1) the co-owners acquire the property at the same time; (2) the co-owners share identical same title to the property; (3) each co-owner has an identical share of the property; and (4) the co-owners have an equal right to possess the property. If any of these conditions are not met, or cease to exist, there is no longer a joint tenancy, but a tenancy in common.

Recently, the California Court of Appeals addressed a dispute over a joint tenancy that was dissolved shortly before one of the co-tenants died. The surviving co-tenant argued the joint tenancy remained in force. The probate court and the Court of Appeals disagreed. The case is discussed here for informational purposes only.

Published on: November 21, 2013

Understanding the Implications of Disclaiming an Inheritance

by Scott C. Soady

In preparing an estate plan, you need to consider not just the intended beneficiaries of your will or trust, but alternates in the event your first choices either die before you or reject their inheritance. Yes, there are many situations where a beneficiary might disclaim a gift made under a will or trust. Often this has to do with the tax implications of receiving an inheritance. But whatever the reason, it’s important to understand what happens if you leave part of your estate to a person who then turns around and says, “No thanks!”

Wait v. Wait

The California Court of Appeals recently considered a case dealing with this subject. The underlying dispute involved two brothers with different interpretations of their late mother’s trust. Please note, the case is discussed here for informational purposes only and should not be read as a complete statement regarding California law.

Published on: November 16, 2013

Omitting a Residuary Clause From Your Will Makes No Sense

by Scott C. Soady

A last will and testament is an important legal document that provides for the distribution of your property after your death. A will is not something to be prepared casually or haphazardly. You should always work with a qualified San Diego estate planning attorney before preparing or revising a will. Even if you think you understand the requirements of a will, an estate planning attorney can ensure there are no drafting mistakes that may lead to confusion-and litigation-down the line.

Banner v. Vandeford

Consider a recent decision by the Supreme Court of Georgia. Three adult siblings argued over the meaning of their father’s will. John Huscusson signed his will in 2012. The document was prepared by an attorney and executed in full compliance with Georgia law (which is similar to the law of California). There was no question the will was valid.

Published on: November 9, 2013

Joint Accounts Can Help Avoid Probate, If Registered Correctly

by Scott C. Soady

One way to bypass the probate process is to title your assets jointly with another person. For example, you might register your bank account in the name of you and your son. When you die, your son would automatically assume sole ownership of the bank account without having to go through probate. The joint account would not be considered a probate asset passing under your estate.

It’s important to make sure, however, that any asset you intend to hold with another person is properly titled and registered. Informal agreements between family members are not sufficient to prove joint ownership in many cases. A recent decision from the California Court of Appeals, discussed here for informational purposes only, helps illustrate this point.

Mahmood v. Bank of America, N.A.

Published on: October 25, 2013

Understanding the Consequences of a “No-Contest” Clause In Your Will or Trust

by Scott C. Soady

The whole point of making a will or trust is to prevent disputes over the disposition of your estate after your death. One way to protect your estate plan is to include a no-contest provision in your trust or will. Basically, a no-contest provision states that if a person tries to challenge any part of your trust or will in court-and fails-he or she forfeits any inheritance from your estate. No-contest provisions have long been recognized by courts, and in 2010, the California legislature expressly recognized such provisions in the state’s Probate Code.

A recent California Court of Appeal decision demonstrates how this works in practice. In this case, the court upheld a no-contest clause. Please note this case is discussed for illustrative purposes only and should not be construed as a binding statement of California law.

A Son Tries to Change His Mother’s Trust (and Loses)

Published on: October 11, 2013

California Appeals Court Clarifies Burden of Proof In Will Contest

by Scott C. Soady

It’s called a last will and testament because the document is meant to serve as a final disposition of property upon death. When a person makes a new last will and testament, he or she thereby revokes of any previous testamentary instrument. But what happens if a person dies and it’s not clear whether or not he’s revoked his will? The California Court of Appeals recently addressed this situation in a case arising from a family tragedy.

Satish Trikha died in 2009. He was in the midst of a nasty divorce from his wife, Suchitra Trikha. The couple’s problems began in 2008, when Suchitra Trikha discovered her husband had resumed contact with two of his children from a prior relationship. Suchitra Trikha believed these other children were a “black mark” on her traditional Indian family. At one point, she offered to end divorce proceedings if Satish Trikha formally disinherited the two older children and placed his assets in a trust for the benefit of their own two children.

Satish Trikha checked into a Yorba Linda hotel on October 25, 2009. A hotel clerk found his dead body three days later. The coroner’s inventory of Trikha’s personal items recovered the room did not include either a suicide note or a will. Suchitra Trikha and her son, Neel Trikha, subsequently searched Satish’s car and later testified there were no legal documents inside.

Published on: October 4, 2013

“She’s Just Like a Daughter to Me!” But Is That How a Probate Court Will See It?

by Scott C. Soady

Under California probate law, adopted children are treated no differently than biological children. So, for example, if a person dies without a will, his adopted and natural children are afforded the same status as heirs under California’s intestacy law. But that presumes the adopted children are, in fact, adopted in accordance with the law of California or another jurisdiction. What about children who are informally-i.e., not legally-adopted?

Many common law jurisdictions recognize “equitable adoption.” This means that if a person fulfills the role of a child, and the “parent” reciprocates, the courts may recognize a contractual relationship exists for the purposes of establishing intestate succession. As recognized by California courts, equitable adoption establishes the child’s right to receive property from the parent if he or she dies without a will.

It’s important to note that equitable adoption has no affect on estates where there is a valid will. Nor does it affect trusts. The only application of equitable adoption is to estates subject to intestacy law.

Published on: September 27, 2013

Unsolved Murder Prompts Litigation Over Life Insurance Proceeds

by Scott C. Soady

A four-year-old unsolved murder in the Harbor Gateway neighborhood of Los Angeles created a legal headache for the victim’s life insurance company. The victim’s husband was the only named beneficiary of her life insurance policy, but he was also an active suspect in her murder. Since the victim left no will or other instructions regarding her affairs, the insurance company was forced to ask the courts to intervene.

Frank and Rosamaria Rees each held life insurance policies for $150,000 from Farmers New World Life Insurance Company. Rosamaria Rees’ policy insured her life and named her husband as sole primary beneficiary. She did not name any contingent beneficiaries. If Frank Rees predeceased his wife, then her life insurance proceeds would be payable to her estate.

On September 18, 2009, Rosamaria Rees was walking to her car parked on the street outside of her home. According to the Los Angeles Police Department, “an unknown suspect or suspects approached on foot and shot her,” killing her instantly. The LAPD has never made an arrest in the case.

Published on: September 17, 2013

Court Considers Challenge to Reclusive Heiress’ Will

by Scott C. Soady

A New York City jury may soon determine the fate of an estate valued at over $300 million. The deceased, Huguette Clark, left a last will and testament, but her relatives have contested the document as fraudulent. At least 19 distant relatives-most of whom never even met Clark-could share in the estate if the New York County Surrogate’s Court determines her will is invalid. Recent news reports indicate the estate may settle with the would-be heirs to avoid a trial.

Clark died in May 2011 at the age of 104. Clark’s father, a former U.S. senator from Montana, left her an immense inheritance from his copper mining fortune. Huguette Clark’s estate included mansions in Santa Barbara and Connecticut as well as a 10,000 square-foot apartment in Manhattan. But Clark herself was rarely seen by anyone. A 2012 report by MSNBC documented Clark’s isolation and the mystery surrounding her final years.

Clark’s distant relatives long believed she was under the undue influence of her financial advisors, particularly her attorney. Clark’s last will and testament, dated 2009, left the bulk of her estate, including her California property, to a private foundation established under the will. Clark also left over $15 million to her longtime nurse, and made gifts to her attorney and other employees, but left nothing to any of her distant relatives. Before her death, Clark made gifts totaling more than $44 million to her nurse, attorney and others; the executor of Clark’s will now contends those gifts were coerced and has asked the court to order repayment of all funds back to the estate.