WILLS

Published on: June 29, 2009

Settling Michael Jackson’s Estate Could Be a Real Life “Thriller”

Newspapers and magazines are already commenting that Michael Jackson’s estate will be a real nightmare. No one seems to know at this point whether Jackson had a will or a trust. Some people think there is no way he would have failed to provide for his children. In the absence of a will or a trust, his children would inherit the estate equally.

Whether Jackson created an estate plan or not, his estate will have to be settled, either in the probate court, or through trust administration. There are many creditors already lining up to be included. Although Jackson sold millions of records, he reportedly was in serious debt, perhaps as much as $400 million.

One of the assets in his estate that is going to be fascinating is the publishing rights Jackson had to millions of songs. Jackson outbid Sir Paul McCartney for a 50% interest in a music publishing catalog that includes rights to the Beatles hits as well as publishing rights to other hits by major artists, Jackson apparently paid $48 million for the rights, now estimated to be worth $500 million.

Published on: June 27, 2009

Challenging Wills or Trusts

by Scott C. Soady

Part of our estate planning caseload at Law Office of Scott C. Soady, A Professional Corporation are cases in which a will or a trust is being questioned or challenged. Typical factual scenarios are where an heir or a beneficiary has been disinherited or their share reduced because of “death bed” changes which may have resulted from undue influence, fraud, or duress. Most wills or trusts contain a clause known as a “no contest clause.” “No contest” clauses are commonly found in wills and trusts to discourage someone from challenging the will or trust. Typically, the language is that if anyone contests the will or trust, that individual will take nothing.

Existing law however, allows a beneficiary or other individual to file a petition with the court (called a Safe Harbor petition) asking the court to determine whether a particular challenge fits within the definition of a “contest.” If the court rules that it doesn’t constitute a contest, then the will or trust can be challenged in spite of the “no contest” clause.

Last Year the California legislature passed a bill which was signed by Governor Schwarzenegger that will change the law regarding “no contest” clauses. Under the new law which will take effect in January 2010, the applicability of the “no contest” clauses will be limited to specific circumstances. The new law will eliminate Safe Harbor petitions and will also provide that a “no contest” clause will only be enforceable to defeat a will or a trust contest if brought without probable cause.

Published on: June 19, 2009

Is there a Reading of the Last Will & Testament?

by Scott C. Soady

You have no doubt watched movies or TV shows where everyone gathers in the lawyer’s office, solemn and perhaps anxious about the “reading of the will“. The will is then read aloud by the lawyer to all interested parties. It is unknown where this idea came from but it never happens in real life. There is no legal requirement that a will or a trust be read out loud to family members. As a practical matter, family members usually know where their loved one’s will or trust is located and it may be several weeks until they even consult with a lawyer about what should be done. At that point, the lawyer may even provide copies to the beneficiaries.

With a will, the will is filed with the Probate Court to start the probate process and once that happens, the will is a matter of public record, open to anyone who wants to view it. That is how the public knows so much about celebrities and their wills.

If you have a trust, the trust which becomes irrevocable at your death, your beneficiaries and heirs are entitled to a copy of the trust but your trust does not become public. Privacy is one of the advantages of a trust over a will.

Published on: June 11, 2009

What Assets Do Not Go Through Probate?

by Scott C. Soady

If you have a will and not a trust, when you die your estate will have to go through probate. In general this means that all the property that the deceased owned at the time of death such as real property, personal property, bank accounts, investment accounts, etc. will be part of the probate estate. However there are some exceptions. You may have in your estate some assets that do not go through probate in California. These are some of them:

1. Property held in joint tenancy. An example might be a home you own with your spouse with a “right of survivorship.” Sometimes people own their cars in joint tenancy with other people or a bank account in joint tenancy. When a joint tenant dies, the other joint tenant(s) inherit the property without the probate process. Although assets held in joint tenancy avoid probate, holding title in joint tenancy can cause other problems such as the potential loss of a full step-up in basis which can result in capital gains. Another problem which can result when you own something in joint tenancy is that creditors of the other joint tenant may be able to enforce a judgment against the property.

2. Payable on Death Accounts (or POD accounts). This is a type of account where you choose a beneficiary who will receive the account upon your death. These accounts pass to the beneficiary without probate.

Published on: May 28, 2009

Who Will Be Appointed Executor or Administrator in Probate

by Scott C. Soady

In our last blog, we talked about the timeline for probate in San Diego. Another question we are asked frequently is who is going to be appointed the executor or administrator of the estate? If there is a will created by the decedent, the will usually names the “executor.” If that individual is unable or unwilling to serve and there are no successor executors named in the will, then the court may be asked to appoint an administrator with will annexed also known as an administrator CTA. If a person dies without a will, the person who handles the estate is called the “administrator.” All administrators and executors have the same function which is to oversee the decedent’s estate, including evaluating assets, paying bills, and distributing the estate to the beneficiaries.

Any interested party can petition the court to become the administrator. An interested party could be a family member or even a friend. There is however an order or priority which is set forth in the Probate Code. The following list shows the persons who have priority if they choose to be appointed:

1. Surviving spouse or domestic partner 2. Children 3. Grandchildren 4. Other issue (“Issue” means one’s descendants)

Published on: May 23, 2009

Time Line for San Diego Probate

by Scott C. Soady

If your loved one who resided in San Diego has passed away with a will or no estate plan, there will have to be a probate proceeding in the Superior Court. Probate can be a lengthy and complicated process with deadlines that have to be followed. Most people want to know “how long is this going to take?” Every probate is different. There are no simple answers to that question. The time depends on what assets are in the estate, how easily they can be liquidated, whether you own property in other states, and other issues.

The following guideline gives you a basic idea as to what has to be done and when it is usually accomplished, assuming you contact us at Law Office of Scott C. Soady, A Professional Corporation or another experienced probate lawyer soon after the death.

Filing the will with the Superior Court – Within 30 days of death

Published on: May 14, 2009

Is a Handwritten Will Valid in California?

by Scott C. Soady

A will that is written in one’s own hand is called a holographic will and is valid in California. The basic requirements are:

1. The document must be completely written in the handwriting of the Testator (the individual creating the will).

2. The will must be dated and signed.

Published on: May 4, 2009

What is the meaning of the term “capacity” in California?

by Scott C. Soady

What is the meaning of the term “capacity” in California?

Many people, particularly estate planning lawyers toss the term “capacity” out as though everyone knows what the term means. Often you hear people talk about someone “losing capacity” in the sense of not being able to make a will or trust or take care of their finances. What exactly does the term “capacity” mean in the context of making a will or a trust?

The California Probate Code provides that a person is not “mentally competent”to make at will if either of the following is true:

Published on: April 4, 2009

Unusual Will Contest before Death of Testator

by Scott C. Soady

In the category of “stranger than fiction,” a lawsuit has been filed in Arizona by a man who was cut out of his mother’s will. The problem is that she is not dead yet. Here in the San Dieigo Probate Court, will contests are filed but after the death of the testator (the individual who made a will before their death.)

The lawsuit filed by Robert Jaeger seeks $1 million in punitive and compensatory damages from his brothers and sisters on the basis that they interfered with an expected inheritance by persuading his mother to cut him out of her will. Jaeger claims that he took care of his mother for seven years and in return she promised to leave him her house when she died. His mother changed her will to leave her estate to her other children instead. The mother, Patricia English, says that her son was unemployed, spent her money, failed to find work, and became more and more demanding. In any case, she says, she had the right to decide who should inherit her house when she died. The siblings are fighting over English’s house which has $130,000 equity. She has no other assets.

In Arizona as in California, there is no cause of action for interfering with an expected inheritance. Only Maine and Florida have such causes of action while the person who executed the will is still alive. The court in Arizona has ruled however that the suit can proceed.

Published on: March 29, 2009

Procrastination Has Its Problems

by Scott C. Soady

We know that many Americans procrastinate about getting a will or a trust done. Especially in this economy where people have a lot of challenges, an estate plan, even if desired, sometimes doesn’t work itself up to the top of one’s To Do List. What happens if you procrastinate about getting an estate plan?

Probate – Without a trust or a will, your estate will wind up in the probate court. Statutory fees will have to be paid to the probate attorney and the administrator of your estate. Probate is not private – anyone can view probate records – and the distributions to your heirs can be delayed for as much as a year and in some cases, longer.

Without a will or a trust, your surviving spouse may not inherit your entire estate. Your spouse will inherit all the community property but will only get 1/2 to 1/3 of your separate property. The remaining property will go to the children.