Articles Posted in WILLS

The Illinois Supreme Court recently held that a Jewish couple’s wish to disinherit any of their grandchildren that married outside their faith was lawful. The particular will had provided that upon the death of the surviving Trustor, if any grandchild had married outside the Jewish faith, their non-Jewish spouse had a year to convert to Judaism. If they did not, the gift would lapse. The Illinois Supreme Court held that the clause was valid as long as the method of disinheritance did not encourage divorce. One of the Justices wrote that the Trustors were “free to distribute their bounty as they saw fit and to favor those grandchildren whose life choices they approved of.”

Restraints on marriage contained in wills or trusts are generally held by the Courts to be void as against public policy. In California, Civil Code section 710 provides that conditions imposing restraints on marriage…. are void. Althought there doesn’t seem to be as yet a case in California involving a clause such as in the Illinois case, it seems logical that the California courts would rule similarly and uphold a clause that provided for disinheritance of a beneficiary who married outside of a particular faith.

Including a provision to disinherit a particular beneficiary because of religion, or on grounds of substance abuse or other conditions, is a tricky area of estate planning. You should consult an experienced estate planning lawyer if you want to create such provisions. At Law Office of Scott C. Soady, A Professional Corporation, we can help you create an estate plan that will contain such provisions. Call us to schedule a complimentary consultation.

There are many reasons why a will or a trust may be challenged and set aside as invalid. Here are some of the more common grounds to contest someone’s will or trust.

1. Coercion – If someone coerces the testator (the person creating the will or trust) to make changes in a will or a trust or forces them either physically or emotionally to do something that is not what they truly wish to do, the document can be challenged on the basis of coercion.

2. Duress – If someone exerts pressure upon he testator to change their will or trust or make dispositions they don’t want to do, the document could be held invalid on the basis of duress.

In the 1950’s there was a TV program called “The Millionaire” where an anonymous millionaire gave away a million dollars each week to people he never met. The money was conditioned on the donee not revealing how he got the money or how much he received. I guess no one thought about things like gift tax, gift returns, or the IRS. It was TV!

A new documentary about real life situations involving wills and trusts is filming now for airing on Discovery Investigation. It will chronicle true stories about will, trusts, and estates and how they affected the people who created the will or trust, beneficiaries, or those cut out of a will. The program will interview everyone involved and show both sides of the controversy.The program is appropriately called “The Will.”

At Law Office of Scott C. Soady, A Professional Corporation we know the importance of creating an estate plan. Without a will or a trust, the California Probate Court will determine who inherits your assets and will do so through probate administration. Maybe such a documentary as “The Will” will help viewers to understand the importance of wills and trusts and encourage people who do not have an estate plan to create one.

With the recent downturn in the economy, San Diego has been one of the hardest hit with declining property values and unemployment. According to the Feds, the states in a full recession are California, Florida, Arizona, and Nevada. California has reached 11%unemployment and San Diego is in the top five cities for decline in property values. Because of these factors, San Diegans may need to review their estate plan and possibly amend their will or trust.

Suppose your trust leaves a cash bequest to a particular beneficiary, maybe a charity, and then divides the rest of your estate into percentages. When the value of your assets goes down, because of lower real property values or a decline in your investments, that in turn will affect the amount other beneficiaries receive as a percentages. As an example suppose an individual decided to leave $100,000 to his favorite charity and the rest of his estate is to be divided between his four children. The trust was done at a time when the rest of his estate had a value of $1 million. With the problems in the economy, now the estate is only worth $700,000. Instead of each child receiving 1/4 of $1 million, they will be receiving 1/4 of $600,000. Since the cash bequest to the charity comes out of estate before the rest of the estate is divided, the children are now going to have a $100,000 per child reduction. Instead of each child inheriting $250,000, they will only inherit $150,000. The trustor may want to rethink the amount of the cash bequest to charity and amend his trust accordingly.

Another example is where you leave one child your trust assets and other children non-trust assets such as an insurance policy. The amount of the life insurance proceeds are not going to change because of the economy but the trust assets very well may. If your goal is to treat all your children equally, then maybe your trust should be amended.

Many wills and trusts include language to deter future disputes or contests over the provisions of the will or trust. These “no contest” clauses typically provide that if someone challenges the validity of a will or trust, they take nothing under the instrument.

As an example, suppose a parent has two daughters and creates a trust leaving her estate equally to her two children. Just before her death, she changes her trust to leave the bulk of her estate to the younger dauhter with whom she lives. If the trust contains a “no contest” clause, the daughter who wants to challenge the validity of the trust as amended, faces a court holding that her objection constitutes a “contest” and therefore, the objecting child takes nothing under the trust.

Beginning in 2010, Probate Code Sections 21300-21322 will be repealed. New Probate Code Section 21310(6) will define a “contest” as one that alleges the validity of an instrument based on either (1) forgery, (2) lack of capacity (3) fraud, duress, or undue influence (4) revocation or (5) disqualification of a beneficiary under Probate Code Sections 6112 or 21350 (care custodians, drafters, etc.)