San Diego Estate Planning Lawyer Blog

Published on: July 19, 2012

Should Spouses Have the Same Estate Planning Attorney?

When you are married, you start putting your own interests aside and consider what is best for both you and your spouse. Every time you make a decision, you must consider what is best for you, your spouse and any children you may have. Estate planning greatly impacts your family’s future and is one of the most important decisions you make together as a couple. Thoughtful estate planning is especially important for the well being of blended families –those comprised of a step-parent and step- or half-siblings.

For example, one scenario that typically occurs in a blended family upon the death of one spouse is that their significant other, their children, and step-children fight over the decedent’s estate. In order to avoid such a scenario, and other variations on that theme, we recommend you take careful measures in planning your estate and your spouse’s.

As touched upon in a Forbes article earlier this year, one initial issue couples must confront is figuring out whether they should get their own attorneys for estate planning purposes. Most couples consider it safe to share everything, including legal representation. However, as efficient joint representation may be –in terms of cost, time saving and mutual trust- it can also make things unpleasant for a couple in some cases, especially if husband and wife have underlying trouble (e.g., communication problems).

Published on: July 16, 2012

Common Confusion: The Difference between a Trustee and an Executor

by Scott C. Soady

Having a basic understanding of estate planning terms can be helpful when working through the process. However, it is easy to get confused. For example, two terms often used (and misunderstood) are “trustees” and “executors.” Both a trustee and an executor are persons selected to hold and manage assets of a decedent. The difference between the two is the manner and source of their appointment as well as the extent of their authority.

A trustee is named in a trust as the person (or one of several) in charge of the assets held in the trust, whereas an executor is named and appointed by the probate court to administer the estate of the decedent under the supervision of the court.

Responsibilities

Published on: October 27, 2011

Debts Owed by Beneficiaries in an Estate Plan

by Scott C. Soady

Given the state of the economy, many people are giving loans to their children. While it is very generous of parents to loan money to their children, it can create several problems down the road. Most parents give money to their children but do not expect to ever be paid back. Even if the parents expect to be paid back many children do not make any payments on the loan or they consider it a gift that does not need to be repaid. This can can cause tension and resentment between those children who did not receive a gift or loan from their parents and those who did.

It also causes problems after the parents have passed away. Typically, the child who did not receive any money will expect their siblings share of the estate to be reduced by the amount of the debt. The child who did receive the money usually will say that the money was a gift or that it was paid back a long time ago. If disputes arise, it would be up to the probate court to resolve them.

If you do want to loan money to your children it is important to have the amount of the loan and the interest in writing. If it is not in writing, it is important to keep evidence of the amount that was loaned and whether any payments were received over time. The biggest problem occurs when the child stops making payments on the loan. The law has a statute of limitations, meaning that a claim for money must be brought within a specific time period. The statute of limitations on loans is six years after the due date of the loan. Therefore, if a child does not pay on a loan, the parents have to enforce the loan within six years of the last payment due date. Most parent will not sue their children for not paying on the loans while they are still living and thus the claim to the money by the parent’s estate will be barred by the statute of limitations.

Published on: September 22, 2011

Disinheriting a Child or Heir in a Will or Trust

by Scott C. Soady

The decision to disinherit a child can be very difficult for some people. Other people just want to give less to one child and more to another. There are usually valid reasons behind the decision and it is not one people take lightly. Most clients I see are reluctant to share their reasoning behind their decision. They think, correctly, that “they can leave money in their will or trust to whomever they wish.” However, it is very important to discuss your reasoning with your attorney. Once you pass away your estate planning attorney is in the best position to testify about the language and intent of your estate plan.

You intent is crucial to determine the validity of your will and trust if it is ever contested. Many people think, incorrectly, that a will or a trust cannot be challenged. However, any estate planning document can be challenged by a disinherited heir on two grounds. The first is undue influence, meaning that the person who benefited from the will or trust exerted too much influence over the person leaving them an inheritance. The only other ground is lack of capacity meaning that the person making the will or trust did not understand what they were doing when they executed their estate plan.

There are a few ways to prevent a contest of an estate plan. One is to have a ‘no-contest clause’, sometimes referred to as an ‘in terrorem clause’ in the will and trust. Basically this states anyone contesting the terms of the estate plan gets nothing. The other popular phrasing is the person contesting gets one dollar. The problem is these clauses only work if you give the person you are disinheriting something in the first place. I always advise clients who want to disinherit children completely to leave them some amount of money so that a disinheritance clause will work. The purpose of the clause is to take an emotional decision about being disinherited and making it an economic decision.

Published on: September 12, 2011

San Diego Power Outage Shows the Importance of Preparation in Estate Planning

by Scott C. Soady

The recent power outage in San Diego left the entire population of the county in the dark. Many people were unprepared and did not have basic resources including food, water and gas. Only after the power went out did people rush to the stores and gas stations only to find them closed as well. We are always told to be prepared but rarely to people heed that advice.

Preparation is also essential to estate planning. Many people wait until too late to draft a will, trust or power of attorney and the consequences can be disastrous. If you do not have an estate plan it can lead to very costly probate fees or result in other expensive court proceedings such as a conservatorship.

Even if you have a will or trust already, it is important to make sure they are updated. Most people make a will or a trust and then forget about it for years. Did your family member pass away? Is the person you named still capable of acting as trustee or executor? Were there any changes in the law that would effect your estate plan?

Published on: August 18, 2011

Dennis Hopper: Probate

by Scott C. Soady

TMZ has an article which discusses the probate issues with Dennis Hopper. Probate is the process by which a court administers an estate. Dennis Hopper recently died. He was married and filed for a divorce but his divorce was not final when he died. He also had a prenuptial which specified certain terms and conditions.

When Dennis Hopper died, the divorce action terminates as a matter of law and the case goes into probate court where the litigation will continue. The division of the estate’s assets and debts will be decided by a probate Judge and not in a family law Judge. The factual pattern of a person passing away while going through a divorce is not as uncommon as one would imagine. It is very important, when going through a divorce, to consider whether or not modification to your estate plan is recommended. In a divorce case, since there are automatic temporary restraining orders when the petition and summons is filed and served, this needs to be considered in any change in the estate plan.
Continue reading

Published on: August 16, 2011

San Diego Probate Court N-23: Policies and Procedures: August 2011

by Scott C. Soady

The San Diego Superior Court has a probate court in the North County Branch in Vista. Department N-23 hears probate matters and the only other court in San Diego County is at the Madge Bradley Court House in downtown San Diego. Each probate court has its own policies and procedures and this will focus on the department in Vista.

For ex parte applications, there must be compliance with with requirement that there is a factual affirmative showing in the form of a declaration with competent testimony of personal knowledge that there is immediate danger, irreparable harm or any other statutory basis or local rule which permits ex parte relief. Ex parte hearings are heard on Mondays at 1:30pm and Thursdays at 2:00pm and notice needs to be given by 10:00am the day prior to the ex parte except under exceptional circumstances which requires a different showing. The pleadings must be filed with the business office by 10:00am the day before the hearing. Ex parte applications which do not include an Order specially prepared will not be considered.

There are also procedures for law and motion, evidentiary hearings and trials.
Continue reading

Published on: August 11, 2011

San Diego Probate Court 2: Policies and Procedures: August 2011

by Scott C. Soady

The San Diego Superior Court website has information about probate and other areas of the law. For probate, each department has its own policies and procedures. This article will focus on some of the procedures and policies for Department 2.

For ex parte, or emergency hearings, which are contested are heard on Tuesday and Friday at 8:45am by reservation only. All moving papers and declarations must be filed in the business office no later than 10:00am the day preceding the hearing. The procedure for the reservation can be obtained at the business office and can be complicated. All parties asking for emergency relief must provide notice and meet other requirements which include a declaration and the necessary attendant pleadings. There must be an affirmative factual showing in the declaration which contains competent testimony based on personal knowledge of immediate danger, irreparable harm or other legal basis for the emergency.

Law and motion matters are heard on Tuesday at 1:45pm and are governed by the California Code of Civil Procedure and the California Rules of Court.
Continue reading

Published on: August 9, 2011

San Diego Probate Court 1 Policies and Procedures: August 2011

by Scott C. Soady

In San Diego, the San Diego Superior Court has three probate departments. Each department is different for the policies and procedures. This will be a series of three postings with links to the San Diego Superior Court website page with that probate court policies and procedures. These can change without notice so make sure to confirm that these are still in effect for your pending case. For Probate Court 1, the policies and procedures are very detailed.

For emergency relief, also referred to as an ex parte, the moving papers must show extraordinary circumstances as a prerequesite showing. This includes a written declaration under penalty of perjury showing that irreparable harm, immediate danger or some other extraordinary circumstances exists with personal knowledge. The pleadings must be filed in the business office and the ex parte applications are only heard on Tuesdays and Fridays at 8:45am. A reservation must be made and this is a limit on the number of reservations. There is also a notice requirement which needs to be strictly followed.

There are also policies and procedures for law and motion, trials, evidentiary hearings, telephonic appearances and telecourt.
Continue reading

Published on: August 4, 2011

Anna Nicole Smith: United States Supreme Court Decision

by Scott C. Soady

The United States Supreme Court, on June 23, 2011, decided that the order from the Bankruptcy Judge did not have the consitutional authority to “reach” into probate court. In San Diego, there are different courts for different issues. The San Diego Superior Court decides probate cases and the United States Federal Court decides bankruptcy issues.

USA Today posted an article about this case. Celebrity cases attract media attention and the case of Anna Nicole Smith has attracted a lot of attention. Anna Nicole Smith received millions of dollars during her life from her husband [E. Piere Marshall] however her estate asked for millions more. The United States Supreme Court is the highest court in the United States and the other courts are bound by their decision.

It is unknown whether this decision will end this case. It is clear that it is crucial, whether you are a celebrity or not, to have a valid estate plan so that your wishes are carried out after your death and to save your surviving heirs the cost and expense of extended litigation.
Continue reading