San Diego Estate Planning Lawyer Blog

Published on: May 24, 2011

FAQs In California Probate

The estate planning attorneys at Scott C. Soady, A Professional Corporation handle not only estate planning, conservatorships, guardianships, and will and trust litigation, but also many probate matters. We receive a lot of calls from individuals who have a lot of questions about probate. Here are some the frequently asked questions about probate in California and more specifically in San Diego.

1. What is Probate? Probate is the court process in which the estate of a deceased person is inventoried, appraised, and distributed to either the beneficiaries of a will or to the heirs at law of a person who has died without a will or trust (ie. intestate).

2. Why is Probate Necessary? When someone has died, whether there will be a probate depends on whether the decedent had all of his assets in a living trust or joint tenancy. If so, then there is no necessity for probate. If a person has died with a will rather than a trust, there will have to be a probate. If the person had no estate plan, ie. no trust or his assets were not in joint tenancy or in payable on death accounts, his estate will have to go through the probate process to distribute the assets to the decedent’s heirs at law. The probate procedure in the county where the individual died will see that the estate is inventoried and appraised, debts of the decedent are paid, and that the property is distributed to the proper individuals.

Published on: May 20, 2011

Deceased Chest Champion May Soon Rest in Peace

by Scott C. Soady

Bobby Fischer, the former world chess champion, died in 2008 and yet the fight over his estate goes on. You may remember Bobby Fischer won the world chess championship in 1972 when he beat the Russian Boris Spassky in Iceland during the period of the cold war.

Fischer was born in the United States but was living in Iceland when he died in 2008 with no will. Four individuals were fighting over his probate estate, said to be worth between $2 and $3 million. Two are Fischer’s nephews Alexander and Nicholas Targ who live in California. The third is Marilyn Young who claims to have a daughter by him, named Jinky Young. Fischer had apparently been giving Jinky’s mother money for Jinky’s support and wrote postcards to the child which he signed as “Daddy.” The fourth is Miyoko Watai, a Japanese woman who married Fischer in 2004 and therefore is his widow.

To resolve the issue of the competing claims, the Court in Iceland ordered that Fischer’s body be exhumed to obtain a DNA specimen to determine if Jinky Young is in fact his daughter. Those results showed that she was not his daughter so then the contest continued between the widow Miyoko Watai and the two nephews. In March of this year, the court in Iceland ruled that his Japanese widow is his heir and entitled to his estate. The new nephews had claimed that the widow did not produce sufficient documentation that they were married and may appeal the court’s ruling.

Published on: May 16, 2011

Your Continuing Responsibilities as a Guardian

by Scott C. Soady

During the time you are the appointed guardian of a minor child, you are responsible for providing

for all the personal needs of that minor such as food, shelter, education, and health needs.

Your responsibilities remain in effect until the child reaches the age of 18 or the guardianship is terminated by the Court.

Published on: May 12, 2011

ILITs Revisited

by Scott C. Soady

An ILIT is an irrevocable life insurance trust. The purpose of an ILIT is to cause life insurance death benefits to be excluded from a decedent’s taxable estate. With the usual life insurance policy owned by a decedent, the death benefits are part of the decedent’s estate and subject to estate taxes because the decedent has the power to change the beneficiary. In an ILIT, the life insurance is owned by the ILIT and therefore the death benefits are not subject to estate tax.

ILITs have been an important tool in estate planning either to remove wealth from a decedent’s estate thereby reducing estate taxes and in situations where a decedent wants to provide cash to his beneficiaries to pay estate taxes.

With an ILIT, the individual or married couple creates an irrevocable trust and funds the trust with an insurance policy. If certain requirements are met, the proceeds from the life insurance policy upon death are removed from the decedent’s taxable estate. The decedent during his life can make a yearly tax free gift to cover the cost of the insurance premium. One of the differences between an ILIT and a revocable living trust is that the ILIT is irrevocable and the trustee cannot be the trustor/decedent or the beneficiaries. The trustee must be independent, usually a trusted family friend, private professional fiduciary, or a financial institution.

Published on: May 8, 2011

May 8-May 14 is National Womens’ Health Week

by Scott C. Soady

National Women’s Health Week is a weeklong health observance coordinated by the U.S. Dept. of Heath and Human Services Office on Women’s Health. It runs from May 8 – May 14 and encourages women to take steps to improve their physical and mental health.

The theme this year is “It’s Your Time!” Some of the steps recommended for better health are getting at least 2 1/2 hours of moderate physical activity, 1 1/4 hour of vigorous physical activity, or a combination of both each week; eating a nutritious diet; visit your health care provider to receive regular checkups and preventive screenings; avoid risky behavior such as smoking and not wearing a seatbelt; and paying attention to your mental health, including getting enough sleep and managing stress.

These are great steps toward physical and mental health but what about also focusing on your financial health this week. If you are like most women, you are raising or raised your children, building a career or thinking about retirement, caring for your elderly parents, etc. Since women outlive men by 5 years and 2/3 of Americans over 85 are women, women need to be thinking about the steps they can take to improve their financial health as well as their physical and mental health. Women can overlook the need to be proactive to set financial goals, to address issues of incapacity, and to make an estate plan, leaving the decisions to their spouse, children, or worse, a judge.

Published on: May 3, 2011

Contested Conservatorships and Guardianships

by Scott C. Soady

Petitioning the probate court to be appointed the conservator of someone’s person or estate may be necessary when an individual has become legally incapable of taking care of himself or unable to handle his finances, and has not created a durable power of attorney for finances. The majority of the time, conservatorships are not contested and granted upon a showing to the court that the proposed conservatee is incapacitated and unable to manage their personal or financial affairs. Sometimes, however, conservatorships are contested.

Family members may disagree as to who should be the conservator. Sometimes the proposed conservatee has a lawyer and wants to contest the granting of the conservatorship. Other times the contest arises simply because of miscommunication among family members who may not understand what it means for an individual to be conserved.

Contested guardianships are similar to conservatorships in the sense that the majority of the time they are not contested. Like conservatorships, family members can fight about who would be the best guardian for minors who have lost their parents or minors whose parents cannot take care of them. If there is no agreement, then a trial may become necessary before a probate judge.

Published on: April 30, 2011

Removing the Trustee of a Trust

by Scott C. Soady

Sometimes a trustee of a trust has to be removed for a violation of his fiduciary duties. In California the Probate Code sets forth the various duties a trustee of a trust has to the beneficiaries. Some of these duties are the duty of loyalty, duty not to self deal, the duty to keep the beneficiaries informed, duty to act impartially, and the duty to use skill and care in administering the trust.

You may recall the late Dr. Atkins, the author and physician who created the Atkins diet. When he died in 2003, he left 90% of his estate to a Marital Trust for the benefit of his wife Veronica and the balance to his charitable foundation. Dr. Atkins had named three business associates to serve as co-trustees with his wife. The three business associates resigned their trusteeship within 9 months of Dr. Atkin’s death and were replaced with individuals who were named as beneficiaries in Veronica Atkins estate planning documents. Agreements were entered into with these co-trustees agreeing to pay them millions of dollars for trust administration. Mrs. Atkins was obligated to pay her co-trustees a minimum of $100,000 per month. In the first six months, two of the trustees were paid more than $1 million in fees. When Mrs. Atkins stopped paying them, they sued her for breach of contract.

Finally in 2007, Mrs. Atkins filed a petition to remove her co-trustees in a New York probate court. New York has similar codes to California which allow a trustee to be removed if they engage in a breach of their fiduciary duty or if hostility between the co-trustees or the trustees and the beneficiary impair the administration of the trust. In ruling that the trustees should be removed, the Court said when the trustees are chosen by the testator, the court is reluctant to remove a trustee but there was a clear showing of misconduct and a level of hostility between Mrs. Atkins and her co-trustees such it would affect the trust administration.

Published on: April 27, 2011

When Not to Accept the Job as Successor Trustee

by Scott C. Soady

Your friend or parent has asked you to be the successor trustee of his trust. Is there anything you should ask before accepting such a responsibility? Yes, yes, yes. You may think that being asked to handle someone’s estate is not that hard but sometimes being a trustee can be aggravating, frustrating, time-consuming, and even lead to litigation.

Money Magazine has a good article about the warning signs that, if present, may make you want to think twice about accepting a trusteeship. Here are some of the red flags:

1. You are being left in the dark. Before you agree to be a trustee and administer a trust, you should know the facts. Review the trust and see what is involved. If the trustor is asking you to be his successor trustee but won’t provide a copy of the trust, you may not want to take on such a task without being informed.

Published on: April 23, 2011

Interesting Case on How Not to Revoke Your Living Trust

by Scott C. Soady

The recent case of Estate of Stoker, decided in a California Appellate Court, involved an interesting way one person revoked his living trust.

Steven Stoker signed a will in 1997 in which he left the bulk of his estate to the Steven Stoker Revocable Trust, which he created at the same time as his will. His girlfriend Destiny Gularte was named the successor trustee and the beneficiary.

Several years later, Steven and his girlfriend had an argument and separated permanently. Steven did not do anything to formally amend or revoke his trust. He did however have a friend write out a new will which Steven dictated and signed, revoking his 1997 will and leaving everything to his two children, not the girlfriend. Steven signed the will in front of two witnesses but did not have them sign the document. He then urinated on his original will of 1997 and set it on fire.

Published on: April 19, 2011

Talking to a Human

by Scott C. Soady

In today’s high tech world, it’s difficult sometimes to get through to a human to address your concerns when you call the bank, the cable company, public agencies, etc. Sometimes you feel like there is no live person who is working there. Now there is a website, GetHuman.com. which tells you the numbers to press or the words to say to reach an operator.

There are more than 2000 companies listed on the website from AT&T to Zappo’s. With many companies you can reach an operator by just dialing 0, however that is not always the case. To reach an operator at Master Card, for example, you have to press 0 three times. At Greyhound Bus Lines, you have to press 26. There are many companies who actually have humans answering the phone and there are also a couple of companies on the list that say you cannot reach a human to talk to.

The website also has user reviews for customer service lines, including the average wait time. At Facebook, for example, it can take from 1-2 hours to get to talk to a live person. Verizon Wireless gets a good customer service rating with an average 4 minute wait time. To reach a live person at Verizon, press # and then 0.