San Diego Estate Planning Lawyer Blog

Published on: July 10, 2016

Taking Proper Inventory of a Probate Estate

An essential function of the personal representative of a probate estate is to identify and inventory the estate’s assets. Keep in mind, an estate’s assets at death may not be limited to property and funds in possession of the decedent at the time of death. If the decedent was a party (or potential party) to any civil lawsuit, any future proceeds from such a case may also be considered an estate asset.

Lawyer’s Statement Does Not Prove Intent to Disclaim Share of Judgment

A recent California case illustrates this point. This case is discussed here for informational purposes only and should not be treated as a complete statement of California law on this subject.

Published on: July 9, 2016

When Does My Trust Become Irrevocable?

by Scott C. Soady

Under California law, “Unless a trust is expressly made irrevocable by the trust instrument, the trust is revocable by the settlor.” This means that if you make a living trust as part of your estate plan, you are free to amend or revoke the trust at any time. You may, however, choose to make the trust (or part of a trust) irrevocable, in which case the trust should include clear language to that effect.

Court Upholds Husband’s Partial Revocation of Trust After Wife’s Death

Confusion over whether a trust is revocable can lead to litigation following the death of the settlor. Here is a recent example from here in California. This is only an illustration and not a binding statement of California law on the subject of revocable trusts.

Published on: July 8, 2016

Can a Court Force Me into a Conservatorship if I Have a Mental Disability?

by Scott C. Soady

A conservatorship exists whenever a California probate court determines that a person is not capable of taking care of him or herself or managing his or her finances. In the case of an individual who suffers from a mental disorder, a court may order what is known as an LPS conservatorship if there is sufficient evidence that the person is “gravely disabled,” and “unable to provide for his or her basic personal needs for food, clothing, or shelter.” But merely having a mental illness does not, in an and of itself, justify imposing a conservatorship against a person’s will.

Court Reverses “Close Call” Conservatorship Order

A California appeals court recently addressed the type of evidence necessary to create an LPS conservatorship for an individual with a mental disorder. The subject of this case is a man suffering from schizophrenia. He had been hospitalized multiple times over the years and has been required to take psychiatric medications since he was a child.

Published on: July 7, 2016

How Does Estate Planning Work With Unmarried Partners?

by Scott C. Soady

Marriage is not for everyone. Many couples are happy in long-term relationships that do not result in marriage or even a legally recognized domestic partnership. But if you are in such a relationship, you and your partner should consider the estate planning implications if one of you passes away. California law does not treat married and unmarried partners in the same way. A spouse has certain automatic community property and inheritance rights that an unmarried partner does not.

Partner’s Settlement Ends Up Hurting Her

That is not to say unmarried partners are completely unprotected. Since the 1970s, California courts have accepted and enforced contracts between unmarried partners. This can include oral promises to treat property acquired by either partner during the relationship similarly to community property. In these types of cases, commonly known as “Marvin petitions,” the surviving partner may seek to enforce these promises.

Published on: June 27, 2016

Estate Planning, Charitable Pledges, and Community Property

by Scott C. Soady

Many people pledge money to charity as part of their estate planning. In California, charitable pledges are generally not enforceable in court unless the donor receives some consideration, thereby creating a binding contract. For example, if a college offers to name a building after you in exchange for your gift, that would be consideration for your pledge. If you pledge money contingent on other people making similar donations, that would constitute mutual consideration among all of the donors.

If you do make a binding pledge as part of your estate plan, however, make sure you consider the wishes of your spouse. Under California law, any community property held by a married couple is owned one-half by each spouse. This means you may not make a gift of your spouse’s share of such property without his or her consent.

Ex-Husband Cannot Pay for Pledges With Ex-Wife’s Share of Community Property

Published on: June 26, 2016

Should My Estate Plan Be Digital?

by Scott C. Soady

For many of us the “paperless office” is a reality. Our personal and professional lives reside online through our laptops, smart phones, and cloud storage. But what does this mean for our estate planning?

Recently, an article on CNBC.com discussed the growing popularity of “digital document archives,” which offer specialized cloud storage for estate planning materials including wills, powers of attorney, and health care directives. The idea behind such services is to make it easier for family members or other fiduciaries to locate important estate planning documents. For example, if a person dies, his or her executor could go to a digital archive and promptly download a copy of the will.

Are “Digital Wills” Admissible in California?

Published on: June 25, 2016

What Happens if the Beneficiaries Named in My Will Die Before I Do?

by Scott C. Soady

When making a last will and testament, you may assume that the beneficiaries you name will outlive you. Of course, that is not always the case. So what happens, for example, if you leave your brother $10,000 in your will and he dies before you?

The Anti-Lapse Statute

Like many states, California has what is known as an “anti-lapse” statute. Under California’s version, if a named beneficiary is dead at the time a will is probated, the “issue of the deceased transferee” may inherit the gift in his place. So, to apply the anti-lapse statute to the above hypothetical, your brother’s children would receive the $10,000 gift you left him in your will.

Published on: June 24, 2016

Using Your Bank Account to Avoid Probate

by Scott C. Soady

Estate planning can seem like an unnecessarily complicated process. But there are ways to simplify matters. After all, the whole point of estate planning is to facilitate the transfer of assets from the deceased person to the chosen beneficiaries—and this does not always require a will or formal trust document.

Totten Trust vs. Payable-on-Death Account

In the early 20th century, courts began to recognize something known as a “Totten trust.” Also called a “bank account trust” or sometimes a “poor man’s trust,” a Totten trust is nothing more than a bank account opened by a depositor in his or her own name as trustee for a beneficiary. The depositor is free to withdraw funds or even close the account during his or her lifetime. Any funds remaining in the account at the time of the depositor’s death are then paid over to the beneficiary.

Published on: June 20, 2016

Should I Require My Executor to Post Bond?

by Scott C. Soady

One issue that comes up when making a will is whether to require your designated personal representative (a/k/a executor) to post a bond. California law requires any personal representative to post bond as a condition of his or her appointment. The purpose of the bond is to protect the interested persons in your estate, i.e. the beneficiaries named in your will. The personal representative’s job, after all, is to ensure your beneficiaries receive their inheritance. The bond helps insure against an unscrupulous personal representative who misappropriates estate property for some other purpose.

Of course, you can choose to waive the state’s bond requirement in your will. In fact, many people do just that given that their chosen executor is usually someone they trust, such as a spouse or child. In cases where the deceased did not leave a will, the beneficiaries of the estate may also choose to waive the bond requirement by written notice to the probate court.

Requiring a Bond After Administrator Fails to Account for Funds

Published on: June 19, 2016

Who Pays for a Lawsuit Contesting My Trust?

by Scott C. Soady

When you create a trust as part of your estate plan, the trustee is obligated by California law to be “impartial” with any beneficiaries you name. In other words, if you specify the trust assets should be divided equally among your children after your death, your trustee cannot favor one child over another. This requirement of impartiality is especially important if your trustee is also a beneficiary. You do not want the beneficiary-trustee misusing trust assets to benefit themselves at the expense of the other beneficiaries.

One consequence of this impartiality rule is that when someone challenges or contests your trust, the trustee may normally not use trust assets to defend against such a challenge unless it touches upon the validity or assets of the trust itself. So if someone files a lawsuit claiming they are a rightful beneficiary of the trust—or someone else is not a rightful beneficiary—the trustee should not get involved. Of course, California law only establishes a default position. In making a trust, you are free to instruct the trustee to defend against any and all lawsuits at the trust’s expense.

Daughter Contests No-Contest Clause in Mother’s Trust