Category: Wills and Trusts

will

Who Inherits When There Is No Will in California?

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When a person dies without leaving a valid will or trust, that person has died “intestate.” Failing to ever make a will or create a trust document could cause intestacy, but many other events could also invalidate a will or make a will impossible to probate.

A California estate planning attorney can help you protect your own estate from intestacy. A lawyer can also help your family if a close relative dies intestate, by determining who will inherit the decedent’s assets and guiding the estate through the probate process. 

The California Rules for Intestate Succession

The California Probate Code sets out the rules for intestate succession. These rules can apply when the entire estate is intestate, or to the part of an estate that a will or other testamentary document does not cover.

Some of the rules for intestate succession in California include the following:

  • The surviving spouse inherits the half of the community property that the decedent owned in California at the time of death.
  • The surviving spouse receives the entire estate, including the decedent’s separate and community property, if the decedent does not have any surviving children, grandchildren, or other descendants, or any surviving parents, brothers, sisters, or any issue of the decedent’s deceased brothers or sisters.
  • The surviving spouse will get half of the decedent’s separate property in the intestate estate if the decedent has only one surviving child, or has surviving issue from only one deceased child.
  • If the decedent has more than one surviving child, or a surviving child and the issue of at least one deceased child, or the issue of more than one deceased child, the surviving spouse will get one-third of the decedent’s separate property in the intestate estate.

The California Probate Code provides detailed rules for how the legal beneficiaries other than the surviving spouse are to divide and distribute their shares of the decedent’s intestate estate. The rules also cover the situation in which an intestate person dies without leaving a surviving spouse.

How a Will Could Become Invalid or Impossible to Probate

Your lawyer could write a beautiful will that contains all the necessary terms and information to distribute your assets to your loved ones one day when you die. Many people take such a document and stick it in a drawer, never to look at it again. They check the “write a will” task off of their To-Do list and move on to other things. 

Unfortunately, using that strategy could make all of that work pointless for your heirs. Here are some of the things that could happen that make the will impossible to probate:

  • A potential heir successfully contests the will.
  • The court refuses to accept the will because of technical defects in the document.
  • The will has been lost, stolen, or destroyed.

These events could automatically invalidate your will if you do not write an updated will:

  • If you revoke a prior will but do not write a new will before you die.
  • If your marriage or domestic partnership ends in divorce or annulment, or is otherwise terminated, and your will does not expressly cover that situation.  In that case, California law will change or delete some of the terms as they relate to your former spouse or partner, unless you marry each other again or unless you execute a new will after you are divorced.

We understand that these rules are complex, but you do not have to learn all the laws of intestacy on your own. A California estate planning attorney can walk you through the rules and regulations relevant to your situation. Contact us today.

lawyer mediating trust disputes

How Do Trust Disputes Arise?

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Whenever there is money involved, there can be conflict. Trust disputes happen when people are not happy with the terms of the trust or how the trustee carries out the duties of the position. Sometimes the person objecting to the trust has a legitimate complaint. Some people challenge trusts hoping to get “free money” or make things difficult for the trust beneficiaries. A California trust attorney can advise you on whether you have a valid case against a trust and explain how trust disputes arise.

Complaints Against the Trustee

One of the most frequent sources of trust disputes is that the trustee does not perform the duties properly. The trustee has a fiduciary duty to act in the best interests of the trust beneficiaries. If the trustee puts his own interests ahead of the beneficiaries, he violates the fiduciary duty.

When you set up your trust, you should exercise extreme caution when selecting the trustee. People often choose a trustee because of personal feelings rather than an unbiased assessment of that person’s appropriateness for the position.

You might want to reconsider naming someone to serve as the trustee of your trust if any of these factors are true about the person:

  • Has ever filed bankruptcy
  • Causes you any doubts about his honesty, integrity, or character
  • Has a conviction for any crime involving fraud, theft, or a related offense
  • Has addiction or mental health issues
  • Dislikes any of the beneficiaries
  • Does not have financial stability
  • Has a history of making unwise investments or has little experience handling large sums of money and assets

It is always better to avoid a problem than to try to repair the damage afterward. You do not have to name a friend or family member to serve as the trustee. You could have a professional person or company serve as the trustee, like an accountant, attorney, or trust department of a bank. It is better to pay fees to a professional who will do the job right than to have your loved ones lose everything you left to them because the trustee breached the fiduciary.

Allegations that the Settlor Did Not Have Legal Capacity

When a person of advance years or cognitive impairment from Alzheimer’s disease or some other cause creates a trust or makes significant changes to a trust agreement, there will likely be allegations that the settlor (the person whose assets went into the trust) did not have the legal capacity to write or modify the legal document. Often, accusations that someone unduly influenced the settlor will accompany the “lack of capacity” challenge to the trust.

One way to avoid this issue or defend against such claims is to get a cognitive assessment from your doctor at the time that you make or change the terms of your trust. Make sure that your lawyer has the letter from the doctor that says you were competent at that time. 

Rolling the Dice

A person with nothing to lose might dispute a trust on the chance that the judge will award him something or the trustee will offer him money to dismiss the challenge. Even if you are upset with someone who might expect to inherit from you, like one of your adult children, you might want to consider leaving enough assets to this person to make him think twice about challenging the trust.

Contact our office today. A California trust attorney can talk with you about your family dynamics and help you develop a strategy to protect your loved ones and your estate.

Man submitting a will contest.

Four Things You Should Know About Will and Trust Contests

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Your loved one dies, and you discover that you’ve been cut out of the will or trust. You might still be reeling emotionally from the death in the family when you are shocked by this further bad news. The inheritance you have expected throughout your life is not going to happen. 

A California estate planning attorney can help you decide whether to contest the will or trust. There are many reasons to fight a will or trust. The most recent instrument might be a forgery, for example. Or the person who benefits under the document might have exerted undue influence to get your loved one to change the terms of a previous estate plan. If your loved one had Alzheimer’s disease or some other condition that affected their cognitive ability, they might not have had the legal capacity to make a new will or trust.

If you are thinking about contesting a will or trust, here are four things you need to know:

1. The Point of No Return

Things will never be the same in your family after you file a contest. Of course, relationships were already damaged if your loved one made a will or trust that cut out one or more natural heirs.

Expect that future holidays and family events will feel strained and uncomfortable for many years to come, whether you file a contest or not. Also, there can be collateral damage from this situation. For example, your relationships with your nieces and nephews, in-laws, and other people connected to those involved in the dispute could change forever.

2. Get Out Your Wallet

It may cost you plenty to fight a will or trust, and you may have to pay the legal fees and costs out of your pocket, upfront. Many attorneys will only represent you if you pay their fees by the hour, regardless of the outcome of the case. In appropriate cases, however, a few trust and estate litigation firms, including Loew Law Group, take on a will or trust contest on a contingency basis, meaning that they agree to receive a percentage of whatever you win.  

Still, the out-of-pocket costs of filing fees, obtaining documents, paying court reporters, and retaining experts for trial may make a contest an expensive proposition for all involved. Loew Law Group is always happy to discuss potential payment options with clients.

Filing a lawsuit does not guarantee that you will win. When the dust settles, you might end up paying tens of thousands or even hundreds of thousands of dollars in legal fees and costs and still lose the contest.  

3. Choose Your Lawyer Wisely

Your results will depend in part on the lawyer you hire. Do your homework before you hire a lawyer to handle the contest. Ask for recommendations of lawyers from people you know and trust. When you get the names of several highly recommended trust and estate litigators, ask other professionals, like your accountant or other lawyers you’ve worked with in the past, about the candidates.  Make sure that the lawyer you select is a specialist in trust and estate litigation.

Just make sure that you do not take too long to make a decision. You have very little time to file a will or trust contest. If you miss the deadline, you can lose the right ever to dispute the terms of the will or trust.

4. Prepare to Adjust Your Expectations

Unlike on television or in the movies, you are unlikely to have a “knock-down drag-out” battle in court. 

The vast majority of lawsuits settle. The parties may prepare vigorously and thoroughly for trial, but the risks and costs, as well as the delay, create the incentive for all parties to seek resolution before trial.  Given the limited resources of courts, the judge will heavily encourage the parties to pursue mediation, asking a professional, usually a retired judge, to help them resolve the case.  

Whether you are still on the fence or have made a decision to contest the will or trust, a California estate planning attorney can guide you through this process. Contact us today for a consultation. 

Older couple discusses potential trust contest problems.

Three Trust Contest Problems Your Survivors May Face

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If you have a living trust, or are considering getting a living trust in California, you might wonder what may happen to your trust after you pass on. You’ll probably want to know if someone can come along and challenge the trust — possibly getting a judge to set it aside, or causing your survivors to settle for less than you intended them to have. A California estate planning attorney can talk to you about specific trust contest problems that the beneficiaries of your assets might face. 

A trust contest happens when an heir,  beneficiary or other interested person asks a court to change the terms of a trust, or to throw out a trust, to ensure that the contestant will receive more assets from a friend, relative, or loved one’s trust agreement. Often the challenger was previously a legal heir to a larger share of the assets, or a beneficiary who had a larger share of the assets under a prior trust,  but will receive a smaller portion under the most recent version of the document.

Here are some of the more common reasons that people challenge a trust:

Capacity

You must be at least 18 years old to sign a trust agreement, but there is no age that is automatically too old to create a trust. The law generally presumes that adults are of sound mind, but certain facts can cast a shadow of doubt on a person’s legal capacity to understand who their natural heirs are and the legal ramifications of signing a trust agreement.

For example, there might be questions about capacity if the person who creates or changes a trust:

  • Has an official diagnosis of Alzheimer’s disease or another form of dementia. It is often best to have a medical authority certify that the person has legal capacity at the time that he or she signed the original or amended trust.
  • Has a mental illness. A mental health practitioner may determine and certify whether the individual had legal capacity when he or she signed the papers.
  • Is quite aged. For example, if your great-aunt is 104 years old, it may help her in some cases to have a medical expert evaluate and certify her capacity. 

It is often better to memorialize the mental state of the person to avoid problems down the road.  But you should consult with an experienced estate planning attorney before taking any action concerning an elder’s trust or other estate planning documents.

Undue Influence or Coercion

Unfortunately, some people use others for their own benefit. If someone exerts undue influence on a vulnerable person who makes a trust, and obtains a benefit from that undue influence, a judge can later set aside the trust on the grounds of undue influence because, but for the improper conduct, the person would not have signed a document with those terms.

Coercion (sometimes referred to as duress or menace) happens when someone threatens, bullies, or intimidates another person to cut a beneficiary out of a trust, reduce the person’s share, or give assets to an individual through the trust. Similar to undue influence, coercion involves depriving the person signing the document of his or her unfettered free will.

Fraud or Forgery

It is fraud when someone deceives another person into signing a trust instrument. The signer might be misled to believe, for example, that the document is something other than a trust, like an insurance form. Also, fraud can happen when someone tricks the signer into changing the terms of a trust based on false or misleading information, such as misleading the signer to believe that his sole heir, such as a child, is dead, or by falsely asserting that the child abused or abandoned the signer. 

Fraud can be a crime, such as when a document is forged. Forgery is when someone fabricates or alters a document, for example, typing up a trust agreement and forging someone else’s signature on the papers. If you can prove fraud, a judge can void the trust.

A California estate planning attorney can explain your options for protecting your estate from a frivolous trust challenge. You set up your trust and estate planning documents to provide for your loved ones. Contact us today for a consultation. You do not want someone to be able to countermand your wishes and take away the assets you planned to give to your beneficiaries.

Couple looking at fixed and discretionary trusts.

Understanding Fixed and Discretionary Trusts

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Trust agreements offer a variety of benefits for both the settlor and the beneficiary. However, there are many different types of trusts. Knowing which type of trust is best for your situation may require assistance from a California estate planning attorney. For example, would you and your beneficiaries gain more advantage from fixed or discretionary trusts?

Fixed Trusts vs. Discretionary Trusts

Many people are familiar with the terms “revocable” and “irrevocable” when discussing trusts. You may not be familiar with the terms “fixed” and “discretionary” trusts as they relate to agreements. However, these two terms are very important because they control how much flexibility your trustee has when distributing funds from your trust.

In a fixed trust, the person creating the trust schedules distributions to specific heirs in specific amounts. The trustee has no control over the schedule, the amounts, or the beneficiaries. The trustee’s job is to manage the assets within the trust as the trust dictates and make distributions according to the terms set by the trust. The person creating the trust has complete control of when and how distributions from the trust will be made and to whom distributions will be made. 

However, a discretionary trust, which is more common, gives the trustee the authority to make distributions according to the trustee’s discretion. The trustee can follow the terms outlined in the trust or the trustee can make changes to the distribution schedule and the amount of distributions.  A discretionary trust places the control of distributions in the hands of the trustee instead of the person creating the trust. 

Benefits of a Fixed Trust vs. Discretionary Trust

A fixed trust decreases the chance of arguments between beneficiaries and trustees because the terms of the trust cannot be changed. Beneficiaries will receive the money they are scheduled to receive under the terms of the trust. However, this means that some beneficiaries who may not need the funds may receive the same amount or more money than other beneficiaries who might have a substantial need for those funds.

With discretionary trusts, the trustee can choose to pay a higher amount to some beneficiaries than other beneficiaries. The trustee can withhold distributions from some beneficiaries for certain reasons. For example, a trustee may choose not to disburse funds to a beneficiary who may be contemplating bankruptcy or who may be filing for divorce. Because the beneficiaries have no interest in a discretionary trust that can be transferred or attached by creditors unless the trustee makes a distribution, a discretionary trust can protect those assets. 

Discretionary trusts are frequently administered for the “health, education, maintenance, and support” of the trust beneficiaries.  Often, a discretionary trust will remain in place until the beneficiary reaches a certain age, when some or all of the trust assets may be distributed outright.  Discretionary trusts are useful when providing for minor children after the death of a parent, or for special needs adults who need to protect government benefits by receiving distributions only for limited purposes. 

Contact a California Estate Planning Attorney for More Information

Your estate plan may contain one or more trust agreements, depending on your needs and desires. Contact us today for a consultation. Our California estate planning attorneys can help you identify your estate planning goals, discuss options for meeting those goals, and develop an estate plan that protects you, your assets, and your family.

Loew Law Group discusses how you would know if you are a beneficiary of a trust.

How Do I Know If I’m a Beneficiary?

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A beneficiary is a person or legal entity designated to receive assets from a trust or estate. Beneficiaries receive property or liquid assets after a person’s death or according to the terms of a trust. As a beneficiary, you have certain rights. If you believe your rights as a beneficiary were violated, you should talk with a California estate-planning attorney about your legal options.

Who Notifies Me That I Am a Beneficiary of a Trust?

A trustee is required by law to notify beneficiaries of a trust upon the settlor’s death. The settlor is the person who created the trust. The trustee has 60 days from the settlor’s death to provide the notification to the beneficiaries. The notification by the trustee must contain:

  • The settlor’s identity
  • The trust’s formation date
  • The name, address, and telephone number of the trustee
  • The address of the physical location where the trust is administered
  • Any other information that the trust requires the trustee to provide to beneficiaries
  • Notification that the beneficiary is entitled to a complete copy of the terms of the trust upon reasonable request to the trustee

If a trustee refuses to produce a copy of the terms of the trust or you believe the copy of the terms is not accurate and complete, you should contact an attorney immediately. The time to contest the trust is generally limited to 120 days from the date of the notification from the trustee, if the trustee includes a copy of the trust with the notice.

What Happens if the Trustee Does Not Notify Me?

Upon the filing of a will with the probate court, the will becomes a matter of public record. You can obtain a copy of the full will from the court. 

California Probate Code §8200 generally requires the custodian of a will to deliver the will to the superior court for the county in which the decedent resided within 30 days after the person’s death. If the custodian is not the executor or personal representative named in the will, the custodian is also required to deliver a copy of the will to the executor or personal representative named in the will. If the personal representative’s whereabouts are unknown to the custodian, the custodian is required to give a copy of the will to a beneficiary named in the will, if the whereabouts of the beneficiaries are known to the custodian.

If a custodian refuses to file the will with the court, you can file a petition with the court demanding that the custodian produce the will. 

Contact a California Estate-Planning Attorney for Help

Estate and trust matters can be complicated. Deadlines for filing contests and other petitions may be short. It is best to consult a California estate-planning attorney as soon as possible if you believe you are being denied information or property that your are entitled to receive as a beneficiary of a trust or estate. Talk with our California estate planning attorneys today.

The Loew Law Group discusses four beneficiary rights that you should know about.

4 Beneficiary Rights You May Not Know About

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As a beneficiary of a trust agreement, you have certain rights by law. The trust agreement may also give you rights as a beneficiary. Because you may receive significant benefits from the trust, it makes sense to know and understand your rights as a beneficiary. A California beneficiary rights attorney can help you protect your rights as a trust beneficiary, including contacting the trustee on your behalf to resolve issues directly or by filing a lawsuit with the court seeking resolution of a matter related to the trust or its administration.

1.  You have the right to receive notice of the trust and the property held by the trust.

As a beneficiary, you have the right to review a copy of the trust once the vestment of your rights under the trust occurs. Your rights in a trust become vested with the trust becomes irrevocable. A trust can be created as an irrevocable trust while other trusts become irrevocable upon the death of the grantor or another qualifying event. When you receive a copy of the trust, read the entire trust. If you do not understand any of the terms of the trust, contact an attorney for assistance. You need to understand the provisions of the trust to know whether your rights are being violated.

2.  You have the right to receive an annual accounting from the trustee.

Each year, the trustee must provide the trust beneficiaries with an accounting pursuant to trust laws in California. The terms of the trust agreement cannot waive or restrict the duty of the trustee to provide annual accounting. Beneficiaries are also entitled to an accounting from the trustee upon termination of the trust or when a new trustee assumes management of the trust.

3.  The accounting must contain certain details regarding trust property.

The annual accounting by the trustee must satisfy the legal requirements for a trust accounting record. For example, the trustee must include information related to expenses incurred by the trust during the year. The trustee must also account for any trust property sold, transferred, or distributed during the year. The beneficiaries also have the right to know what property the trust still holds.

4.  You have the right to petition the court for assistance.

If a trustee fails to perform his or her duties or breaches the fiduciary duty owed to beneficiaries of the trust, you have the right to petition the court to ask the court to intervene. The court may require the trustee to account for various actions and property. Depending on the outcome of the case, the court may remove the trustee and order the trustee to reimburse the trust for value lost because of the trustee’s breach of duty or other wrongdoing.

Contact a California Estate-Planning Attorney for More Information

The terms of the trust agreement impact your rights as a beneficiary. Trust agreements are complicated documents. A California estate-planning attorney can review the trust to determine your rights as a beneficiary under the trust agreement and pursuant to California trust law. If your beneficiary rights have been violated, the attorney can explain the various legal options available, including trust litigation, to resolve the matter. Contact us today for a consultation.

The Loew Law Group discusses the best ways to avoid a will contest.

How to Avoid a Will Contest in California

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After your death, the person you name in your will to manage your estate begins the process of probating your will. Your will is authenticated, and your personal representative begins securing your property, identifying your heirs, and assessing your final debts and legal obligations. Your will dictates the distribution of your property after payment of your final debts.

However, your heirs or other interested persons could contest the terms of your will. If your will is overturned, your wishes may not be carried out. Consulting a California estate-planning attorney when drafting your will is one of the best ways to avoid a will contest.

Steps You Can Take to Avoid a Will Contest

You cannot stop someone from contesting the terms of your will after your death. However, you can make it more difficult for someone to have grounds to contest the will and make it less likely that a will contest succeeds. Steps you can take to protect your will from a contest after your death include:

  • Include a no contest clause in your estate. A no contest clause states that if someone contests your will, then that person cannot inherit from your estate. However, no contest clauses can only be enforced in California under very specific, limited circumstances. In many cases, if the court finds that the person had probable cause to contest the will, the person is not disinherited if that person loses his or her battle to contest the will.
  • Properly execute your will. Improper execution of a will could give someone grounds to contest your will. Even though California recognizes wills that are handwritten and signed without witnesses, it is best to have at least two witnesses sign your will at the same time you execute the will who are not beneficiaries of your estate.
  • Include a self-proving clause in your will. A self-proving clause is a statement by the witnesses that you (the testator) had the capacity and intent to create the will and there appears to be no undue influence being exercised to force the person to sign the will. A notary public’s signature is also required stating that the information in the affidavit has been sworn to and acknowledged by the witnesses and the testator.
  • Obtain proof of mental capacity. If you believe that one of your heirs may attempt to contest your will alleging you lacked the mental capacity to execute a will, you might want to obtain at least two written statements from physicians who have examined you and determined you have the mental capacity to execute legal documents. While this will not prevent someone from contesting your will, it could make it much more difficult for the person to succeed in their endeavor.
  • Discuss your wishes and desires with your family. One of the reasons that family members contest a will is that they believe the terms of the will are not what you intended as your final wishes. Discussing your will with your heirs in a candid fashion may be difficult, but it can reduce the chance of a will contest because an heir believes he or she was to receive an inheritance even though you never made any explicit or implied statements that supported the person’s assumption.

Contact a California Estate-Planning Attorney for Help

Again, one of the best ways to ensure that your wishes are carried out after your death is to create a valid will. A California estate-planning attorney can help you avoid mistakes or errors that could give rise to a contest of your will. Your attorney can also help you take additional steps to protect your will and your estate, such as including trust agreements in your estate plan, if you believe that an heir may contest your will after your death. Contact us today for a consultation.