Articles Posted in Probate

One way to disinherit someone is to state in your California Will or living trust that if a beneficiary files a “pleading” in court, that person is penalized in some fashion, often by forfeiting their inheritance or distribution out of a trust.  This is often referred to as a no contest clause or an in terrorem clause.  The term “pleading” means a claim, petition, complaint, objection, cross-complaint, response or answer.  No contest clauses are valid in California and are favored by the public policies of discouraging litigation and giving effect to the settlor’s expressed purposes.  There are, however, other public policies that compete with that one and therefore no contest clauses are also disfavored by the policy against forfeitures and may not extend beyond what was clearly the trustor’s intent.  The California Probate Code contains an entire Part dedicated to no contest clauses in Sections 21310 through 21315.

California Probate Code Section 21311 defines what no contest clauses can be enforced and provides that a no contest clause may be enforced against a direct contest that is brought without probable cause. A “direct contest” is defined to mean a contest that alleges the invalidity of a protected instrument or one or more of its terms, based on one or more of the following grounds:

(1) Forgery.

The California Courts has a very informative website.  The section discussing probate, estates and wills is the most interesting and very comprehensive.

For example, the website begins the discussion on wills, estates and probate by stating in part:

“Losing a loved one is a sad and difficult time for family, relatives, and friends. In addition, those left behind must often figure out how to transfer or inherit property from the person who has died.

The Detroit Free Press published the article below about Aretha Franklin’s estate which illustrates for those of you living in California how important it is to get your estate planning affairs in order by having a Will and perhaps a living trust prepared.  If you own real property in California or have money in the bank or stock worth $150,000 or more, then seriously consider preparing a living trust in order to avoid probate.

To decide whether you can avoid probate, figure out if the value of the property (the estate) is worth $150,000 or less. To do this:

Include:

Almost all of the California probate courts now require electronic filing (efiling) of documents.  For about the last year, the Los Angeles Superior Court requires efiling in probate.  There are over five dozen providers assisting with efiling.  Those providers charge a filing fee over-and-above the filing fee charged by the court.

Exceptions to mandatory efiling in probate cases are:

  1. Original testamentary instruments (wills & codicils), letters, original trust documents, and bond or undertaking documents

Your spouse may still inherit a part of your estate in California even if you are separated and not living together at the time you die.  The California Probate Code, beginning with Section 6400, addresses how your property passes when you die without a will.  Not having a will is called dying “intestate”.  If you are married when you die, certain rules apply to how much your surviving spouse inherits but if you are “legally separated” yet still married, those rules don’t apply and your spouse gets nothing.  There is a difference between simply being “separated” and being “legally separated”.

Being “separated” and dying without a will results in your spouse getting half of your community property which means that the surviving spouse ends up with about three-fourths of your community estate (the half already owned by the surviving spouse plus half of the dead spouse’s community property).  It also means that the deceased spouse’s separate property all goes to the surviving spouse who may have previously separated and moved away from the decedent if the deceased spouse does not leave kids, grandkids, parents, siblings, nieces or nephews.  If any of those types of “heirs” are alive when you die intestate, then your surviving spouse won’t inherit all of your property since it will be split with the other heirs according to the rules of intestacy.  Nonetheless, if you don’t want any of your property going to the person with whom you are still married when you die even if you’ve “told” others what your wishes are, put your wishes in writing.

Your marriage is not necessarily over simply because you may be living apart.  Some spouses spend huge amounts of time apart while they are attempting to reconcile.  Some spouses continue to maintain an intimate spousal relationship while living apart.  When there are kids, spouses may want to postpone a divorce until some later time related to the kids’ life so as to reduce the impact on them.  The time when an inference of being “legally separated” may be made is when one spouse unambiguously declares there is a complete breakup of the marriage; otherwise, no legal inference of being legally separate is made simply because spouses live apart from one another.

When the person who made a trust dies, the trust needs to be administered by the trustee named in the document in order to manage trust property according to the trust document’s terms and for the benefit of the beneficiaries after the settlor’s death. Effective trust administration requires many steps to be done right. I recommend working with an attorney to help facilitate the process for the trustees who have a tremendous job ahead of them.

Mandatory notice to all the settlors’ heirs and beneficiaries is where trust administration starts. In California, the beneficiary has 120 days to file a trust contest after receiving notice. The beneficiary may forfeit his or her ability to file a contest if the time period runs out.  One of the benefits of providing that 120-day notice is to get the clock running so as to prevent claims from being made once they are too late to make.

The trustee will need to inventory all trust assets, such as real estate, bank and investment accounts, and transfer the title of those assets into the trustee’s name as the successor trustee. To do that, the trustee needs to first get the trust’s IRS federal tax identification number so that any income earned from the accounts in the name of the trust is reported correctly.

My client’s brother died in Los Angeles, California without a will (intestate), without a surviving spouse and without children.  His sister, my client, was his sole surviving heir.  When he visited California to begin the probate and clean out her brother’s house, she found a large collection of guns, rifles, bullets and magazines.  The collection contained Remingtons, Winchester, Colts and Rugers.

California law as it now stands makes the transfer between members of the same immediate family by gift, bequest, intestate succession, or other means exempt from the requirement firearm transaction be conducted through a firearms dealer.  If the person acquired ownership of the firearm from an immediate family member by bequest or intestate succession, existing law makes the importation of a firearm into the state exempt from the requirement that the firearm first be delivered to a firearms dealer in this state.

A transfer between “immediate family members” for purposes of qualifying for an exemption from using a firearms dealer defines those members as a parent, child, sibling, grandparent and grandchild whether consanguinity, adoption or step-relation.  So firearms transfers between siblings, as in my probate case, can be accomplished without the use of a dealer.

You have 3 choices to resolve a probate dispute: litigation, arbitration or mediation.  How do they differ from each other?

Mediation is generally done with a single mediator who helps facilitate discussion and eventual resolution of the dispute.  Mediation is often used as a non-binding process in contrast to arbitration which often produces a binding outcome.  It is up to the parties to agree or not about whether the outcome is binding on them. Besides being confidential and non-binding, mediation is relatively quick and inexpensive compared to litigating a dispute.

Arbitration is generally conducted by several arbitrators acting together. Each side selects an arbitrator who in turn picks another arbitrator so that in the end there is an odd number of arbitrators.  They take on a role like that of a judge, make decisions about evidence and give written opinions. Decisions are made by majority vote.  The parties decide ahead of time whether to make arbitration binding or non-binding. Binding arbitration replaces the trial process with the arbitration process.

In California, will contests and trust disputes are quite common.  When someone who believes they are entitled to share in an estate or a family member disagrees with how estate property is being distributed, the likely result is probate litigation.  Litigation begins with a petition and that means someone who has an interest in the estate brings their disagreement to the court to resolve. Litigation is sometimes difficult to avoid despite using even the best estate planning techniques.

There are essentially four legal grounds for challenging the validity of a will.  Each of these bases can be difficult to prove because medical records need to be obtained, witnesses’ declarations/testimony needs to be provided and experts may need to be hired for their input.  Contesting a will can also be a very expensive court process, yet that fact does not often dissuade everyone.  The legal bases to challenge a will include the following: (1) there is a question about testamentary capacity, (2) there is a suspicion of undue influence in preparing or executing the will, (3) it was not signed properly, and (4) the testator was fraudulently induced into creating the will or including certain provisions.

A lack of testamentary capacity can invalidate a will.  Under California law, an incapacitated person is defined as follows:

California probate, especially in Los Angeles, costs money.  Fees are payable for all kinds of things, including and certainly not limited to, filing a probate petition, filing objections, filing trust contests, and filing demurrers.  For a complete list of fees, see the 2017 fee schedule here.

In a nutshell, here is a list of items for which a fee is due (just click on the image):

 

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