Posted on December 04, 2023 in Trusts

There are several options available for you to set your estate plan up so your loved ones are cared for when you pass away. While you probably know about writing a will, you should also consider trusts.

There are two types of trusts – irrevocable and revocable. An irrevocable trust can't be changed without the permission of the court or beneficiaries. This is the opposite of a revocable trust, which can be changed. The benefits of the irrevocable trust may outweigh the inability to change the terms.

1. Specific rules can be outlined

You can set specific terms for the distribution of the trust. This enables you to have control over when your loved ones get the contents. You may choose to include age distributions, milestone distributions or many other options. Special types of irrevocable trusts, such as special needs trusts, serve specific purposes.

2. Protection from creditors

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 Posted on November 28, 2023 in Estate And Trust Litigation

Trusts are put in place for the good of its beneficiaries – and a trustee is put in charge. The trustee is responsible for managing the trust's assets and distributing funds according to the terms of the trust, even if they're permitted to do so with a great deal of flexibility.

Unfortunately, not every trustee is actually trustworthy. Some of them take advantage of their positions to line their own pockets, putting their interests above their duties.

A trustee is obligated to put their own self-interest aside

Trustees are fiduciaries, which means they are required by law to act in the best interest of the trust and its beneficiaries, above all else – including their own best interests. Self-dealing involves any actions that benefit the trustee to the detriment of the trust or its beneficiaries. Self-dealing can look like:

• Claiming excessive compensation: Trustees are usually paid for their services. That's only fair, given the job they have to do. However, a trustee who awards themselves outrageously large fees for their services can essentially "bleed" the trust dry.

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 Posted on November 13, 2023 in Estate Planning

When choosing the person who will carry out your last wishes as outlined in your will, it is natural to incline towards a family member. We all love our families, but let's face it - divvying up assets and navigating legal waters can be a breeding ground for tension. Therefore, it is prudent to make the right choice, even if it means looking beyond blood relations.

Your cousin or brother might be the life of the party, but do they have what it takes to manage your estate when the time comes? Remember, an executor needs more than good intentions; they require a solid understanding of the legal and financial matters involved in the role to ensure a smooth legal process.

Consider someone with the right skills

As mentioned, the complexities of executing a will demand more than mere enthusiasm. Some of the personal traits and characteristics to look out for include:

• Impartiality - An ideal executor should be fair and unbiased, capable of making decisions based on the merits of the situation rather than personal affiliations.

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 Posted on October 26, 2023 in Estate And Probate Administration

Before rightful heirs and beneficiaries get their share of their deceased loved one's estate, the personal representative must first pay all debts and taxes.

For executors and administrators, it is essential to know the order of priority to ensure they are administering the estate properly. For heirs and beneficiaries, knowing the payment order and the decedent's actual obligations can set their expectations as to what they would receive.

Payment by the list

According to California probate laws, an estate's personal representative shall pay all of the deceased owner's debts in the following order:

1. Obligations to the U.S. government and California
2. Expenses related to the estate's administration
3. Secured debts
4. Funeral costs
5. Medical and other expenses associated with the treatment of the deceased's last illness

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 Posted on October 23, 2023 in Estate Planning

A will is one of the most important legal documents that you can ever sign. Done right, a will takes the guesswork out of the equation and ensures that your assets pass down to the people and causes that you approve of when you die. Without one, the government might step in and decide what happens to your estate.

For your will to be deemed valid and, thus, enforceable, however, it must meet certain important conditions. One of these is that you must be in the right state of mind at the time of signing the will. If there are doubts regarding your testamentary capacity, then someone might successfully contest your will. But what exactly does this mean?

Understanding testamentary capacity

Basically, testamentary capacity is a mental threshold that you must meet to be able to make a will or update an existing one. Of course, it is not uncommon for an individual to temporarily lose their testamentary capacity. For instance, you may fall into a coma and regain your consciousness after treatment. Thus, testamentary capacity is assessed at the time of signing the will.

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 Posted on October 16, 2023 in Estate Planning

A will dispute after the testator's passing is not uncommon. This dispute can be time and resource-consuming. Worse still, it can sow a lasting seed of discord amongst family members. It's for this among other reasons that a testator might want to add a no-contest clause to their will.

The primary goal of including a no-contest clause in your will is to dissuade beneficiaries from disputing the document on frivolous grounds. But is it always enforceable?

Understanding how a no-contest clause works

Basically, a no-contest clause makes a beneficiary's allotment conditional on their acceptance of the will. This provision states that should a beneficiary contest the will, they may forfeit their share of the inheritance.

But while you are generally free to include a no-contest clause in your will, certain limitations apply that, if you overlook, might result in the clause being voided. And if the clause is voided, it will be struck from your will. Consequently, this might open the door for your beneficiaries to dispute your will without the risk of losing their inheritance.

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 Posted on October 02, 2023 in Estate And Trust Litigation

In the world of estate management, a trustee might not handle the trust's assets wisely or may lack transparency about the trust's affairs. These issues could depend a lot on what the trust agreement says and what the specific situation is. But if a beneficiary thinks the trustee isn't acting with their best interests in mind, they might have a chance to replace or even fire the trustee.

This possibility could depend on certain legalities, which might help you understand what this might mean for everyone involved.

Through the trust agreement

If the trust agreement says beneficiaries can remove or replace a trustee, they typically can do so following the steps outlined in the agreement. Often, replacing or ending a trustee's role requires more than half of the beneficiaries to agree. If all beneficiaries agree, they can vote to change the trustee without needing to go to court.

By court order

On the other hand, a trust agreement might not allow the beneficiaries to remove or replace a trustee. In that case, they can try to convince the trustee to step down on their own. But if that doesn't work, the beneficiaries can petition the court to remove or replace the trustee. The court will only grant the petition if there is a valid cause for removal, such as:

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 Posted on September 08, 2023 in Probate Litigation

Ideally, a will can guide surviving family members and the probate court on how to properly distribute the deceased's estate. But sometimes, specific circumstances can cause disputes and lead to probate claims. These claims can result in disputes and even litigation based on the situation.

These cases might only undergo litigation if their claims have a firm legal basis that contradicts the terms within the deceased's will. Claimants can exercise their probate rights if they have valid reasons, including the following:

• The decedent has unpaid debts to the claimant.
• One or some of the beneficiaries were directly or indirectly liable for the testator's death.
• One or some of the beneficiaries were involved in the events leading up to or contributing to the testator's death.
• The testator drafted the most recent version of the will when they were mentally incapacitated.

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 Posted on August 16, 2023 in Probate Litigation

Parties to an estate would want to have a smooth and speedy probate administration. However, if an heir or beneficiary finds that there was an undue influence when the testator created their will, they would most likely contest the will's validity, even if it means having a lengthier probate duration.

Unfortunately, unlike proving a testator's lack of testamentary capacity to create a will, undue influence can be more challenging the substantiate. Nevertheless, it is still possible.

What are the elements of undue influence?

By technical definition, there is an undue influence when the following circumstances are present:

• The testator was in a vulnerable state: Undue influence is more common when a testator is a senior citizen, a person with a disability or any individual who is excessively vulnerable.
• The influencer had power over the testator: Individuals guilty of undue influence are those who hold power over the testator. They usually have a fiduciary or confidential relationship with the victim, like a medical care provider, financial advisor or family member.

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 Posted on July 25, 2023 in Estate And Trust Litigation

Trusts are usually straightforward. The settlor creates the trust, the trustee manages and administers it, and the beneficiary receives their share. However, confusion may arise if creditors appear and demand payments from the trust. Fiduciaries and beneficiaries must equip themselves with the proper knowledge to handle this situation. Otherwise, it might create complications to the trust and compromise interested parties' rights.

Looking into the nature of the trust

Creditors can only go after assets that a debtor owns and controls. If a debtor creates an irrevocable trust, they give up control and no longer have ownership over the assets, which the trust now owns. Therefore, creditors cannot go after the trust. However, if the trust is revocable, creditors may be able to access the assets because the grantor still has control over and benefits from the trust.

Analyzing the spendthrift trust's provisions

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