An interesting tale of IRS woe, click on the following link, Death Tax Grasps for More of William Davidson’s Wealth.

Dave Tate, Esq. (San Francisco), Trust, Estate and Conservatorship Litigation and Contentious Administrations

See also my other blog re civil litigation, real estate, business, risk and governance, http://businesslawrealestate.com.

Fiduciary Trust International of California v. Superior Court (Brown) (California Court of Appeal Case No. B247441, July 31, 2013).

Greetings. The following is a summary discussion about the Court’s decision in Fiduciary Trust International.

The Court held that under the circumstances of this case that a law firm that did estate planning for a husband and wife was disqualified due to conflict of interest from representing the trustee of the husband’s trust in a dispute with the representative of the wife over from which trust or pot of money estate taxes would be paid. The case reminds attorneys that when they provide estate planning services they need to be careful about potential and actual conflicts of interest not only when jointly representing two or more people with respect to their estate planning but also subsequently if the same estate planning attorneys are providing services in the context of administration or disputes. These cases and situations should be evaluated on a case by case basis.

The Court’s decision in Fiduciary Trust International provides lengthy discussion and analysis relating to conflicts of interest in the context of estate planning and a subsequent dispute between the husband’s estate planning and his provisions and the wife’s estate planning and her provisions. And it is also reasonable to believe and conclude that the original estate planning law firm and its records also might be called upon to provide evidence as to the provisions in question and the intentions of the husband and wife.

I also found important the Court’s comments that (1) it is also important that the Rules of Professional Conduct are also intended to protect the integrity and public trust in the legal profession, not just to regulate or apply to the specific situation in question; and (2) even if the potential for conflict is originally disclosed to the multiple parties, “if the potential adversity should become actual, the [attorney] must obtain the further informed written consent of the clients.”

Dave Tate, Esq. (San Francisco)

Click the following link to see the article from LeClair Ryan, New ACA Regulations Prohibit Discrimination in Health Care Programs.

Dave Tate, Esq. (San Francisco)

Click on the following link for a discussion from the Tierney Watson Healy blog, Medicaid Denials of Coverage on the Rise. As I have been a litigation attorney, for both plaintiffs and defendants, for sometime, there are always two or more sides to the story; however, as a significant amount of medical care is now covered or potentially covered under government or government related programs, and as those programs are expected to increase, there should be an online publicly available, easy-to-read, transparent clearinghouse website that discusses coverages in detail and, if legally permissible, specific fact situations relating to coverage, with names and private information redacted of course.

Dave Tate, Esq. (San Francisco)

The following is a link to a NY Times article in which it is stated that there is evidence that in some situations there has been a sharp dip in dementia rates as age progresses, click here for the article. I can tell you that I would like to live to be a ripe older age assuming that I remain physically and mentally healthy as I like out-of-doors activities such as hiking hills and camping. The thought of dementia/Alzheimer’s is a scary thought – yes presumably I should have many years to go without concern, but I have told my sons that I would rather they put me on a lake with a tent and a folding chair than being in a nursing home. I also read a recent article that keeping the brain stimulated, such as by reading, helps to combat dementia. Keep on, or start, reading.

Dave Tate, Esq. (San Francisco)

I started this blog with seven days remaining in April, 2011. In the approximately two and one-third years that this blog has been in operation we have had in excess of 16,000 views, and we are continuing to increase the monthly viewership. I just wanted to say thank you for taking a look.

Dave Tate, Esq. (San Francisco)

Conservatorship Dementia Medical Treatment & Placement

California courts are or should be more closely scrutinizing conservatorship requests for authority to administer dementia medications, and to place a conservatee in a secured or locked facility. The Probate Code contains specific pleading and evidentiary requirements when these issues are present. Although the specific requirements add complexity to conservatorship proceedings, the provisions are designed to protect the conservatee’s constitutional and personal rights. In some cases these provisions can present the Judge with a “tough call” scenario.

In summary, California Probate Code §2356.5 provides that the Court can grant authority to place a conservatee in a secured parameter residential care facility if the Court finds, by clear and convincing evidence, all of the following:
-The conservatee has dementia;
-The conservatee lacks the capacity to give informed consent to placement;
-The conservatee needs or would benefit from a restricted or secure environment as demonstrated by evidence presented by a physician or psychologist; and
-The proposed placement in a locked facility is the least restrictive placement appropriate.

California Probate Code §2356.5 further provides that the Court can grant authority for the administration of medications for the care and treatment of dementia if the Court finds, by clear and convincing evidence, all of the following:
-The conservatee has dementia;
-The conservatee lacks the capacity to give informed consent to the administration of medications appropriate to the care of dementia; and
-The conservatee needs or would benefit from that medication as demonstrated by evidence presented by a physician or psychologist.

Section 2356.5 further provides that the petition shall be supported by a sufficient declaration by an appropriate licensed physician or psychologist, and that the provisions of §2357, which is discussed below, shall govern the petition for authority to act under §2356.5.

California Probate Code §2357 provides in pertinent part that with respect to medical treatment issues, the petition shall state or set forth by medical affidavit all of the following so far as known to the petitioner at the time the petition is filed:
-The nature of the medical condition which requires treatment;
-The recommended course of medical treatment which is considered to be medically appropriate;
-The threat to the health of the conservatee if authorization to the consent of the recommended course of treatment is delayed or denied by the Court;
-The predictable or probable outcome of the recommended course of treatment;
-The medically available alternatives, if any, to the course of treatment recommended; and
-Efforts made to obtain an informed consent from the conservatee.

The conservatee is entitled to be represented by an attorney, and is entitled to have the issues set for an evidentiary hearing (i.e., a trial) unless the attorney for the conservatee decides to stipulate that there remains no issue or fact to be determined, and that the matter may be submitted to the Court upon proper and sufficient medical declarations. In other words, in cases where the issues are not clear, it may very well be appropriate to have the evidence, including the testimony of the physician or psychologist presented in Court, with the opportunity for cross-examination.

We are seeing more cases where Courts are requiring added careful analysis of the issues and the evidence, and conservators are expected to provide clear and convincing evidence, meeting statutory requirements, that dementia medications and secured parameter facilities are necessary and in the best interests of the conservatee.

Dave Tate, Esq. (San Francisco)

The following is a brief discussion about the interpretation of a will or trust in California. Why is interpretation important? Because the estate or assets should be administered and distributed in accord with the Decedent’s or Trustor’s intent. In the majority of cases the wording of the will or trust and the Decedent’s or Trustor’s intent are clear and correctly stated. However, it can be surprising in how many cases wording can be ambiguous or missing, or the Decedent’s or Trustor’s intent might not be clear, or clearly or properly stated in the will or trust.

It is long established California law that it is the intent of the decedent that controls the legal effect of his/her dispositions and whether or not an alleged will or trust document is in fact his/her valid and enforceable last will or trust including the interpretation of that alleged will or trust document, and that as an aid to the understanding of the alleged will or trust document and to the discovery of the Decedent’s or Trustor’s intent extrinsic evidence and evidence of the surrounding circumstances are admissible. Estate of Russell (1968) 69 Cal. 2d 200, 2006; Estate of Hollingsworth (1940) 37 Cal. App. 2d 432, 435; Cal. Probate Code §21102; see also Cal. Code Civ. Proc. §1860 (for the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject of the instrument, and of the parties to it, may also be shown, so that the Trier of fact be placed in the position of the person whose language is being interpreted); and Cal. Probate Code §6111.5. For example, extrinsic evidence is admissible not only to resolve a latent ambiguity in a will but also to show that a latent ambiguity exists, as by showing that more than one person met the description of beneficiary in the will, that more than one thing met the description of what appeared as a specific devise or bequest, or that certain language of the will was understood and intended by the testator to have a meaning different from what on its face it appeared to have. In re Flint’s Estate (1972) 25 Cal.App.3d 945.

Dave Tate, Esq. (San Francisco)
Disclaimer and Warning About This Blog and Post: The contents and discussions on this blog are not a solicitation for or to provide attorney, legal or other services, are only a summary of complicated and more detailed topics, pertain if at all only to California, and do not apply to any specific person, organization, situation or circumstance. You cannot rely on these contents or discussions for your situation, and you definitely should consult with an attorney for your situation, and to make sure that you don’t file or commence any legal action or court proceeding that could trigger a no contest or other will or trust clause or provision which might or could disinherit you.

Drake v. Pinkham (California Court of Appeal, Third District, Case No. C068747, decided May 28, 2013, ordered for publication June 21, 2013).

This case involves a daughter’s (Gina) contest of two of her mother’s (Josephine) trust amendments (amendments dated 2001 and 2004) on the grounds that at the time of the amendments Josephine lacked mental capacity, was unduly influenced by a second daughter (Janice), and did not understand the amendments or her estate.  On a motion for summary judgment the trial court found that Gina’s contest was barred by the statute of limitations and principles of collateral estoppel.  On appeal, the Court of Appeal did not consider the statute of limitations or collateral estoppel issues, but instead found that Gina’s contest was barred by the defense of laches.

Gina filed her contest after her mother’s October 2009 death.  However, several years earlier, in 2005, Gina had filed a petition requesting the court to confirm her appointment as co-trustee under the terms of the trust and amendments dated 1992, 1993 and 1999.  Gina claimed that Josephine lacked the ability to care for herself or act as trustee and Janice’s alleged undue influence over her – Gina alleged that after the death of Josephine’s husband Theodore Janice began progressively isolating Josephine to the point that Gina no longer had contact with her mother, and that Janice had complete control over Josephine including her finances and was acting as the sole trustee of the trust.  Filed an objection to Gina’s 2005 petition and attached to her objection copies of her 2001 and 2004 trust amendments. The 2001 Fourth Amendment eliminated Gina as a beneficiary and named Janice as the sole successor trustee, and the 2004 Fifth Amendment designated Janice as Josephine’s acting co-trustee and sole successor trustee.  At that time in 2005 Gina did not challenge the 2001 or 2004 amendments.  Instead, Gina entered into a settlement agreement in which Josephine represented that she was the sole acting trustee, and in her capacity as such on behalf of all successor trustees, she agreed not to sell, encumber, lease, rent, transfer or otherwise take any action affecting any real property of the trust without prior notice to Gina and Janice as provided in the trust.

On appeal the Court addressed several important issues that could have ramifications or that might at least be considered in cases where issues exist relating to mental capacity, undue influence, and understanding of the trust or will documents and the nature of the estate and its assets.

1.  On appeal Gina argued as a defense that in 2005 she did not have standing to contest the 2001 and 2004 amendments pursuant to Cal. Probate Code sections 17200 and 15800 because the trust was still revocable in 2005.  The Court of Appeal noted that under sections 17200 and 15800 a beneficiary lacks standing to challenge a trust so long as the “trust is revocable and the person holding the power to revoke the trust is competent.”  The Court held that it was not persuaded by Gina’s argument, holding that since Gina alleged in 2005 that Josephine was incompetent, those allegations by Gina in 2005 took the matter outside of the terms of section 15800, and with those allegations Gina had standing in 2005 to contest the trust amendments, although at trial she still would have had the burden of proving her contest of the amendments.

2.  The Court further held that laches barred Gina from contesting the 2001 and 2004 amendments after her mother died in 2009.  In pertinent part, the Court discussed that the defense of laches requires unreasonable delay plus either acquiescence in the act about which plaintiff complains or prejudice to the defendant resulting from any delay – and that any delay is measured from the time that the plaintiff knew or should have known about the alleged claim.  In 2005 Gina had the usual rights of a trust beneficiary and beneficiary legal standing if Gina simply alleged that Josephine was incompetent, which Gina did in fact allege in 2005.  Further, “Finally, Gina’s failure to bring the action until after Josephine had passed away was necessarily prejudicial where, as here, each and every cause of action set forth in the underlying petition centered on Josephine – her mental capacity, defendant’s influence over her, and her understanding of the Fourth [2001] and Fifth [2004] Amendments and her estate.  (See Bono v. Clark (2002) 103 Cal.App.4th 1409, 1420 [the death of an important witness may constitute prejudice]; Stafford v. Ballinger (1962) 199 Cal. App.2d 289, 296 [same].”

Take away from Drake v. Pinkham, assuming that the case is not further appealed to the California Supreme Court.

1.  As always, before you file any pleading, claim, allegation or paper with any court relating to a trust, will or other document with a no contest clause or to which a no contest clause applies, you must evaluate and make sure that the filing will not trigger the no contest clause.  If such a clause is triggered, the result might be that you are disinherited.  These are complicated issues – you need to consult with an attorney on these issues.

2.  A simple allegation that the trustor is incompetent might allow or provide the trust beneficiary or potential beneficiary with legal standing and certain beneficiary rights in an otherwise revocable trust under Cal. Probate Code sections 17200, 15800, the terms of the trust, accounting and information provisions, and other statutes.  Of course, the proof of those claims must still be established by the evidence.

3.  Allegations and claims, statements, and knowledge of facts by a beneficiary or potential beneficiary, or facts that a beneficiary or potential beneficiary should know, could trigger a requirement that the beneficiary or potential beneficiary bring suit and not delay bringing suit to enforce his or her rights and entitlements, or be barred from doing so later pursuant to the defense of laches such as if the testator dies or the testator’s mental competency declines as time passes.

4.  The defense of laches, i.e., delay, and case law relating to laches now take on renewed potential importance in trust, will, conservatorship and power of attorney litigation.  For example, if a beneficiary or potential beneficiary knows of a trust or will, or a trust amendment or will codicil, that is contrary to the beneficiary’s rights or interests, and the beneficiary simply believes that the trustor or testator might have had capacity issues or might have been unduly influenced, or that testamentary document seems contrary to what the trustor or testator would have naturally done or wanted or understood about his or her assets or estate, might that beneficiary or potential beneficiary be required to file a legal action on those possible claims without delay, or be barred by laches from doing so at a later time?  I have seen trust, will, conservatorship and power of attorney situations where people have delayed taking action – under the holding in Drake v. Pinkham they now need to consider the possible effect of delay and possible laches defenses against them if they do delay in bringing a legal action.

Dave Tate, Esq. (San Francisco)
Liability, litigation and trials; mediator and dispute resolution; risk management; D&O; boards, governance and leadership.
Real Estate Blog, http://taterealestatelaw.com
Trust, Estate, Conservatorship & Elder Litigation Blog, http://californiaestatetrust.com

Disclaimer and Warning.  This blog post and the contents and information contained in the post are not legal advice, do not create or cause an attorney client relationship with your or anyone else, and do not relate or pertain to any person, entity or factual situation, and I do not know the facts of your situation.  The contents of this blog post are only a summary of information which could change over time.  I have not advised you about your situation, and you definitely should consult with an attorney for your particular situation.

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The following is a link to a Forbes article entitled “How To Kill An Irrevocable Trust,” click here for the article.

In California Probate Code sections 15400-15414 and related relevant sections govern the modification and revocation of a trust. These statutes and the provisions of the trust itself must be read and carefully evaluated. In some situations it might or it might not be possible to modify or revoke an irrevocable trust. You should consult legal counsel on these issues. The Forbes article is also interesting for its discussion of some of the changed circumstances that might prompt someone to consider seeking to modify or revoke an irrevocable trust, and legal planning opportunities relating to those situations.

Dave Tate, Esq. (San Francisco)
Liability, litigation and trials; mediator and dispute resolution; risk management; D&O; boards, governance and leadership.
Blogs: http://taterealestatelaw.com; http://californiaestatetrust.com