Summary of California Trustee and Beneficiary Responsibilities and Rights, and Handling Contentious Trust Administrations and Other Family Situations (PPT slides saved as PDF)

The following is a link to a PDF of my PowerPoint slides for a Summary of California Trustee and Beneficiary Responsibilities and Rights, and Handling Contentious Trust Administrations and Other Family Situations: David Tate, Esq. – Summary of California Trustee and Beneficiary Responsibilities and Rights 02252020 Slides Saved as PDF

And below is a snapshot of page 1 of the slides. Best to you, Dave Tate, Esq.

 

 

Barefoot v. Jennings, Supreme Court of California (January 23, 2020), Standing Under Cal. Probate Code §17200, and More . . .

Barefoot v. Jennings, Supreme Court of California (January 23, 2020), S251574, 2020 WL 372523

Summary and Holding: (1) Settlor Maynord executed eight amendments (amendment numbers 17 through 24) to the trust through which petitioner’s/plaintiff’s share of the trust as set out in the 16th amendment was eliminated; (2) the Court held that petitioner/plaintiff, an ex-beneficiary, has standing to bring an action under Cal. Probate Code §17200 to challenge the validity of the trust amendments where she alleges that the amendments that disinherited her were invalid because Maynord was incompetent to make the amendments; the amendments were the product of respondents’/defendants’ undue influence; and the amendments were the product of respondents’/defendants’ fraud; (3) §17200 allows a trustee or a beneficiary to petition the Court; (4) petitioner/plaintiff had standing under §17200 because although she is not currently a beneficiary, she would or will be a beneficiary if her allegations are proven.

The following are my initial comments:

  1. I don’t understand why the Court went down this path – petitioner already had standing to challenge or contest the trust amendments under her three theories (lack of mental capacity, undue influence, and fraud) – §17200 wasn’t necessary to provide petitioner with standing. Nevertheless, the holding is as it is.
  2. Allegations of lack of mental capacity, undue influence, and fraud can or might trigger a no contest clause – does bringing the action under §17200 in some manner change (lower or eliminate) that argument? See also footnote 3 in this regard.
  3. It is interesting that since petitioner was provided benefits under the 16th amendment, she had to argue that the 17th through 24th amendments are all invalid.
  4. The Court’s decision is not based on the Legislative intent – I would have thought that it would be, or at least that the Court would have thought that the Legislative intent would be relevant.
  5. In its decision the Court specifically declines to discuss or interpret Cal. Probate Code §850. That would have been an interesting discussion as I have had cases involving allegations pertaining to §850 (and §859) and when someone has standing or not – there is almost no case law on this topic although there is Legislative history. For example, one provision of §850 provides that in particular circumstances a trustee or an interested person has standing to bring a petition – but absent case law, I would not view “interested person” under §850 as being the same as “beneficiary” in the context of the Barefoot v. Jennings discussion under §17200.
  6. The Court’s decision is of interest for additional reasons, including, for example, the Court’s affirmation that in construing a trust the Court’s primary duty is to give effect to the settlor’s intentions, and the Probate Court has extremely broad power and authority to apply equitable and legal principles in order to assist its function as a Probate Court, and is given broad jurisdiction over practically all controversies that might arise between trustees and those claiming to be beneficiaries of the trust (including to preserve trust assets and the rights of all purported beneficiaries while the Court adjudicates the standing issue).

We can expect that more decisions will be forthcoming relating to the impact of the holding in Barefoot v. Jennings, potential issues that I have discussed above, standing under §17200, and the entirety of §850, et seq.

You can click on the following link for a copy of Barefoot v. Jennings Barefoot v Jennings California Supreme Court

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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.

Thank you for reading this post. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.

I am also the Chair of the Business Law Section of the Bar Association of San Francisco.

Blogs: Trust, estate/probate, power of attorney, conservatorship, elder and dependent adult abuse, nursing home and care, disability, discrimination, personal injury, responsibilities and rights, and other related litigation, and contentious administrations http://californiaestatetrust.com; Business, D&O, board, director, audit committee, shareholder, founder, owner, and investor litigation, governance, responsibilities and rights, compliance, investigations, and risk management  http://auditcommitteeupdate.com

My law practice primarily involves the following areas and issues:

Probate Court Disputes and Litigation

  • Trust and estate disputes and litigation, and contentious administrations representing fiduciaries and beneficiaries; elder abuse; power of attorney disputes; elder care and nursing home abuse; conservatorships; claims to real and personal property; and other related disputes and litigation.

Business and Business-Related Disputes and Litigation: Private, Closely Held, and Family Businesses; Public Companies; and Nonprofit Entities

  • Business v. business disputes including breach of contract; unlawful, unfair and fraudulent business practices; fraud, deceit and misrepresentation; unfair competition; licensing agreements, breach of the covenant of good faith and fair dealing; etc.
  • Misappropriation of trade secrets
  • M&A disputes
  • Founder, officer, director and board, investor, shareholder, creditor, VC, control, governance, decision making, fiduciary duty, conflict of interest, independence, voting, etc., disputes
  • Buy-sell disputes
  • Funding and share dilution disputes
  • Accounting, lost profits, and royalty disputes and damages
  • Access to corporate and business records disputes
  • Employee, employer and workplace disputes and processes, discrimination, whistleblower and retaliation, harassment, defamation, etc.

Investigations and Governance

  • Corporate and business internal investigations
  • Board, audit committee and special committee governance and processes, disputes, conflicts of interest, independence, culture, ethics, etc.

The following are copies of the tables of contents of three of the more formal materials that I have written over the years about accounting/auditing, audit committees, and related legal topics – Accounting and Its Legal Implications was my first formal effort, which resulted in a published book that had more of an accounting and auditing focus; Chapter 5A, Audit Committee Functions and Responsibilities, for the California Continuing Education of the Bar has a more legal focus; and the most recent Tate’s Excellent Audit Committee Guide (February 2017) also has a more legal focus:

Accounting and Its Legal Implications

Chapter 5A, Audit Committee Functions and Responsibilities, CEB Advising and Defending Corporate Directors and Officers

Tate’s Excellent Audit Committee Guide

The following are other summary materials that you might find useful:

OVERVIEW OF A RISK MANAGEMENT PROCESS THAT YOU CAN USE 03162018

Audit Committee 5 Lines of Success, Diligence, and Defense - David Tate, Esq, 05052018

COSO Enterprise Risk Management Framework ERM Components and Principles

From a prior blog post which you can find at https://wp.me/p75iWX-dk if the below scan is too difficult to read:

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Power of Attorney / Attorney in Fact Responsibilities and Rights – Slides 3, 4 and 5

I seldom see discussions about power of attorney, principal, and attorney-in-fact responsibilities and rights. In this post and in subsequent posts I will be providing some of my power of attorney presentation slides. Below in this post I have provided screenshots of my slide numbers 3, 4 and 5.

You should note, obviously these slides are a summary of what can be a complicated area of law and specific facts, they are not a solicitation for services inside or outside of California, and they do not pertain to any particular situation or to you and your situation. You need to consult with an appropriate professional for your specific situation.

Best to you, Dave Tate, Esq. (California)

Blogs:

 

 

New California case upholds the substantial benefit doctrine for payment and recovery of attorneys’ fees and expert witness fees from the entire trust and the shares of all of the beneficiaries

In Smith v. Szeyller (Court of Appeal, Second Appellate District, B281758, January 16, 2019), the court held that the probate court’s award approving payment of attorneys’ fees and expert witness fees from the trust to the beneficiary who challenged the trustees’ accounting and management of the trust was appropriate under the substantial benefit doctrine. The beneficiary who challenged the trustees’ accounting and management of the trust prevailed, thus benefiting the trust and all beneficiaries of the trust although only the one beneficiary challenged the accounting and management. As the trust and all of its beneficiaries benefited from the successful challenge, it was appropriate that the attorneys’ fees and expert witness fees be paid and reimbursed from the assets of the entire trust and the shares of each of the beneficiaries thereof.

Note: I used this doctrine after a successful week-long trial in one of my cases.

Thanks for reading this post. If you have found value in this post, I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly. And please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

Every trust situation is different. You do need to consult with professionals about your particular situation. This post is not a solicitation for services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation.

Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only

Blogs: California trust, estate, and elder abuse litigation and contentious administrations http://californiaestatetrust.com; D&O, audit committee, governance and risk management http://auditcommitteeupdate.com

From Frameworks Institute – Elder Abuse Toolkit

The Frameworks Institute has developed a toolkit which analyzes problems with society’s view of elder abuse and recommends alternative more effective approaches to discussing elder abuse. The following is a link to the Frameworks Institute, Elder Abuse website page, and a screenshot of the initial website page. Best to you – David Tate, Esq.

Here is the link to the Frameworks Institute, Elder Abuse website page, http://frameworksinstitute.org/elder-abuse.html

And the following is a screenshot of the initial website page:

 

Don’t delay: allegations of incompetence could give beneficiary standing, but delay in taking action could bar a beneficiary from contesting a trust or will at a later date (laches), Drake v. Pinkham

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.

Best to you, David Tate, Esq.

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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Dr. Kerry Burnight on Live Long and Master Aging – Loneliness, Aging, Technology and GrandPad

Below I have provided a link to a podcast with Dr. Kerry Burnight on Live Long and Master Aging, in which Dr. Burnight, a gerontologist, discusses many aspects of aging, including, for example, the value of older people, and how technology can help with aging loneliness. Dr. Burnight also discusses a product that she is involved with, the GrandPad and how they worked to make the product specifically useful for older users. The podcast is somewhat long; however, you will find that there are useful comments and information throughout. Here is the link to the podcast http://www.llamapodcast.com/kerry-burnight/

As I was listening to the podcast I started thinking about the usefulness of the GrandPad in terms of risk management or enterprise risk management (ERM), and legal duties, responsibilities and rights, in the context of nursing homes for example. Is a product like the GrandPad something that nursing homes should (or must?) provide or make available to their residents, to make it easier for a resident to safely stay in touch with family and friends, for socialization, for mental stimulation and to help prevent decline in mental capabilities, and for personal daily living enjoyment?  

Best to you, David Tate, Esq.

And here is a snapshot of the Live Long and Master Aging website page:

Snapshot of Kerry Burnight on Long Live and Master Aging

David Tate, Esq. (and inactive California CPA), Royse Law Firm, Menlo Park, California office, with offices in northern and southern California.  My blogs: trust, estate, elder abuse and conservatorship litigation http://californiaestatetrust.com, D&O, boards, audit committees, governance, etc. http://auditcommitteeupdate.com, workplace http://workplacelawreport.com

OVERVIEW OF A RISK MANAGEMENT PROCESS THAT YOU CAN USE 03162018

Audit Committee 5 Lines of Success, Diligence, and Defense - David Tate, Esq, 05052018

COSO Enterprise Risk Management Framework ERM Components and Principles

David Tate, Esq., Overview of My Practice Areas (Royse Law Firm, Menlo Park, California office, with offices in northern and southern California. http://rroyselaw.com)

  • Civil Litigation: business, commercial, real estate, D&O, board and committee, founder, owner, investor, creditor, shareholder, M&A, and other disputes and litigation
  • Probate Court Litigation: trust, estate, elder abuse, and conservatorship disputes and litigation
  • Administration: trust and estate administration and contentious administrations representing fiduciaries and beneficiaries
  • Workplace (including discrimination) litigation and consulting
  • Board, director, committee and audit committee, and executive officer responsibilities and rights

Royse Law Firm – Overview of Firm Practice Areas – San Francisco Bay Area and Los Angeles Basin

  • Corporate and Securities, Financing and Formation
  • Corporate Governance, D&O, Boards and Committees, Audit Committees, Etc.
  • Intellectual Property – Patents, Trademarks, Copyrights, Trade Secrets
  • International
  • Immigration
  • Mergers & Acquisitions
  • Labor and Employment
  • Litigation (I broke out the litigation as this is my primary area of practice)
  •             Business & Commercial
  •             IP – Patent, Trademark, Copyright, Trade Secret, NDA
  •             Accountings, Fraud, Lost Income/Royalties, Etc.
  •             Internet Privacy, Hacking, Speech, Etc.
  •             Labor and Employment
  •             Mergers & Acquisitions
  •             Real Estate
  •             Owner, Founder, Investor, D&O, Board/Committee, Shareholder
  •             Lender/Debtor
  •             Investigations
  •             Trust, Estate, Conservatorship, Elder Abuse, and Administrations
  • Real Estate
  • Tax (US and International) and Tax Litigation
  • Technology Companies and Transactions, Including AgTech and HealthTech, Etc.
  • Wealth and Estate Planning, Trust and Estate Administration, and Disputes and Litigation

Disclaimer. This post is not a solicitation for legal or other services inside or outside of California, and also does not provide legal or other professional advice to you or to anyone else, or about a specific situation – remember that laws are always changing – and also remember and be aware that you need to consult with an appropriate lawyer or other professional about your situation. This post also is not intended to and does not apply to any particular situation or person, nor does it provide and is not intended to provide any opinion or any other comments that in any manner state, suggest or imply that anyone or any entity has done anything unlawful, wrong or wrongful – instead, each situation must be fully evaluated with all of the evidence, whereas this post only includes summary comments about information that may or may not be accurate and that most likely will change over time.