Tag Archives: trust

From a fiduciary viewpoint, meeting the financial planning challenges of the future – Tate comments on Journal of Accountancy Article

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Click the following link to a pdf with my comments on a Journal of Accountancy article: Meeting the financial planning challenges of the future. My comments are from a fiduciary viewpoint in response to article discussions about robo-advisers, use of long-term cash projections, and spotting and planning for dementia.  This is a good article, although short in length, and it does not purport to cover these issues entirely. In any event, every situation is different. Click on the following link: Tate comments J of A article meeting the financial planning challenges of the future

Dave Tate, Esq. and licensed CPA (inactive) California
Blogs: http://californiaestatetrust.com and http://directorofficernews.com

California Trustee Discretionary Powers – Video

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California Trustee Discretionary Powers – see the video immediately below, and the primary text for the video at the bottom of this post. Thank you. Please pass this information to other people who would be interested. Dave Tate

Text: California Trustee Discretionary Powers

Hello, I’m Dave Tate. I am a San Francisco litigation attorney and I handle cases throughout California in trust, estate, conservatorship, elder abuse and civil litigation, and I also represent fiduciaries and beneficiaries in administrations.

This discussion is about trustee discretionary powers. You can find additional information on my blog at http://californiaestatetrust.com.

A trust will typically contain provisions that give the trustee discretionary powers, that is, the power to use his or her own judgment in specific circumstances. The courts will strictly construe the amount of the discretion from the language in the trust document and the intent of the trustor.

Be cautious, however—and this is important, even if the trust provides sole, absolute or uncontrolled discretion, courts still require the trustee to act within the fiduciary standards, to not self-deal, and to not act in bad faith or in disregard of the purposes and interests of the trust and of the beneficiaries. You can refer to Probate Code §§16080-81.

In other words, if the issue of a trustee’s discretion is presented to the court, the judge will make a determination based on his or her own evaluation of the trust, the trustor’s intent, and the circumstances at issue.

Unless limited by the terms of the trust, the trustee will also have other statutory powers. You should review the powers and limitations specified in the trust document, and also the powers listed at Probate Code §§16200-16249. These sections are important – however, they are too detailed to include in this discussion.

That’s it for now. There are of course other cases and statutes that can apply, and the facts of each situation are different. This discussion doesn’t constitute legal advice. You need to consult a lawyer or professional for your situation. You can find more information on my blog at http://californiaestatetrust.com. Thanks for listening.

Dave Tate, Esq. (San Francisco / California)

Inheritance From Actor Troy Donahue Estate – Equitable Estoppel Gives Beneficiary Legal Status

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Actor Troy Donahue died in 2001. On August 6, 2015, the California Court of Appeal, Second Appellate District (Los Angeles) held that Janene Curtis, the biological daughter of actor Troy Donahue, who was adopted at birth and thus was not entitled to inherit by intestacy, nevertheless is a beneficiary entitled to recovery pursuant to the doctrine of equitable estoppel. In other words, equitable estoppel conferred upon Ms. Curtis legal beneficiary status whereas otherwise she had no legal right to inherit. You can read the Court’s decision at the following link, https://scholar.google.com/scholar_case?case=14120595921206700250&hl=en&as_sdt=6,47 

In relevant part, the Court held that the separate legal doctrine of equitable estoppel conferred upon Ms. Curtis beneficiary status where the court appointed administrator of Mr. Donahue’s estate treated and communicated to Ms. Curtis as a beneficiary, Ms. Curtis relied upon the actions of the executor to her detriment, and the executor either knew that Ms. Curtis wasn’t an intestate beneficiary or was negligent in failing to know that Ms. Curtis wasn’t an intestate beneficiary.

This case is important because the Court applies the equitable estoppel doctrine in an inheritance case and cites other cases similarly holding. Although currently the decision is unpublished (the Court should change it to “published”), meaning that it cannot be cited as decisive legal authority in other cases, the case nevertheless is or might be relevant in other cases because it cites other legal authorities and provides a roadmap for the argument. Equitable estoppel can be another tool in estate, trust, conservatorship and elder abuse litigation cases.

Dave Tate, Esq. (California); Blog: http://californiaestatetrust.com; Email: tateatty@yahoo.com

 

Materials on Undue Influence and Susceptibility to Undue Influence

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I have a high interest in the validity or lack of validity of will, trust and other estate planning and transfer documents including related mental capacity, undue influence, fraud, decedent or testator intent, document and wording interpretation, and elder abuse. These are issues or criteria that we very often see in will and trust disputes, and financial elder abuse. It’s not too difficult to find discussions in which the author defines undue influence in various legal terms or definitions, and in deed you can find similar discussions in my materials, including that the definitions have changed and are changing over time and that they also depend on the nature of the document or issue at hand including for example whether the document is a will or trust and the sophistication or complexity of the document and its contents. However, as a trial attorney dealing with evidence and expert witnesses the victim’s susceptibility to undue influence and whether or not the victim was in fact unduly influenced or unduly persuaded are equally or perhaps more interesting.

For example, there are many new articles being written about dementia and new findings about how early cognitive deficiencies are being found (i.e., much earlier that previously thought); however, a deeper look considers the extent to which the deficiency makes the person susceptible to undue influence and all of the factors that go into that evaluation. As I like to pass along to my readers worthwhile information and links written by other people, the following is a link that contains discussions about undue influence and susceptibility from a psychological perspective. I believe it is worthwhile reading. Click on the following link for the materials, CLICK HERE

And if you come across materials on these topics that you believe that I should read please do pass them along to me.

Thank you. Have a good weekend. Dave Tate, Esq. (San Francisco/California)

California Trustee and Beneficiary Responsibilities and Rights, a 7-Page Summary

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Click on the following link for my 7-page paper discussing California trustee and beneficiary responsibilities and rights, A Summary of California Trustee and Beneficiary Responsibilities and Rights Dave Tate Esq 08012015

Dave Tate, Esq. (San Francisco/California), http://californiaestatetrust.com, http://directorofficernews.com

Description of some of my trust, estate, conservatorship and elder abuse cases

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The following are some of the trust, estate, conservatorship and elder abuse cases in which I have been involved.

Trust administration dispute and trial:
Represented a trustee in a very contentious trust administration. Two nephews thought that the trustee was in some manner not administering the trust and the real property properly, hired a very aggressive attorney, and spent a lot on attorneys’ fees. After distributions the nephews sued the trustee for breach of fiduciary duty. After a one week trial the trustee prevailed.

Will contest trial:
A 16-day will contest trial about an at-home computer software prepared will that left everything to the long-time live-in friend who the decedent would not marry, and nothing, not even personal property and family heirlooms, to the children who everyone testified the decedent loved. The testimony presented included family members and family friends, and computer and handwriting forensic experts. The court held: nevertheless there was not enough evidence to overturn the will.

Breach of fiduciary duty trial:
Trustee/beneficiary obtained multiple real property appraisals and then sought to sell the real property to her son for the appraised value. The other trust beneficiary objected. At trial the court held that the trustee/beneficiary breached her fiduciary duty in wanting to sell the property to her son. Neither the trustee/beneficiary nor the other beneficiary were happy with the court’s decision – both got together and settled the entire matter more favorably to both.

Breach of fiduciary duty and elder abuse trial:
A trust beneficiary brought an action against his trustee mom to stop the contract and sale of a trust commercial building at a significantly below market price. Mom sought to sell the property to a “friend” and ex-business partner of dad. The siblings were split – (1) either stop the sale because the property was worth a lot more and mom was being taken advantage of by the “friend”, or (2) let mom do what she wants and what will make her happy. After a 1-week court trial including valuation experts the sale was invalidated.

Trust contest and alleged oral agreement dispute:
Son claimed dad orally told him years ago that he would have some rights to the residential home, but mom and dad’s trust said otherwise. Close to trial and after multiple mediations the son withdraws his claim.

Multiple real property partition trials where owners or beneficiaries could not get along.

Conservatorship and financial elder abuse of mom by two strangers:
A lonely, nice, financially comfortable elderly woman was befriended by two men, both of whom were brothers. Mom loved corvette cars. The two men convinced mom to buy herself a corvette (V-8 engine) and another corvette for them. Daughter caught wind of it – went in for conservatorship and restraining orders. After some convincing the men abandoned the car and did not return.

Board and care facility financial elder abuse by two strangers:
A lonely, nice man was befriended by a younger man and woman couple, who come into the facility and spend a lot of time with the man in his room. The family heard of it. Conservatorship and stay away restraining orders are granted. The facility is supposed to keep the couple out but the couple keeps coming back and getting back in and are having the man start buying them gifts. The police tell the couple to stop, but they continue. When the police then threatened to arrest the couple they stop.

Grandfather wants to leave his house to his grandson:
Grandson and his wife helped take care of Grandfather. Grandfather lived in an expensive neighborhood. Grandfather wants to leave his house to his Grandson. APS got involved over issues relating to whether grandfather had mental capacity, knew what he was doing, and whether he was being unduly influenced. After extensive investigation APS concludes that all is okay.

Union post-death of judgment debtor action to recover remaining judgment:
Union recovered a judgment against a prior officer for embezzlement. The judgment debtor then died before the judgment was paid back, and the debtor’s surviving spouse would not pay the remaining amounts due. Brought multiple action and recovered the debt due (petition for probate and creditor claim, complaint for recovery of the creditor claim amount, action against the trust and its beneficiaries, and separate action against the surviving spouse for community property debt).

Multiple probate and trust actions on behalf of a bank to recovery on an unsecured loan after the debtor dies.

Administrative law action to stop a nursing home to stop the home from discharging a wheelchair resident who was backing up too fast – the SNF wanted to discharge the resident instead of fixing the problem – the ALJ ruled in favor of the resident but had to be forced into that decision as he wasn’t interested in the resident’s rights

Dispute whether an elderly husband and wife could stay at home:
Husband and wife wanted to continue living together and to stay at home. They had at-home care. One or both had possible dementia. There were also allegations of possible self-abuse (inadequate taking care of themselves), and they both liked to have a cocktail late in the day as both husband and wife were ex-military. After a contentious battle both were allowed to remain together at their home.

Dispute whether to disconnect mom from life prolonging hospital machines, and overmedications:
Mom was in a hospital, kept alive by machines. She did not have an advance directive. The siblings were split about whether to keep mom connected to the machines and whether she would have wanted to live that way. Mom could only blink her eyes. Experts came in on medical issues. The judge was asked to decide mom’s wishes. Eventually mom was disconnected. As it turned out, after mom was disconnected, the issue was improper and overmedication and how the medications were interacting – mom did not die, the medications were fixed – she lived a health, ambulatory life for 5 more years and died a natural death.

Nursing home drop and elder abuse:
Dad was a large man, and was prone to striking out when he was unsure what people were doing with him. The nursing home put a red sign above his bed stating that anytime he was moved from or to his bed (he had to be moved using a hoyer lift and was moved from his bed to a chair and back daily) there must be three certified nursing assistants present. Dad was moved using the hoyer lift with only two CNAs present. The hoyer lift tipped, dad was dropped, hit his head and subsequently died. The SNF blamed the CNAs. Testimony by the staff ultimately evidenced that there was inadequate staffing and that there never were enough CNAs available to have three people present.

Nursing home restraining jacket and elder abuse:
Nursing home CNA put dad in a restraining jacket and caused bad bruising to dad’s back and front torso so that the worker could get off work on time or early so to go see his girlfriend that night as it was Valentine’s Day.

Nursing home physical abuse of female resident:
A nursing home resident soiled herself. The male CNA was unhappy that he had to wash the resident – the CNA was rough with the resident and physically hurt and bruised her as he washed her in the shower.

Action against trustee for failure to diversify investments:
The trust terms allowed the trustee to invest essentially all of the assets in a stevedore company. The law firm that prepared the trust was also the successor trustee, and the stevedore company was also a client of the law firm. The value of the stevedore company was declining significantly year after year over a long period of time. A beneficiary brought suit against the trustee for damages.

Multiple other actions for or against trustees for accountings, and breach of fiduciary duties including investment breaches.

New California Case – An Unambiguous Will With A Mistake Can Be Reformed With Clear And Convincing Evidence – Estate of Duke

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In re the Estate of Irving Duke
California Supreme Court, Case No: S199435, July 27, 2015

In Estate of Irving Duke the California Supreme Court has held that an unambiguous will with a mistake may be reformed if (1) clear and convincing evidence establishes that the will contains a mistake in the expression of the testator’s intent at the time the will was drafted and (2) clear and convincing evidence also establishes the testator’s actual specific intent at the time the will was drafted.

On the one hand, Duke is a good decision as cases have already held that the intent of the testator should prevail, which is a position with which I agree. On the other hand, the Court jumps through some hoops which could result in different standards or criteria for wills compared to trusts, and different standards or criteria for remedying mistakes compared to ambiguities. See, for example, the quotes below from the Court’s decision. The fact is that after over a century of will and trust case law, in addition to old, revised and new California Probate Code statutes, we continue to have in probate law a large body of legal authorities that variously apply differently in different situations and that can contradict. See, for example, my prior blog posts discussing undue influence case law and how the standards are or might be different in the circumstance of a will (or at least a “simple” will) compared to a trust.

The following are some of the interesting quotes from the Court in Estate of Duke.

“In cases in which clear and convincing evidence establishes both a mistake in the drafting of the will and the testator’s actual and specific intent at the time the will was drafted, it is plain that denying reformation would defeat the testator’s intent and result in unjust enrichment of unintended beneficiaries. Given that the paramount concern in construing a will is to determine the subjective intent of the testator ( Estate of Russell, supra, 69 Cal.2d at p. 205; 4 Page on Wills (Bowe-Parker rev. 2004) § 30.1, p. 2), only significant countervailing considerations can justify a rule categorically denying reformation.”

“Fourth, the Radins assert that allowing reformation will result in a significant increase in probate litigation and expenses. Claimants have long been entitled, however, to present extrinsic evidence to establish that a will is ambiguous despite the fact that it appears to be unambiguous. ( Estate of Russell, supra, 69 Cal.2d at pp. 206-213.) Therefore, probate courts already receive extrinsic evidence of testator intent from claimants attempting to reform a will through the doctrine of ambiguity. (Cf. Buss v. Superior Court (1997) 16 Cal.4th 35, 57 [in rejecting the contention that requiring only a preponderance of the evidence to establish an insurer’s right to reimbursement will open the floodgates of litigation, the court noted that “the ‘floodgates’ have been open for quite some time”].) The task of deciding whether the evidence establishes by clear and convincing evidence that a mistake was made in the drafting of the will is a relatively small additional burden, because the court is already evaluating the evidence’s probative value to determine the existence of an ambiguity. FN:13 To the extent additional claims are made that are based on a theory of mistake rather than a theory of ambiguity, the heightened evidentiary standard will help the probate court to filter out weak claims. Finally, fear of additional judicial burdens is not an adequate reason to deny relief that would serve the paramount purpose of distributing property in accordance with the testator’s intent. (See Buss, at p. 58 [acknowledging that the future might bring more claims for reimbursement, “[b]ut the possible invocation of this right — or any other — is not a sufficient basis for its abrogation or disapproval”]; Ochoa v. Superior Court (1985) 39 Cal.3d 159, 171 [rejecting a proposed limit on the circumstances in which negligent infliction of emotional distress may be established, despite claim of ” ‘infinite liability’ “].)”

“Fifth, the Radins discount justifications for allowing reformation in appropriate circumstances. They assert that Probate Code section 6110, subdivision (c)(2), which allows the probate of a will that was not executed in compliance with statutory attestation requirements if clear and convincing evidence establishes that the testator intended the writing to be a will, was not intended to lessen required formalities. Although section 6110 does not reduce the formalities of attestation, it reflects a judgment that the formalities should not be allowed to defeat the testator’s intent when clear and convincing evidence satisfies the evidentiary concerns underlying the formalities of the statute of wills.”

Dave Tate, Esq. (San Francisco / California)

There Needs To Be A Law – Petitioning For Conservatorship Should Not Disinherit You

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Short and sweet. I’m not sure what the wording should be, but we need a law that to some extent protects a person from being disinherited for filing a petition for conservatorship.

The situation that I have in mind: a son or daughter files a petition for conservatorship of their mother or father. In doing so, the son or daughter risks that mom or dad will be very angry with the petition and will seek to change their estate planning to exclude or disinherit the son or daughter.  There needs to be some protection for the son or daughter, whether the petition for conservatorship is granted or not.

I’m not saying that I favor conservatorships. A conservatorship can be a serious restriction on a person’s constitutional rights and freedom. All I’m saying is that a son or daughter should not have to fear possible disinheritance for filing a petition for conservatorship in a situation where there is no finding that the petition was filed in bad faith or where there is evidence that a conservatorship might be necessary even if less restrictive options are available.

Dave Tate, Esq. (San Francisco and California), click link to this blog, Law Office of David W. Tate, and also working with Albertson & Davidson LLP, northern and southern California click link to Albertson & Davidson website.

Will and Trust Undue Influence and Fraud – Sibling v. Sibling Misrepresentations

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What is Elder and Dependent Adult Self Abuse or Neglect?

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This is a significant category of elder and dependent adult abuse or neglect that generally isn’t discussed or defined. When thinking about elder and dependent adult abuse most of us tend to first think about abuse committed by persons other than the victim, and those perpetrators are typically classified either as outside third party or family perpetrators. Statistically, I have read that approximately 1/3 of the perpetrators are outside third party perpetrators, and about 2/3 of the perpetrators are family members.

But what about self abuse or self neglect. The following is a definition of self neglect from the National Center on Elder Abuse – and then below that definition I have added one area to that description:

“Tragically, sometimes elders neglect their own care, which can lead to illness or injury. Self-neglect can include behaviors such as:

  • Hoarding of objects, newspapers/magazines, mail/paperwork, etc., and/or animal hoarding to the extent that the safety of the individual (and/or other household or community members) is threatened or compromised.
  • Failure to provide adequate food and nutrition for oneself.
  • Failure to take essential medications or refusal to seek medical treatment for serious illness
  • Leaving a burning stove unattended
  • Poor hygiene
  • Not wearing suitable clothing for the weather
  • Confusion
  • Inability to attend to housekeeping
  • Dehydration

Self-neglect is one of the most frequently reported concerns brought to adult protective services. Oftentimes, the problem is paired with declining health, isolation, Alzheimer’s disease or dementia, or drug and alcohol dependency.

In some of these cases, elders will be connected to supports in the community that can allow them to continue living on their own. Some conditions like depression and malnutrition may be successfully treated through medical intervention. If the problems are severe enough, a guardian may be appointed.”

See also the discussion about self neglect by the National Clearinghouse on Abuse in Later Life at Click Here.

The area that I would add is financial elder and dependent adult self abuse or neglect – i.e., difficulty or the inability to make sound financial management decisions or choices, also including (1) lack of or difficulty with mental capacity and ability to understand the issues and choices at hand, (2) delay, procrastination or simply not making decisions that need to be made, and (3) also including an already recognized area of abuse by a third party which is the inability to resist the efforts or activities by a perpetrator of financial abuse.

I am seeing an already not insignificant, and an increasing number of materials and articles about elder and dependent adult situations that fit the financial elder and dependent adult self abuse or neglect definition.

These situations can raise a whole host of issues to address, such as how to protect the elder or dependent adult without violating his or her rights, in addition to satisfying personal third party duties and avoiding personal third party liability.  A scenario, for example, where you might see this type of situation in the financial category is when the elder or dependent adult goes to consult with his or her banker, investment advisor or financial advisor and the banker or advisor sees or gets a feeling that there are or might be actions or occurrences by the elder or dependent adult that evidence financial elder or dependent adult self abuse or neglect.

Please do pass information about self abuse, this blog and this blog post to other people who would be interested.

Dave Tate, Esq. (San Francisco), Civil Litigation; Trust, Estate, Conservatorship and Elder Abuse Litigation; Trust, Estate and Conservatorship Administration; Representing Fiduciaries and Beneficiaries.