Probate Litigation and Trust Litigation can come in many forms. It can include actions against executors, administrators, trustees, personal representatives, and other third parties. Sometimes a dispute may arise when suspicious gifts were made to unknown third parties at the end of a person’s life who was severely ill or demented. Other times, disputes can arise when there is a suspicion that gifts made under a will or trust or provided during the life of an elderly person were procured through undue influence.
At Sklar & Sklar, we represent beneficiaries and trustees in the following areas:
A Will Contest generally involves challenging the validity of a Decedent’s Will or portions thereto. This challenge can be based on numerous legal theories including, but not limited to, undue influence, fraud, lack capacity or mistake.
Breach of Fiduciary Duty Litigation
A personal representative or trustee of a trust stands in a fiduciary relationship with the estate or trust beneficiaries. A trustee must use ordinary care and diligence in administering a trust. A trustee cannot simply do whatever he/she wants. Every decision must be thought out and reasonable under the circumstances. A trustee who fails to meet the applicable standard of care when administering the trust can be held liable personally. A trustee has the following duties, including, but not limited to: (1) The duty of loyalty (See California Probate Code Section 16002); (2) The duty to keep trust assets in the name of the trust and segregated from the trustee’s own property (See California Probate Code Section 16009); (3) The duty to deal impartially with all beneficiaries (See California Probate Code Section 16003); (4) The duty to avoid conflicts of interest (See California Probate Code Section 16004); (5) The duty to control and preserve trust property (See California Probate Code Section 16006); (6) The duty to make trust property productive (See California Probate Code Section 16007); (7) The duty to keep beneficiaries of a trust reasonably informed of the condition of the trust and its administration (See California Probate Code Section 16060); and (8) The duty to administer the trust according to the terms of the trust, and when not inconsistent, to the terms of trust law. Failure to follow the above guidelines can result in removal of the trustee and damages. If a trustee commits, or threatens to commit, a breach of trust, a beneficiary or co-trustee can bring an action against the trustee.
Caretaker Litigation often occurs when a dependent adult provides gifts to hired caretakers, nurses, and/or care custodians who provided health or social services to the dependent adult. Under California Probate Code Section 21380, a provision in a will or trust making a donative transfer or gift to a care custodian of a dependent adult will be presumed to have been procured by undue influence if the will or trust or other instrument was executed during the period in which the care custodian provided services to the transferor, or within 90 days before or after that period. Often, the elderly are strategically isolated by their caretakers from their family who exert pressure to gain an undeserved benefit upon their death. This code section provides a strong public policy for the protection of dependent adults and their estate plans.
Undue Influence and Coercion Challenges
Undue influence means excessive persuasion that causes another person to act or refrain from acting by overcoming that person’s free will and results in inequity. In these situations, a court will presume undue influence if a special relationship exists between a victim and the perpetrator. An analysis will be conducted into the vulnerability of the victim, the influencer’s apparent authority, the actions or tactics used by the influencer, including, but not limited to, the use of affection or intimidation, or the use of haste or secrecy in exacting changes in personal or property rights and the equity of the result.
Actions for fraud occur when it is found that the decedent or testator, even though acting through his or her free will, was deceived into doing what he or she would not have done without fraudulent representations. Fraud can affect an entire estate plan or portions of an estate plan which were linked to the fraudulent act.
Lack of Capacity
This challenge attacks the capacity of the decedent who created a testamentary instrument such as a will, trust or amendment. Generally, incapacity must be determined by looking at specific, relevant functional abilities. Probate Code §811(b) states that deficits are relevant only if (individually or in combination) they significantly impair the person’s ability to understand the consequences of the act or decision in question.
Proper Execution of Will and Trust Documents
This challenge determines whether the legal formalities of proper execution of a Will or Trust were observed.
Challenging the Validity of Wills and Trusts and Amendments thereto
This challenge can be based on numerous legal theories including, but not limited to, undue influence, fraud, lack capacity or mistake.
Estate and Trust Mismanagement
A personal representative and trustee has the paramount duty to act in the best interests of those affected by a will or trust. The failure to marshal assets, reasonably invest assets, protect assets from waste and distribute assets as called for in the estate planning instrument can open a personal representative or trustee for damages due to mismanagement.
If a decedent fails to provide by will or trust for a child born to or adopted by the decedent after the execution of the will or trust, the child is considered an “omitted” child, entitled to receive a share of the decedent’s will or trust equal in value to what would be the child’s intestate share in the absence of a will or trust, unless the decedent’s failure to provide for the child is intentional and that intention appears from the instrument. Similarly, if a married person’s “testamentary instrument” fails to provide for his or her surviving spouse, who married the decedent after the execution of the testamentary instrument, the omitted spouse is entitled to a share of the decedent’s.
Disputes regarding Separate Property vs. Community Property Characterization
Disputes can arise over whether certain property of a decedent is separate or community. In these situations, careful attention is taken to trace the property’s origin and to determine if it has been commingled with other assets. Under California law, the characterization of property as separate, community, or quasi-community can impact the distribution of property under an estate plan.
If you require representation in Trust Contests, Will Contest or Probate and Trust Litigation, Sklar & Sklar can help. At Sklar & Sklar, we represent clients throughout Riverside County, including, but not limited to: Palm Springs, Cathedral City, Rancho Mirage, Palm Desert, La Quinta, Indian Wells, Indio, Coachella, Joshua Tree, Morongo, Banning, Desert Hot Springs, Beaumont, Moreno Valley, Thousand Palms, Bermuda Dunes, and Twentynine Palms.
Recent Trust & Estate Litigation Case Results
Breach of Fiduciary Duty/Undue Influence Trial
Client, a Trustee, was the daughter of the Decedent who created a Trust in which the residue beneficiaries were his children from a prior marriage with the income beneficiary being his spouse who he married late in life for companionship. Decedent and his spouse had a premarital agreement prior to marriage, keeping all property separate. Several years prior to Decedent’s death, Decedent was diagnosed with dementia and was not capable of managing his finances. Decedent’s spouse managed the finances during this time and misappropriated hundreds of thousands of dollars of Settlor’s separate property prior to his death. Client, Trustee sued Spouse for Breach of Fiduciary Duty, Undue Influence and other theories.
Case Result: Over three-week court trial resulting in several hundred-thousand-dollar judgment against surviving spouse for breach of fiduciary duty and undue influence.
Trust Accounting Trial
Client, a local charity and one of several remainder beneficiaries of a Trust, objected to a Trustee’s 7th Amended First Account and Requested Surcharge against Trustee and Attorney’s Fees. Issues involved were complex and included, but were not limited to: Interpretation of Principle & Income Act Sections 16350, 16373, Surcharge Issues and Attorney Fees.
Case Result: Court trial was 11 half days and Trustee was liable for Attorney Fees and Surcharge, Objections to Account sustained at Court Trial.
Spouse Secretly Disinherited after Long Term Marriage
Client was married to her husband for over 20 years. Husband had two children from a prior marriage. Client was a housewife who did not work during the marriage. Husband was a successful businessman and had interests in businesses that started prior to marriage with our Client. Husband secretly created an estate plan which disinherited his spouse (our client) and died a few months after the creation of this estate plan. Husband’s children from a prior marriage and trustee of husband’s trust claimed that most of the marital assets were the separate property of the husband’s. Client sued husband’s estate and trust in two counties, Orange County and Riverside County for fraud, breach of promise, community property rights and other equitable theories.
Case Result: Settlement prior to trial for community property interest in husband’s estate.
Defense of Estate Plan
Client (non-family member) was the 100% beneficiary under decedent’s will. Estate was valued at well over $1,000,000.00. Decedent’s family member objected to the will and filed a will contest alleging, among other things, undue influence, care custodian disqualification and that decedent’s was of unsound mind, and lacked testamentary capacity.
Case Result: After discovery, Will Contest Objections were Withdrawn and Will was probated adjudicating client as beneficiary of estate.
Community Property vs. Separate Property
Husband died intestate (without a will) leaving an estate valued over $24,000,000.00. Sklar & Sklar represented surviving spouse who contended that the funds were community property. Estranged daughter challenged characterization of property and argued that her father promised to leave a share of his estate to her and therefore objected to a Spousal Property Petition filed by our client.
Case Result: After discovery, Daughter withdrew Objection to Petition and surviving spouse inherits community property estate.
Challenge to Caretakers Gifts
Clients, relatives of a wealthy elderly single man who passed away (“Decedent”), filed a lawsuit against two hired caretakers for undue influence under Probate Code Section 21380. Decedent was an elder as defined in Welfare and Institutions Code § 15610.27, and was a dependent adult as defined in Probate Code § 21366 and Welfare and Institutions Code § 15610.23. Decedent was primarily bedridden during the approximate last year of his life. Decedent was physically handicapped, unable to walk or ambulate, and required a wheel chair or other assistive devices. Furthermore, Decedent was dependent on and required the help of hired care custodians to provide health or social services to Settlor, including, but not limited to: grocery shopping, banking, travel, assistance with finances, medication administration, cooking and household cleaning, among other things. Client’s sought to invalidate provision of an amendment in Decedent’s trust which provided 50% of the residue of a trust to go to his caretakers. This amendment was executed by Decedent approximately four months before Decedent’s death. The estimated value of this 50% interest in Decedent’s trust was approximately $1,000,000.00.
Case Result: Judgment against Caretaker #1, whose interest in the trust was terminated. Nominal settlement with Caretaker #2 which provided the vast majority of challenged assets to pass to the family.
Breach of Fiduciary Duty
Client, conservator of 82 year old man diagnosed with diminished mental capacity, sued predecessor conservator for breach of fiduciary duties and failure to preserve and protect assets of Conservatee’s estate, specifically Conservatee’s home. Conservatee’s home was vandalized and destroyed by vagrants and ultimately demolished.
Case Result: Substantial Monetary Settlement prior to trial.