Articles Posted in Estate Planning

In other words, must there be a full-on probate in California because the real property asset (assuming a value in excess of $20,000.00, no joint tenancy or transfer on death provision in the deed) was in the decedent’s name alone when he/she died?

Likely the answer is no.  Assuming that there is a trust and for purposes of example, a surviving spouse, there will have to be a petition filed in the probate court (per Probate Code §850) to get the real property asset transferred to the trust, but that is not the same as a full-on probate.

Consider this set of facts:  Husband, in California, acquires a parcel of land while he is married and fails to have his wife’s name put on it.  In fact, let’s say that he takes title as a married man, as his sole and separate property.  He dies.  There is a family trust and if someone had thought about it, the decedent would have been counseled to place the property into the name of the trust, thus avoiding any probate proceeding.  Alas, that was not done.  Please note, I am ignoring any Family Law issues in this discussion.

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By California Trust Litigation Attorney – Ted Hankin

Over the years I have watched many attorney-themed television programs.  I understand, given the time allotted, one must take the case and try it to conclusion within the obligatory one hour format.  Unfortunately, this perception of a sprint to the finish line is not reality; litigation is more in the nature of an endurance contest in California.

Much of the time involved in a litigated case (let’s take a business case as an example) involves discussion with the attorney to insure that he/she has a complete understanding of the facts, analysis by the attorney to determine what rights have been violated by the actions of the other side, and drafting a complaint.

Once the complaint has been drafted and approved by the client, it then is filed, with an accompanying summons, with the court.  After filing, it is sent out for service on the defendant.  Once the defendant has been served, the defendant, in California, has thirty days in which to respond.  A response can be an answer (the case is then “at issue”) or a demurrer.  If a demurrer (everything in the complaint may be assumed to be true, but still doesn’t give the plaintiff a right to the relief sought), the court might set it out three or more months before scheduling a hearing (for oral argument).

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In California, a typical estate planning tool is the revocable trust. A husband and wife usually create one jointly, with the two of them serving as co-trustees until one dies. Then the other becomes the sole trustee. When the surviving spouse dies, the trust will usually name a successor trustee to take over the responsibilities of trustee.

A key feature of a revocable trust is to recognize that what was once a revocable trust becomes an irrevocable one when both of its creators/settlors/grantors die ( a portion of it could become irrevocable on the first death, depending on the language of the trust).

As the successor trustee, one of your responsibilities is to notify all named beneficiaries of the trust and heirs of the decedent that the trust has become irrevocable. This is as set forth in California Probate Code §16061.7, which prescribes the notice that is to be given by the successor trustee.

In California, Probate Code Sections 15300-15301 protect the principal and income of a spendthrift trust from judgment creditors. A spendthrift trust is one where there is a restraint written the trust instrument to prevent a transfer of a beneficiary’s interest. This protection does not exist with respect to distributions from a spendthrift trust, once the distributions become due and payable (Probate Code Section 15301(b)); it also does not exist with respect to support orders for spousal or child support that exist against the beneficiary of the trust (Probate Code Section 15305).

Further, under Probate Code Section 15306.5, up to 25% (but no more) of the principal of a spendthrift trust may be reached by judgment creditors. Additional rules apply if there are both support orders and judgment creditors, with the general rule being that the support orders have a priority over those of judgment creditors.

The take away is that while spendthrift trusts are useful, they are not 100% bulletproof. Some portion of them will be made available to creditors regardless of the grantor’s intent.

Roughly 10,000 Baby Boomers will turn 65 today, and about 10,000 more will cross that threshold every day. (Pew Research)

With the massive increase in baby boomers retiring over the next decade, proper estate planning is more important than ever! When you are looking for an estate lawyer to assist you with planning — experience and knowledge from a reputable attorney is key.

What is estate planning? Estate Planning isn’t just about protecting assets, it’s about peace of mind for you and your loved ones. Our comprehensive approach is a cost-effective “no homework” way to protect your assets and prevent disputes that might arise in the future.

Don’t be tempted by “Do It Yourself” guides and kits. I have known experienced professionals whose loved ones have seen estates ruined by poorly thought-out cookie cutter solutions that left families vulnerable to taxes, litigating family members, probate, guardianship issues and unknown creditors.

Here are a few questions to consider:
• How do I insure the financial security of my spouse and children?
• How do I avoid family conflicts and ensure equitable treatment of my children?
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I have represented three sisters against their brother over their mother’s will.

I’ve represented a child who was adopted and thought she had a great relationship with her presumed half-sister and then found out the sister wanted all of the deceased father’s estate. We had to find tissue and get DNA testing to resolve that matter despite all of the family photographs.

I’ve represented cousins against a decedent’s lover, who got the decedent to leave his entire multi-million dollar estate to the lover. We showed up for trial at 1PM. The judge sent us to discuss settlement … three different times I announced that I would proceed with the trial because there could be no settlement, and three different times the other side blinked. We finally settled at 7:30 PM (kudos to the judge and his staff for staying so late).

1. Each US citizen has a lifetime exclusion amount from estate taxes of $5,340,000 (this amount adjusts for inflation each year).

2. There is an unlimited marital deduction for gifts from a deceased spouse to a surviving spouse who is a citizen.

3. The two concepts at play at the threshold are whether to simply leave everything to the surviving spouse and take advantage of the unlimited marital deduction (therefore no tax on the first death) which may result in a tax at the second death (while the unused portion of a decedent spouse’s lifetime exclusion may be “ported” over to the surviving spouse, the total assets on the second death may still exceed the surviving spouse’s lifetime exclusion amount). or 4. Alternatively, fund a bypass trust to the maximum amount of the lifetime exclusion of $5,340,000…. This will not be taxed at the first death and will “bypass” the estate of the survivor (i.e. not be subject to tax at the survivor’s death; and if the survivor’s estate is $5,340,000 it will not be taxed on the survivor’s death).

A typical case will involve a family member contacting me to complain about the dispositions in a will or trust of a deceased relative, with allegations that another family member or a caregiver “got” to the deceased relative to unduly benefit themselves at the expense of the other family members.

To properly analyze the case, I obtain copies of all prior testamentary documents (to determine if the terms are at variance with the current documents, and how great a variance there is).

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California defines undue influence in the Civil Code. Specifically, Civil Code Section 1575 states:

“Undue influence consists:

1. In the use, by one in whom a confidence is reposed by another, or who holds a real or apparent authority over him, of such confidence or authority for the purpose of obtaining an unfair advantage over him;

thumbnail%20inland%20empire.jpgLytton Williams Messina & Hankin LLP (the “Firm”) maintain close relationships with their clients and continue to make personalized service their number one priority. Partners Lytton Willaims and Messina were all formerly partners in the Century city law firm of Kelly Lytton & Williams. Prior to joining Kelly Lytton, Sheldon Lytton and Richard Williams, each with more than 30 years of legal experience practiced at O’Melveny & Myers and Manatt, Phelps & Phillips, respectively, and were then partners in Finely Kumble Wagner Heine Underberg & Manley, one of the largest national law firms in the United States. John Messina, head of the Firm’s Temecula Valley Office, is a licensed real estate broker and was the head of a mortgage banking firm in the San Gabriel Valley before turning to the law. Ted Hankin, an attorney and CPA, heads the Firm’s Newport Beach Office and was formerly the Division Chair of the Estates, Probate and Trust Division of Alvarado Smith APC. Henry Holguin, of Counsel to the Firm, was formerly a name partner in Miller & Holguin, and is one of California’s most noted health care attorneys; he currently serves as the general counsel of AltaMed, the largest Federally qualified Community Health Center in the United States.

The Firm’s Practice Areas Include:

1. General Business Litigation and Resolution of Disputes, including Representation of Public Agencies, and Representation of Clients before Federal, State and Local Government Agencies.