Legal Updates

Sefton v. Sefton (4/24/2015) Fourth Dist., Div. One; D065898

Powers of appointment at the time of the execution of the Will and at the time of decedent’s death were governed by California common law rather than the subsequent statutory scheme.  The power of appointment conferred by decedent on his son was nonexclusive because it did not expressly give the donee of the power any right of exclusion.

Facts: Grandfather died in 1966 leaving a 1955 Will with a testamentary trust.  Testamentary trust for the benefit of his son established, for use during his life with the stipulation that three-fourths of the estate would then go to the son’s "then living issue." The son, who had three children, provided in his will for only two of them, excluding his older son. Under common law, the non-exclusive power of appointment precluded son from denying a share of the trust to his older son.   

Estate of Amine Britel (4/23/2015) Fourth Dist., Div.Three; G049161

Petitioner had not met her burden under Probate Code § 6453(b) to establish by clear and convincing evidence that the Decedent had openly held out the minor as being his own. The statutory requirement of “openly held out” requires an unconcealed affirmative representation of paternity in open view.

Facts: Decedent died intestate. The parent of a minor child born out of wedlock brought petitions to administer the estate of Decedent and to determine heirship. Evidence was admitted that the Decedent was 99.99 percent likely to have been the parent of the minor child.  Petitions denied by the trial court and affirmed on appeal.  Petitioner had not met her burden under Probate Code § 6453(b) to establish by clear and convincing evidence that the Decedent had openly held out the minor as being his own. The judgment was affirmed on appeal.  

Paul v. Patton (4/9/2015); H040646; 2015 WL 1570220

Beneficiaries of a Will that failed to implement decedent’s intent and instructions, and caused harm to beneficiaries allowed the beneficiaries the right to file an action against the drafting attorney where the harm was foreseeable.

Facts: Decedent retained an attorney to draft an amendment to a revocable trust.  The decedent executed the amendment, which as drafted named decedent’s 4 children of his first marriage and his second spouse as beneficiaries. contrary to decedent’s intent. After decedent’s death, 2 of decedent’s kids, who were the named successor trustees, petitioned to modify the amendment, alleging it failed to implement the decedent’s instructions by incorrectly including his spouse as a beneficiary entitled to receive an interest in certain assets that were supposed to go directly to the kids.  The surviving spouse filed objections.  The drafting attorney admitted in the probate matter that the amendment did not reflect the decedent’s stated intentions.  The matter eventually settled, with the surviving spouse receiving more than the decedent intended.  The decedent’s children sued the attorney for legal malpractice. The decedent’s attorney successfully demurred to the complaint on the ground that he owed no duty to decedent’s children.  The appellate court reversed on the basis that decedent’s children should have been granted leave to amend to allege such a duty.

The appellate court cited the Heyer v. Flaig foreseeability holding: “When an attorney undertakes to fulfill the testamentary instructions of his client, he realistically and in fact assumes a relationship not only with the client but also with the client’s intended beneficiaries. The possibility of thwarting the testator’s wishes by the attorney’s actions and omissions is foreseeable. Equally foreseeable is the possibility of injury to an intended beneficiary. In some ways, the beneficiary’s interests loom greater than those of the client.”

Siegel v. Fife, (2/26/2015) 234 Cal.App.4th 988

The Court of Appeal upheld trial court’s ruling overriding an elderly woman’s trust provision for the care of her cats, concluding that the woman’s own needs must take precedence.

Facts: This case involves the issues of abatement, and who is the primary beneficiary of the trust.  The Court of Appeal cited a number of authorities holding that a trustee may abate or reduce devises to pay trust obligations, and rejected Fife’s contention that §21402(a) bars the sale.  Given the trust’s express requirement that Brown’s needs take precedence over all remaining interests, and “the precarious nature of the trust estate,” the petition was properly granted.

Ukkestad v. RBS Asset Finance 3/16/2015; 85 Cal.Rptr.3d 145

This case appears to broaden the use of the Heggstad petition to fix trust funding issues.  The recital in the Trust satisfied the statute of frauds because it could be established by extrinsic evidence that the Settlor held title to the parcels.

Facts: The Settlor established a Trust which recited that all of his “right, title and interest” to “all of his real … property” is included in the Trust’s assets.  After the Settlor’s death, the Co-Trustee brought a petition under§ 850 for an order that two parcels held in the name of the Settlor were part of the Trust.  In reversing the trial court’s denial of the petition, the appellate court noted that a Heggstad petition will lie if the owner of the real property is the settlor and the trustee, and if the transfer of the real property complies with the statute of frauds.

The Tax Court has ruled that Code Sec. 408(d)(3)(B)'s one-rollover-per-year rule applies to all of a taxpayer's IRAs, not to each of his IRAs separately. IRS's position in this case, and the Court's holding, are at odds with IRS Publication 590, Individual Retirement Arrangements. Bobrow, TC Memo 2014-21

The 2008 amendment to the Civil Code Sec. 3344.1(p), which provides that a deceased celebrity’s right of publicity is descendible, did not create a new right to the interests in community property for a party who received a settlement before the amendment went into effect expressly waiving claims to additional property interests. Res judicata barred relief to a petitioner making the same assertion of primary rights-—a claim of a community property interest in the right to publicity-—as in the previously settled litigation. Crosby v. HLC Properties; Ltd. - filed January 29, 2014, Second District, Div. Three Cite as 2014 S.O.S. B242089. Read more

January 2014:

Lintz v. Lintz-- 2014 S.O.S. H037738
Discusses the application of the testamentary capacity standard under Probate Code section 6100.5 versus the sliding-scale contractual standard in sections 810 and 812 where a trust instrument addressed community property concerns, income distribution for a surviving spouse, and the creation of multiple trusts. Read more.

November 2013:

Castellon v. U.S. Bancorp-- 2013 S.O.S. B245651
Where real property is held in a trust, the trustee is only personally liable for injuries suffered on the premises if the trustee was "personally at fault" and intentionally or negligently committed a tort within the meaning of Probate Code sections 18001 and 18002. Read more.

Steinberg v. Commissioner-- 141 T.C. No. 8 (September 30, 2013)
The US Tax Court decided that the value of a gift may be reduced by the donees’ assumption of the potential estate tax liability of the donor’s estate. Read more.

October 2013:

Bridgeman v. Allen-- (2013) 219 Cal.App.4th 288
Notification of Trustee is served when deposited in the mail and CCP sections do not apply.  An earlier filed petition that was dismissed without prejudice does not form a basis to relate back to that petition. Read more.

Benson v. Marin County Assessment Appeal Board-- 2013 S.O.S. A134340
Under Proposition 13, there is a "change of ownership" where one of two brothers severed a joint tenancy by deeding the property to himself and his brother as tenants in common.  The event triggered a reassessment despite the fact that the brothers continued to own the property equally. Read more.

July 2013:

Straley v. Gamble-- (2013) 2nd Dist., Div. 2, B240380
The California Court of Appeals considered the statute of limitations to challenge a trust amendment.  It also held that a petition contesting a trust did not need to be served on trustee prior to 120-day statutory deadline to "bring an action." Read more.

In Re the Marriage of Greenway-- (2013) 4th Dist., Div. 3, G045949
A family law matter that provides a detailed discussion of the way in which mental capacity is determined under Probate Code sections 810 to 812, and 6100.5. Read more.

Recent Court Notice and Updates:

  1. In Los Angeles Superior Court, Probate and Family law Divisions, effective January 1, 2014, the Court will collect a $30 fee for the services of an official court reporter for matters lasting one hour or less. Read more.
  2. Notice of Fee Changes effective January 1, 2014. Learn more.
  3. In Los Angeles Superior Court, beginning February 3, 2014, Probate Division has made changes to judicial assignments.Read more.

The value of a financial advisor’s book of business acquired during marriage was a valuable community property asset. Bonuses derived from it were not precluded from being divisible community assets despite being subject to contingencies to be satisfied after separation. A deferred bonus to be paid at a later date, contingent upon spouse’s continuous employment until such later time, was separate property because prior to the vesting date spouse had no enforceable right to receive it. Read more.

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