Trust litigation is about mending unfinished business. And, wronged beneficiaries are often the victims of the unfinished business.
Trustees have a duty to direct “the trust solely in the interest of the beneficiaries.” Trustees who shirk this duty invite legal action from harmed beneficiaries.
When trustees fail to respond to grievances, lawsuits ensue. And, lacking timely resolution, family assets can melt away in endless disputes. This is not the goal of advocacy.
In the words of Sun Tzu: “The greatest victory is that which requires no battle.” Trust & estate litigators should understand this. Trust lawsuits, at their best, are about tying up loose ends.
These loose ends stem from a variety of trustee failures, among them[...]
You’re the beneficiary of a trust in California. You want to ensure that the distribution of trust assets is smooth and timely. And while the chances are good that distribution to beneficiaries will go off without a hitch, there is still potential trouble to look out for. What are the top five factors to keep in mind if you’re the heir to an estate and are concerned about a bad trustee or possible trust litigation?
1. Beneficiaries Frozen Out & Disinherited
Disinheritance can come as a shock, both at the emotional level and to a beneficiary’s financial security. You’ve been wrongfully excluded from a trust – it’s not what the trust maker would have wanted, and it’s certainly not what you want. Your elderly parent or gran[...]
It’s been twelve months since your mom died. You and your sister are your mom’s only children. She established a trust a few years ago.
She made herself the trustee during her lifetime, and her accountant, Mumford Pennypincher, the successor trustee. Your mom’s real estate, securities and bank accounts are assets that are in the trust.
The trust provides for the support of your mom during her lifetime. The trust does not become irrevocable until she passes away. Since the trust is revocable your mom can invade all, part or none of the principal and income for her benefit during her lifetime.
A few weeks after you mom passes away, you ask you own estate planning attorney, Maggie Einstein, to review the trust and explain it to you. M[...]
Imagine these common circumstances. You are your father’s only child. You are 40 years old - a single mom raising two minor children. Your father sets up a trust for his benefit during his lifetime and at his death, for your benefit during your lifetime.
Your father is the sole trustee of the trust during his lifetime. Your father, at the recommendation of his estate planning lawyer, names a fiduciary licensed by the California Professional Fiduciaries Bureau as his successor trustee.
The fiduciary has been licensed for several years and focuses on conservatorships. The fiduciary’s website says that he also administers trusts. Your father meets with the fiduciary once before executing the trust instrument. Your father’s expressed in[...]
Several years of legally representing abused estate heirs and trust beneficiaries in California’s Superior Court system, both civil and probate, provide lessons worth noting.
The first is that family dysfunction is not cured by the rigors of litigation. At best it is minimized and at worst exacerbated. The second lesson is that mediation, as process toward resolution, works. While mediation will not recast the dynamics deep in family history it will often provide an opportunity to equalize estate or trust distributions. It is not a perfect system.
Wills and trusts formed by undue influence and/or undermined by legal incompetency aren’t easily surrendered by those financially advantaged by their wrongdoing. Parties to a mediation shoul[...]
I’ve heard more than one trust beneficiary say: “I wish I had a trust protector.” The circumstances underlying the wish vary. So, let’s talk about a few of them.
A mother, dying of terminal cancer, hires a local estate planning lawyer to prepare a trust. The trust is to provide, at her death, a lifetime income benefit for her 60-year-old son. The mother is the trust settlor. The son is the beneficiary. The mother identifies The Little Sisters of the Poor as the beneficiary of whatever trust assets are left at her son’s death.
The mother meets with the estate planner. The estate planner recommends a health, education, maintenance and support trust (HEMS) for the benefit of the son. The estate planner suggests a local fiduciary, a[...]
Alameda County represents most of the East Bay and is home to 1.6 million people. It’s California’s seventh largest county and includes the cities Oakland, Berkeley, Fremont, San Leandro, Pleasanton and Castro Valley. Alameda County also has plenty of Baby Boomers, with 12.7% of residents aged 65 or over.
Baby Boomers are the wealthiest generation in history. That means that there will be a massive transfer of wealth in the coming years as Boomers make estates and trusts for their loved ones.
Trusts are the most frequent method of wealth transfer for a wealthy estate. When circumstances are right, a trust maker will have property and assets transferred in an orderly manner to rightful beneficiaries. That’s the majority of cases – [...]
I’ll start with a disclaimer. We represent beneficiaries who have been abused by banks, trust companies and professional fiduciaries.
My take on fiduciary wrongdoing is colored by a lot of experience in civilly prosecuting trust wrongdoers. It’s that simple.
I don’t see the cases where the fiduciary is doing his or her duties well. I see the cases that range from the boneheaded to the botched. That’s where I get my perspective.
So, we started with a title that is really a question: What are professional fiduciaries priorities? Property or people? I’ve seen too many trust cases where the professional fiduciary gave unequivocal priority to property over people. The property being the trust assets, and the people being the trust b[...]
California “licensing is required for non-family member professional fiduciaries who serve as … trustees for at least four non-related trustors.”
The Professional Fiduciaries Bureau … in the Department of Consumer Affairs … is responsible for the licensure and regulation of non-family member professional fiduciaries, including conservators, guardians, trustees, and agents under durable power of attorney… Professional fiduciaries are responsible for the property or well-being of their clients and coordinate overall care for their client’s medical and/or financial needs. A professional fiduciary is not necessarily an expert in all areas and may hire other persons to handle duties for the trust or estate. However, as the ultimate[...]
Do California licensed fiduciaries put you first?
They should. This is what the law says. This is what makers of trusts think when they name a stranger as the fiduciary of their trust.
But it doesn’t always work, does it? An example:
A multimillionaire, the father of two, is dying. He is in and out of the hospital. He is on heavy medications. He wants to set up a trust to benefit his only two children.
He meets with an estate planning attorney. The meetings are at his home. He hires the estate planner. The father tells the estate planner that he wants to take care of his children, both in their 50s.
The estate planner creates a HEMS trust – a trust designed to provide for the health, education, maintenance and welfare of his childr[...]