We handle substantial trust, estate, probate and elder financial abuse litigation cases in California’s largest cities and counties. Frequent venues include Sacramento, Los Angeles and the major Bay Area Counties in between – including San Mateo, Santa Clara, Alameda and Contra Costa Counties.
While every case is different, there are often some common acts of fraud in trust, estate or probate litigation. I’ll talk about some of my own observations of these common acts of fraud in trust and probate disputes. Let’s start with the difference between actual and constructive fraud.
California law defines actual fraud as consisting “in any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract:
1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
3. The suppression of that which is true, by one having knowledge or belief of the fact;
4. A promise made without any intention of performing it; or,
5. Any other act fitted to deceive.”
Then there’s constructive fraud. According to California law, “Constructive fraud consists:
1. In any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; or,
2. In any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud.”
Where fraud alone is the basis for a contest to a will or a trust, the theory underlying the claim is that “the testator (or the grantor of a trust), even though acting, in a manner of speaking, of his own free will, was, nevertheless, deceived by false data into doing that which he would not have done had he not been fraudulently imposed upon.”
If you believe a will or a trust was obtained through fraudulent means, delay in filing a challenge can jeopardize an otherwise viable case. Simply put, statutory timelines penalize late filings.
Will contests have their own particular timelines. When a person has died and you believe that the will was procured by fraud, you can file an objection to the will prior to the time the personal representative named in the will files a probate petition. If the person named in the will has already filed the probate petition, you must file your objection prior to the hearing on the petition. If the personal representative has already been named, you only have 120 days from the hearing date of appointment to file a petition to revoke the will probate.
Trust contests also have their own specific timelines. Probate Code Section 16061.8 provides that a trust contest must be brought not more than 120 days after notification by the trustee that the trust has become irrevocable, or 60 days from the day on which a copy of the terms of the trust is mailed or personally delivered to the beneficiary, whichever is later.
California also has statutes that work to invalidate donative transfers that are made by the decedent to certain person categories or “prohibited transferees.” Probate Code Section 21380 provides that “(a) A provision of an instrument making a donative transfer to any of the following persons is presumed to be the product of fraud or undue influence:
(1) The person who drafted the instrument.
(2) A person who transcribed the instrument or caused it to be transcribed and who was in a fiduciary relationship with the transferor when the instrument was transcribed.
(3) A care custodian of a transferor who is a dependent adult, but only if the 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.
(4) A person who is related by blood or affinity, within the third degree, to any person described in paragraphs (1) to (3), inclusive.
(5) A cohabitant or employee of any person described in paragraphs (1) to (3), inclusive.
(6) A partner, shareholder, or employee of a law firm in which a person described in paragraph (1) or (2) has an ownership interest.
(b) The presumption created by this section is a presumption affecting the burden of proof. The presumption may be rebutted by proving, by clear and convincing evidence, that the donative transfer was not the product of fraud or undue influence.
(c) Notwithstanding subdivision (b), with respect to a donative transfer to the person who drafted the donative instrument, or to a person who is related to, or associated with, the drafter as described in paragraph (4), (5), or (6) of subdivision (a), the presumption created by this section is conclusive.
(d) If a beneficiary is unsuccessful in rebutting the presumption, the beneficiary shall bear all costs of the proceeding, including reasonable attorney’s fees.”
There are many examples of fraud found in everyday trust and probate litigation. Here are a couple more examples:
- Fraud in the Inducement; and
- Fraud in the Execution
Fraud in the inducement occurs when someone convinces a testator or grantor — through a deception, false representation, concealment or nondisclosure — that something fraudulent is true, and that the will or trust, or provisions thereof resulted from that deception and there is resulting damage.
For example, a family member lies about a sibling not caring about or failing to call or visit the testator or trust maker in order to get more money or a house left in a will or a trust to themselves. While actually, the sibling was making every reasonable effort to contact their parent – but the lying family member prevented any communication and fully isolated the parent. This induced belief could cause a testator or trust maker to change their estate plan to distribute more or all estate or trust assets to the person committing the fraud.
Fraud in the execution occurs when a wrongdoer misrepresents the nature of a document in a scheme to get a testator or trust maker to sign a will or a trust. For example, someone states that a document they placed in front of the trust maker or testator for signature is an application for public benefits when it is actually the person’s will or trust. It’s very disturbing when someone fraudulently induces a decedent to sign a document favoring the person instigating the fraud.
Hackard Law represents clients who have substantial cases in estate, trust and elder financial abuse litigation where we think that we can make a significant difference and there is a wrongdoer who can be made financially accountable for their wrongdoing. If you would like to speak with us about your case, call us at: (916) 313-3030.