Estate Fight: The Entrepreneur’s Wife

Estate Fight: The Entrepreneur’s Wife

• March 23, 2022 - Estate Planning, Trust Litigation,

I’m Mike Hackard with Hackard Law. We represent clients in California estate, trust, and elder financial abuse litigation.

I’m often asked: “what is it that you do?” The short answer is “we litigate estate, trust, and elder financial abuse cases.” The answer raises another question: “What’s that?”

So, in explaining what we do, I’ll start with the famous Dragnet opening: “The story you are about to see is true. The names have been changed to protect the innocent.” Even better, let’s use a Dragnet parody opening: “The story you are about to see is fiction. The names are made up, but the problems are real.”

That’s really it. The problems are real. Let’s look at a common one: “The Entrepreneur’s Wife.”

Nick and Noel marry in 2009. They have very little in the way of personal assets at their marriage. Noel does not have any children. Nick has three children by a prior marriage.

Noel encourages Nick to learn coding. He agrees. They think that it might bring them greater financial security.

Nick learns quickly and starts a tech company in 2011. He names the company “Opus Supratech” and bases it in Santa Monica. Nick is the company’s President. Noel doesn’t participate in the company’s management.

Nick forms his own living trust in 2018. The Trust recites: “Upon the death of Nick, the stock of Opus Supratech is to be distributed outright and equally to my three children. My wife, Noel, is to receive nothing of the stock.” Nick’s trust gives Noel his cactus collection.

Nick dies in late 2021. Nick’s trust has a problem.  Nick can’t give away what isn’t his. California law says that “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.”

The stock in Opus Supratech was acquired by Nick during his marriage while he was domiciled in California. The stock is community property.

Noel needs a lawyer. The problem has a solution. When a settlor, a maker of a trust, in this case – Nick, indicates a belief that he is disposing of the entire estate, the surviving spouse, Noel, must make an election between asserting her community property and taking under the trust, even if the settlor (Nick) was mistaken in the belief that his spouse (Noel) had no interest in Opus Supratech stock.

So, Noel’s choice – take the cactus collection under the trust or her 50% ownership in a multimillion-dollar company. Noel chooses the stock. She hires us to file a spousal property petition.

The children want to fight. They will lose. Half of the stock belongs to Noel.

Hackard Law represents disinherited heirs and beneficiaries in cases like “The Entrepreneur’s Wife.” If you’d like to talk with us about your case, call us at Hackard Law (916) 313-3030.

We’ll be happy to hear from you.

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