Trusts and Estates

Ca. Trs. & Estates Quarterly 2023, VOLUME 29, ISSUE 2

MCLE SELF-STUDY ARTICLE WHERE AGREEMENTS WON’T WORK – A WORD TO THE WISE REGARDING STRICT WAGE AND HOUR LIABILITY AND RELATED CLAIMS

Written by Daniel C. Kim* and Ryan Abernethy*

I. SYNOPSIS

Ed was a vibrant and healthy 85-year-old. One day, he decided to sign an advance healthcare directive providing that if his physical condition ever declined, he wished to remain in his home as long as possible with the help of live-in caregivers and other staff, as needed. Although his wife, Donna, and his daughter, Taylor, tried to assist Ed on their own, Ed’s growing needs became more than they could handle. They decided to bring in a live-in caregiver, Paula, who was a family friend. Paula was loosely hired by all three of them. Ed and his wife, Donna, were trustees of their family revocable trust. Taylor was Ed’s acting agent under his advance healthcare directive. No written employment agreement was signed by the parties. Paula was expected to work a "standard" workday, Monday through Friday, but was expected to be "on-call" during the evenings, weekends, and holidays. The family verbally agreed to pay Paula $500 per week, which was more than she made at her last job, so she felt she was adequately compensated. Moreover, over the years, Ed repeatedly promised her that after he passed, his estate would be sure to "take care of her." Based on this promise, Paula selflessly cared for Ed until he sadly passed away more than ten years later. She did not pursue any other employment, despite having a number of great opportunities.

Following his death, Paula was stunned to learn that she was not a beneficiary of Ed’s estate. She also learned from an attorney-friend that her work arrangement with the family did not comply with various labor laws. Paula filed a creditor’s claim in Ed’s estate and a subsequent lawsuit against Donna, as successor trustee and personal representative, and Taylor, as former agent under the advance healthcare directive. Paula alleged the following causes of action:

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