Trusts and Estates Case Alerts

Summary: Despite the trust’s general provision authorizing retention of trust property, the specific provision requiring the co-trustees to distribute the trust assets after the settlors died and all beneficiaries reached age 30 controlled, although they had discretion over the method of distribution. Read more

Summary: Under the substantial benefit doctrine a probate court may award attorneys’ fees to a litigant whose efforts have resulted in a substantial benefit to other parties, whether such benefits are pecuniary or non-pecuniary. Read more

Amanda Meleski was injured when Albert Hotlen ran a red light and collided with her vehicle. At the time of the accident, Hotlen had a $100,000 policy limit through Allstate Insurance. Hotlen then died and, as authorized by the Probate Code, Meleski filed a probate action against Holten’s estate for the policy limits of $100,000, serving her complaint on Allstate. Allstate rejected Meleski’s C.C.P. 998 offer to compromise of $99,999. At trial, Meleski recovered $180,613.86, and sought costs, including expert fees, of $66,017.08 under C.C.P. 998. The Court denied Meleski’s requests for costs, holding that Plaintiff’s recovery was limited to the $100,000 policy limit. Plaintiff appealed. Read more

Walter C. Permann established a trust whereby he provided distributions to employees of his company, so long as each beneficiary remained “employed” by the company at Walter and his spouse’s death or else such gifts would lapse. The trust also included a gift to the drafting attorney, whom had obtained a certificate of independent review before Walter executed the trust. Read more

Josephine created a trust in 1997. When Josephine died in 2007, her niece, Rosie, succeeded her as trustee. Rosie was neither legally nor financially sophisticated, but had been close with Josephine and knew her wishes. Under the trust Josephine left a life estate in a residence to her long-time family friend, Paul, and the residue to Orange Catholic Foundation. The trust required Paul to pay “ordinary maintenance expenses” on the residence. Paul was elderly, had dementia, and was unable to afford the expenses. Read more

Marcie Weber was convicted of theft from an elder, Philippa Johnston, and was ordered to pay restitution to the victim’s estate. Following Johnston’s death, her conservator, Sarah Kerley, filed a restitution action and an 850 petition to recover civil damages for the wrongful taking from an elder. In the restitution action, the parties stipulated to a judgment of $700,000. In the 850 action the court, based on principles of res judicata, granted the petition and awarded double damages of $1.4 million. Read more

Decedents Fusae Obata and Emi Obata died intestate in 2013, unmarried, and leaving no issue. In 1911, their father Tomejiro Obata had been adopted in Japan under the Japanese practice of yōshi-engumi. Tomejiro’s descendants from his biological parents claimed under the laws of intestate succession, arguing that Tomejiro’s adoption was not valid under California law because (1) it did not create a sufficient parent/child relationship between the adoptee and the adopting parents; (2) it did not terminate the parent/child relationship between the adoptee and the biological parents; (3) it did not require a judicial or neutral third party review process; and (4) it did not result in a permeant relationship – all of which are requirements for a valid adoption in California. Read more

M.B., a minor, appealed an order appointing the Public Guardian as the conservator of her person pursuant to the Lanterman-Petris-Short (“LPS”) Act. Minor contended that the court should have applied the definition in Welfare Institutions Code section 5585.25, which defines “grave disability” of a minor as “a minor who, as a result of a mental disorder, is unable to use the elements of life that are essential to health, safety, and development, including food, clothing, and shelter, even though provided to the minor by others,” instead of the definition contained in section 5008, subdivision (h)(1)(A). Read more

Arthur and Hildis created a trust and named their children as remainder beneficiaries. Under the trust their son John held a power of appointment over his interest in the trust that, if not exercised, would pass to the other trust beneficiaries. In order to validly exercise the power of appointment it had to be exercised in “a will specifically referring to and exercising this general testamentary power of appointment.” Read more

A’Yana was the beneficiary of a special needs trust established by court order in 2004 and funded with proceeds from the settlement of a medical malpractice lawsuit. Melodie, a professional fiduciary, was appointed trustee in 2004 and signed the trust instrument. Although the trust required biennial court accountings Melodie filed her first accounting in 2012, asserting she was unaware the trust was court-supervised. Read more