Trusts and Estates

2009 Case Alerts

Balian v. Balian

Filed December 11, 2009 – Second District, Div. Five

Trusts and Estates

The filing of a petition to modify a special needs trust was not a violation of a trust’s no contest provision where the modification was necessary to effectuate the settlor’s intent.

Rudnick v. Rudnick

Filed December 3, 2009 , Fifth District
Cite as F056587

Trusts and Estates

When a trust beneficiary instigates an unfounded proceeding against the trust in bad faith, a probate court has the equitable power to charge the reasonable and necessary fees incurred by the trustee in opposing the proceeding against that beneficiary’s share of the trust estate.

Chatard v. Oveross

Filed November 30, 2009 , Second District, Div. Four
Cite as B213392

Trusts and Estates

The beneficiary of a spendthrift trust who also acted as trustee and committed a breach causing financial harm to the trust could have her interest in the trust estate impounded to satisfy a claim arising from her misfeasance because the damage resulting from her breach would otherwise be sustained by the beneficiaries.

1680 Property Trust v. Newman Trust

Filed November 17, 2009 , Second District, Div. Five 
Cite as B207613

Civil Procedure

Code of Civil Procedure Sec. 366.2’s one-year period of limitations for actions against a deceased person is applicable to fraud claims based on statements of a decedent on behalf of a trust of which decedent was trustor and trustee, even though fraud action is against successor trustee.

King v. Johnston

Filed November 9, 2009 , Fourth District, Div. One 
Cite as D054136

Trusts and Estates

Trust beneficiary had standing to sue fellow beneficiary for aiding trustee in transferring property out of trust in breach of trustee’s duties. Trial court erred in failing to consider and make necessary findings as to whether plaintiff could recover from defendant under a theory that after trustee’s death, defendant–by holding herself out as trustee and purporting to perform trustee’s duties–became a trustee de son tort and could thus be held liable for breach of those duties.

Johnson v. Greenelsh

Filed October 29, 2009 
Cite as S166747

Trusts and Estates

A challenge to a surviving spouse’s mental capacity to transfer trust assets and appoint a successor trustee did not violate no-contest clause in a family trust. Proceeding contesting a settlor’s mental competence to exercise rights under a trust does not amount to an attack on the trust itself, unless it seeks to thwart the estate plan established by the trust.

Presta v. Tepper

Filed October 28, 2009, publication ordered November 24, 2009, Fourth District, Div. Three
Cite as G040427

Trusts and Estates

Where two individuals entered into a real estate partnership acting in their capacity as trustee of a family trust, the partners were the individuals, not the trusts. A trust is a relationship by which one person or entity holds property for the benefit of another and is not a separate entity from its trustees; trustees act as individuals when carrying out trust business.

Guardianship of K.S.

Filed September 30, 2009 , Sixth District 
Cite as H032581

Trusts and Estates

No authority supported objector’s proposition that Code of Civil Procedure Sec. 631.8 does not apply to probate proceedings. Guardianship accountings require the same procedure for filings and objections as conservatorship proceedings. Where trust was specifically created to provide for minor’s “health, maintenance, education, travel, and welfare, and general welfare,” minor’s father did not need to exhaust his own resources to provide for minor before dipping into trust assets. Trial court did not abuse its discretion in overruling objection to handling of wrongful death proceeds that funded trust or excluding certain evidence absent any demonstration of error by objector. Totality of facts supported trial court’s finding that objector filed objection in bad faith and without reasonable cause. Probate Code Sec. 2622.5 specifically provides compensation for fees incurred to defend an account from unreasonable objections and does not preclude compensation for costs associated with collecting those fees.

Cook v. Cook

Filed September 29, 2009 , Second District, Div. Six 
Cite as B205793

Trusts and Estates

Where testators instructed that beneficiary’s debt to them be offset against that beneficiary’s distribution, beneficiary’s assertion that his debt was not enforceable violated trust’s no-contest provision since beneficiary’s pleading attacked testators’ plans to distribute their property.

Estate of Pryor

Filed September 29, 2009 , Second District, Div. Four 
Cite as B207402

Trusts and Estates

Neither plain language nor legislative history of Probate Code Sec. 21351 supports judicial creation of a fraud or undue-influence exception to rule that a spouse may receive a donative transfer from a dependent or elder adult.

Pryor v. Pryor

Filed September 29, 2009 , Second District, Div. Four 
Cite as B207398

Family Law

Standard of review on a question of annulment is substantial evidence; limitations period and standing provisions are dependent on the ground for annulment invoked. Since a third party is never accorded standing to seek annulment based on fraud, a cause of action does not survive defrauded spouse’s death.

Stevens v. Tri Counties Bank

Filed September 1, 2009, Third District Cite as C058154

Trusts and Estates

Where bank account contract incorporated California law relating to such agreements except to the extent that the contract explicitly varies from California law, trial court erred in finding such contract was not governed by California’s Multiple-Party Accounts Law absent varying contractual provisions. CAMPAL governs whether a person is a proper party to the account unless the terms of the account vary from CAMPAL’s provisions, and CAMPAL does not deprive account holders of recourse against financial institutions that permit a party to withdraw funds from a multiple-party account when the person is not a proper party to the account pursuant to CAMPAL and the account contract.

Cabral v. Martins

Filed August 21, 2009, publication ordered September 4, 2009, First District, Div. Four 
Cite as A120657

Civil Procedure

Where plaintiff filed suit against her ex-husband’s attorneys, asserting that their actions–revising estate plan for ex-husband’s mother in a manner that appeared to disinherit ex-husband, participating in probate court proceedings to effectuate this revised plan, and defending ex-husband and his siblings in litigation by plaintiff–unlawfully aided a child support obligor to avoid paying child support by transferring or concealing assets, plaintiff’s action was predicated on protected activity since counsel’s conduct was neither inherently criminal nor otherwise outside the scope of normal, routine legal services even if those actions had the effect of defeating or forestalling plaintiff’s ability to execute her judgment for child support. Because ex-husband’s expectancy as a probable heir of mother’s estate was not an “asset,” plaintiff had no reasonable probability of success as to her child support evasion claim as to those actions taken by attorneys to effectuate and defend mother’s estate plan. As those actions took place prior to effective date of child support evasion statute and subsequent actions taken by attorneys in probate proceedings, and the litigation defense were absolutely protected by the litigation privilege, plaintiff had no probability of prevailing as to her remaining claims. Trial court did not abuse its discretion in determining the appropriate amount of attorney fees to award.

Estate of Lensch

Filed August 31, 2009, publication ordered September 9, 2009, First District, Div. Two 
Cite as A123296

Trusts and Estates

Where testator bequeathed estate to her son and daughter and son disinherited his children, trial court erred in denying petition for an evidentiary hearing on issue of whether son predeceased testator, in which case his children would take his share from testator’s estate under anti-lapse statute.

Salter v. Lerner

Filed July 28, 2009, publication ordered August 19, 2009, First District, Div. Three 
Cite as A121525

Trusts and Estates

Petition by contingent remainder beneficiaries, seeking information with regard to how trustee who was also income beneficiary was spending trust funds, would not violate trust’s no-contest clause.

Drummond v. Desmarais

Filed August 5, 2009, Sixth District 
Cite as H031659

Civil Procedure

Termination based upon violation of the compulsory cross-complaint rule is a “technical” disposition rather than one “on the merits.” Because malice concerns a party’s actual mental state, it necessarily presents a question of fact; a reasonable trier of fact could readily find that defendant acted without probable cause when he sued his former clients in tort, threatening them with punitive damages, merely for objecting to his fees and that defendant had acted with spite. Events after defendant’s complaint against plaintiffs was filed and dismissed had no logical bearing on question of probable cause because essence of that element was tenability of defendant’s claims based upon his knowledge and belief at the time of filing. Fact finder would be entitled to disbelieve defendant’s asserted reasons for dismissing action against plaintiff and so that declaration could not establish as a matter of law that plaintiffs would be unable to prove favorable termination. When a malicious prosecution action is stayed on the ground that an appeal from the underlying judgment is pending, and the appeal is thereafter resolved adversely to the malicious prosecution plaintiff, a voluntary dismissal by him in response to that event is a technical determination and not a termination on the merits in favor of his opponent.

Conservatorship of Becerra

Filed July 28, 2009, Fourth District, Div. One 
Cite as D053519

Trusts and Estates

Standards of professional responsibility prepared by the State Bar are not regarded as court orders or local rules for purposes of awarding sanctions, and trial courts do not have responsibility to directly enforce these rules, even when violations of court orders are alleged, since disciplinary authority is lodged in the Supreme Court, which has delegated it to the State Bar Court. Where probate courts issued an order appointing attorney, and court-appointed attorney requested that other attorneys in case make contact with client only though her, violations of that request would amount to violations of the Rules of Professional Conduct, not of a court order. Probate court’s determination that counsel’s disregard of such a request by court-appointed attorney justified setting a sanctions hearing and finding that counsel had violated a court order was incorrect and exceeded probate court’s discretion.

Baker Manock & Jensen v. Superior Court (Salwasser)

Filed July 22, 2009, Fifth District 
Cite as F056973

Trusts and Estates

Trial court order removing counsel, based on erroneous legal conclusion that counsel had a conflict of interest, was not entitled to deference. While an attorney may have liability to an intended beneficiary of a will who, because of the attorney’s error, does not receive a bequest that testator had intended to grant as a result of negligent performance of a contract, such potential negligence liability does not bring third-party beneficiaries of a contract to draft a will into an attorney-client relationship. An attorney who has drafted a will is not bound to a beneficiary by the duties of an attorney to a client because beneficiary is not a client and does not become a successor client just because the will becomes irrevocable upon testator’s death. Attorney for executor does not have a conflict of interest merely because he represents one beneficiary of a will in a dispute with another beneficiary unless such representation presents a conflict between the executor and the represented beneficiary.

Gdowski v. Gdowski

Filed June 23, 2009, Fourth District, Div. Three 
Cite as G040975

Family Law:

Protective order under Elder Abuse and Dependent Adult Civil Protection Act may be issued on the basis of evidence of past abuse without any particularized showing that the wrongful acts will be continued or repeated. Issuance of protective order was an abuse of discretion where judge acknowledged that decision was “tipp[ed]” by defendant’s counsel’s aggressive and confrontational cross-examination of plaintiff, which judge assumed was consistent with defendant’s desires; counsel’s tone of voice or style of examination is not evidence, and cannot be the basis for the issuance of a protective order under the Elder Abuse Act.

Cory v. Toscano

Filed June 8, 2009, Fifth District 
Cite as F055231

Trusts and Estates

Where petitioner sought determination that handwritten notations on trust document that reduced petitioner’s share of a trust asset were not part of the terms of the trust, such notations were an attempt to amend the trust; since the “amendment” was not part of the original trust agreement, the challenge to its validity was not a contest under Probate Code Sec. 21305(a)(3).

Phelps v. Orange County Assessment Appeals Board No. 1 (Guillory)

Filed May 27, 2009, publication ordered June 29, 2009, Fourth District, Div. Three 
Cite as G040428

Taxation

 Income beneficiaries of a trust that owned a shopping center complex had a present interest in improvements on the property constructed and owned by lessee and sublessees because such improvements were part of the property that had to be surrendered to the lessor in good condition at the close of the lease. By receiving rent income from trust property, beneficiaries had beneficial use of that property even though they did not have legal title. A lifetime beneficiary receiving the rental value of a parcel of real property is considered under the law to be receiving value substantially equal to the value of the fee interest.

Estate of Beckel

Filed May 20, 2009, Fifth District 
Cite as F055384

Trusts and Estates

Where statutory rules governing the law of intestate succession required decedent’s estate be passed onto decedent’s first cousins, estate was to be divided into as many shares as there were first cousins who survived decedent and first cousins who predeceased the decedent but left surviving issue of any generation. Surviving issue of a predeceased heir entitled to inherit was not limited to the first generation.

Conservatorship of Amanda B.

Filed May 15, 2009, Fourth District, Div. One 
Cite as D053732

Family Law

After a conservatorship has been established, a conservatee may file an initial petition for rehearing to challenge her status as a conservatee at any time and is only required to wait six months before filing a another petition for rehearing.

Morrison v. Commissioner of Internal Revenue

Filed May 13, 2009 
Cite as 06-75332

Taxation

If a third party who has no direct interest in tax litigation pays fees on behalf of a taxpayer, that taxpayer “incurs” fees so long as he assumes either an absolute obligation to repay the fees–regardless of whether he successfully moves for a fee award–or a contingent obligation to pay the fees in the event that he is able to obtain a fee award.

Conservatorship of Edde

Filed May 1, 2009 , Fifth District 
Cite as F055054 

Individual Rights

Statutory provision allowing state to seek reimbursement from estate of a pretrial detainee committed to a state hospital does not violate equal protection because pretrial detainees are not similarly situated to inmates transferred to state hospital for treatment while incarcerated. Legislature also had a rationale basis for treating two categories of patients differently.

Smith v. Shewry

Filed April 21, 2009, publication ordered May 11, 2009, Second District, Div. Four 
Cite as B207305

Trusts and Estates

Decedent’s authorization of law firm to act as his “authorized representative” regarding his application for Medi-Cal eligibility and benefits created an agency relationship that was revoked by decedent’s death.

Estate of Prindle

Filed April 20, 2009 , Third District 
Cite as C055832  

Trusts and Estates: 

Homeowners insurer had standing in probate court to challenge validity of judgment claim against decedent’s estate (Nicholson, J.) 

Somers v. Superior Court of San Francisco City and County

Filed  April 10, 2009 , First District, Div. One 
Cite as A123445 

Individual Rights

Where an out-of-state resident who was born in California petitioned for issuance of a new California birth certificate reflecting her gender reassignment, Health and Safety Code requirement that such a petition be filed in the county of petitioner’s residence–which did not permit a change of gender on a birth certificate–violated the Equal Protection clause and Privileges and Immunities clause.

Kelly v. Human Rights Campaign, Inc.

Filed April 1, 2009 , Third District 
Cite as C058941 

Trusts and Estates

Time limit for admitting new or competing wills to probate under Probate Code Sec. 8226(c) does not apply to proponent of a will who did not receive notice of the petition for letters of administration.

Bradley v. Gilbert

Filed April 1, 2009 , Second District, Div. Seven 
Cite as B201357 

Trusts and Estates

Proposed petition by successor trustee to marshal assets in two trusts fell within safe harbor of no-contest provision.   

In re Marriage of Padgett

Filed March 25, 2009 , First District, Div. Two 
Cite as A120644 

Family Law

The pre-retirement death of a pension plan participant ordinarily irrevocably vests the right to survivor benefits in the existing spouse, but a domestic relations order possessed by a former spouse before the plan participant’s death may be qualified postmortem as a “qualified domestic relations order” under the Employee Retirement Income Security Act of 1974 where it substantially complies with ERISA’s specificity requirements. When a pension plan participant dies or retires before a former spouse secures an order awarding that spouse any interest in the plan, a domestic relations order entered before the death that does not award the former spouse an interest in the participant’s pension plan, but simply “reserves jurisdiction” over the plan, provides an inadequate basis for entry nunc pro tunc of either a QDRO under ERISA or of an order determining the former spouse’s interest that later may be qualified as a QDRO. 

In re Charlotte D.

Filed March 19, 2009 
Cite as S142028

Family Law

Probate Code Sec. 1516.5–which authorizes termination of parental rights when a probate guardianship has continued for at least two years, and trial court finds that adoption by guardian would be in child’s best interest–is not facially unconstitutional by adopting the best interests of a child as standard for terminating parental rights. Court of appeal erred in barring termination of father’s parental rights without a finding of unfitness if father could demonstrate a commitment to parental responsibility where father was qualified to assert his rights as a presumed father but expressly waived those rights when child was placed in guardianship. 

Guardianship of Ann S.

Filed March 19, 2009 
Cite as S143723 

Family Law

Probate Code Sec. 1516.5–which authorizes termination of parental rights when a probate guardianship has continued for at least two years, and trial court finds that adoption by guardian would be in child’s best interest–is not facially unconstitutional because a showing of current unfitness is not always necessary when a court terminates parental rights after parent-child family unit has ceased to exist and parent’s entitlement to custody is not at issue; when child develops an interest in a stable, continuing placement, and guardian acquires a recognized interest in the care and custody of child; and when statute requires trial court to balance all familial interests in deciding what is best for child. Trial courts have discretion to determine on a case-by-case basis whether to apply Sec. 1516.5 to a guardianship in existence on its effective date. Where mother had not sought visitation during more than three and a half years of probate guardianship and did not see child for an even longer period, reunification was a remote possibility, and retroactive application of Sec.1516.5 was consistent with due process. 

Chang v. Lederman

Filed March 16, 2009 , Second District, Div. Seven 
Cite as B199813 

Torts

Testator’s lawyer owes no duty of care to a nonclient who alleges he or she was a potential beneficiary of the testator’s estate in the absence of an executed will or trust instrument expressly reflecting the testator’s intent. Testator’s lawyer owes no duty of care to a nonclient who was previously class=”anchor” named in a will or trust instrument executed by testator and who alleges testator intended to revise his or her estate plan to increase the gift to the beneficiary.

Giammarrusco v. Simon

Filed March 12, 2009 , Second District,  Div. One 
Cite as B199998

Trusts and Estates

Beneficiary’s contention that ambiguous language in trust documents was result of scrivener’s error and should therefore be reformed in accordance with grantors’ intent did not violate trusts’ no-contest clauses. Trial court could excuse compliance with trust provision–providing for a conclusive presumption that survivor did not exercise her limited power of appointment over specified property if survivor’s will or codicil was not filed within 60 days of her death–if survivor exercised her limited power of appointment in a way that approximated the manner prescribed by trust documents and that did not defeat a significant purpose of trustors. 

Birl v. Heritage Care LLC

Filed March 11, 2009 , publication ordered April 8, 2009 , Second District, Div. Two 
Cite as B206952 

Civil Procedure

Trial court did not abuse its discretion in denying defendant’s motion to compel arbitration where codefendants were third parties unaffected by arbitration agreement and plaintiffs asserted causes of action as successors in interest of decedent as well as in their individual capacities as third parties not bound by the arbitration agreement.

Shewry v. Wooten

Filed February 27, 2009, publication ordered March 24, 2009 , First District, Div. Three  
Cite as A120402 

Trusts and Estates

California Department of Health Care Services’ claim for Medi-Cal expenses paid on behalf of decedent were not governed by general Probate Code provisions for creditor’s claims but by specific provisions for creditor’s claims by public entities. 

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