Trusts and Estates

2010 Case Alerts

Fazzi v. Klein

Filed December 14, 2010, Fourth District, Div. Three

Trusts and Estates

Lack of explicit statement that trust’s no-contest clause also applied to subtrusts did not entitle petitioner to a “safe harbor” determination that the clause did not apply, where intent to apply the clause to the subtrusts was implicit in the terms and it was unreasonable–considering the “whole of the trust”–to interpret the clause as inapplicable to the subtrusts. Petition for determination that designated successor trustee for trust was not entitled to appointment as successor trustee for subtrusts was a “contest” because it directly contravened trustor’s express directive.

Hall v. Kalfayan

Filed December 8, 2010, Second District, Div. Four

Trusts and Estates

Prospective beneficiary of a will could not maintain a cause of action for legal malpractice against the attorney who drafted the will where it was not executed before the testator’s death.

Conservatorship of Whitley

Filed Cal.Sup.Ct.; November 8, 2010

Trusts and Estates

The fact that a plaintiff’s interests in litigation were personal and nonpecuniary did not bar an award of fees under the private attorney general doctrine.

Citizens Business Bank v. Carrano

Filed November 5, 2010, Second Dist., Div. Eight

Trusts and Estates

The term “issue” included issue born out of wedlock when the terms of the trust did not provide a contrary definition.

Kircher v. Kircher

Filed November 4, 2010, First District, Div. Three

Trusts and Estates

Where husband executed a modified marital settlement agreement with his ex-wife that provided for continuing support payments to the ex-wife after his death, and husband subsequently remarried, the trial court did not err in holding that real property the husband’s widow held with him in joint tenancy could be considered under Probate Code Sec. 13551 in determining the extent of the widow’s personal liability to the ex-wife. The scope of a surviving spouse’s personal liability encompasses all property which, at the time of a decedent’s death, is characterized as community property or the decedent’s separate property, regardless of the manner in which title to the property is held.

Lickter v. Lickter

Filed October 27, 2010, Third District

Trusts and Estates

Beneficiaries of decedent’s trust who had already been paid the amounts they were owed under the trust were not “interested persons” for purposes of pursing an elder abuse action after decedent’s death pursuant to Welfare and Institutions Code Sec. 15657.3(d); beneficiaries’ status as beneficiaries of decedent’s trust never gave them standing to pursue the elder abuse action because the beneficial interest they had in the trust estate was not one that could have been “affected by” the elder abuse action. The only way beneficiaries would have standing would be as decedent’s successors in interest under subdivision (d)(1)(B) if the requirements of Probate Code Sec. 259 were met as to the residuary beneficiaries. Since defendants’ summary judgment motions were based on the premise that plaintiffs lacked standing to pursue any cause of action that belonged to decedent because they could not show defendants were disinherited under Sec. 259, defendants did not have to separately address plaintiffs’ claims or make a prima facie showing as to those causes of action. Even though liability for abuse under Sec. 259 could be premised on aiding and abetting abuse by another or on a conspiracy to commit the act of abuse, it still must be shown that the person who is liable for the abuse acted in bad faith and was reckless, oppressive, fraudulent, or malicious. Plaintiffs did not demonstrate prejudicial error in the denial of their motion to compel one defendant to respond to discovery since they did not show that defendant’s answers would have led to admissible evidence sufficient to raise a triable issue of fact as to whether defendant acted in bad faith and engaged in reckless, malicious, oppressive, or fraudulent conduct.

Starr v. Starr

Filed October 18, 2010, Second District, Div, Eight

Family Law

Evidence supported finding that house was community property based on violation of marital fiduciary duty when husband failed to keep promise to put wife on title after purchase (Rubin, Acting P. J.) 

Day v. Apoliona

Filed July 26, 2010

Trusts and Estates

District court did not err in granting summary judgment to trustees of Hawaii state agency that administered a portion of a public trust created, along with four other purposes, to benefit native Hawaiians in suit by native Hawaiians because federal law did not oblige the trustees to use proceeds only for native Hawaiians. Where trust gave trustees broad discretion to serve its purposes, the district court properly found that challenged expenditures were sufficiently directed to one or more trust purposes to fall within the range of permissible spending. State’s spending of far more money each year on public education–one of the enumerated trust purposes–than it received from the trust did not deprive any beneficiary of standing to bring a claim for breach of trust for lack of injury.

Estate of Hastie

Filed July 22, 2010, First District, Div. Two

Trusts and Estates

When donative transfer was allegedly made in violation of Probate Code Sec. 21350–which imposes restrictions on the making of such transfers to certain categories of beneficiaries, including one who has a fiduciary relationship with the donor–and the transfer became irrevocable while the donor was still alive, administrator of donor’s estate had three years from the date he became apprised of the relevant facts in which to bring an action to set aside the transfer.

Quick v. Pearson

Filed July 1, 2010, Second District, Div. Three

Trusts and Estates

A trustee who successfully hid the existence of the trust from a beneficiary was precluded from asserting laches or relying upon the statute of limitations to defeat claims later brought by the beneficiary.

Soria v. Soria

Filed June 14, 2010, Fourth District, Div. Three

Trusts and Estates

Civil action alleging defendants breached their duties as trustees and seeking an injunction to compel defendants to produce an account–in an action in which the existence of a trust was in dispute–was not a contest of a trustee’s account within the meaning of Probate Code Sec. 17211(b), which authorizes recovery of attorney fees by a beneficiary who brings such a contest if the trustee unreasonably opposes the contest.

Munn v. Briggs

Filed June 10, 2010, Fourth District, Div. One

Trusts and Estates

Brother who alleged his sister and brother-in-law interfered with his expected inheritance by unduly influencing their mother to sign a codicil to her will that gave $1,000,000 each to sister’s children could not bring a cause of action in tort because he had an adequate remedy in probate.

Estate of Lewis

Filed May 6, 2010, Fourth District, Div. Three

Trusts and Estates

The guardian of the decedent’s minor children was entitled to priority over the public administrator for appointment as personal representative.

United States v. Rich

Filed May 3, 2010, Ninth Circuit Court of Appeals

Criminal Law

Decedent was convicted of operating a Ponzi scheme. While the decedent’s death during a pending appeal provided grounds to abate the criminal conviction and its associated restitution order, decedent’s stipulation to the appointment of a receiver prior to his death was not dependent upon his later conviction. As a result, the receivership remained in force following the decedent’s death.

Estate of Kraus

Filed April 27, 2010, Second District, Div. Five

Trusts and Estates

Trust beneficiaries have standing to seek restitution for misappropriated funds, even when their rights in the decedent’s estate have not been conclusively determined.

Estate of Winans

Filed March 26, 2010, First District, Div. One

Trusts and EstatesA probate court erred in upholding a certificate of independent review when the sufficiency of the counseling and independence of the certifying attorney presented a triable issue of material fact.

Leader v. Cords

Filed March 23, 2010, Fourth District, Div. One

Trusts and Estates

A probate court has discretion under Probate Code § 17211(b) to award attorney fees to a trust beneficiary who contests a trustee’s account by challenging the trustee’s refusal to make a final distribution based on a collateral dispute among the parties that did not pertain to the trust.

Marshall vs. Stern

Filed March 19, 2010, Ninth Circuit Court of Appeals

Bankruptcy

A state probate court’s findings were entitled to preclusive effect, and a tortious interference with inheritance counterclaim was a “non-core proceeding” for which the bankruptcy court could issue only proposed findings of fact and conclusions of law,

Conservatorship of John L.

Filed February 25, 2010 California Supreme Court

Trusts and Estates

Court hearing Lanterman-Petris-Short Act conservatorship proceeding did not violate the act or the conservatee’s constitutional right of due process by accepting representation of conservatee’s attorney–that conservatee was waiving his right to be present for hearing and was not contesting petition–where attorney personally discussed the proceedings with conservatee, and there was no allegation that attorney misrepresented the contents of that discussion.

Donahue v. Donahue

Filed February 24, 2010, Fourth District, Div. Three

Trusts and Estates

Probate court abused its discretion in awarding fees to trustee without any explanation for what it concluded trustee had reasonably incurred those fees and without specifying the amount of that award. An assessment of reasonableness for a fee award depends not only on what fees were reasonably incurred but also on whether such fees are reasonably and prudently incurred for the trust.

Estate of Tolman

Filed February 11, 2010 , Second District, Div. Eight

Trusts and Estates

A provision in a will that excluded unclass=”anchor” named was heirs not sufficient to defeat the operation of the anti-lapse statute.

Charles Schwab & Co., Inc. v. Debickero

Filed January 22, 2010 – 9th U.S. Circuit Court of Appeals

Trusts and Estates

Widow was not automatically entitled to surviving spouse rights under ERISA or Internal Revenue Code where husband established an IRA, in part using funds from a 401(k) plan from prior employer.

Suleman v. Superior Court (Petersen)

Filed January 8, 2010 – Fourth District, Div. Three

Trusts and Estates

A person with no connection to the family of minors lacked standing to petition for appointment of guardian of estates for newborn children.

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