Will Contests and Trust Litigation

• Trustee steals from trust he administered for his daughter
  Mar 01, 2009

  This story from Philadelphia recounts how a state senator received a $1,000,000 gift from his friend.  It just so happens that gift came from the friend taking the money from his daughter's trust.  Of course, as trustee he had no right to take the money from the trust and make a gift of it.
  
  Trustees improperly taking money from a trust is not uncommon.  Beneficiaries of a trust who have been ripped off can sue the trustee in probate court if they are going to recover what is rightfully theirs.  Usually this is done by filing a petition in probate court seeking to surcharge the trustee. - 31 - 40

• Lawsuits fly against probate estate in attempt to recover assets
  Feb 19, 2009

  This story illustrates one of the more unpleasant tasks that falls to executors and administrators, defending the probate estate from lawsuits.  Had this story been from California it's possible the probate estate would do better than it appears to be doing in this case.  Under California probate law a creditor has to file a claim with the estate before suing the estate.  The creditor can not sue a California probate estate without taking this step.  If the probate estate denies the claim or fails to act on it then the creditor can sue the estate.  If the creditor sues the probate estate without filing a creditor's claim then the estate will have a perfect defense to the lawsuit.

  - 32 - 40

• Heir grievances lead to estate litigation
  Feb 17, 2009

  Gifts made while your loved one is alive can lead to probate litigation after they have died.  This story from Kansas City illustrates a common scenario seen so often in California probate court and litigated by California probate lawyers.  Here, a blended family had a harmonious relationship while both the husband and wife were alive.  When the husband died his children took items from the house they claimed were family heirlooms and some money from a joint bank account.  After the wife died, and her will was admitted to probate, litigation ensued to determine what each person named in the will was supposed to receive.
  
  Had this case been in California, a good California probate attorney would have recognized the property taken from the wife would give the executor a reason to file a financial elder abuse lawsuit or an "850 petition" (which is petition in a California probate court claiming someone is holding property that really belongs to the probate estate.)  Financial elder abuse lawsuits can lead to the defendant having to repay the amount they took along with attorney's fees and costs.  An 850 petition can lead to the defendant having to pay double damages.  - 33 - 40

• Scam artists appear to be active in Nigerian probate court
  Feb 11, 2009

  I shouldn't take such delight in this case but reading about this probate litigation case from Nigeria brought a smile to my face.  The executors of two probate estates couldn't agree how to use some of the estate's property.  The probate litigation features some unintentionally funny testimony.  It appears the same type of person who runs those terribly Nigerian email scams are also active in Nigerian probate courts. - 34 - 40

• Does Anna Nicole Smith's will contest provide any lessons for the rest of us?
  Feb 11, 2009

  The Anna Nicole Smith will contest is celebrating its second anniversary and drawing another round of commentary.  A commentator at Townhall.com urges that this case sets a bad example for families everywhere.  I disagree.
  
  Let me blunt.  From everything I have read about this case it appears to me Anna Nicole Smith was a gold digger and her husband knew it.  Her husband spent millions on her while he was alive.  He had other plans for when he died.  He went to his lawyers, had his will changed, and deliberately left her nothing.  She hired some probate lawyers, sued in Texas and lost.  After declaring bankruptcy she sued in a California bankruptcy court invoking artfully alleging her case wasn't really probate litigation or a will contest but rather the tort of interfering with her inheritance.  In other words, she found a way into federal court.  The bankruptcy court agreed with her and she was awarded about half a billion dollars.
  
  Unsurprisingly, her husband's estate appealed.  The United States District Court cut the award by about three quarters.  It went up another level of appeal to the Ninth Circuit Court Of Appeals who threw the case out saying it should never have left Texas.  Smith then appealed to the Supreme Court.  They sent it back to the Ninth Circuit.  It appears the case is dead.
  
  So, as I see it, Smith filed a will contest but tried not to call it a will contest.  She, and later her estate, spent a ton of time and money pursuing a case she should lose.  It now appears she has.  In my opinion this will contest teaches us the facts of a case matter.  Meritorious cases will prevail and unmeritorious cases will fail.  It also teaches us that everybody gets their day in court.  That's the way it should be.
  
  - 35 - 40

• Delayed probate accounts were a sign of trouble
  Feb 11, 2009

  This case supervised by New York's equivalent of probate court involves an attorney who was apponted to act as guardian of disabled adults.  He wouldn't file required accounts.  It turns out those accounts weren't filed because he was stealing money from the guardianship accounts.
  
  This case presents a lesson for every beneficiary of a probate estate or trust estate.  If you are not getting timely accounts from the probate or trust then you need to take action to protect your interest in the probate or trust. - 36 - 40

• Probate estate sues for retirement plan assets and loses
  Feb 10, 2009

  If, as part of the divorce settlement, one spouse waives her rights to the pension plan of the other spouse, what happens if the other spouse fails to change his plan beneficiary designation? Does the waiver divest the ex-wife of her interest in the pension benefits?
  
  The United States Supreme Court recently addressed these questions in a very important case that affects a lot of people right now and will affect even more as time goes on.  The case is based on a common situation.  William Kennedy married Liv Kennedy and worked for Dupont.  William named Liv as the designated beneficiary of his Dupont savings and investment plan (SIP) which was William's pension plan.  Years later William and Liv got divorced.  Their divorce decree divested Liv of her interest in William's SIP.  William had the ability to change his designated beneficiary at any time.  The SIP plan document directed that the assets go to the plan participant's estate if there is no designated beneficiary.
  
  William died.  He never changed his designated beneficiary even though he was divorced from Liv.  He also did not name a contingent beneficiary.  William's daughter, as the executor of his probate estate, asked the SIP plan administrator to distribute the assets to the probate estate.  The plan administrator declined saying the probate estate was not the correct beneficiary and paid out the plan assets to Liv.
  
  The probate estate sued and the case made its way to the Supreme Court.  The Supreme Court ruled against the executor and the probate estate.  The ex-wife was the correct beneficiary they ruled.  The Supreme Court explained that the plan rules were known to William and he could have changed his beneficiary designation at any time.  He didn't.  He left his ex-wife as the designated beneficiary even though his divorce decree divested her of an interest in the SIP. The ex-wife was the correct beneficiary under the terms of the plan because she was still the designated beneficiary at the time of Willilam's death.
  
  The obvious lesson to learn is change your designated beneficiary to whomever you want to inherit your pension plan.  Do not rely on any other document to make a change for you. - 37 - 40

• Riverside County probate court is not the only one backed up
  Feb 10, 2009

  Probate courts in Florida are backing up just like the Riverside County probate courts.  Florida has experienced an increase in civil litigation which has spilled over and slowed down its probate courts.  In Riverside County we have experienced a combination of having too few judges for our population and a district attorney's office that seems to believe every case it charges should go to trial.  These forces have caused probate litigation, along with all civil cases, to be inordinately delayed.
  
  As a Riverside probate lawyer I have experienced first hand the delay in getting cases to trial.  Walking through the Riverside or Indio courthouse you see large numbers of jurors waiting to be called into their courtrooms to decide criminal cases.  Unfortunately, this is in the civil courthouses which shouldn't be hearing criminal cases.  Probate lawyers are being told by the presiding judge in civil court that no cases are being sent to trial without the parties first engaging in some form of alternative dispute resolution.  In a recent trust contest and will contest case I tried the judge wouldn't even set a trial date because our case wasn't "old enough" and lots of older cases had a priority to get to trial.
  
  California, like Florida, would benefit from some form of dedicated court funding.  The Riveride County probate courts, the cases they hear, the parties involved, and every Riverside probate lawyer would greatly benefit from the county getting an appropriate number of judges for the population and ( a district attorney who realizes most criminal cases can be fairly resolved with a plea bargain.) - 38 - 40

• Arizona will contest with strange twist
  Feb 05, 2009

  Go here for the whole story.

  - 39 - 40

Estate Planning

• Estate planning for blended families
  Apr 14, 2009

  Blended families have special challenges when creating their estate plans.  Clarity of purpose and design are extremely important if your plan will work as intended and leave the family intact rather than fighting with one another. - 40 - 40