Category: Trust Litigation

pensive woman in tight curly hair sitting on the couch

When to Consider a Living Trust

Posted by Susan B. Geffen on

Regardless of the amount or their worth, we all have possessions. As you get older, it’s natural to start thinking about what will happen to these possessions when you die. To ensure it is your loved ones who receive your assets, a trust can be established with a qualified attorney. A living trust is an excellent solution for Los Angeles residents to secure their possessions after they have passed without having to hassle with the California probate process. Attorney Susan B. Geffen is the qualified estate planning and trust lawyer you need to arrange establish this important legal arrangement before it’s too late.

What is a Living Trust?

A trust is a legal arrangement in which a person (referred to as the “trustor” or “grantor”) transfers ownership of their assets to a separate legal entity known as a “trust,” managed by a trustee. The trustee holds and manages the assets for the benefit of another person or group of people, known as the beneficiaries. The trust document sets out the terms and conditions under which the trustee must manage and distribute the assets.

There are various types of trusts, and one common type is a living trust, also known as an inter vivos trust. A living trust is created during the trustor’s lifetime and can be revocable or irrevocable.

Revocable Living Trust

With a revocable living trust, the trustor retains control over the assets placed in the trust and can modify or revoke the trust at any time during their lifetime. They can serve as both the trustor and the trustee, managing the assets as they see fit. The primary advantage of a revocable living trust is that it allows for the avoidance of probate—a legal process that validates a will and distributes assets after a person’s death.

Irrevocable Living Trust

An irrevocable living trust, as the name suggests, cannot be altered or revoked once it is established, except under certain circumstances and with the consent of the beneficiaries or a court order. The trustor transfers ownership of the assets to the trust and gives up control over them. This type of trust can provide benefits such as asset protection, estate tax planning, and eligibility for certain government benefits.

Both types of living trusts can be used to manage and distribute assets during the trustor’s lifetime and after their death, depending on the specific terms outlined in the trust document. They are popular estate planning tools that allow for the efficient transfer of assets, privacy, and potentially avoiding the probate process. Attorney Susan B. Geffen can help you understand the legal and financial implications of creating a trust based on your specific circumstances.

Top Reasons to Have a Living Trust

There are several reasons why you may choose to establish a living trust as part of your estate planning in Los Angeles. Here are some common reasons:

  • Probate avoidance: One of the primary motivations for creating a living trust is to avoid the probate process. Probate is a court-supervised legal process that validates a will, settles debts and taxes, and distributes assets after a person’s death. Probate can be time-consuming, costly, and public. By placing assets in a living trust, they can be transferred to beneficiaries outside of probate, allowing for a faster and more private distribution.
  • Privacy: Unlike the probate process, which is a matter of public record, a living trust provides greater privacy. The terms and details of the trust remain confidential and are not accessible to the general public. This can be advantageous for individuals who value privacy and want to keep their financial affairs confidential.
  • Incapacity planning: A living trust allows for the management of assets in the event of the trustor’s incapacity. If the trustor becomes unable to handle their financial affairs due to illness, disability, or other reasons, the successor trustee named in the trust document can step in and manage the assets on behalf of the trustor, ensuring the smooth continuation of financial affairs without the need for court intervention.
  • Control and flexibility: A living trust provides the trustor with control and flexibility over the management and distribution of their assets. As the trustee of their own living trust, the trustor can continue to manage and control the assets as they see fit during their lifetime. They can also establish specific instructions for the distribution of assets after their death, ensuring that their wishes are carried out according to their specific intentions.
  • Blended families or complex family dynamics: Living trusts can be particularly useful for individuals with blended families or complex family dynamics. By using a trust, the trustor can outline specific instructions on how assets should be distributed among beneficiaries, ensuring that their wishes are followed and potential conflicts are minimized.
  • Estate tax planning: Depending on the size of the estate, a living trust can be used as a tool for estate tax planning. By placing assets in an irrevocable living trust, it may be possible to remove them from the estate for estate tax purposes, potentially reducing the overall tax liability.

It’s important to note that the suitability and benefits of establishing a living trust can vary depending on individual circumstances and the laws your specific jurisdiction in California. Consulting with Trust Attorney Susan B. Geffen can help determine if a living trust aligns with your goals and needs.

What to Know About Living Trusts in California

Susan B. Geffen is a qualified estate planning attorney who can ensure compliance with current California laws.

Here are some key points regarding California laws and living trusts:

Validity and Formation

California law recognizes the validity of living trusts. To create a valid living trust, the trustor (also known as the grantor or settlor) must have legal capacity, meaning they must be at least 18 years old, of sound mind, and not under undue influence or duress. The trust must also meet the legal requirements for trust formation, including having a clear expression of the trustor’s intent, identifiable trust property, and a designated trustee.

Trustees

In California, a living trust can be revocable or irrevocable, and the trustor can serve as the initial trustee. However, the trustor must also name a successor trustee to take over management of the trust assets upon their incapacity or death. The successor trustee has legal responsibilities to administer the trust according to its terms and California law.

Probate Avoidance

One of the primary benefits of a living trust in California is the ability to avoid probate. Assets held in a properly funded living trust can pass to the beneficiaries without going through the court-supervised probate process. However, it’s essential to properly transfer assets into the trust by re-titling them in the name of the trust or designating the trust as a beneficiary.

Spousal Property Petition

California allows for the simplified transfer of community property to a surviving spouse through a Spousal Property Petition. This process can be used in conjunction with a living trust to transfer assets from the deceased spouse’s name to the surviving spouse, avoiding probate.

Medi-Cal Planning

For individuals concerned about potential long-term care costs and Medi-Cal eligibility, specific provisions must be considered in the living trust. It’s important to consult with an attorney knowledgeable in Medi-Cal planning to ensure compliance with the complex regulations.

Trust Administration

California law outlines the duties and responsibilities of trustees in administering living trusts. Trustees are required to act in the best interests of the beneficiaries, avoid conflicts of interest, provide accountings, and fulfill other legal obligations. Beneficiaries also have certain rights under California law to receive information and enforce their interests in the trust.

California’s trust laws are detailed and can be complex. Working with experienced Attorney Susan B. Geffen can help you navigate the specific requirements of your living trust and ensure compliance with the current laws of your California county.

To schedule your Trust or Will with a skilled attorney, call the law firm of Susan B. Geffen today.

Young woman talking aggressively to a scared elder woman.

Fighting Families

Posted by Susan B. Geffen on

Trust litigation is very taxing. I just had a mediation, and the Judge described the probate courts as “family law on steroids.” There is no typical case, but they all seem eerily similar. Most all involve older adults, usually parents, who have been taken to a new attorney by an adult child who unduly influences said parent into disinheriting the other children. Worse, often that parent is isolated from the other children and is turned against them because the “bad” kid has their ear 24/7. While it is bad enough that the heirs have had their bequests stripped from them, what is truly tragic is that the older adult has had their dignity smashed; a whole life of love and kisses in bits and pieces like a fragile mirror after a tumultuous earthquake.

To do this takes a lot of moving pieces.

Here’s the recipe:

Step 1. Make sure that your parents are cognitively challenged, and vulnerable.
Step 2. Find a willing attorney (that is not me)
Step 3. Drag your parent to the “willing” attorney, and on the way fill her head with horror stories and make her fearful of her other children. I have a good one. Tell her that your siblings want to lock her up in a facility and steal her money. That should do the trick. Once the deed is done, move in with her and isolate the rest of her kids from her. Tada! Just like magic.

So what can you do about it? Unless you’ve lucked into a good Probate Judge, sometimes nothing. Can you imagine going to court (with a conservatorship or elder abuse petition) and having the Judge either kick the can down the road while your time with mom fades away or defer it to a court appointed counsel who either does not understand the subtleties of undue influence or for some inexplicable reason sides with the what seems to be the obvious ne’er -do-well? In the latter circumstance, it seems that the “bad” kid must be really good at bamboozling not just the demented.

Old people can get brainwashed easily. Period.

If you get a thoughtful Judge, you can petition the court for an emergency conservatorship and get a visitation order. In one case recently that is exactly what happened. The trouble is that mom may not abide by the order having been told repeatedly that you are evil. In another case, the isolation was so bad, that my client got custody of her father and was made his temporary conservator.

What if you know that mom is incapacitated, and you know that the changes to her trust are the result not only of undue influence but that she did not have the capacity to make the purported changes? Can you fix this during her lifetime?

The answer is yes and more importantly if you wait until after she dies, you may have waived your right to contest. During mom’s life you can either petition the court for a conservatorship and seek to reform the trust though a substituted judgment proceeding within the conservatorship proceedings, or you can file a petition to invalidate the trust if there is no conservatorship proceeding.

If you do neither you can lose your standing to challenge the trust after mom dies under the doctrine of latches according to Drake v. Pinkham 217 Cal.App.4th 400 (Cal. App. 2013).

In Drake v. Pinkham the Third District Court of Appeal held that that a beneficiary may have had standing if, as the beneficiary alleged, the settlor was incompetent at the time she brought her trust contest. The court suggests that an aggrieved beneficiary may be able to bring a pre-death trust contest if the beneficiary can ultimately prove the settlor’s incompetence.

More importantly the court found that by the daughter failing to take this action during mom’s lifetime, she could not pursue a trust contest post death because she was barred by the doctrine of latches (an equitable doctrine that is a sorry Charlie you waited too long).

The key lesson of Drake is that beneficiaries cannot simply wait until Mom is deceased to contest trust amendments that disfavor them if they know (or should know) of the amendments and also know (or should know) of mom’s incapacity.