Some of the estates we probate contain great collections.  Dad may have collected automobiles; baseball cards; or stamps.  Mom may have collected silver; wine; rare books; or jewelry. 

The process of probate in California does not change even though a significant portion of the estate is comprised of a collection.  Rather, the collection is ultimately appraised by the probate referee assigned by the court.  Sometimes the administrator or executor hires a third party appraiser and less frequently a member of the family will also hire an appraiser.

The issues in probate frequently are what ultimately happens with the collection.  Each family and each collection presents its own challenges.  Ideally, the family sat down and each individual expressed his/her true feelings about the collection.  However, frequently this did not happen.

When the collector has not written specific instructions about what he/she wants to have occur, it becomes a decision for the administrator or the executor to make.  This can be a burden on the executor or administrator and frequently the probate attorney has to serve as a sounding board.

An experienced probate lawyer can be worth his or her weight in gold in these types of cases.

Vickie Lynn Marshall?  Does anyone know who she is?  How about a big clue from her Will which is a public document filed with the Los Angeles Superior Court:  “I VICKIE LYNN MARSHALL, also known as Vickie Lynn Smith, and Vickie Lynn Hogan, and Anna Nicole Smith . . . .”

Yes, that Anna Nicole Smith.  The ex-model turned reality star that died at age 39 from an accidental overdose.  The one embroiled in a lawsuit with her late husband’s heirs regarding nearly a half billion dollars. 

Her Will provides examples of some general things that estate planning attorneys counsel about to the point that it makes us “blue in the face.” 

First, we generally recommend having a living trust prepared.  First, unlike a Will, it is not a public document.  Therefore, generally speaking, people like you and me cannot go online or to the county courthouse and obtain a copy of the document.

Second, make certain that there are not contradictory statements in your plan.  In one paragraph, she seems to indicate that she only wanted her son to inherit her estate:

            “Except as otherwise provided in this Will, I have intentionally omitted to provide for my spouse and other heirs, including future spouses and children and other descendants now living and those hereafter born or adopted, as well as existing and future stepchildren and foster children.”

This would seem to disinherit any future born children.  However, in the very next paragraph the Will used the words “child” and “children” interchangeably with regard to the distribution of her estate. 

Two things happened after Anna Nicole signed this Will.  She gave birth to a daughter, Dannielynn, and her son died.  Moreover, since her son died prior to her, her legal heir under California’s laws of intestacy was her daughter. 

Thus, my third major point is that people need to revisit their estate planning documents on a consistent basis.  Things change.  Heirs and beneficiaries change.  Even if they are the same individuals they themselves may change for the better or for the worse.  They may marry.  They may have financial success or they may demonstrate that they cannot handle money. 

Your finances may have changed.  That may cause you to think about the distribution of your estate.  In the event that your finances have increased to a great degree, it may involve some additional estate planning. 

Finally, the person or entity you selected to administer your estate may or may not be the person or entity you currently want to administer your estate.  You may have moved; they may have moved.  You may have had a falling out with them.  They may not have the “energy” to do it.  They may not be financially astute.  There are a variety of things that can happen.

Estate planning is important!  Treat it with the respect that it deserves.  Work with an attorney who devotes his/her time to this area of the law.

For those that are interested, the probate court judge in the Los Angeles County Superior Court, awarded Anna Nicole’s estate to her daughter. 

It has become easier for executors and administrators to open a probate in 2008.  The filing fee paid to the county court has been set at $320 (in Riverside County there is an additional fee of $15 to pay for the courthouse).  The other major probate fees are still due at the time they have always been due.  These include the fee for publication; the probate referee’s fee; and the fee for the bond, if any.

Prior to this year, the filing fee was based on an estimate made by the administrator or executor as to the value of the probate estate. Making an intentionally low estimate helped in the short run as the filing fee paid to the county was based on the estimate.  However, ultimately, the court received what it was due because the petition for final distribution would not be granted without a showing that the correct fees had been paid to the court.

The fee that the court ultimately receives is set by a fee schedule found in California Government Code Section 70650 and it provides:

$320 for estates or trusts under $250,000;

$385 for estates or trusts between $250,000 and $500,000;

$485 for estates or trusts between $500,000 and $750,000;

$635 for estates or trusts between $750,000 and $1,000,000

$1,135 for estates or trusts between $1,000,000 and $1,500,000.

The fees increase from there.

A benefit of this new rule is that it makes it easier for administrators and executors to begin the probate process.  Previously, they may have had to loan a large amount of the filing fee to the estate.  Now, virtually all of the time they will be able to pay these fees from the probate estate when the estate is in a position to close.

There has been a wrinkle thrown in as a state appellate court as recently found that the probate fee schedule violates the California state constitution.

Stay tuned!

Sometimes the famous have issues that our clients also face.  Frequently we receive telephone calls from throughout Southern California (including, but not limited to, Culver City, Inglewood, Brentwood, Marina del Rey) from adult children indicating that their mother or father is no longer able to manage their financial affairs. 

In Ms. Britney Spears’ case, it was the opposite from the normal situation.  Ms. Spears’ father and an attorney have been named co-conservators over her.  On February 1, a Los Angeles Superior Court judge granted a temporary conservatorship over Ms. Spears which was set to expire on March 10.  In early March, the Court extended the conservatorship until July 31.

In finding that a conservatorship was warranted, the judge was bound by California Probate Code section 1800.3(b) which states:

            “No conservatorship of the person or of the estate shall be granted by the court unless the court makes an express finding that the granting of the conservatorship is the least restrictive alternative needed for the protection of the conservatee.”

Moreover, the California Probate Code also requires that the judge had to find that Ms. Spears was “substantially unable to manage . . . her own financial resources or resist fraud or undue influence.”

Hopefully, by July 31, Ms. Spears will be able to manage her own affairs and not require a conservatorship any longer.  In most cases, where the child becomes the conservator of his or her parent, it lasts for the remainder of the parent’s lifetime.   

Given that I do a pretty good bit of estate planning and elder law in my real job, I read with great interest this article from today’s New York Times.  It concerns lawsuits being filed by people who lost a great deal of money who claim that they should not be responsible for their actions because they are old. Not because they were mentally incapacitated, not because they were the victims of fraud, not because they were intimidated, not because they were forced to do so, not because they were taken advantage of by charlatans - but simply because they were old.

The subject of the article is 81-year old Joseph Pyle:

    Eight years ago, when Robert J. Pyle was 73 years old, he had about $500,000 in the bank and owned a house in Northern California worth about $650,000. He was looking forward to a comfortable retirement.

    Today, at 81, he has lost everything. Mr. Pyle, a retired aerospace engineer, now lives in his stepdaughter’s tiny, mountainside home in a room not much larger than his bed.

    By his own admission, Mr. Pyle willingly made every decision that led to his financial problems. He gave away large sums to people he thought were friends, and then, in need of money, sold his house at a deep discount to the first person who offered to buy it.

    Even so, he claims in a lawsuit that he should be compensated for some of his losses for a simple reason: he is old, and should not bear the full responsibility for his choices.

    “I still make pretty good decisions about most things,” said Mr. Pyle, who shows no signs of dementia. “But for others, I guess I’m not as sharp as I was before, and people take advantage of that.”

    For his part, Mr. Pyle wants to have it both ways — protection when he makes mistakes, and the right to make all his own decisions.

    “It would be complete overkill to take away my independence,” Mr. Pyle said. “So I made a few mistakes. Twenty-five-year-olds make mistakes all the time, but they don’t lose their right to make decisions. I helped build this country. I deserve more dignity that that.”

When you read the whole story, which is fascinating for me, both on a personal and professional level.

On the human side, it’s hard not to feel sorry for Mr. Pyle.  After his wife died he met a 40-something single mother who talked to him (she says there was a romantic relationship, he denies it) and made him feel good again, and seemingly took awful advantage of him.  He started giving her loans because she was struggling. He also bailed out her and her boyfriend when they got in criminal trouble and also co-signed loans for her and ended up paying creditors a few hundred thousand dollars on her behalf.

Then with his resources running dry and much of his savings used he refinanced his home to pay off his debts, but soon found he could not afford the new mortgage.

Finally, forced to sell his house, Mr. Pyle accepted the first offer he got (from an 18 year old mortgage broker) that he knew was about $110k less than value.

Unfortunately, Mr. Pyle’s story is more common than you might realize. I’ve often seen people his age, especially widowers who just lost their wives of many years, suddenly start spending money on the first person they meet after their spouse dies. Sadly for Mr. Pyle, the person he met only seemed to be interested in his money.

Many people Mr. Pyle’s age also will not share their financial situation with their children, either out of stubbornness or embarrassment, even though the children have their best interests at heart. And in many cases they may be totally adrift because the deceased spouse took care of all the bills. I’ve had clients in their 80’s who never wrote a check or paid a bill in their lives, and barely know where they have bank accounts.  Almost nothing breaks your heart as much as seeing just how sad and really lost these people are.

However, I don’t think that Mr. Pyle’s claims in his lawsuit should be given any merit whatsoever. By his own admission he knew exactly what he was doing every step of the way, and because of that he should bear the consequences of his decisions, no matter how heartbreaking.

If such a claim were allowed to succeed, it would create a slippery slope, and allow simply being over a certain age, to be a defense to poor decision making.  It also would diminish and take focus away from dealing with the real problem - people who purposely and criminally take advantage of the elderly.

Just a note of free advice - if you have an elderly parent or a relative that you are concerned about being taken advantage of, try talking to them about the subject and getting them to an elder law attorney or a reputable financial advisor. However, if they are stubborn or refuse to go and are competent to make their own decisions, there’s really nothing you can do.

A large percentage of my clients, want to leave at least some specific personal items to a specific person or persons.  These may be family heirlooms; a collection; a piece of jewelry; an automobile; etc.  I caution against specifically mentioning them in a will or a trust because frequently people change their minds or they no longer own the asset at their death because they have given it away.  In the event the client wishes to change his or her mine, he or she has to call the lawyer and have the lawyer prepare an amendment to the trust or a codicil to the will.  This becomes expensive and is great for attorneys, but not so great for the clients.

As I have written before, many disputes in California probate involve the disposition of personal items.  Therefore it is important to set forth a disposition of assets.  The California Probate Code sets forth a relatively simple way to accomplish this task.  Probate Code Section 6132 was passed by the legislature in 2006, signed by the governor that year and went into effect January 1, 2007. 

Section 6132 permits an individual to “direct disposition of tangible personal property not otherwise specifically disposed of by the will, except for money that is common coin or currency and property used primarily in a trade or business.”  This writing “is effective if all of the following conditions are satisfied:

            “(1)      An unrevoked will refers to the writing.

            (2)        The writing is dated and is either in the handwriting of, or signed by, the testator.

            (3)        The writing describes the items and the recipients of the property with reasonable certainty.”

The section further provides that the “writing may be written or signed before or after the execution of the will” and “the testator may make subsequent handwritten or signed changes”. 

This writing is useful, but for people with large amounts of personal property, one needs to be careful because:

            The total value of tangible personal property identified and disposed of in the writing shall not exceed twenty-five thousand dollars ($25,000).  If the value of an item of tangible personal property described in the writing exceeds five thousand dollars ($5,000), that item shall not be subject to this section and that item shall be disposed of pursuant to the remainder clause of the will.”

The intent of this statute is to make things easier for people.  You should always contact a California estate planning attorney to make sure that you are doing things correctly and you still need to have a will that refers to the writing or list.

From time to time probate lawyers are in the news. Most of the time it is because of famous clients; wealthy clients; family disputes; interesting bequests; or the continuing saga of the distribution of an estate.

Rarely are they in the news because people are upset with them.  However, recently there have been two cases outside of California wherein it has been alleged that probate attorneys took money from their clients.  Both of these attorneys have filed for bankruptcy.

It was reported in the Rocky Mountain News this month that Denver probate attorney Susan Haines was disbarred (lost her license to practice law) for taking $70,000 from a client’s estate and then committing perjury.

Essentially the facts are as follows.  Ms. Haines was among several attorneys representing an estate in Colorado when a settlement in the amount of $200,000 came in from litigation of a Florida matter.  Ms. Haines then wrote herself checks in the amount of $70,000 even though the amount of work that she had done in the Florida litigation matter was approximately $4,000.  It should be noted that before the litigation matter arose, Ms. Haines’ firm “had logged nearly $100,000 for administrative work done on behalf of the estate.”  

Ms. Haines’ defense was that she had told others involved in the case that she was going to write the checks, but both a hearing board and the Colorado Supreme Court found that she was lying and had not told those people.

Ms. Haines had been practicing probate and elder law for about 18 years at the time this occurred and was active in the bar association on elder law issues.

In Allegheny County Pennsylvania – Pittsburgh is the biggest city in the County – a former attorney is standing trial on three felony theft charges for stealing more than $260,000 from a man whose estate she handled.  The client died in 2002; the attorney was disbarred in 2004; and the trial is ongoing. 

In California, it is not the everyday experience for the attorney for the estate to have access to the estate’s accounts or monies.  It does occur when the attorney is acting as the administrator or the executor of the estate.  Therefore, these are simply cautionary tales — precautions should always be taken. 

Choose your California probate attorney carefully and always make sure you are on top of the case!!

Heath Ledger was acclaimed as a great actor and tragically his life was cut short at a very young age.  I do not know much about his estate planning documents, but I have read that they were done prior to the birth of his child and did not provide for his daughter.  I have also read that Mr. Ledger’s father has indicated that the family will financially support Heath’s daughter.

Were Mr. Ledger a resident of the State of California at his death – Los Angeles, San Francisco, San Diego, Orange County, or anywhere else, his daughter would have received a portion of his estate by operation of statute.  Section 21620 of the California Probate Code provides as follows:

            “Except as provided in Section 21621, if a decedent fails to provide in a    testamentary instrument for a child of decedent born or adopted after the   execution of all of the decedent’s testamentary instruments, the omitted child shall      receive a share in the decedent’s estate equal in value to that which the child          would have received if the decedent had died without having executed any       testamentary instrument.”

Thus in California, under the laws of intestacy, or intestate succession, Matilda would receive the entire estate.  Questions would remain as to how the estate would be managed and whether she would get everything that had not been previously spent at age 18.  Obviously, there might be a lot of money to give to an 18 year old.

All of this points to the necessity of estate planning.  Young people are not immune.  Older people need to constantly revisit their estate plans as circumstances change including values of the estate; financial situations of their children; marital situations of their children, etc.

In the event that it has been some time since you have reviewed your estate plan with your attorney, it is a good idea to do so. 

There is plenty of software out there.  Quicken, Suze Orman, LegalZoom, etc. are all vying for your money.  For almost everybody, using this software is a mistake and I predict that in the next decades because of this software, there is going to more litigation over wills and trusts than ever before.  Thus, instead of paying an attorney to prepare an effective estate plan, there will be two (or more) attorneys involved in litigating an estate in a California probate court.  (In California, probate court is where disputes over living trusts and wills are heard).  The costs of litigation are rarely cheap.  Moreover, the damage to the families involved will be incalculable.

What are some of the problems in doing it yourself?

Because most of the online wills and trusts or kits are created for people in all 50 states, they do not take into consideration differences in the states.  For example, California is a community property state.  A California attorney has the ability to inform you of the laws in California that are different from other state’s laws.

Most states including California have laws concerning the execution of Wills and Trusts.  In the event those laws are not complied with, the Will or Trust might be considered to be invalid.

One of the biggest mistakes people make is not coordinating their estate plan and thinking about the ramifications of their specific gifts.  People call me in Los Angeles – they may be calling me from anywhere in California or from another state, and tell me that they were accidentally disinherited by their father.  For example, they were to receive a certain account, but the account was not part of the estate at their parents’ death. 

Another problem that is often not anticipated is the death of a beneficiary before the person making the trust or will.  What happens then?  People often assume things that turn out to be false.  On the other hand, frequently self-drafted trusts and wills are vague and do not answer questions concerning the payment of taxes and expenses.

Preparing a will or trust might seem easy, but you will never know if you mess up.  It is not like fixing your car where you know right away if you did it correctly.  Most of the time you will be long gone and your heirs and beneficiaries will be fighting.  Sometimes you will be gone and one of your children will lose out because of a mistake that you made!

In the event that you live in southern California and want your estate to avoid litigation after you are gone, contact me.  In the event that someone has already passed, and a probate is required, I can help as I handle probates throughout the state.

Previously I wrote about the administration of a person’s estate in California – the law is the same in southern California as it is in northern California – when a person is missing.  There is an entire procedure in the California probate code for administering that person’s estate. 

What happens if the person reappears after the “estate” has been distributed?

The probate code states that if he reappears he may “recover property of the missing person’s estate in the possession of the personal representative, less fees, costs, and expenses thus for incurred.”

Moreover, he may also recover from people that have received the property, “that which is in their possession, or the value of distributions received by them, that the extent that recovery from distributees is equitable”.  However, such an action is only allowed for five years from the time the distribution was made.

In the event that there is a dispute “as to the identity of a person claiming to be a reappearing missing person, the person making the claim, or any other interested person may file a petition” for a court determination of the identity of the person who is contending that he is the missing person.

Thus, California law provides a remedy not only for families to move on if there is a missing person, but also a remedy for a person who was missing for whatever reason who reappears.

In the event that you have a probate question and are not represented by an attorney, please give our office a call at 1888EZProbate or at 310-391-1311.