Recently I have read about two cases that have interesting fact situations that are being heard  in probate courts .  While neither of them are California cases, as a California probate attorney it is important for me to be aware of what is going on nationally.

In Florida, Jessica Kalish was stabbed to 222 times with a screwdriver by her lover, Carol Ann Burger.  Kalish and Burger owned a home in joint tenancy.  Therefore, under normal operation of law, the home became Burger’s upon Kalish’s death.  (Burger killed herself a day later).  However, Florida has what is known as a “Slayer Statute” which provides that murderers and their estates cannot inherit from the victims. 

Just this week, Wendy Hunter Roberts, a  feminist writer, therapist, and new age guru filed an action seeking part of Kalish’s estate.  Roberts claims that she had “a very close personal relationship” with Kalish and that according to her there is a will naming her as a beneficiary.  Therefore her attorney has indicated that he will file a “request for access to the property to find that will.”

As a probate lawyer based in Los Angeles, but handling cases throughout the state of California, I always explain that it is extremely important that people have their estate planning in order.  I realize it is easy to write this after the fact, but it would have been wise for Ms. Kalish to have held her interest in the property in a living trust.  In that document she would have set forth her beneficiaries.  Another option would have been to hold title to the property as tenants in common. 

The second case involves a couple in Ohio and their son.  That son was convicted of attempting to kill his adoptive parents.  Two years after that attempt, Walter and Mildred Sowell had wills prepared.  In their wills, they left $50 for their only child.  They left the remainder of their estates to the other.  Unfortunately, or not,  there was no mention of secondary heirs.

Therefore, under the laws of intestacy, the son who attempted to murder them in 1982 now appears ready to collect more than $500,000.  To his credit, the now 43 year old runs a commercial cleaning business.  Previously he was in the Navy and he also drove an 18-wheeler for 10 years.

Did his parents want him to receive everything?  We will never know.  Not just in Ohio, but probate courts in Los Angeles, Orange, San Bernardino, or Riverside Counties are not in the business of deciding what decedents should have wanted or even what they might have wanted.

I just finished reading Paul Newman’s will.  You can too by going to the website Radaronline.com.  Mr. Newman signed his will on April 11, 2008 and passed five months later on September 26.  As an estate planning attorney who probates many estate annually it is always interesting for me – maybe not for most others – to read the work product of other attorneys who practice in the same area of the law as I do.

A couple of things caught my attention.  One is that Mr. Newman’s will never directly mentions the names of his children (he left 5 daughters).  Second is that very early in his Will he indicates what is to happen to his airplane and race cars (they are to be sold with the proceeds distributed to his trust) and his Oscars and other theatrical awards (which are left to Newman’s Own Foundation).  Third, I read that one of his co-executors lives in Manhattan Beach, California which is where I reside.

Newman did have a Living Trust (“the Amended and Restated Newman Living Trust Number One”), but his Will is very specific concerning the distribution of many of his assets.  It is unclear whether a lot of his assets will be subject to probate or if in fact they were owned by his living trust. 

It is rare in California that a will executed in the last fifteen years has as much detail as Mr. Newman’s.  Most people who do estate planning in California save the details for their living trust and the will is much more general.  Therefore, the public generally knows less as a result of the filing of a will in probate court.

Probate proceedings take many forms.  The laws and procedures vary from state-to-state.  Thus, when someone calls me and asks me a question about someone who died in a state other than California, I quickly tell them that I am not qualified to answer their question.  In California, our probate procedures do not provide for the judge to administer the estate. 

While I do not know the law in Alabama, I have been reading about the case of a Covington County probate judge who has recently been convicted on theft by deception and ethics charges. Specifically she was convicted of stealing 1.8 million dollars from an estate with no heirs.  Witnesses testified that she put the money in a personal account instead of a public account.  Moreover, there was testimony that she made withdrawals to buy an expensive car, a truck and to pay off mortgages.

In California, the administrator or executor of the estate is in control of the assets of the estate.  Only that individual has the legal ability to handle the estate assets.  This is not to say that there are not unscrupulous administrators or executors.  Frequently, but not always, the probate judge requires them to post a bond.

The Judge in the Alabama case was sentenced to three years in prison and is currently a free woman because she posted a $20,000 appeal bond.  The lesson to learn is that beneficiaries of probate estates ideally should be aware of the status of the probate proceedings.

In California we are very fortunate.  Our probate courts have some very exceptional judges and people assisting them in one way or other.  In our larger counties, including Los Angeles County, we have judges that are full-time probate judges.  Probate judges do more than just decide cases involving the distribution of the assets of a decedent.  They also hear cases concerning the administration of trusts, conservatorship cases, guardianship cases, elder abuse cases, petitions regarding specific medical treatment, petitions to establish the fact of birth, marriage or death and even tuberculosis-detention proceedings among others.

The probate judges cannot do it all by themselves especially in the large counties.  While the number of cases a judge hears is obviously smaller in Alpine County (population 1,208), Sierra County (population 3,555), Modoc County (population 9,449), Mono County (population 12,853), Trinity County (population 13,022), Mariposa County (population 17,130), Colusa County (population 18,804), or Plumas County (population 20,824) than it is in Contra Costa county (population 948,816), Sacramento County (population 1,223,499), Alameda County (population 1,443,741), Riverside County (population 1,545,387), Santa Clara County (population 1,682,585), San Bernardino County (population 1,709,434), San Diego County (population 2,813,833), Orange County (population 2,846,289), and Los Angeles County (population 9,519,338).

In the larger counties, there are some combination or all of the following: probate examiners; probate investigators; probate attorneys; and research attorneys.  For example, Aviva Bobb the Supervising Judge of the probate departments of Los Angeles County has written that for the Los Angeles central district (the largest courthouse for Los Angeles County) the court has a staff of 19 probate investigators, 14 probate attorneys, 1 research attorney, and 8 probate examiners.

Obviously, in the smaller counties, the judges hear cases in a variety of areas of the law.  However, because the probate process in California is similar throughout the state, the judges hearing probate cases become very expert in those counties as well.

By some estimates, there are over 2,000,000 children between the ages of 5 and 15 in this country with a disability.  In fact, approximately 30% of that group, or more than 600,000 people, have two or more disabilities.

Parents of special needs children need to seriously think about doing long range planning and consulting with an experienced estate planning attorney when preparing their estate plan including their living trust.

Life insurance is certainly something that an estate planning attorney can and should discuss with the parents of a special needs child.  The reason that parents want to discuss with an estate planning attorney is that life insurance proceeds can theoretically disqualify an individual from federal assistance.  Inheritances can affect eligibility for programs offered by the state of California. Moreover, an inheritance of greater than  $2,000 can disqualify a recipient from federal assistance including Supplemental Social Security (SSI) for up to three years.

 In the event a special needs trust is correctly set up for the special needs beneficiary, the beneficiary remains eligible for assistance.  In this way the trust can be utilized to pay for things such as rehabilitation, entertainment, trips, home health aides, etc.

Used correctly, life insurance may be a great source of funding a special needs trust.  Parents should consider term life, whole life, and second-to-die.  Each has its advantages and disadvantages when used in this context.

For  more information, contact an estate planning attorney who has experience in this area and understands how to create a special needs trust within a living trust.

As an estate planning attorney who prepares living trusts, administers many estates and probates approximately 50 estates a year throughout California, I am always on the lookout for interesting stories to write about.  Recently the British newspaper ran the story of a Jane Ritchie who inherited over $15 million dollars – and gave it away.

Ms. Ritchie is a single 59 year old who inherited the money from a distant cousin.  She had to pay approximately $5.7 million in taxes.  Her major expenses were purchasing a new hat for a wedding that she was attending and treating herself to a stay at a nice hotel for the event.

Ms. Ritchie knew that her cousin had some money, but was surprised at the amount.  The solicitor (an English attorney) visited her at her house and told her the amount.  The Daily Mail quotes her as saying “I nearly fell off my chair.”

Ms. Ritchie made some charitable gifts and then took the bulk of her inheritance, approximately $8.5 million dollars and decided to build a job related learning center which will allow teenagers to gain an understanding of how what they learned in school relates to jobs in the real world.

Ms. Ritchie explained to the Daily Mail her generosity this way: “I’ve got everything I want.  I’ve got a nice house with two dogs and two cats.  I’m the wrong shape for fancy clothes.  I don’t drink and I don’t smoke and I don’t take holidays because I’m too busy.  I am very happy as I am.” 

She also said: “I believe if you do get something like winning the lottery you should do something good with it and that’s what I have tried to do.”

Her story certainly got me to stop and think.  As someone who prepares estate plans including living trusts for a living, I always am happy when a client indicates they want to leave something to charity.

Like almost anything in life, reverse mortgages can be great if utilized correctly and can result in financial chaos if used incorrectly. 

Reverse mortgages are marketed to older Americans as a means for people to have some extra money so that they may live comfortably.  Borrowers must be at least 62 years of age and must live in the home.  With a reverse mortgage, the homeowner always retains title to their property.  However, they may have little to show for it.

The negative to reverse mortgages is that while the borrower most of the time is not required to repay the loan provided they are living and stay in the home, upon death or moving from the home, the lender frequently becomes the virtual owner of the home.

Usually what happens is that in exchange for giving the borrower money, the lender places a lien on the property.  This allows the lender to be repaid for the loan, fees and interest.  Obviously, this will reduce, sometimes significantly the amount of the inheritance to the heirs of the borrower.  In any event, it is a nonrecourse loan – therefore the lender may not go after the heirs for payment.

As a probate attorney in Culver City, which is just outside of Los Angeles, who handles probates throughout the state of California, I see what happens after someone has passed.  Like anything else, all of the options should be considered before entering into a reverse mortgage.  For some people, it will be the best option.  Others will find that they can do something else and ultimately get a better bang for their buck. 

Consult an unbiased person.  Sometimes an estate planning or probate attorney may be helpful.

The State of California has been in a prolonged budget crisis.  Everyone on both sides of the aisle knows that something has to be done, but agreement has not happened.  The budget deficit has been estimated to be 15.2 billion dollars.

In July the budget Conference Committee which is comprised of state senators and state assembly members voted to cut from the state budget 17.4 million that was to be used for over-sight of court-appointed conservators.  What that means, is that the state’s probate courts will have to come up with the money.  Thus local courts are being forced to pay for laws enacted in Sacramento.

The cut in and of itself obviously is approximately one-tenth of one percent of the deficit, meaning that approximately1,000 similar cuts would have to be found to balance the budget.

Conservators control either the care or finances or both of adults who have been found by a court to be unable to do by themselves.  Courts are required to send investigators to visit people under conservatorship to make sure that they are being treated correctly and that their finances are being managed appropriately.  This includes making sure that the conservators are not stealing from the people they are conserving or otherwise mismanaging the funds.

One way to avoid ever being under the need of a financial conservator, is to have a funded living trust and a properly prepared power of attorney.  Otherwise, there is a chance that the probate court will be involved in your finances even prior to your death.

While my practice is in California, and I am most familiar with probate litigation in the California court system, there all probate disputes throughout the world.  Obviously the ones that get written about generally concern the wealth and generally make for an interesting story.  From time-to-time, I like to write about one that I have come across.

The London Daily Mail carried the story earlier this summer of a mistress who accused her lover’s son of forging his father’s will to deprive her of any money from his estate.  Ms. Pat Powell, currently 59 years old,  testified that during their 15 years together, Jimmy Swantson always assured her that she would be provided for upon his death.  Mr. Swantson was 35 years older than Ms. Powell when he died in 2003.

When she discovered that she was not mentioned in his will, she retained solicitors (English attorneys) who discovered that witness signatures were fakes. One of the “witnesses” names was misspelled and his address was incorrect. That “witness”, Peter Coletti, testified that he did not sign the Will.

A second witness testified that he was asked to sign by the decedent’s son even though Mr. Swantson was not present.

While it was alleged by the mistress that the estate was worth 26 million British pounds (approximately $47,500,000), the co-executor of the estate testified that the amount was closer to 2.5 million British pounds (approximately $4,600,000).

In California, even if the Will were found to be a forgery, the mistress would not inherit unless she had proof that he had prepared another Will or Trust because of the laws of intestacy.  In other words, if someone dies without having memorialized their intentions by a Will or Trust, his/her estate is going to be distributed according to the laws of intestate succession.  In California those laws do not provide that a mistress is to receive anything.

We all know that eventually someone is going to have to deal with the issues concerning our funeral and/or memorial service; burial or cremation.  As with other parts of estate planning, we have the ability to make things much easier on our  loved ones by doing a little planning ahead of time.

When our office prepares an estate plan for a client, we provide them with a section in their estate planning binder to make their wishes known to their family.  This includes notifying specific family members, friends, and organizations of the individual’s passing.  We also provide forms for our clients to set forth their personal information; sections for handling of remains and marker selection; casket or urn selection; information concerning a remembrance/funeral service; and information regarding costs and expenses.

We encourage our older clients to be proactive and if they wish to be buried to think about purchasing their burial plot and their casket.  For those that want cremation, we ask them to think about making the arrangements and to detail that information in the estate planning binder that we provide.

For those that do not wish to pre-pay the expenses, we encourage them to make sure their estate has the liquid assets available to make payment.  This can be done in a variety of ways including earmarking an account for the purpose or even purchasing insurance.