In California, a person who is under a conservatorship retains the right to make a will, unless he or she is found to lack testamentary capacity. California Probate law does not take away the conservatee’s right to make a will under Prob C §1871(c), but the question of whether a will created by a conservatee is valid, is a factual one, if there is no finding of lack of testamentary capacity.
Probate Code 1871 provides:
“
PRB § 1871. Nothing in this article shall be construed to deny a conservatee any of the following:
(a) The right to control an allowance provided under Section 2421.
(b) The right to control wages or salary to the extent provided in Section 2601.
(c) The right to make a will.
(d) The right to enter into transactions to the extent reasonable to provide the necessaries of life to the conservatee and the spouse and minor children of the conservatee and to provide the basic living expenses, as defined in Section 297 of the Family Code, to the domestic partner of the conservatee. [Amended by Stats. 2001, Ch. 893, Sec. 23. Effective January 1, 2002]”
The issue of testamentary capacity, by contrast, does not involve such issues. [3] “It is thoroughly established by a series of decisions that: ‘Ability to transact important business, or even ordinary business, is not the legal standard of testamentary capacity. …’ (Estate of Arnold [1940] 16 Cal.2d 573, 586 ….” (Estate of Powers (1947) 81 Cal.App.2d 480, 483-484 [184 P.2d 319]; Estate of Mann (1986) 184 Cal.App.3d 593, 605 [229 Cal.Rptr. 225].) Rather, testamentary capacity involves the question of whether, at the time the will is made, the testator “‘has sufficient mental capacity to understand the nature of the act he is doing, to understand and recollect the nature and situation of his property and to remember, and understand his relations to, the persons who have claims upon his bounty and whose interests are affected by the provisions of the instrument.'” (Estate of arnold (1940) 16 Cal.2d 573, 586 [107 P.2d 25], quoting Estate of Sexton (1926) 199 Cal. 759, 764 [251 P. 778]; Estate of Mann, supra, 184 Cal.App.3d at p. 602.) It is a question, therefore, of the testator’s mental state in relation to a specific event, the making of a will. [2b] While it is true that the existence of a conservatorship at the time a will was executed may have some bearing on the question of testamentary capacity in a will contest (see, e.g., Estate of Wochos (1972) 23 Cal.App.3d 47 [99 Cal.Rptr. 782]), appointment of a conservator is not an adjudication of testamentary incapacity. fn. 5
This is made clear by the conservatorship statute itself. Section 1872, subdivision (a) states: “Except as otherwise provided in this article, the appointment of a conservator of the estate is an adjudication that the conservatee lacks the legal capacity to enter into or make any transaction that binds or obligates the conservatorship estate.” A specific exception to this general rule of legal incapacity, however, is that the conservatee retains “[t]he right to make a will ….” (§ 1871, subd. (c).) . Estate of Powers (1947) 81 CA2d 480
If you have a Glendale family member or have filed a Petition for Conservatorship for a loved one or parent, you should investigate whether or not a will exists, and if it does not, consult with a conservatorship attorney regarding creating a will or trust for an incompetent person by using a substituted judgment petition.
If there is a doubt as to the conservatee’s testamentary capacity, a conservator may petition the court to create a will under a substituted judgment petition rules. The court in Murphy v Murphy (2008) 164 CA4th 376, held that a substituted-judgment order had collateral estoppel effect and therefore could not be challenged after the conservatee’s death.
What Standard Does The Court Look For In Finding Incompetency to Make a Will in California?
Under Probate Code § 6100.5. (a), an individual is not mentally competent to make a will if at the time of making the will either of the following is true:
(1) The individual does not have sufficient mental capacity to be able to (A) understand the nature of the testamentary act, (B) understand and recollect the nature and situation of the individual’s property, or (C) remember and understand the individual’s relations to living descendants, spouse, and parents, and those whose interests are affected by the will.
(2) The individual suffers from a mental disorder with symptoms including delusions or hallucinations, which delusions or hallucinations result in the individual’s devising property in a way which, except for the existence of the delusions or hallucinations, the individual would not have done.
(b) Nothing in this section supersedes existing law relating to the admissibility of evidence to prove the existence of mental incompetence or mental disorders.
(c) Notwithstanding subdivision (a), a conservator may make a will on behalf of a conservatee if the conservator has been so authorized by a court order pursuant to Section 2580. [Amended by Stats. 1995, Ch. 730, Sec. 8. Effective January 1, 1996]
If you are unsure that your loved one has the capacity to make a will, please call us with your questions. Call Mina Sirkin, at 818.340.4479 to consult with out attorney to determine if a conservatee can make a will.
When you dispute the position of an executor in a probate case in Los Angeles, there are many questions that come up which may put you in the position of a removal challenge to the executor or even the will itself.
What is considered “good cause” or grounds to challenge an executor to remove him or her in California?
California Probate law requires good cause to remove an executor. In removing a personal representative or executor, you must first file a petition to remove an executor stating your reasons or causes for such a request. Because California inheritance rules favor the designation of the person who was named in the will, you must be able to present your argument and show why having that particular executor is not in the best interest of the estate as a whole, or a change in circumstances that disable the executor from properly satisfying his or her duty as an executor. In general, contempt of the court, the bankruptcy of an executor or a criminal act by an executor which may affect the assets of the estate, as well as incapacity or death of an executor are common reasons for removing an executor and replacing the executor. When there is no will and a will is later found, upon admission of the later will, the old administrator will be removed in favor of an executor named in the later found will.
Good Cause to Replace an Executor:
Negligence of executor’s duties leading to loss;
Incapacity, death or inability to act as executor;
Financial disqualification;
A Surcharge order;
Contempt of a prior order;
Failure to Account;
Embezzlement from the estate;
Failure to tender an account on a timely basis;
Other breach of fiduciary duty causing loss to the estate.
What are the financial risks in removing or challenging an executor?
If you fail to remove an executor for good cause, you may trigger a no-contest clause in the will, and where there is a trust, you may accidentally trigger a no-contest clause there too. This poses a risk to you in that it may cause your disinheritance.
Who can ask for the removal of an executor?
California Probate Code 8503 provides that a spouse or a relative entitled to a relative of the decedent entitled to succeed to all or part of the estate, or a nominee of the spouse or relative may file such a petition to remove.
How long does it take to remove an executor in Los Angeles California?
It takes over a year to remove a Los Angeles executor, but if you can see an emergency, the Court may consider suspending an executor before a formal removal trial.
How do you replace an executor in Los Angeles California?
A Petition for Appointment of a Successor Administrator or a Petition for Appointment of a Special Administrator can be used to replace the suspended or deceased executor. Depending on the circumstances and your probate judge, he or she may have a preference for which method you will use.
Can I become an executor in California?
You can become an executor if you have been named in the will as the executor or successor executor. If you have not been named in the will, and you are a relative, you may become an administrator with will annexed or just an administrator. Ask our estate attorney, Mina Sirkin, if you want to become the executor or administrator of the estate of a loved one or family in Los Angeles. As an administrator, you must be bonded or the court may waive the bond in very limited circumstances.
How to become a Successor Administrator in Los Angeles California?
You must file a Petition for Probate, or if you want to be a successor administrator, a Petition for Appointment of a Successor Administrator. If you are named as an alternate executor in the will of the decedent, you will fie a Petition for Probate, and explain what has happened to the prior executor.
Getting a bond when you become an executor in Los Angeles California:
If the will does not waive the requirement of the bond, you must make an effort to obtain a bond in Los Angeles California via a surety company who will send you a bond application before they commit to a bond. The amount of the bond is based on a formula in California and generally includes the liquid assets and the annual income of the estate, or if there is a sale of real property, then the value of the proceeds of the real estate.
Discuss your Executor Removal Petition with our Estate Attorney, Mina Sirkin, by calling our Probate attorney at 818-340-4479.
How the California Probate Code defines the activities of someone under a power of attorney is for the most part affected by the definitions under California Power of Attorney law or California’s Uniform Durable Power of Attorney Act. Did you know that there are many terms for someone who acts as an agent under a power of attorney?
(a) “Attorney-in-fact” means a person granted authority to act for the principal in a power of attorney, regardless of whether the person is known as an attorney-in-fact or agent, or by some other term.
(b) “Attorney-in-fact” includes a successor or alternate attorney-in-fact and a person delegated authority by an attorney-in-fact.
“Durable power of attorney” means a power of attorney that satisfies the requirements for durability provided in Section 4124.
This generally means that the power of attorney is not affected by the subsequent disability of the principal. It is Durable as it lasts beyond incapacity. However, the principal must be competent when he or she signs or executes it.
“Power of attorney” means a written instrument, however denominated, that is executed by a natural person having the capacity to contract and that grants authority to an attorney-in-fact. A power of attorney may be durable or nondurable.
“Springing power of attorney” means a power of attorney that by its terms becomes effective at a specified future time or on the occurrence of a specified future event or contingency, including, but not limited to, the subsequent incapacity of the principal. A springing power of attorney may be a durable power of attorney or a nondurable power of attorney.
Many people ask us if there is such a thing as an undisputed probate in Los Angeles County! We start by telling our clients that in most cases, people enter a probate case believing that their case is and will be undisputed. You first have to investigate to see if there are possible reasons for discord that can arise later in the estate case.
List of causes of disputed probates in Los Angeles:
Every person believes he/she is right.
There is a person who feels entitled in the estate case.
There are long-time feelings of resentment among the parties, siblings, or step-relatives.
Someone who is named as an executor has died or declined to act.
The executor believes he/she is king/queen.
Someone has embezzled money or other assets of the estate.
Someone took unfair advantage of the deceased person before he/she died.
Where do you go from here to resolve probate feuds?
Every estate fight has the potential in being resolved in probate because no one wants to pay for attorneys’ fees. Getting the parties to a settlement table to negotiate a probate case requires everyone’s understanding of the potential costs of probate fees if the case is not mediated.
Why should I mediate?
Your friends will ask you “why should you mediate?” You will need to come to the realization that estate trials are extremely expensive. There are often forensic accountants and experts that have to testify as to breaches of duties by the executor. You should mediate to eliminate the extra-ordinary probate fees and costs. Mediation lets you leave money on the table for everyone. Mediating a case allows creative solutions that the court judges do not possess and cannot carve out by law.
Talk to Mina Sirkin, probate trial and mediation attorney about undisputed or other probates in Los Angeles. Call 818.340.4479
What is the process to appoint a probate executor or administrator?
Assume that your probate jurisdiction is Los Angeles. You first have to determine if there is a will. Not just any will, but a valid will. For the Court to use a will to appoint an executor, the will has to be authenticated. During a will contest, if there are questions about the authenticity of a will, the Court will generally not appoint an executor from the will but will appoint a special administrator to manage the assets of the decedent during litigation, in hopes that people will negotiate and end the dispute.
Below is a list of factors the probate court will consider in appointing an executor or administrator of a Los Angeles estate:
The authenticity of the Will.
Suitability of the proposed Administrator or Executor.
Bondability of a person who is not named in the will as executor.
Below is the Guide to Appointment of a Los Angeles Executor in pdf format:
The Court in Placencia found, that a Will can be a clear and convincing evidence of the intent of the decedent to change the survivorship of an account. Read the Court’s opinion below:
STEPHANIE A.
PLACENCIA,
as Cotrustee, etc.,
Plaintiff, Defendant and Respondent, v. LISA M. STRAZICICH, as Cotrustee, etc.,
Filed 11/26/19
CERTIFIED FOR
PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH
APPELLATE DISTRICT
DIVISION THREE
G055631
(Super. Ct. No.
30-2010-00356226) O P I N I O N
Appeal from a judgment of the Superior Court of Orange County, David L.
Belz, Judge. Affirmed in part, reversed in part and remanded with directions.
Bradley R. Kirk & Associates and Bradley R. Kirk for
Plaintiff, Defendant and Appellant.
Bidna & Keys, Richard D. Keys and Howard M. Bidna for Plaintiff,
Defendant and Respondent.
* * *
Ralph Placencia died, leaving behind, among other things, a will, a
trust, and a joint bank account with an express right of survivorship in favor
of one of his daughters, appellant Lisa Strazicich. Prior to his death in 2009,
Ralph left clear statements in his will that he did not want Lisa to have the
right of survivorship; he wanted the proceeds of the account to go to his trust
so it could benefit all three of his daughters.1 After his death,
Lisa refused to relinquish the funds, and both she and respondent Stephanie
Placencia, another of Ralph’s daughters, both of whom were cotrustees of
Ralph’s trust, filed petitions in the probate court in their capacity as trustees
to determine the parties’ respective rights. The court determined that Ralph’s
intent should prevail and ordered Lisa to account for the funds to the trust.
Lisa appealed.
This appeal turns on a close reading of Probate Code sections 5302 and
5303, part of the California Multiple-Party Accounts Law (Prob. Code, § 5100 et
seq.; CAMPAL), which governs rights of survivorship in joint accounts.2
Section 5302, subdivision
(a), provides that a joint account entails a right of survivorship “unless
there is clear and convincing evidence of a different intent.” The
commentary to that section makes clear that “the intention to negate survivorship may be shown to have
existed after the time of creation of
the account.” (Cal. Law Revision Com. com., 53 West’s Ann.
Prob. Code
(2009 ed.) foll. § 5302, p. 61, italics added.) On the other hand, section 5303
provides that “rights of survivorship are determined by the form of the account at the death of a
party.” (Id., subd. (a), italics
added.) “Once established, the terms of a multi- party account” including joint
tenancies, “can be changed only by
one of the following methods” (id.,
subd. (b), italics added), which generally require a party to file paperwork
with the financial institution. (id.,
subd. (b)(2).) This case presents a difficult question:
1 For
purposes of clarity, we use first names because some of the individuals
involved share the same last name. No disrespect is intended.
2 All
statutory references are to the Probate Code.
Ralph clearly
expressed the intent to negate survivorship, but the form of the account
included a right of survivorship, and Ralph did not employ one of the methods
listed in section 5303 to change the terms of the account.
We harmonize the two
statutes by recognizing the explicit distinction drawn in CAMPAL between the
actual ownership of the beneficial interests in the account, and the express
terms of the account. The
distinction allows the court to honor the clear intent of the person who
established the account while at the same time offering protection to the
financial institution which holds the depository account.
The express terms of the
account bear particular importance for the financial institution that holds the
account: CAMPAL contains a safe harbor that immunizes a financial institution
for payments it makes in compliance with the express terms of the account.
Nonetheless, CAMPAL
recognizes that the beneficial interests in the funds may differ from its
express terms. Section 5302 concerns the rules to determine the
beneficial interests in the account; section 5303 concerns the express terms of
the account. Thus, we hold
that the financial institution was correct to pay the funds to Lisa pursuant to
the express terms of the account, but the beneficial owner of those funds is
Ralph’s estate.
We also conclude the
court properly relied on Ralph’s will as evidence of his intent,
notwithstanding section 5302, subdivision (e), which provides that a right of
survivorship “cannot be changed by will.” That provision merely preserves the
nonprobate quality of survivorship rights. The court may still look to the will
as an expression of intent to negate survivorship.
However, we reverse on two
issues. First, the funds in the bank account belong to Ralph’s estate, which
has not been subject to a probate proceeding. It was error for the court to
award those funds directly to the trust in the absence of a probate proceeding.
Second, in light of that reversal, we remand for the trial court to reassess
Stephanie’s attorney fees.
FACTS
In 1985, Ralph opened what the parties refer to as the Franklin Fund
account with an initial deposit of $140,000. Lisa was listed as a
co-owner. Lisa’s counsel states the
paperwork submitted to open the account specifies that it is a joint account
with right of survivorship, though the copy in the record is almost entirely
illegible. Regardless, Stephanie stipulated that the account was opened as a
joint tenancy with right of survivorship. Moreover, an account statement from
2009 addressed to Ralph and Lisa bore the acronym “JT WROS,” which appears to
stand for joint tenants with right of survivorship.
Lisa, who was 23 years old at the time, had no involvement in opening the
fund. Ralph told Lisa that he put her on the Franklin Fund, but never had any
other discussion with her about it. Lisa never deposited money into the
account, all of which, to Lisa’s knowledge, came from Ralph. Lisa never
withdrew money from the account during Ralph’s lifetime. The account paid
dividends, which Ralph took during his lifetime.
Ralph passed away in December 2009. In the months leading up to his
death, Ralph had
a number of conversations with Henry Rivera, his brother-in-law, which resulted
in Henry assisting Ralph to prepare a will and trust, which Ralph executed
approximately 11 days before his death.
His will left specific directions as to the Franklin Fund account:
“Remove Lisa Strazicich as sole beneficiary of my Franklin Fund. I want the
beneficiaries to be Lisa Strazicich, Stephanie A. Placencia and Tina R.
Placencia, my three daughters. [¶] I want the Franklin Fund to be placed into
my trust fund and then be used to pay off the mortgage of my home in Huntington
Beach, CA.” Henry confirmed that Ralph specifically made these requests in
their conversations.
The trust specified that the res would be distributed evenly between
Ralph’s three daughters, Lisa, Stephanie, and Tina. It specifically
disinherited his two sons (one of whom passed away). The trust named Lisa and
Stephanie as successor cotrustees after Ralph’s death but specified that most
important decisions would need Tina’s consent as well. At the time of Ralph’s
death, the trust contained three properties located in California: a residence
in Huntington Beach, raw land in Brea, and a residence in Long Beach.
Collectively they were valued at approximately
$2,215,000.
In January 2010, about a month after Ralph passed away, Lisa transferred
the assets of the Franklin Fund account to an account in her name.
In March 2010, Mark Zavala, one of Ralph’s sons, filed a petition seeking
to invalidate the trust. Ultimately that petition was denied and the validity
of the trust confirmed.
Meanwhile, the sisters’ relationship grew contentious; they could not
reach a consensus on the proper disposition of the trust assets. Lisa was
performing most of the work administering the trust. Stephanie testified that
she had not performed any role as trustee for the first four years after her
father passed away. However, she was consulting with Lisa and Tina on major
decisions related to the trust.
In September 2014, Stephanie filed the first of the underlying petitions
in her capacity as cotrustee of the trust. She sought an accounting, damages
for breach of fiduciary duty, and to remove Lisa as trustee. In December 2014,
Lisa filed a petition in her capacity as cotrustee, seeking, among other
things, to remove Stephanie as cotrustee, to recover various costs and fees
associated with her work administering the trust, and declaratory relief as to
the status of the Franklin Fund account. By the time the petitions were filed,
most of the property in the trust had been sold and the funds distributed. Only
the Long Beach residence and a small bank account were still held in trust.
The court ultimately trifurcated the trial into three phases. The first
phase concerned most of the issues on the merits, including the Franklin Fund
issue. The second phase dealt with requests for trustee fees, attorney fees,
and other litigation costs. The third phase concerned an accounting of the
Franklin Fund account.
In the first phase the court concluded Ralph’s will, as confirmed by Henry’s conversations with
Ralph, amounted to clear and convincing evidence that Ralph intended to revoke Lisa’s right of survivorship in the Franklin
Fund account at the time of
his death. Consequently, the
court ordered Lisa to account for the proceeds of the Franklin Fund account,
with Lisa’s share in the trust to be reduced by the amount she owes the trust
from the Franklin Fund account.
Also in the first phase, the court rejected several of Stephanie’s claims
for relief, including: her request to remove Lisa as trustee, her claim that
Lisa breached her fiduciary duty by failing to rent the Long Beach residence,
her claim for double damages under section 859 for Lisa’s refusal to turn over
the Franklin Fund account, and her claim that Lisa violated other fiduciary
duties.
As to
Lisa’s other claims, the court granted her request to sell the Long Beach
property and distribute the proceeds, granted her request to remove Stephanie as trustee, and
rejected her claim of malfeasance against Stephanie.
In the second phase, the court first concluded that Stephanie was entitled to
attorney fees. In reaching that conclusion, the court found that
Stephanie was acting on behalf of the trust as a trustee, that she prevailed on
the Franklin Fund issue, and that the fees she incurred were expended for the
benefit of the trust. After reducing what the court found to be excessive hours
spent, the court awarded Stephanie $138,580 in fees, and $19,236.46 in costs.
Lisa also sought attorney fees, which the court granted in part and
denied in part. The court denied Lisa fees to the extent they were incurred in
connection with the Franklin Fund issue, but granted her fees in connection
with her successful efforts to remove Stephanie as trustee and to sell the Long
Beach property. This resulted in a fee award of $95,284 to Lisa, which she does
not challenge on appeal.
However, Lisa does challenge the amount of trustee
fees the court awarded her. The court awarded her $38,850 for the period of
2009-2017. We discuss the court’s ruling in more detail below.
In the third phase, the accounting of the Franklin Fund
account, the court found Lisa held a total of $221,006.44 traceable to the
Franklin Fund. Lisa appealed from the final judgment that incorporated the
court’s rulings from all three phases.
DISCUSSION
The Franklin Fund Account
Does Not Belong to Lisa
Lisa first contends the court erred by denying her right of survivorship
to the Franklin Fund account. We disagree. In reaching the conclusion that Lisa
is not entitled to the funds, we address two aspects of the statutory scheme
that, at first blush, seem to support Lisa’s position: section 5303’s
restrictions on the methods of altering the terms of a multi-party account, and
section 5302, subdivision (e)’s restriction on the use of a will to change a
right of survivorship.
Sections 5302 and 5303
CAMPAL provides a roadmap for joint accounts, and rights of survivorship
in particular. Section 5302,
subdivision (a) provides, “Sums remaining on deposit at the death of a party to
a joint account belong to the surviving party or parties as against the estate
of the decedent unless there is clear and
convincing evidence of a different intent.”
(Italics added.)
“This section is the same in substance as Section 6-104 of the Uniform Probate
Code (1987), except that section 5302 omits the UPC requirement that the intent
that there be no rights of survivorship exist at the time the account is created.” (Cal. Law Revision Com. com.,
53 Wests Ann. Prob. Code, supra,
foll. § 5302, p. 61, italics added.) Section 5302 omits the italicized
language. The commentary to section 5302 draws the logical conclusion that, “under Section 5302, the
intention to negate survivorship may be shown to have existed after the time of
the creation of the account.” (Cal. Law Revision Com. com., 53 Wests
Ann. Prob. Code, supra, foll. § 5302,
p. 61.)
Section 5303, on the other hand, contains the following restrictions:
“The provisions of Section 5302
as to rights of survivorship are determined by the form of the account at the
death of a party.” (Id., subd. (a).)
“Once established, the terms of a multiple-party account can be changed only by any of the following methods:
[¶] (1) Closing the account and reopening it under different terms. [¶] (2)
Presenting to the financial institution a modification agreement that is signed
by all parties with a present right of withdrawal. If the financial
institution has a form for this purpose, it may require use of the form.
[¶] (3)
If the provisions of the terms of the account or deposit agreement
provide a method of modification of the terms of the account, complying with
those provisions. [¶] (4) As
provided in subdivision (c) of Section 5405 [payment by the financial
institution in accordance with written instructions from a party].” (Id., subd.
(b) (1)-(4),
italics added.) Section 5303, subdivision (c) further provides that withdrawal
of funds from the account eliminates rights of survivorship as to the funds
withdrawn.
The question we confront is: What happens when the form of the account includes a right of
survivorship, which was not altered by any of the methods listed in section
5303, but the decedent expressed an intent to negate survivorship before
passing? The key to
harmonizing these statutes lies in the distinction between the express terms of the account and the beneficial interests in the account.
This distinction is explicitly set forth in section 5201, which
provides, “(a) The provisions of Chapter 3 (commencing with Section 5301)
concerning beneficial ownership as between parties .
. . are relevant only to controversies between these persons and their
creditors and other successors, and have no bearing on the power of withdrawal
of these persons as determined by the terms
of account contracts. [¶] (b) The provisions of Chapter 4
(commencing with Section 5401) govern the liability of financial institutions
who make payments pursuant to that chapter.” (Id., italics added.) Sections 5405 and 5402, in turn, provide a
safe harbor for financial institutions that pay according to the terms of the
account, irrespective of any beneficial ownership interests: “Payment made
pursuant to Section . . . 5402 . . . discharges the financial institution from
all claims for amounts so paid whether or
not the payment is consistent with the beneficial ownership of the account as
between parties.” (§ 5405, subd. (a), italics added.) Section 5402
provides, “Any sums in a joint account may be paid, on request and according to its terms, to any party ”
The distinction
between the terms of an account and the ownership of
beneficial interests is
key to interpreting section 5303 because the principal restriction in section
5303 is that “the terms of a
multiple-party account can be changed only by” utilizing one of the listed
methods. (Id., subd. (b), italics
added.) Section 5302,
by contrast, concerns the
beneficial interests as between the parties to the account: “Sums remaining on
deposit at the death of a party to a joint account belong to the surviving
party or parties as against the estate of
the decedent unless there is clear and convincing evidence of a different
intent.” (Id., subd. (a),
italics added.) Further evidence that section 5302, subdivision (a), concerns
beneficial interests appears a few lines down in subdivision (d). Subdivision
(a) concerns joint accounts, subdivision (b) concerns pay on death accounts,
subdivision (c) concerns Totten trusts,3 and subdivision (d)
contains the
3 “The
term Totten trust describes a bank account opened by a depositor in his own name as trustee for another
person where the depositor reserves the power
to
following
catchall: “In other cases,
the death of any party to a multiparty account has no effect on beneficial ownership of the account
other than to transfer the rights of the
decedent as part of the
decedent’s estate.” (Italics added.) The fact that the catchall is
explicitly framed in terms of the ownership of beneficial interests strongly
suggests that subdivisions (a) through (c) also concern the ownership of
beneficial interests.
The answer to the question we posed above, therefore, is this: The financial institution may pay the surviving party according to the
terms of the account, but the decedent’s estate has a claim for the funds
against the surviving party. This result achieves the dual aims of (1)
honoring the actual intent of the decedent as to the disposition of his assets,
and (2) ensuring the financial institution has an ascertainable, objective
basis upon which to pay out the funds in a manner that does not subject it to
liability. Here, it was proper for the financial institution to pay out the
funds to Lisa, as the terms of the account listed her as having a right of
survivorship, but Ralph’s estate had a valid claim for the funds against Lisa.
The court in Araiza v. Younkin (2010)
188 Cal.App.4th 1120 (Araiza) reached
the same result. There, the decedent had established a checking and savings
account naming her stepdaughter as the beneficiary of the account (though
without any
right of
withdrawal during the decedent’s lifetime). (Id. at p. 1123.) Four years later, the decedent established a
living trust, expressly transferred the savings account into the trust, and
provided that the savings account was to go to someone else upon decedent’s
death. (Ibid.) Upon decedent’s death,
the trial court awarded the account to the trust beneficiary. (Id. at pp. 1123-1124.) The stepdaughter
appealed, contending that the
withdraw the funds during his
lifetime. If the depositor has not revoked the trust then, upon his death, any
balance left in the account is payable to the beneficiary.” (Estate of Fisher (1988) 198 Cal.App.3d
418, 424.) A Totten trust is a type of multi-party account governed by CAMPAL.
(§ 5132.)
account was hers
because the decedent had not changed the terms of the account pursuant to
section 5303. (Araiza, at p. 1124.)
The Court of Appeal treated the account as a Totten Trust, which is
governed by essentially the same rules as a joint account. (Araiza, supra, 188 Cal.App.4th at pp. 1124-1125; § 5302, subd. (c).) The
court rejected the stepdaughter’s argument concerning section 5303, stating,
“This narrow reading of the statute, however, fails to harmonize it with
section 5302. Section 5302, subdivision (c)(2) provides that sums remaining on
deposit in a Totten trust after the death of the sole trustee belong to the
person named as beneficiary, ‘unless there is clear and convincing evidence of
a different intent . . . .’ Here, although the signature card for the savings
account named [the stepdaughter] as the beneficiary, there is clear and
convincing evidence that [the decedent] had a ‘different intent’ at the time of
her death. She established a living trust that expressly stated her intention
to give the savings account to [the trust beneficiary].
The trial
court properly relied on the living trust to find that [the decedent] intended
to change the beneficiary of her Totten trust from [the stepdaughter] to [the
trust beneficiary].” (Araiza, at pp.
1125-1126.)
The result in Araiza is consistent with our analysis
here. As between the parties to the account, the decedent’s intent prevails.4
4 In allowing rights of
survivorship to be negated after the creation of the account, our
Legislature chose to treat rights of survivorship in much the same way Totten
trusts traditionally operated, which could “‘be revoked by the depositor at any time during his lifetime, by a manifestation of his intention
to revoke the trust. No particular formalities are necessary to manifest
such an intention.’” (Brucks v. Home
Federal S. & L. Assn. (1951) 36 Cal.2d 845, 851.)
A Will May Furnish Evidence of Intent
But can a will supply evidence of the intent to negate
survivorship?
Section 5302, subdivision (e),
states, “A right of survivorship . . . cannot be changed by will.” According to
Lisa, if a will could furnish evidence of intent, then a will could effectively
change a right of survivorship, nullifying this provision. We disagree.
The purpose of section 5302, subdivision (e), is to preserve the
nonprobate quality of rights of survivorship, not to create a firewall between
a will and a right of survivorship. Section 5304 makes this policy explicit:
“Any transfers resulting from the application of Section 5302 are effective by
reason of the account contracts involved and this part and are not to be considered as testamentary.” (Italics added.) The
California Law Revision Commission commentary to that section explains the
thinking behind this policy: It “avoids the need for a probate proceeding to
accomplish a transfer.” (Cal. Law Revision Com. com., 53 West’s Ann. Prob.
Code, supra, foll. § 5304, p. 67.)
The declaration that a right of survivorship cannot be changed by a will in
section 5302, subdivision (e), simply reflects the policy of section 5304. Survivorship rights represent a nonprobate
transfer and thus, by definition, are not determined by a will.
But in assessing the
decedent’s intent, the court should consider all evidence, including evidence
of intent expressed in connection with executing a will. To ignore the
will would generate artificial results contrary to the decedent’s actual intent. This result would be
inconsistent with the modern trend toward favoring the decedent’s intent over
formalities. In Estate of Duke (2015)
61 Cal.4th 871, for example, our high court abolished the longstanding rule
that extrinsic evidence is inadmissible to reform an
unambiguous
will. (Id. at p. 875.) In reaching
that result, the court relied on the principle that “the paramount concern in
construing a will is to determine the subjective intent of the testator
[citations]
.” (Id. at p. 890.) Courts
have expressed similar sentiments in the context of trusts. (See Morgan v. Superior Court (2018) 23
Cal.App.5th 1026, 1039 [describing the testator’s intent as “the all
controlling factor”].) Here, too, our ultimate
aim is to
ascertain the Ralph’s subjective intent as to the disposition of his assets. To
that end, it would be counterproductive to blindfold the trial court to
expressions of intent found in a will.
Although case law on this issue is sparse, we find support
for our conclusion in Gardenhire v.
Superior Court (2005) 127 Cal.App.4th 882 (Gardenhire), which addressed an analogous situation. There, the
issue was whether a will could revoke a trust notwithstanding section 15401,
subdivision (a)(2), which provides that a revocable trust may be revoked “[b]y
a writing (other than a will) signed
by the settlor and delivered to the trustee . . . .” (Gardenhire, at p. 887, italics added.) The trust permitted
revocation “by written notice signed by the Trustor and delivered to the
Trustee.”
(Id. at p. 886.)
The Gardenhire court held that,
although a will could not revoke the trust as a testamentary act, it could,
nevertheless, fulfill the more mundane role of providing written notice. The
court’s colorful analysis is worth quoting in full: “[A]lthough the
dispositional provisions of a will remain inoperative until the trustor’s
death, it does not necessarily follow that the will cannot separately and
effectively have a present and immediate effect upon delivery, such as notice
of intent to revoke. For example, suppose a person writes a will and in it
states that he loathes his brother and bequeaths to him a bag of garbage. He
then gives the will to his brother. Although the bequest is legally
inoperative, the will nevertheless immediately and effectively communicates the
person’s feelings to his brother. We perceive no logical reason
why a will similarly cannot provide immediate and present notice of a trustor’s
intent to revoke a trust. Indeed, where
a trustor unambiguously manifests an intent to revoke, amend, or alter a trust
in a will, and where the trustor delivers it to the trustee, who reads it, we
believe the trustor’s intent must control and be given effect.” (Id. at p. 891.)
Likewise here, while a will cannot change a
right of survivorship as a
testamentary act, it may,
nonetheless, provide evidence of the account holder’s intent during his
lifetime.
Given the evidence of Ralph’s will, it is beyond dispute that, during his
life, he intended to negate Lisa’s right of survivorship. And it does not matter
that Ralph intended to set up a joint account with right of survivorship when
the account was created. As we discussed above, section 5302 was specifically crafted to allow a party’s
intent after account creation to
negate a right of survivorship. Ralph’s intent, expressed through his
will, did so here.
The Franklin
Fund Account is Subject to a Probate Proceeding
Having negated Lisa’s right of survivorship, the question then becomes:
What happens to Ralph’s interest in the account? The court essentially ordered
Lisa to transfer funds directly to the trust. That disposition of the account
funds, however, is principally found in Ralph’s will, which was never admitted
to probate. And in a multi- party account with no right of survivorship, “the
death of any party to a multiparty account has no effect on beneficial
ownership of the account other than to transfer the
rights of the decedent as part of the decedent’s estate.” (§ 5302, subd. (d).)
As the commentary to section 5302 explains, “The rule stated in subdivision (d)
applies to an account where there is clear and convincing evidence of an intent
not to have a right of survivorship . . . .” (Cal. Law Revision Com. com., 53
West’s Ann. Prob. Code, supra, foll.
§ 5302, p. 62.) Arguably, therefore, upon Ralph’s death, his interest in the
Franklin Fund account became part of his personal estate, which would need to
be probated.5
5 Ralph’s
interest consisted of the entire account because all of the money in the
account came from him during his lifetime. Probate Code section 5301, subdivision
(a) provides, “An account
belongs, during the lifetime of all parties, to the parties in proportion to
the net contributions by each, unless there is clear and convincing evidence of
a different intent.” The California Law Revision Commission commentary explains
Given this possibility, we invited the parties to provide supplemental
letter briefs on the following question: “Assuming for purposes of your
analysis that the court correctly determined that the will provided clear and
convincing evidence that the decedent intended to revoke Lisa M. Strazicich’s
right of survivorship in the Franklin Fund account: Did the court err in
ordering distribution of the account directly to the trust, instead of through
a probate of the decedent’s estate, to be thereafter distributed either by will
or by intestacy? (See Prob. Code, § 5302(d), subd. (d).)” Lisa and Stephanie
both submitted letter briefs. Lisa contends that if the funds are not to go to
her by way of survivorship, then probate is the only other possibility.
Stephanie, however, contends that Ralph’s oral statements and written
intent in his will operated to transfer ownership of the Franklin Fund account
to his trust prior to his death. Her argument begins with the language of the
trust, which allows property to be added without the need for a writing:
“Additional property may be added to the trust estate at any time by the
Trustor . . . by inter vivos or testamentary transfer.
Such
additions and title to any property so added may be, but need not be, evidenced by . . . writings transferring the
property to the Trustee.” (Italics added.) Moreover, by statute, oral trusts
are permitted, provided the oral trust is corroborated and proven by
clear and
convincing evidence: “(a) The
existence and terms of an oral trust of personal property may be established
only by clear and convincing evidence. [¶] (b) The oral declaration of the settlor, standing
alone, is not sufficient evidence of the creation of a trust of personal property.”
(§ 15207, subds. (a), (b).) The California Law Revision
this is a change from the usual
joint tenancy laws: “The presumption under subdivision
(a) that an account belongs to
the parties during their lifetimes in proportion to the net contributions by
each changed the rule under former law. Under former law, if the joint account
provided for rights of survivorship, the account was presumed to be a joint
tenancy and each joint tenant was presumed to have an equal interest in the
account.” (Cal. Law Revision Com. com., 53 West’s Prob. Code, supra, foll. § 5301, p. 58.) There is
nothing in the record that evidences an intent contrary to the rule that,
during Ralph’s lifetime, ownership was determined by net contribution.
Commission
commentary to section 15207 states: “Under subdivision (b), a delivery of
personal property to another person accompanied by an oral declaration by the
transferor that the transferee holds it in trust for a beneficiary creates a
valid oral trust. Constructive delivery, such as by earmarking property or
recording it in the name of the transferee, is also sufficient to comply with
subdivision (b).” (Cal. Law Revision Com. com., 54
West’s
Ann. Prob. Code (1991 ed.) foll. § 15207, p. 542.)
The problem is, Ralph never did any of that. Indeed, there is not even a
mention of an oral trust in our record, or an oral transfer to the trustee,
much less corroborating evidence such as physical delivery or earmarking.
Instead, in a will, in a section entitled
“I hereby make the following specific bequests”
(italics added), Ralph simply bequeathed the funds to his trust.6 In the absence of any transfer
to Ralph’s trust prior to his death, the Franklin Fund became part of Ralph’s
estate (§ 5302, subd. (d)) and is, therefore, subject to probate
administration (§ 7001).
And there may
well be live issues in any probate proceeding. We note that Lisa’s petition originally contained a cause of action to
invalidate the will, which she abandoned before trial, but which raises the
specter of a will contest. Also, one of
Ralph’s
sons was disinherited, so he clearly has an incentive to invalidate the will.
Accordingly, it
would be premature for the court to distribute Ralph’s personal estate at this
time. (See Estate of Hart (1957) 151
Cal.App.2d 271, 280-281 [where
title vests subject to the administration of the estate, the right to
possession is deferred until the distribution of the estate and is contingent
upon the will not being set aside by a contest after probate].) In doing so,
the court erred.
6 There
is some ambiguity as to whether the funds were bequeathed directly to the
daughters or to the trust. We express no opinion on the matter. The parties are
free to litigate that issue in any future proceeding.
Fees and Costs
Lisa assigns two errors concerning fees and costs:
that she was entitled to more trustee fees than the court awarded, and that
Stephanie was not entitled to attorney fees paid by the trust.
Trustee Fees
Section 15680 provides that where, as here, the trust provides for a
trustee’s compensation, “the trustee is entitled to be compensated in
accordance with the trust instrument.” (Id.,
subd. (a).) And where, as here, “the trust instrument does not specify the
trustee’s compensation, the trustee is entitled to reasonable compensation
under the circumstances.” (§
15681.) “‘Allowance of compensation
rests in the sound discretion of the trial court, whose ruling will not be
disturbed on appeal in absence of a manifest showing of abuse.’” (Estate of Gump (1991) 1 Cal.App.4th 582, 597.)
Lisa sought trustee fees of $186,900, which was calculated as
1,068 hours spent between 2010 and 2017 at a rate of $175 per hour. The court
determined her reasonable rate was $75 per hour, that the amount of hours she
claimed was excessive, and that her time sheets were too vague to demonstrate
how the time she invested benefited the trust. In its statement of decision,
the court awarded Lisa $40,893.75 “for the period of 2009 to 2017.” For reasons
that are not clear in the record, in the final judgment the court reduced that
amount to $38,850.
Lisa contends the court abused its discretion by awarding her zero fees
from 2015 to 2017. The court never explicitly denied her fees for the period of
2015 to 2017, but she infers the court did so by noting that she claimed
exactly $40,893.75 for the time
period of December 2009 through November 2014. And since that is the exact
number the court awarded (initially), the court must have only been compensating
Lisa through November 2014.
But that is not what the court’s statement of decision says. It says the
court awarded $40,893.75 “for the period of 2009 to 2017.” We will not infer
from the amount the court chose that it was awarding fees for a period less
than what it said. We draw all presumptions in favor of the court’s ruling, not
against it. The court apparently believed that the amount Lisa claimed for a
lesser period was a reasonable amount for the entire period. Lisa has not
challenged that ruling as an abuse of discretion.
Stephanie’s Attorney Fees
In awarding Stephanie her fees, the court first rendered three predicate
findings: that Stephanie was acting in her capacity as trustee, that Stephanie
prevailed on the Franklin Fund claim (and no other), and that the fees pursuing
the Franklin Fund issue were expended for the benefit of the trust. Lisa
challenges all three predicates.
Rather than resolve this issue, we deem it prudent to remand the matter
to the trial court for another hearing on Stephanie’s attorney fees. Her
prevailing on the Franklin Fund issue was an essential predicate for awarding
her fees. At the time the court made that order, Stephanie had clearly
prevailed: the trust was being enriched by over $200,000. Our ruling here,
however, potentially undermines that conclusion. It is less clear that the
trust will ultimately get that amount. On the other hand, Stephanie was correct
in asserting that Lisa did not have a right of survivorship. In view of these
circumstances, the court should have an opportunity to exercise its discretion
in the first instance as to whether, and in what amount, Stephanie is entitled
to fees. We express no opinion on the matter.
DISPOSITION
The judgment is reversed as to the ownership of the Franklin Fund account
(item 1 of the Final Judgment and Order on Petitions), and the court is
instructed to enter a new order declaring Ralph’s personal estate to be the
beneficial owner of the proceeds of the Franklin Fund account. The judgment is
also reversed as to Stephanie’s attorney fees (item 4 of the Final Judgment and
Order on Petitions). The matter is remanded on those issues for further
proceedings consistent with this opinion. In all other respects, the judgment
is affirmed. Stephanie shall recover costs incurred on appeal.
When you are in the Los Angeles Probate Court, you see many types of disputed cases. Most common types of disputes and feuds in court involve several categories of persons: Siblings v. Siblings; Children of the first marriage v. the Second Wife; and Caregivers v. everyone else. Ownership disputes are also common in probate, especially when it comes to real property.
What makes people have probate disputes?
The root of all probate disputes is emotions. Sibling cases involve one child who believes he or she was loved more or a child who believes that his/her mother loved his sibling more. In the Second wife cases, there is resentment by the children of the first marriage which is the roots of the step-parent feuds in probate court. Conflicts can be deep-rooted or simple disagreements, but for some reason, when they end up in probate court, even a simple discord turns into a full war, sometimes even physical altercations.
How do you fix probate disputes in Los Angeles?
Resolving probate fights comes in stages. The first stage is the most difficult time which is several months after the date of death. During this period, people are angry at each other and few cases resolve in this period. However, after the first six months after date of death, it becomes easier to get people to agree to attend mediation. Probate mediation is a rather simple and out of court way of fixing probate disputes in Los Angeles. There are also informal family meetings which can be used if the parties are inclined to talk to each other face to face. In mediation, you do not have to meet face to fact with your family members. The mediator goes back and forth to the parties in separate rooms.
What disputes lend themselves to mediation and settlement in the probate and estate areas?
List of Types of Probate Disputes in the Los Angeles Probate Court:
Here is a list of estate and probate battles we have concluded in the Los Angeles Court:
Will contests;
Trust contests;
Property ownership disputes;
Forgeries of wills and trusts;
Undue influence in creating trusts and amendments;
Disputes involving which Trust or Will prevail;
Fights about selecting an executor or administrator;
Removing a trustee that fails to act or steals from the trust.
How can Sirkin Law Group, PC’s attorney help with your Los Angeles probate dispute?
We get the probate court to give deadlines for filing papers which speeds up the process of getting responses from people. When you are in the middle of emotional issues, we keep the emotions from getting the best of you and the other side. Because we usually get paid at the end of probate, we have every incentive to get your case to close, and to resolve faster. While trials are the forum to get your voice heard, the cost of probate increases by tenfold when you go to trial. This is a fact that you must consider when you fight in probate court.
Answers to your questions about the Los Angeles Probate Court and probate updates in 2020
When you call our Los Angeles attorneys, you will speak with a probate attorney with over 27 years of expertise in the Los Angeles Probate Court matters. We can answer the most common questions about probate in Los Angeles and be your guide when you need an answer about any aspect of estate law in Los Angeles. To make an appointment, call us at 818.340.4479 or email us at Info@SirkinLaw.com.
What exactly is an Ex Parte Probate hearing in Los Angeles? Ex Parte means with respect to interest of one side. In reality, an Ex Parte Probate hearing means that you are given short notice or no notice to act because there is some kind of urgency.
In probate, there are certain situation when the probate court will entertain urgency proceedings by Ex Parte because there is imminent threat of harm or loss. Sometimes, there is urgency in suspending an executor or trustee. Other times, there may be reason to stop a trustee or executor from taking a certain action.
In some cases, when there is a foreclosure pending, estate court judges may also allow a short restraining order against a lender to allow a probate sale to close.
On occasion, the Court may suspend a conservator, make provisional orders to appoint a temporary trustee, executor or conservator to address certain types of issues. Ownership issues are rarely subject of Ex Parte proceedings in estate court in Los Angeles.
If you have been served with an Ex Parte notice and would like to talk to us, please call probate attorney, Mina Sirkin at 818.340.4479 and email Info@SirkinLaw.com.
Meaningful resolution of a dispute in Probate Court in Los Angeles can take many turns and twists, but there are essentially several ways to resolve probate estate cases in Los Angeles County. Here is a list of types of ways that the probate court assists litigants in settling cases:
The probate court may guide the litigants to engage in the mediation process put forth by the Settlement Officer Program (of the San Fernando Valley Bar Association).
The court may ask the parties if they are willing and able to attend a private mediation with a retired judge or another mediator.
The probate court may set a mandatory settlement conference (called an MSC).
Call our probate dispute attorney in Los Angeles to discuss the settlement procedures in the probate court at 818.340.4479
When you have been involved in an estate case in Los Angeles, there may be times where you need the services of a Los Angeles Probate Real Estate attorney.
Here is a list of some specific cases where you can use our probate services:
When you are bidding on a probate property in Los Angeles.
When you are involved in a dispute regarding title to an asset which is either in probate, in an estate, or in a trust.
When you believe that the estate asset should not be in the probate court.
When you want to petition to partition the property.
When you have a dispute with an estate or administrator about ownership or title to a property.
When you are about to sell a piece of property and escrow or title tells you that you need a probate court order.
Call attorney Mina Sirkin to consult with us about Los Angeles Probate real estate dispute services by calling 818.340.4479 or email: Info@sirkinlaw.com
