Top 10 Types of Estate Battles | CA Probate & Trust Litigation
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Top 10 Types of Estate Battles | CA Probate & Trust Litigation

At Hackard Law, we’ve identified 10 of the
most common probate, trust and estate battles that California heirs and beneficiaries will
face. This is not an exclusive list, but we hope
that it helps those who may be facing trust or estate litigation. This may help to answer the question often
posed – Are we the only family that is facing this kind of problem? You’re far from the only family. 1. Petitions against Former Trustees Alleging
Wrongful Acquisition and Misappropriation of Trust Assets. These cases can be quite messy. Successor trustees to original settlors or
makers of trusts are often family members. Putting together a priority list for designation
of successor trustees isn’t an easy task for the makers of the trust, and the disclosure
of the list to children or other beneficiaries is not always met with ready acceptance. What can happen when successor trustees take
charge of the trust? At the death of the trust maker, the first
successor in interest is appointed. This can be a readily accepted choice among
heirs, or it can be an object of criticism and disagreement. New purchases of cars, boats, houses and exotic
vacations taken by the successor trustee are an invitation to suspicion. We often see the suspicion that trust assets
are not being fairly administered – and maybe even wrongfully taken by the successor
trustee. In those cases where family members decide
to challenge the actions of the successor trustee, the successor trustee might resign
or otherwise be removed from his or her position. Under such circumstances, the new trustee
gets to look at accounts and make a determination whether assets were transferred – and if
transferred – whether the transfers were the result of undue influence or fraud. The battleground is then set. Were the asset transfers valid gifts? Were signatures forged? What was the mental capacity of the transferor? What was the health of the transferor? Were the gifts made consistent with long solidified
estate plans? The fight is on. 2. Petition for Court Order for Authorization
for the Settlement of an Action on Decedent’s Behalf. The good news is that cases do settle. Sometimes they settle early, and sometimes
late. Sometimes an agreement is reached on the day
of trial. When cases settle, the settlements must be
memorialized, and a court order effectuating the settlement is the wisest course of action
to verify the settlement. Such court orders reserve the power of the
court to address any disputes over the settlement. Disputes can occur over the terms of a settlement
agreement. Unforeseen circumstances may arise that are
not directly addressed in the agreement. In these cases, if the parties cannot resolve
the dispute between themselves, they can return to the Court for the Court’s interpretation
of the settlement or its enforcement. 3. Petition by Beneficiaries For Instructions
Regarding Interpretation of Trust Terms. Trust terms are not always clear. There may be a reference to property that
is unclear. The distribution of assets to beneficiaries
may also be unclear. The arithmetic indicated as to estate divisions
may not add up. Life estates can present particular problems. If there is a life estate, who is to pay for
maintenance? Taxes? Insurance? The mortgage? Other common issues are whether the value
of gifts made prior to death are to be deducted from a beneficiary’s share of an estate. 4. Petition To Compel Return of Real Property
To Trust, For Breach of Fiduciary Duty, Financial Elder Abuse, Conversion and Imposition of
Constructive Trust. This handful of serious allegations can evolve
into protracted litigation. These types of petitions generally arise when
the trust maker – or his or her appointed trustee – transferred real property to a new
owner prior to the trust maker’s death. Whether the trustee breached fiduciary duties
or took unfair advantage of the trust maker to make a secret profit is part and parcel
of these claims. The trustee’s duties of reasonable care,
undivided loyalty, avoidance of conflict of interest, and preservation of trust property
all become points of contention. 5. Notice of Proposed Action for personal representative
to take without court supervision. These provisions of the Probate Code allow
for certain actions to be taken without a Court hearing. Such Probate Code provisions allow for more
expedited decision-making, when all beneficiaries agree to a course of action. 6. Citation To Appear At Hearing to Answer Interrogatories
– to be examined under oath or both. This is what I’ve colloquially referenced
as a scenario of “We’ll see about that.” We often encounter trustees, executors or
family members who think they can suppress the existence of a trust or will. I suppose that they might think that possession
is nine-tenths of the law – it isn’t. We can bring people into Court who have estate
planning documents. We can have them examined under oath or ordered
to answer questions that are posed to them. The availability of this remedy usually cures
the document possessor’s overconfidence, and the documents are relinquished to our
clients. 7. Petition For Order Removing Co-Trustee and
Appointing Fiduciary as Successor Trustee and Bringing Trust Under Court Supervision. We use this process when there are cotrustees
that don’t get along – for whatever reason. Once you’re a trustee or cotrustee, it is
not a good idea “to hide the ball.” Yet this happens. When we represent an active cotrustee who
cannot get information or performance from the other cotrustee, this step comes into
consideration. Another part of the process is the appointment
of a licensed California fiduciary as the replacement for the errant cotrustee. Probate Courts generally like this approach
as an alternative resolution to the paralysis induced when cotrustees cannot cooperate. 8. Ex Parte Petition for Order Suspending the
Powers of Cotrustee and appointing fiduciary as temporary successor trustee and bringing
trust under court supervision. This has all the attributes of the above Petition
for Removal, but it reflects an urgency to act. Court rules require a demonstration of urgency
for ex parte petitions. In most cases, suspension can occur because
of misuse of assets or the danger of the loss of assets. An interim trustee – a licensed fiduciary
– can come in and help protect assets during the time period between the fiduciary’s
appointment and the Court hearing on the appointment of a permanent cotrustee. 9. Petition for Order Suspending Trustee’s
Powers, appointing temporary trustee, compelling a forensic accounting, instructing trustee
on real property. This is similar to the Ex Parte Petition referenced
above, but it is generally scheduled for a Court hearing two or three months after filing. The unique part of this is the appointment
of a forensic accountant to review trust records and account for receipts and disbursements. 10. Petition to invalidate a trust amendment on
forgery and undue influence. No trust funds for legal defense. It’s a nightmare when trust assets are spent
defending what ultimately turns out to be wrongful conduct. This type of petition asks the Court (and
it will require follow up Orders) to prevent the expenditure of trust funds to defend an
action to set aside a trust amendment based on forgery and undue influence. The concept is clear – its implementation
is not. There can be skirmishes and all-out battles
to stop the payment of trust money for a defense that benefits only the trustee (usually as
a beneficiary) and not the trust itself. Our experience is that once the decision is
made to litigate, it is critical to be organized, focused and aware that litigation itself is
not a middle ground or a halfway solution. It is a path to victory – a path that may
result in resolution before trial – but resolution is possible only because a competent
legal team is forging that path to victory. Hackard Law represents beneficiaries throughout
California in estate, trust and elder financial abuse litigation. We protect client interests throughout the
state’s major urban areas, including Los Angeles, Orange, Santa Clara, San Mateo, Alameda,
Contra Costa and Sacramento. You can call us today at 916-313-3030 if you’re
facing an estate or trust battle. We want to hear your story. Thank you.

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