Probate, Estate Planning and Trust Law
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San Fernando Valley Probate & Estate Administration Law Blog

Proving that you are an heir

For those in Woodland Hills who are not able to work with us here at the Law Offices of Alice A. Salvo to officially designate beneficiaries to their estates, the issue of who is given ownership of their assets upon their deaths is dictated by state law. If you, for example, had a parent who died without a will, then you may be considered an heir to his or her estate. However, unless you are directly identified as so, you may have to go through the process of proving yourself to be one.

This exact process is detailed in Section 248 of the California Probate Code. There, it states that you (or your personal representative) must file a petition claiming your right to any ownership of or interest in any of the real property included in the estate. That petition must be filed in the county where the property is situated or being held. In it, you must include the following information:

  •          Your own personal identifying information
  •          A description of the property you claim to have a right to
  •          The names, addresses and ages of any other potential heirs

An overview of trust companies

When Woodland Hills residents first begin to consider the idea of setting up a trust, their first thoughts may be to appoint friends or family members as their trustees. While this may be understandable given the established relationships that they may already have with such parties, oftentimes the duties of a trustee can be complex and difficult for a laymen to completely comprehend. The California Probate Code offers a potential solution to those searching for a qualified trustee. It states that a trust company may be appointed to such a role in the same manner as any individual.

Trust companies are corporate entities that assume fiduciary responsibilities for both personal and business trusts. Often, their services are included in those offered by banks and other financial institutions, or they may simply be private firms whose sole function is trust management. Their staffs often consist of:

  •          Attorneys
  •          Financial planners
  •          CPAs
  •          Portfolio managers
  •          Tax experts

What powers do you have as a trustee?

To take upon the role of trustee over a trust containing the real property and assets of a family member or friend in Woodland Hills can be quite a daunting task. Before agreeing to assume such a role, it may be helpful to understand exactly what powers you have as a trustee. These may seem to be spelled out in the general definition of a trust: a collection of assets transferred to you to be managed accordingly. Yet once you have been entrusted with these assets, what then are you allowed to do to ensure that the trust is managed properly?

Your powers as a trustee are clearly spelt out in Chapter 2 of Part 4 of the California Probate Code. There, it clearly states that as a trustee you are allowed to do the following without needing to have first obtained permission from the court:

  •          Perform any duties outlined in the trust instrument.
  •          Perform any actions aimed at accomplishing the purposes of the trust that are done with prudence as well as with reasonable care and caution given to the current circumstances.
  •          Exercise any powers conferred to you by the law except those explicitly limited by the trust instrument.

When is a trustee in breach of trust?

If you are the beneficiary of a trust being administered in Woodland Hills, you may at times feel as though you are at the mercy of the trustee. After all, that person or party has been given authority to oversee the trusts’ assets. However, his or her role should not be mistaken for control over those assets. In fact, the trust instrument typically outlines a specific duty that the trustee owes to you as a beneficiary. A violation of that duty is considered to be a breach of trust, and could be grounds to have the trustee’s powers revoked.

The California Probate code lists the following scenarios as the only circumstances where a trustee would not be liable to you for acts and omissions in violation of his or her duty:

  •          The violations were committed by an agent of the trustee.
  •          The violations were committed by a co-trustee.
  •          The violations were committed by a predecessor trustee.

Three things to help you think about estate planning

Many people put off estate planning for as long as possible, but the unintended consequences of this frequently have negative outcomes. ideally, the estate planning process should begin at a relatively young age, particularly if you have children, substantial assets and/or property, or own your own business.

Because life is unpredictable, failing to have a proper plan in place can leave your intended beneficiaries in a very difficult position in the event of an unexpected occurrence. Here are three important first steps in crafting a document that protects your final wishes.

Knowing when one is competent to create a will

Whenever disputes arise over the disposition of an estate in Woodland Hills, one of the more common accusations thrown around by those challenging the validity of estate planning documents is that the decedent was not of a sound mind when he or she created them. When clients come to us here at the Law Offices of Alice A. Salvo with such claims, they usually want to know if the law specifies when one may or may not be competent enough to engage in estate planning. If you have the same question, you may be happy to hear that the answer is yes.

The standards for testator competency can be found in Section 6100.5 of the California Probate Code. They state that in order for you to successfully prove your loved one may not be (or may not have been) of a right mind to make a will, either one of two things must be proven. The first is that is he or she does not (or did not) have the mental capacity to:

  •          Understand the nature of the will or testamentary act
  •          Recall the current status of his or her property
  •          Comprehend the relationship he or she had with those affected by the will

Exotic car collection being returned to Paul Walker’s estate

Many in Woodland Hills may assume that the estate administration process is a brief, fleeting matter that those to whom it may concern will only have to deal with for a short time. While that may be the case in certain situations, other cases may continue on for years as disputes and other matters are dealt with. The size of an estate may certainly play a factor in how long it takes to be properly executed and closed. Larger estates with a high volume of assets may take longer to disperse. Questions involving liability in the death of the testator of such an estate may serve to further delay its administration.

Such appears to be the case with the estate of the late actor Paul Walker. The actor was killed in late 2013 when the Porsche he was riding in was involved in a crash. A judge recently ruled that the automaker could be held liable for the accident. Around the same time, Walker’s daughter was awarded over $10 million from the estate of the man who was driving the car that her father was killed in. Now, negotiations have begun to return the late actor’s collection of exotic cars. A worker at the warehouse were the vehicles had been stored reportedly took them in an attempt to extort Walker’s family. Walker’s estate, in turn, filed a lawsuit against him. It is now being reported that a settlement has been reached that will allow the estate to re-take possession of the cars.

Terminating a trust

Many in Woodland Hills may understand that a trust is a tool used in estate planning, yet not fully comprehend its nature or its purpose. Some could simply view it as an account managing assets that extends in perpetuity. It is true that there are types of trusts that are irrevocable by even their settlors (those who set up the trust). According to the American Bar Association, these are valued because of the unique asset protection and tax advantages that they provide. Revocable trusts (or living trusts as they are more commonly known) tend to be more popular even though they are subject to estate taxes. This is likely due to the added control they offer.

As the name suggests, a settlor or other party may revoke or modify a living trust under certain conditions. According to the California Probate Code, this can be done by following the expressed method of revocation as outlined in the trust instrument. If this article names this method as the only way the trust can be altered, no other means provided by the law can supersede it. If, however, no such specifications are given, the trust can then be changed or cancelled through a written notice signed by either the settlor or any other person granted revocation authority. Such persons may include:

  •          Co-settlors
  •          Spouses
  •          Attorneys (such authority must be designated by the trust instrument)

What is the Uniform Prudent Investor Act?

When appointed as a trustee in Woodland Hills, one of the duties assigned to you by the trust article may be to invest trust assets in an attempt to grow them. When doing so, you are held to a standard designated in the California Probate Code as the Uniform Prudent Investor Act. Understanding the exact investment responsibilities inherent with your role may be vital if you hope to avoid being accused of malfeasance by the trust’s beneficiaries.

As the name implies, the Uniform Prudent Investment Act requires that you manage the trust’s investments as any prudent investor would. That includes following an overall investment strategy with goals that are in-line with the objectives of the trust. Those objectives include the stated need for liquidity, preservation or appreciation of the trusts’ assets, as well as its ability to generate income.

Martin Luther King’s Bible, Nobel Prize at center of dispute

When many in Woodland Hills hear stories about estate disputes, they may immediately assume that the discord is simply related to money. While it may seem that most estate administration issues arise from monetary causes, one should remember that cash may not be the only thing of value included in an estate. Some items may hold a high sentimental value to certain estate beneficiaries. It’s often when such an item’s actual value approaches its monetary one that a great many issues arise.

Given his central role in the Civil Rights movement, one may assume any item owned by Dr. Martin Luther King Jr. would be considered valuable. That perceived value may skyrocket were one to know that the items being referred to included Dr. King’s actual Nobel Peace Prize and his traveling bible. It is the future use of these very items that sits at the center of a lawsuit involving his children.