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

Detailing your protections from liability as a trustee

If you have been asked to serve as a trustee of a trust account by a family member or friend in the San Fernando Valley, your first concern may be what sort of consequences you could face should you commit an error during the execution of your duties. Many of those that we here at The Law Offices of Alice A. Salvo have worked with who have been named trustees come into the role without any related experience. Fortunately, the California Trust Code recognizes that there may be differences between personal liability and alleged incorrect action performed while fulfilling the role of a trustee.

According to Section 18000 of the California Probate Code, you are generally viewed as not being personally liable for any contracts you may enter into while fulfilling a trustee’s designated fiduciary duties. The same holds true disputes arising from ownership or control of trust property, and even tortious actions committed while administering a trust.

Protect your wishes for medical care with health care directives

Being fully prepared for the future might seem like an impossible task. Since no one can predict the future, you should consider putting instructions in place in the event you become incapacitated and can no longer make decisions for yourself, even temporarily. With health care directives prepared and ready to go, you can make sure your that your family members understand and carry out your wishes for end-of-life or long-term care and treatment.

Not sure if you need health care directives? Every adult, no matter how young or old, needs them. This week's column provides you with basic information about advance directives and the legal requirements to make them valid.

Former DA’s family fighting over validity of his will

Woodland Hills residents are advised to see to their estate planning early on their lives so that their true intentions regarding the disposition of their assets are known should they die unexpectedly. They may also be counseled to keep the process as transparent as possible so that all who are parties to their estates understand their wishes, which hopefully will minimize the chances of disputes arising. Yet no amount of planning may overcome any bitter feelings that may exist amongst potential beneficiaries. Estate disputes may often be emotionally charged, with all parties involved being convinced that their claims are valid.

Such cases can often result in legal proceedings. That is exactly what is happening with the estate of a former New York district attorney. The man succumbed to cancer late last year, Days before his death, he wrote a new will in which he left all his assets to his wife and children. This replaced an earlier will that he had written eight years earlier. His mother is now claiming that the man’s widow manipulated him in his final days to amend the will in order to completely exclude her from it. She is now seeking to have that earlier will turned over to her in an attempt to discredit the one he wrote before his death. The widow has countered by claiming that the man destroyed the earlier document, and that the amended will renders its contents moot, anyway.

What are Letters of Administration?

Being asked to serve as the personal representative for the estate of a loved one in Woodland Hills is a tremendous responsibility, which can even carry financial penalties if you are unable to fulfill the duties entrusted to you. In order to meet the obligations that come with the role, you have to prove to interested parties to the estate that you have the legal authority to manage its assets. Otherwise, they may refuse to disclose important information to you. Yet how can you prove that you have been granted this authority?  

According to information shared by the Superior Court of California for the County of Los Angeles, you can obtain Letters of Administration to help fulfill your duties as a personal representative. Letters of Administration are court documents signed by a judge confirming your appointment to administer the estate. These can be presented to banks and financial institutions, trustees, or even tax authorities.

A general overview of the probate process

Many in the San Fernando Valley may talk about the probate process as if it were some form of punishment that should be avoided at all costs. While there are certain advantages to not having an estate go to probate, the truth is that thousands of cases appear in probate court every year. Statistics shared by the Judicial Council of California show that in the 2013-14 fiscal year, 44,298 of such cases were heard in state courts. Understanding the probate process may have a significant impact on one’s estate planning.

According to the website for the California Courts, the probate process involves the appointment of either an administrator or an executor by the court to handle the affairs of an estate. An executor is appointed if the decedent had a will (in which the executor is often specifically named), while an administrator is assigned if a person died intestate (without a will). In either case, the person appointed has three primary responsibilities:

  •          Collect all of the assets that together comprise the estate.
  •          Use those assets to pay off any debts or claims against the estate.
  •          Distribute the remaining assets to estate beneficiaries who are either named in a will or designated as such by the state’s guidelines for intestate succession.

Identifying reimbursable expenses for a personal representative

Assuming the role of personal representative for the estate of a family member or friend in Woodland Hills means making a huge commitment of both your time and effort. If you are not familiar with estate or probate law, you may have to put in additional hours of research on top of the time spent actually performing your duties. Many come to us here at The Law Offices of Alice A. Salvo asking if they can be paid for agreeing to be a personal representative. The payment guidelines for your services as a personal representative have been detailed in the blog before. This post will address which of your expenses may be reimbursable.

On top of the all of the time you will invest in helping to administer your loved one’s estate, you will also likely have additional expenses associated with this role, such as clerical costs, postage fees, and possible even travel expenses. According to the probate guidelines for Los Angeles County, you cannot ask to be reimbursed from the estate’s assets for any following expenses:

  •          Photocopies and postage
  •          Secretarial services
  •          Local telephone charges
  •          Local travel costs (including mileage)

Detailing a trustee’s duty of accounting to beneficiaries

One of the main advantages that many often cite when extolling the benefits of trusts is the privacy that they afford. Woodland Hills residents can place estate property and assets in trusts without having them become a matter of public record. According to the American Bar Association, one can even protect the identities of his or her beneficiaries through a trust. All he or she must do is have their estates pass into trusts via their wills. Yet the privacy protections offered to a trust settlor and his or her beneficiaries may not necessarily extend to a trustee.

There is good reason for this, as the trustee has a duty of care that he or she owes to beneficiaries. Many may be under the assumption that such an accounting of trust matters is only required when it is specifically requested. However, according to the California Probate Code, trust updates must be provided to beneficiaries at least annually, as well as when a change of trustees occurs and when the trust terminates. A trust accounting should include the following information:

  •          All receipts and disbursements of principal and income.  
  •          All of the trust’s assets and liabilities.
  •          A record of the trustee’s compensation.
  •          The compensation of any agents hired by the trustee.
  •          Statements informing beneficiaries of their rights to petition the court for a review of the trustee’s actions or to make claims for breach of trust.

Detailing the duty to submit an estate inventory and appraisal

Those who come to us here at The Law Offices of Alice A. Salvo after having been named as the personal representative for the estate of a deceased acquaintance in Woodland Hills consider such an appointment to be quite an honor. However, if you have been asked to fill such a role, you should understand that there are a great number of responsibilities that come with it. If your experience in estate law is limited, then it may benefit you to research what your expected duties are immediately after learning of your appointment. This is because the law requires a certain immediate action of you: the submission of an inventory and appraisal of the estate’s assets.

According to the California Probate Code, your inventory and appraisal shall list all of the items included in an estate along with their current fair market value. Such an assessment should be done by a qualified appraiser. Often, the court can be resource in helping you find individuals or parties to perform this service. Your inventory and appraisal shall be submitted as one document to the court within four months after being informed of this responsibility. If you fail to meet this time frame, interested parties to the estate may petition that you be removed from your role as personal representative, and that you repay any fees associated with your inaction as well as their petition.

Do you want to risk a court-appointed conservatorship?

When an individual becomes unable to make necessary life decisions on his or her own, that person likely needs someone in a position to make those decisions for him or her. Of course, you would likely want to have someone you trust and who acts responsibly to have that power. However, unless you plan accordingly, a judge could appoint a conservator to act on your behalf.

Dispute arises between siblings over amendment to father’s estate

When preparing estate planning documents, it may be vital that Woodland Hills residents keep all of those that may be interested parties to their estates involved in the process. That may help to eliminate the chance for disputes between heirs and beneficiaries once those people are gone. Yet even with apparently open channels of communication, disagreements may arise if and when those impacted by amendments to documents such as wills or trusts are informed of those changes.

Such a change is at the center of a dispute between a brother and sister over their late father’s estate. The man, known for his philanthropic work throughout Missouri, passed away last summer. His daughter is now alleging that her brother influenced her father to name him as the sole beneficiary to his fortune. She claims that in 2014, her brother approached their father claiming that she was struggling with debt, and that any assets that were left to her would inevitably be seized by creditors. That assertion, she claims, was enough to prompt her father to amend a trust he had previously established that named the sister as well as her two half siblings as his beneficiaries. The woman claims that it was anger about not being named as a beneficiary in that original trust that prompted her brother to take this action.