Hi, my name is John T. Anderson. Welcome to my blog! I have been practicing law in California since 1975 and have been the Chairman of the Estate Planning and Probate Section of the Long Beach Bar Association since the mid-1980s. I'm also certified by the State Bar of California Board of Legal Specialization as a specialist in Estate Planning, Trust and Probate Law. On this blog, you will find articles written by me regarding estate planning and probate in California. Many of these articles address recent changes in the law and summaries of the Long Beach Bar Association’s Estate Planning and Probate Section meetings. I hope that you find these articles helpful. If you would like more information about me or my law office, please visit my website at or contact my office at 562.424.8619.

Thursday, June 21, 2012

The Standard of Capacity to Amend a Trust

The Orange County Bar Association Trust & Estate Section met on June 13, 2012.  The discussion was about Anderson v. Hunt (2011) 196 Cal.App.4th 722, on the issue of the Standard of Capacity to amend a trust.  Is the Amendment complex or in the nature of a Will?  What is the standard for capacity to amend a trust?  A will?

The speaker, John Belcher, Esq., represented the Petitioner in Anderson v. Hunt.  He is a Plaintiff’s attorney and not a Probate attorney.  There was an A/B Trust.  Mom died, Dad lived.  They are into the case $80,000 in costs (which the court has, thus far, refused to approve payment on as the case continues on appeal) and, I believe he said, up to$500,000 in fees thus far.  Joint tenancies by Dad with Defendant, who he referred to as the “abuser,” were set aside for lack of Dad’s capacity.  The living trust was considered complex; but, five amendments were considered simple/will substitutes, benefitted Defendant Abuser, and were upheld on appeal.

The Appellate Courts said that the standard for simple amendments will be the standard for a Will; so, the “Elder Abuser,” Defendant, won.  Forty-one court appearances or hearings were made.  Jury trial was waived.

The Defendant may end up with $1.7 million if the case stands, as some assets roll over into the Trust.

Dad was presumed to have capacity.  Defendant was on the DPAHC and had all the medical records.  Sixty-one subpoenas later, they were getting records they needed on capacity.  Dad had thirty bottles of vodka in the trunk of his car.  He was drinking a bottle per day.

When son took Dad out, Defendant was constantly concerned Dad was changing his estate plan.  So, Defendant took him to an attorney where he said, “I don’t know if I signed estate documents, but if I did, I want things back as they were to Pauline Hunt.”

Dad hadn’t filed tax returns in eight years.  When he got out of a care facility, Defendant took him to banks to change accounts to Joint Tenancy with her. $600,000 was transferred.  One account they tracked down was an inheritance Dad received from an aunt that defendant put directly in an account in her name.

Attorney Belcher said that the trial court found that Dad did not have capacity to change benefits to Defendant Hunt; and, even if he did, there was undue influence.

There is no case law defining complex vs. simple Trust amendments.  The Appellate Court called the Amendments simple, more in the nature of a Will!  There are protections with execution of Wills that don’t exist for Trusts, and thus capacity requirements are different.

The Appellate Court applied P.C. §6100.5, the capacity for a Will, to the Trust Amendments.  Mr. Anderson actually restated the Trust and changed the Trustees.  Anderson ignored the A/B issues and treated the trust as a standard trust.

Attorney Belcher says, neither side raised or briefed the issue of the Trust amendments being “complex” or “simple” and different rules applying.  The Appellate Court raised this issue on its own and did not permit new briefs on that issue.

How does this affect us?  Is capacity there if you can show a person understands a part of the document?  A Trust is a contract and it is evaluated as such.  You must understand the terms and various types of contracts may be treated differently.  

What is going to happen is:

(a)    How do you decide in your office if the client has the capacity to do what he says he desires?

(b)    How much litigation is there going to be over this issue as         Trusts are amended and the client has the lesser capacity for a Will–was the change simple, so it works; or complex, and the amendment fails?

Where are the guidelines?  Would you be better with the protections or a Will, with witnesses?

JUST A NOTE: We now have authorization to give specialization credit, as well as the usual MCLE credit, for meetings of the Estate Planning, Trust, and Probate Law Section of the Long Beach Bar Association.

                John T. Anderson, Section Chair
                Certified Specialist in Probate, Trust and Estate Planning
                By the California State Bar Board of Legal Specialization

Copyright © 2012 by John T. Anderson
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