Probate Court Updates

Probate, Trust and Estate Planning Tidbits.               
by John T. Anderson, Chairman
Certified Specialist in Estate Planning, Trust
and Probate Law by the State Bar of California,
Board of Legal Specialization

Probate Court Updates

The Estate Planning, Trust and Probate Section of the Long Beach Bar Association met on October 21, 2010.  Our speaker was Honorable Judge Beckloff, Supervising Probate Judge for Los Angeles County.  He spoke on the following issues:


Difficult time.  Hard hiring freeze.  Two Probate Attorneys were lost.  Mary Hom, Supervising Probate Examiner, retired after 40 years and he position was lost.


There is little or no coverage for sickness or vacation.  Sixty percent of Los Angeles County’s Probate related matters are heard in Central (LA).  Last year there were 12 furlough days.  This caused the calendars to get pushed-off later. 


There still is no current court budget, but enough has been put together that the court has plans.  The hope is that a budget has prevented the loss of 500 people. 


Calendars get compressed and the court does not get to spend much time on any matters.  The aging population leads to greater numbers of conservatorships.  Decedent’s estates are down, but trust litigation is up.  More and more trust filings are taking place.


Trials: In Central, the Probate Court tries its own trials. In the past three years, only one matter was sent to a Civil Courtroom for trial.  One conservatorship matter with a demand for jury was also sent to civil (where there is a jury box).  Civil Courts are pleased not to hear Probate Court matters.  Most parties are also pleased to have a Probate Judicial Officer ruling.


In Long Beach, Judge Paul does much the same thing by just sending the trials to his San Pedro courtroom.


With finances as they are, this is probably how it is going to be.  We will not get to hire additional Probate Attorneys.


Efficient Use of Time: Judge Beckloff encouraged the use of Court Call to save time sitting in te backed-up courtroom waiting for your case.  But, also realize that in some situations a personal appearance might help get your matter approved because the judge gets to see who you are.  Remember etiquette when using Court Call.  A toilet flushing over the phone is not appropriate.


Meet and Confer.  Even where you do not reach agreement, narrow the issues and be aware of the position of the other party.


The judges really would like to dispose of your case.  The dislike having to continue matters.


Keep the opposition and court informed if you are going to be delayed or be on second call.


Judge Beckloff has put out the word that in-person clearing of notes is going to decrease.  More and more will be done over the computer.  The manpower does not exist.


You cannot walk-in with your supplements the day of a hearing.  They really want to clear matter and dispose of your matters.  It may get reviewed if it is short to clear shore notes; but a more elaborate matter cannot be cleared in that manner.


Attorney’s Fees: Cal Rules of Court §7.702 Estates: Sets forth what “shall” be set forth for fee requests; §7.776 Trustees Fees: The court “may” consider certain matters that are set out.


The required declaration helps you get your fees and saves the judge looking over the required timesheet hour-by-hour.


Status Reports: Return dates are now set.  This helps avoid ten year accountings, because people are kept on calendar deadlines to be accountable.  Have P.C. §12201 legend regarding right to account on papers.


Final Accounts: Give the P.C. §9202 required Notices to DHS, FTB, and Victim’s Compensation Fund.  They have 120 days to respond. If you neglected to give proper notice, your matter will be continued to give them time to act. 


If you are going to trial, prepare.  Have adequate copies of exhibits for everyone.


Bond: More situations are coming-up where parties are unable to qualify for bond.  Think of alternatives so you do not waste time.  Try to pre-qualify your client.  Think, will a blocked account really work if you have to go back to get funds released?  Will this even qualify for extraordinary compensation? or should you have anticipated this?


Miscellaneous: If a supplement changes the relief sought (really an Amended Petition), new notices should be given.  Judge Beckloff says he won’t go for this if it involves drastic changes; he wants a new petition or amended filing rather than numerous supplements.


Filing motions in place of petitions to avoid fees will not work.  The filing will be wrong and it won’t be reviewed.  Pay your fees.


As matters get pushed-out further for setting, more people file ex-partes.  You must show and urgency for an ex-parte.


A request for priority at a hearing will be considered by the court.  Make certain it is a matter that should be considered for priority, sit close to the front, and be ready to proceed.


We have worked with Judge Beckloff for an extended period of time to arrange for him to come to Long Beach to speak to us.  It was a great effort by him to work this out, and it was a very educational and rewarding meeting for all of us.  Judge Beckloff has done a tremendous job in his efforts to make the Probate Courts function well for all of us in very trying times.  We thank you Judge Beckloff, and thanks also to Judge Paul for his assistance in arranging for Judge Beckloff to meet with us.
  
               
Mark your calendar for the upcoming Long Beach Trust, Estate Planning and Probate Brown Bag Luncheon:


Thursday, April 28, 2011, Michael Trainotti, Esq., will be sharing his thoughts on Estate Tax and Related Tax Law Changes for 2011-2012 (and 2010?)  In addition, Judge Paul will give special recognition to those who have so faithfully given of their time and expertise to volunteer for the Pro Per Guardianship Panel.


We meet at the Long Beach Superior Court in Dept. G (on the 5th floor).  There is no charge for the meeting.

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

Copyright © 2011 by John T. Anderson

All articles by John T. Anderson may be copied for personal use, only. All articles or outlines from others may be used only with their personal authorization. Any approval is for personal use, only, and for non-commercial purposes.

File Location: C:\Users\John's LT\Documents\Work\Website\Articles for Website\Word Version of Articles From Lisa\2011.03.09  Beckloff.docx

The Deficit Reduction Act and Surrogates for Healthcare Decisions

Probate, Trust and Estate Planning Tidbits.
by John T. Anderson, Chairman
Certified Specialist in Estate Planning, Trust
and Probate Law by the State Bar of California,
Board of Legal Specialization

The Deficit Reduction Act

and Surrogates for Healthcare Decisions

CANHR (California Advocates for Nursing Home Reform) is one of the leaders in advocacy and educational resources related to elderlaw in California.  The National Association of Elderlaw Attorneys (NAELA; and in California, the Southern California Chapter) is another.  CANHR held their convention in Monterey in November.  A key discussion involved the status of adoption of DRA (Deficit Reductions Act of 2004-signed into effect February 2005) in California.  The consensus is that California is 12-18 months away from putting Regs into effect to adopt DRA here in California AND that it likely will not be retroactive.


California has always been slow adopting Federal Law and strings which attach to the Federal Medicaid (in California, Medi-Cal) moneys.  In 1988 we had MCCA.  It was amended in 1989 but the form of the law adopted in California did not include the 1989 amendments.  In 1993 OBRA went into effect, but not in California.  Every year I advised clients trying to plan of the OBRA rules coming into effect soon.  Seventeen years later, most of OBRA is not part of the law in California.  In 1993 I began advising clients that the “look back” period would be expanding from 30 to 36 months and the gifting of funds in a fractionalized manner to minimize any period of disqualification would be eliminated.  THAT IS STILL NOT THE LAW IN CALIFORNIA 17 YEARS LATER.


Now we have the DRA, but 5-6 years later it is still not the law here; but it is closing in on us.


An issue that was mentioned in the CANHR newsletter, the CANHR Advocate, Summer 2010 issue, dealt with the authority to make healthcare decisions when there is no written Healthcare Directive.  The Advocate article took the position that family members have the right, absent a written directive, to act as the surrogate or agent for a person who is unable to advocate for himself and has not indicated a contrary intent.


Legislative efforts to clarify the issue were not passed, so the author relies on Cobbs v. Grant (1972) 8 Cal.3d 229, and Barber v. Superior Court (1983) 147 Cal.App.3d 1006.


I questioned the author’s conclusion and reviewed these two cases.  Regardless of your conclusion, after reading these cases (and I now believe the author may be correct) recognize that you will not likely be able to convince medical staff who, either is working with the family (written directive or not) or with the Healthcare Agent (with Directive), or not, citing these cases will probably not alter the situation, except in court.


The Cobbs case involved a medical malpractice lawsuit.  The jury found the Doctors committed malpractice and the Supreme Court reversed the decision and analyzed “the doctor’s duty to obtain the patient’s informed consent.”  Plaintiff, the patient, had surgery, recovered and was sent home.  With additional pain and internal bleeding, he returned to the hospital and underwent additional surgery.  This occurred two more times before the patient properly recovered and sued for malpractice.  A great deal of the discussion by the court dealt with conclusions the jury could come to as a result of common lay knowledge and what required expert opinion.
The important issue to us, which arguably is dicta in this case, but is 5½ pages of Supreme Court dicta, dealt with informed consent.  The doctor getting the patient’s consent to one surgery or treatment and the doctor performing yet another treatment without consent and, under the circumstances was that a battery?  It was another treatment, but also was “a known risk.”  There was a split of opinion, but with the trend toward finding negligence.


The court reviewed numerous cases requiring consent to treatment by the person “most directly affected”, the patient.


Turn now to the Barber case, which involved cessation of treatment for a patient who, though not brain dead, was in a vegetative state.  Th patient had listed his sister-in-law on a hospital form, but in what capacity was not clear.  He had a wife and children, who directed that Doctors take no further action to try and treat the patient.  There was no written Directive naming an Agent or Surrogate.


The Appellate Court remanded for the Superior Court to reverse its order re-instating charges against Doctors for their failure to continue treatment of Patient which resulted in a hastening of Patient’s death.


The court said “Patient” interests and desires are the key.  “When the patient, however, is incapable of deciding for himself . . . there is no clear authority on the issue of who and under what procedure is to make the final decision.”  The People argued that only a “duly appointed legal guardian” has authority.  The court said that “whether such proceedings are to be required in the future is again a question for the Legislature to decide.”


Here, the court found the wife was the proper surrogate and that absent “legislative guidance, we find no legal requirement that judicial approval is necessary before any decision to withdraw treatment can be made.”


That’s it in a nutshell.


Mark your calendar for the upcoming Long Beach Trust, Estate Planning and Probate Brown Bag Luncheon:


Thursday, April 28, 2011, Michael Trainotti, Esq., will be sharing his thoughts on Estate Tax and Related Tax Law Changes for 2011-2012 (and 2010?)  In addition, Judge Paul will give special recognition to those who have so faithfully given of their time and expertise to volunteer for the Pro Per Guardianship Panel.


We meet at the Long Beach Superior Court in Dept. G (on the 5th floor).  There is no charge for the meeting.

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

Copyright © 2011 by John T. Anderson

All articles by John T. Anderson may be copied for personal use, only. All articles or outlines from others may be used only with their personal authorization. Any approval is for personal use, only, and for non-commercial purposes.

File Location: C:\Users\John's LT\Documents\Work\Website\Articles for Website\Word Version of Articles From Lisa\2011.03.04  DRA and Surrogates for Healthcare Decisions.docx

More on the Portability of Estate Tax Exemption

Probate, Trust and Estate Planning Tidbits.
by John T. Anderson, Chairman
Certified Specialist in Estate Planning, Trust
and Probate Law by the State Bar of California,
Board of Legal Specialization 

More on the Portability of Estate Tax Exemption

The Tax Relief (etc.) Act of 2010 was signed into law by the President on December 17, 2010.  At long, long last we had some indication of what will happen with the Unified Credit/Estate Tax Exemption.  The issue is, does it help with Estate Planning???

Several Billionaires died in 2010 with zero Estate Tax but only a minuscule adjustment to income tax basis.  But we now know that, at least those with estates of $5 million or less, there is no estate tax in 2011 and 2012 and that above $5 million the top tax rate is 35%.  But we got nothing to allow us to do long-term estate planning.  Unless your clients say with certainty that they will die during 2011-2012, you live and plan with the same uncertainty you had prior to December 17, 2010; because for now, on January 1, 2013, we go back to the $1 million exemption and 55% top tax bracket. 

Note that the Gift Tax Exemption and Generation Skipping Exemption has also been adjusted for 2011/2012 to $5 million and 35% tax rate above $5 million.  This provides for possibly huge multi-generational planning possibilities.

In addition to the two years of adjusted exemption, we have the concept of “Portability of the Exemption from Estate Tax.”  For those two years, only, for spouses, if one spouse dies without using his/her total exemption, the amount of the exemption not used passes to the surviving spouse.  So, if husband dies in 2011/12 and leaves everything to wife, no part of his exemption is used due to the Marital Deduction.  His remaining exemption ($5 million) passes to wife.  If wife dies during that period (2011-12), she would have her $5 million AND his $5 million, and her estate includes all of the assets.  This is not necessarily as advantageous as the A/B or A/B/C/ Trust however if property appreciates in value, since assets going into the exempt or by-pass trust would be exempt including appreciation at surviving spouses’s death.  So, plan with care.  In addition, no one know what happens with “portability” come January 1, 2013.
 
Mark your calendar for the upcoming Long Beach Trust, Estate Planning and Probate Brown Bag Luncheon:

Thursday, April 28, 2011, Michael Trainotti, Esq., will be sharing his thoughts on Estate Tax and Related Tax Law Changes for 2011-2012 (and 2010?)  In addition, Judge Paul will give special recognition to those who have so faithfully given of their time and expertise to volunteer for the Pro Per Guardianship Panel.

We meet at the Long Beach Superior Court in Dept. G (on the 5th floor).  There is no charge for the meeting.

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

Copyright © 2011 by John T. Anderson
All articles by John T. Anderson may be copied for personal use, only. All articles or outlines from others may be used only with their personal authorization. Any approval is for personal use, only, and for non-commercial purposes.
File Location: C:\Users\John's LT\Documents\Work\Website\Articles for Website\Word Version of Articles From Lisa\2011.03.04  Portability of Estate Tax Exemption.docx


 

Privity and Duty to Beneficiaries

Probate, Trust and Estate Planning Tidbits.
by John T. Anderson, Chairman
Certified Specialist in Estate Planning, Trust
and Probate Law by the State Bar of California,
Board of Legal Specialization

Privity and Duty to Beneficiaries

A December 8, 2010 decision out of Los Angeles in Hall v. Kalfayan 12/08/2010, B220320 involved the liability of the estate planner to a potential beneficiary of an estate plan which is prepared by the lawyer, but unsigned by the testator prior to her death.


Cutting to the quick, the court held that “in this case” that “a prospective beneficiary of a will cannot maintain a cause of action for legal malpractice against the attorney who drafted the will but did not have it executed before the death of the testator.”  I, for one, oppose even the thought that it was the drafter’s duty, in the slightest, to “have it executed,” which sounds like there might be any kind of responsibility on the drafter as opposed to the testator to get their estate plan executed. 


But, here are the facts:


Appellant, Hall, knew Turner for about thirty years. Appellant concluded Turner needed a Conservator, and petitioned to be co-Conservator with a professional as to the Person and sole Conservator as to the estate.  Turner allegedly had memory and hygiene problems.  A PVP Attorney was appointed.  THIS CASE IS WORTH READING just to realize that the matters set forth in the PVP Report, if they ever did belong, do not belong in a PVP Report.  As a PVP, you represent the proposed conservatee.  Your report should not be a source of information detrimental to the proposed conservatee.


During part of the PVP’s interview, Turner acknowledged a deceased sibling, a niece, and adopted siblihgs, none of which she was close to.


The conservatorship was granted.  The PVP Attorney was discharged, but the order provided that the PVP was to be informed prior to any move to a secure a facility.


Two years later, counsel for Conservator notified the former PVP Attorney of the desire of the Conservatee to do estate planning.  The former PVP Attorney met with Conservatee, who told him everything should go to Hall (the Conservator and Appellant) and nothing to her niece or others. Hall would get her condo and know what to do with everything else.  The former PVP Attorney prepared a draft and attempted to meet with Conservatee, without success.  Then, there were two meetings of little substance, because she was not interested.  Later they met and Conservatee indicated a desire to leave over ½ to Hall and less than ½ to her niece.  A draft Trust was prepared with 55% to Hall and 45% to niece.  It was submitted to Conservator’s attorney, who commented that a Will would be easier on Substituted Judgment than a trust.  A new Will was prepared with 51% to Hall and he, as PVP, was to file for Substituted Judgment.  He was reappointed as PVP and filed the Will to be approved as Substituted Judgment.  Supplements were filed and the niece filed objections.  The niece informed the PVP of her aunt’s prior estate attorneys and he obtained a copy of Wills and a Trust prepared and executed by Conservatee.


The PVP filed the prior documents to show prior intent to benefit the niece and other relatives, some of whom were not deceased, and with no mention of Hall.  Also indicated was the need to give notice to others.  The matter was continued.


Conservatee died without executing a new estate plan.  Hall filed suit for legal malpractice, alleging the PVP failed to timely perform his duties, which deprived Hall of the majority of decedent’s estate. 


The Trial Court granted the estate plannner’s motion for summary judgment.  The estate planner owed no duty to Hall, who was not his client and not a beneficiary of an executed estate plan.


The appellate court agreed that the estate planner owed no duty to Hall.  In Chang v. Lederman (2009) 172 Cal.App.4th 67, the court threw-out a strict test of privity, finding that the preparer of a document which was signed but improperly witnessed liable to a named beneficiary in the document. 


In Lucas v. Hamm (1961) 56 Cal.2d 583 the court found an estate planner preparing a Will liable when the negligently drafted document violated the Rule Against Perpetuities, causing a loss to named beneficiaries.  The court did add that some situations could create liability in such a large and unpredictable amount that would create an undue burden on the profession.


Heyer v. Flaig (1969) 70 Cal.2d 223, overruled on other grounds in Laird v. Blacker (1992) 2 Cal.4th 606 involved the preparation of estate planning documents for a single person, leaving the estate to the person’s children, with knowledge of a pending re-marriage but no consideration of the new spouse in the new estate plan.  The court found a duty, not just to the Testator, but also to the beneficiaries.


What the courts have not done, as recognized in Radovich v. Locke-Paddon (1995) 35 Cal.App.4th 946, is find a duty where the testamentary plan has not been found.  The court here distinguished Biakanja, Lucas, and Heyer where the testator had gone so far as to execute the plans.  “There must be the clearest manifestations of commitment the circumstances will permit.”


The same court from Radovich, which did not find a clear commitment to the plan by Testator in an unsigned estate plan, was able to find that commitment in Osornio v. Weingarten (2004) 124 Cal.App.4th 304, where the executed plan left the estate to a caregiver and the estate planner neglected to advise the testator to seek independent review.  Thus, the planner had privity with the intended beneficiary of the executed estate plan.


In this case, the estate planner’s duty was to the Conservatorship.  In the absence of an executed estate plan, Hall was only a “potential beneficiary.”  There was no duty to Hall.  The evidence did not show that Conservatee expressed a desire to have a new Will, and she only had limited conversations about disposition.  Also, there was no certainty that the court would have approved the plan.  Expanding the planner’s duty to potential beneficiaries would include the niece.  This is just “the type of unreasonable burden on an attorney that militates against expanding duty to potential beneficiaries.”


Mark your calendar for the upcoming Long Beach Trust, Estate Planning and Probate Brown Bag Luncheon:


Thursday, April 28, 2011, Michael Trainotti, Esq., will be sharing his thoughts on Estate Tax and Related Tax Law Changes for 2011-2012 (and 2010?)  In addition, Judge Paul will give special recognition to those who have so faithfully given of their time and expertise to volunteer for the Pro Per Guardianship Panel.


We meet at the Long Beach Superior Court in Dept. G (on the 5th floor).  There is no charge for the meeting.

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

Copyright © 2011 by John T. Anderson

All articles by John T. Anderson may be copied for personal use, only. All articles or outlines from others may be used only with their personal authorization. Any approval is for personal use, only, and for non-commercial purposes.

File Location: C:\Users\John's LT\Documents\Work\Website\Articles for Website\Word Version of Articles From Lisa\2011.03.04  Privity and Duty to Beneficiaries.docx