Estate of Wilson: Does a Domestic Partnership Agreement Survive a Subsequent Marriage?

In Estate of Wilson, (Dec. 13, 2012, A133952) ___ Cal.App.4th ___ [2012 Cal.App. Lexis 1264], the Court of Appeal, First Appellate District, Division Two, issued a ruling in a dispute over the survivorship of a domestic partnership agreement after a subsequent marriage.

Decedent, Dr. Philip Timothy Wilson (“Wilson”), and Petitioner/Appellant, Antipas Johnlang Konou (“Konou”), signed a “Pre Registration Domestic Partnership Agreement” (“Agreement”) and then registered as domestic partners. Included in the Agreement were “waivers of any rights, claims or interest in the future property, income, or estate of the other, and [the agreement] required a signed writing to amend or terminate th[e] agreement.” Two years later, during the brief period allowing it in California, the couple married. Then Wilson died.

Konou filed an omitted spouse petition claiming an interest in Wilson’s estate. The trial court denied the claim finding that, although Konou was an omitted spouse, the Agreement remained valid after the marriage, and Konou waived any interest in Wilson’s estate.

Konou appealed arguing that there was no prenuptial agreement and that the marriage license constituted a writing terminating the Agreement.

The appellate court affirmed the trial court’s order.


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

Copyright © 2012 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\2012.12.27 Estate of Wilson.docx

Some Important Updates from the 2012 USC Trust & Estates Conference

1.    The California State Board of Equalization (“BOE”) must give information on real estate transfers to the IRS.

The BOE keeps records on transfers and the IRS was seeking the information on transfers from January 1, 2005 through December 31, 2010.

In 2011, the district court denied an ex parte petition by the IRS for transfer records. Now, in 2012, the district court granted the IRS’s motion for the documentation.

The effect on our clients: records on parent-child and other transfers will be available to the IRS. The IRS can then cross-reference whether or not gift tax returns were filed consistent with Primary Change of Ownership Reports.

2.     Retirement and IRA Beneficiaries.

In order to maximize the stretch-out of funds to be paid-out of an IRA, it is not enough to name a trust as beneficiary and the trust have beneficiaries. Each beneficiary will have to use the oldest beneficiary’s life expectancy for payout.

To maximize the stretch-out under the “separate account” “rule,” you must name each of the separate sub-trusts for the individual beneficiaries, as a beneficiary on the beneficiary designation form. IT IS NOT SUFFICIENT TO JUST NAME THE SINGLE TRUST ITSELF!

A named beneficiary must create a separate account by December 31st of the year of death of the IRA owner in order to use his or her life expectancy for mandatory distributions; if not, the individual beneficiary will have to use the life expectancy of the oldest beneficiary for required distributions.

3.      Who inherits your iTunes library? See Quentin Fottrell, Who Inherits Your iTunes Library? Why Your Digital Books and Music May Go to the Grave, Wall St. J. (Aug. 23, 2012). (Article | Video)

A person who had 10,000 hardcover books and the same number of vinyl records could bequeath them to another person, but passing on iTunes and Kindle libraries would be much more complicated.

4.     Research Tips: Google Scholar—www.scholar.google.com. Good for finding cases. Click on “Legal Documents” and search by party name and volume number or . . . . For cases related to particular statutes, try searching by something like “Probate 2013.” It will also find unpublished decisions citing the case or statute.

5.     California Probate Code section 15401 contains provisions for a settlor to revoke a trust.

A NEW SUBSECTION (effective January 1, 2013)- California Probate Code section 15401, subsection (b)(2), will provide that the settlor may grant to another person, including the settlor’s spouse, a power to revoke all or part of the trust contributed by the settlor whether separate or community property and regardless of whether the power is exercisable during the lifetime of the settlor, or continued after the death of the settlor.

The existing California Probate Code section 15410 contains provisions for disposition upon revocation. Effective January 1, 2013, subsection (a) has been amended as to revocation during life, and subsection (b) has been added to set forth distribution if revocation is after the settlor’s death.  

6.     California Probate Code section 2134 is amended (effective January 1, 2013) to apply to a trust to avoid ademption (extinction of a gift) when specifically bequeathed property is sold by a successor Trustee and the Settlor is incapacitated. The beneficiary will get a general pecuniary gift in an equal amount to the extent trust assets exist.

7.      There are gift and estate tax issues that occur January 1, 2013 due to language of the law that reinstates the pre-2001 law as if the 2001 Act “had never been enacted.” What does that mean? No one knows for certain.

Is there the potential “clawback” or “recapture” as estate tax of the gift tax avoided on large gifts in 2011 and 2012?

It will take an act of Congress or court decisions to clarify this. Most experts do not believe the “clawback” or “recapture” will occur, but what other effects are there of the language as if it “had never been enacted” might there be?

What if the beneficiaries of the lifetime gifts are different from the deathtime beneficiaries?  The additional tax from the lifetime gifts might be collected from the estate going to people who did not receive the lifetime gifts. To the extent that donees of lifetime gifts are also beneficiaries of deathtime bequests, a trust provision that requires that taxes related to the “clawback” or “recapture” are to be paid from the distributable share of these individuals might be appropriate.

What will be the effect on 26 U.S.C. § 6166 installment payment agreements? If payments are still due, will the balance now be due immediately?

8.     Healthcare Directives, regardless of the format you use, should be made effective immediately so that the named agent can have access, under the HIPAA provisions, to records determining incapacity. Otherwise you might face the nightmare of attempting to prove incapacity without access to medical records.

A doctor may refuse to give you a letter declaring incapacity.

9.     Unless an order appointing a conservator SPECIFICALLY suspends or revokes a Power of Attorney for Finances or Assets or a Durable Power of Attorney for Healthcare (which  means the petition must contain a request to do this AND, probably, the agent must be given notice of the hearing) those documents remain in effect!

These are some things for you to consider for January 1, 2013.


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

Copyright © 2012 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\2012.12.18 USC Trust and Estate Conference Important Updates.docx

California Probate Court Consolidation Update & California Elder Abuse Issues: Temporary Restraining Orders

The Estate Planning, Trust, and Probate Law Section of the Long Beach Bar Association met on December 6, 2012. 

Judge Paul opened the meeting by indicating that it was not possible to address all of the issues raised by the possible consolidation of Probate cases to downtown Los Angeles.  This is a long process that is still under consideration.  January and February 2013, at least, we expect to continue in the district courts and likely through June.  A large number of issues need to be dealt with to determine if the proposal to consolidate is the best answer to the financial issues of the court or if there is a better way.  If there is another way, or if some of the issues to be resolved are insurmountable, is there an alternative?  Are there issues which have not even been considered? (Click here for the latest update on the California Probate Court Consolidation as of March 21, 2013)

Next, our speaker, Keith Wisbaum of Robinson and Wisbaum, one of the leading attorneys in the Elder Law area, spoke to us on elder law issues and temporary restraining orders (“TROs”).

He says that water is hot at 211 degrees, but at just one degree higher, it boils.  It is the same with elders.  There are a lot of issues surrounding elders and not all take court action to resolve, although some do.  The Elder Abuse Restraining Order is a fast and unique remedy.

The TRO can be used to stop abuse, to restore relationships that have been splintered over perhaps many years, provide medical interventions, move puzzle pieces around, and allow strategic intervention.

California Welfare and Institutions Code section 15610.07 defines what “[a]buse of an elder or a dependent adult” means, and it allows a huge number of people to file for a TRO.  The forms are the easiest part of the process.

Before you even start with a family, get behind the scene–Is the situation fixable?  Many things fly right under the radar.  Dad died.  Mom has limitations and the deadbeat son has nothing to lose in getting mom to sign for a loan and running off with the cash.  There is a lot of dirty stuff going on.

A TRO is just a piece o f paper.  Make sure you are not making a bad situation worse.  Quietly piece the information together.  How is the senior being hurt?  Segregated, denied medical care?

In many situations, the parent is no longer able to parent the way they used to, but they are still Mom or Dad.

Follow the money.  Is there a lot of “fraudulent emotion” going on?  Is someone being nice only to get to the money?  The abused person often will not be complaining. The senior may even be comfortable and think the bad situation is better than the alternative.  What is really in the best interest of the senior?  What does the senior want?  What does your gut tell you?  What can you solve by being creative?

The TRO is good for up to 21 days and the permanent restraining order is good for up to 5 years.  If you pursue a restraining order, can you couple it with agreements for visitation?  Can you get the abuser to cooperate?  Can relationships be restored to help through more than the immediate problem?  Can we avoid embarrassment to the senior and the abuser who may already be pretty well down in life?

Be honest with your client.  These are risky and unpredictable and will have a long-term effect.  These people may not realize that this type of situation has the ability to explode like a hand grenade.

The client who is the good guy may lose-out in the long run.  No good deed goes unpunished.  The senior may end-up hating the honest child, even if that child “wins.”  If the client does not understand your position and is not on board with all of this, no check they might pay you is big enough. 

You need names of family, neighbors, friends and care providers to gain insight into the situation and formulate possible creative solutions.

There are conditions under which you can get TROs without notice.  These require preliminary showings of harm to the senior.  Is the abuser in the house?  Is the abuser the one that provides the meals, care, medication?  Who is going to take care of those things if the abuser is tossed-out?

Sometimes a cover letter can be served along with the TRO explaining to the abuser that you would like them to call you and discuss the problem and what can be worked-out without court, lawyers, or disruption.  If they do not reply, you can call them yourself.  Let them know the issues that are of concern, and that they can get a lawyer or try to work through some solutions.

All of this is post-TRO, but before any further court hearings in an attempt to get some solutions before being back in court.  Sometimes TROs are extended and permanent hearings are postponed if agreements are being worked-on.

Courts love agreements.  TROs can be extended over and over (he has had one extended over a year in total, 21 days at a time, 3 court appearances) while things with the abuser are addressed and improved, and agreements were reached.


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

Copyright © 2012 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\2012.12.06_Wisbaum_Elderlaw_TROs.docx