One of the biggest misconceptions in California trust litigation concerns the effectiveness of no contest clauses. This article explains no contest clauses and their limited effectiveness in California trust and estate litigation. _________________ A “no contest clause,” according to California Probate Code section 21310(c), is “a provision in an otherwise valid instrument that, if enforced, would…
The Wall Street Journal recently reported that the use of margin debt has increased substantially with the recent run-up of the equity markets following the Trump presidential election. Traditionally, margin refers to borrowing money from a broker to purchase stock or other securities. More broadly, it is a reference to any borrowing associated with securities…
The ominous opening sentences of the court’s opinion in Butler v. LeBouef (2016 Cal. App. LEXIS 480) foreshadow a case study in how an unscrupulous estate planning attorney can influence and manipulate an elderly and infirm client. “An ethical estate planning attorney will plan for his client, not for himself. A license to practice law…
As trust and estate litigation attorneys, we have been involved in many will and trust contests in which parents have disinherited one or more of their children. As estate planners, our experience is that children are usually disinherited because they are estranged or have a persistent drug or alcohol problem. In these circumstances, the disinheritance…
Every year, FINRA publishes its Annual Regulatory and Examination Priorities Letter to help its members understand where FINRA intends to focus its reviews during the coming year. The letter is a must-read for FINRA members, compliance personal, supervisors, and those who provide advice about regulatory exams and related litigation. Among the issues discussed in the…
The start of a new year is a good time to consider upcoming changes in the tax laws that may affect your estate planning in 2017. The federal estate tax exemption is increasing slightly in 2017. Estates of individual decedents who pass away in 2017 will be exempt from federal estate taxes up to $5,490,000,…
On October 23, 2016, CBS’s 60 Minutes ran an informative piece on investment fraud suffered by current and former NFL players at the hands of a financial advisor. According to 60 Minutes, the players invested a total of $51 million in a gambling development in Alabama called Country Crossing. Country Crossing was designed to lure…
Families with college bound children face the hurdle of paying for tuition, books, room and board, and other expenses. While there are many savings options, one of the most popular is the “529 plan.” This article discusses 529 plans and how they can help with estate planning and saving for college. A 529 plan is…
The Financial Industry Regulatory Agency (FINRA) has recently submitted to the U.S. Securities Exchange Commission a rule change proposal designed to provide more protection for elderly investors. As recently reported by the Investment News, the new rules modify FINRA’s rules that require its members to maintain the confidentiality of their customer’s financial information. According to FINRA, the new rules are…
The Financial Industry Regulatory Authority (FINRA) oversees broker-dealers and their licensed registered representatives. FINRA rules surrounding U-4 and U-5 filings require FINRA members to report customer complaints, regulatory investigations and, under some circumstances, conduct outside of the workplace. FINRA mandated reporting provides important information primarily to three constituencies: (1) investors who seek information about their investment advisors; (2) prospective employers…
Many California living trusts contain a “spendthrift clause”— a clause designed to protect trust assets from claims made by a beneficiary’s creditors. Spendthrift provisions commonly include a “shutdown clause,” which stops payments to a beneficiary during any time that the trust could be subject to creditors’ claims. A recent decision held that under California Probate…
This article discusses three ways to attack the report of an Evidence Code §730 expert when the expert’s report goes beyond the scope of the expert’s §730 appointment. California probate court judges frequently appoint “730 experts” in conservatorship and trust proceedings. A 730 expert is an expert appointed by the court under California Evidence Code…
In early June, we published an article outlining the legal case of Mr. Redstone, age 93, who owns about 80 percent of CBS and Viacom—reportedly a $40 billion media empire. In that article, we described how mental capacity claims can be a double-edged sword, with contradicting claims being made by his business partner, Mr. Dauman,…
In plain language, ademption is what occurs in the situation described in the title of this article: A will leaves a particular piece of real or personal property (e.g., a house, car, dog, watch) to a specific individual, but the item is not in the decedent’s estate at his death. (Perhaps the decedent crashed the…
At the conclusion of a trust administration, trustees sometimes ask beneficiaries to acknowledge receipt of their final distribution and release the trustee of liability. While seeking a release is permitted under California Probate Code Section 16004.5, the release must be given voluntarily by the beneficiary. This article discusses Section 16004.5 in the context of Bellows…
In a trust administration, a “reserve” is money the trustee retains for a period of time after the trustee believes the trust administration is complete. The key here is the world believes, because sometimes, when it seems all the work is done—property sold, tax returns filed, taxes paid, creditors’ claims extinguished, and beneficiaries’ gifts distributed—things…
A general conservatorship usually continues until the conserved person (called the “conservatee”) dies. Courts and conservatorship attorneys avoid the term “permanent conservatorship” because it suggests that the conservatee will never regain their independence. However, in most cases—particularly those involving elderly conservatees—that’s exactly what happens. The article addresses the termination of conservatorships upon the death of…
Almost half of all Americans under the age of 30 do not save for retirement. Further, there appears to be a disparity between what many millennials believe to be good financial planning, and what they practice. According to a Wells Fargo Millennial Study conducted early in 2016: 85% of millennials say that saving for…
