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Elder Abuse: Protect Your Loved Ones From Financial Exploitation

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Financial exploitation of the elderly is a growing – and mostly silent – epidemic in our country. In fact, one study estimates the amount lost by exploited seniors to be nearly $5 billion every year. One prime example occurred in 2007, when renowned New York society queen and philanthropist Brooke Astor left behind a coveted estate of nearly $200 million dollars. Though her will appeared to be adequately in place, the three codicils that followed turned out to be anything but.

Under Astor’s will, her only son, Marshall, stood to take tens of millions of dollars – with the condition that remaining funds after his death be given to charity. Marshall, however, had other plans, and the country watched as the truth behind Ms. Astor’s will began to unravel: Marshall, along with his lawyer, had convinced the elderly Astor – while she was suffering from dementia – to sign a series of codicils allowing him to leave much of her fortune to whomever he wanted. Rumor has it that Marshall wanted to share his mother’s fortune with his much-younger wife – whom Astor reportedly detested.

Fast forward to 2009 after 6 months of trial and many millions of dollars later, Marshall (then 85-years-old) and his attorney were convicted of 14 counts out of 16 for financially exploiting Astor. But after 8 weeks in jail, Marshall was out – the parole board found his age, ailing health, and hundreds of support letters from some of New York’s most influential people compelling and released him. With these turn of events, Marshall’s financial exploitation of his mother (to the tune of tens of millions of dollars) essentially went unpunished.

The highly-publicized financial exploitation of Ms. Astor is only one of the millions of cases of financial elder abuse that goes on quietly behind closed doors each year. When a family member manipulates a person with dementia, it is undue influence. California Civil Code § 1575 explains that undue influence comprises of:

  • The use, by one in whom a confidence is reposed by another, or who holds a real or apparent authority over him, of such confidence or authority for the purpose of obtaining an unfair advantage over him;
  • The taking of an unfair advantage of another’s weakness of mind; or
  • The taking of a grossly oppressive and unfair advantage of another’s necessities or distress.

Financial abuse of an elder or dependent adult can occur through various ways – undue influence is only one of them.* Sadly, many greedy individuals will find their elderly family members to be easy targets for financial gain, particularly when the elderly individual’s mind is stricken with a degenerative disease like Alzheimer’s or dementia. The undercover coercion and undue influence to change an estate plan can be hard to notice because these manipulative acts are generally covert and completed with no witnesses around. Even if the coercion is discovered in time, proving it in court can often be an uphill battle.

If you or your loved ones are in the planning stages of creating an estate plan, take the necessary steps to ensure that you and your family members are protected by having an experienced, knowledgeable estate planning attorney guide you through the process. If you suspect undue influence, consult an experienced estate planning attorney for an objective assessment to ensure the decedent’s assets are distributed as they intended. Estate planning laws are constantly evolving and having a trusted estate planning attorney by your side can prove to be invaluable. The attorneys at Lonich Patton Erlich Policastri have decades of experience handling complex estate planning matters, including wills and living trusts, and we are happy to offer you a free consultation.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

* California Welfare and Institutions Code §15610.30(a).

What is Probate and Why Should I Avoid It?

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Probate is a court process that is known for being time-consuming and expensive. It is also a public process that makes personal information about your assets and debts part of the public record. If you die without a will, the probate process can be a nightmare for your family. However, even if you have a well-written will, the probate court still must oversee the payment of your debts and distribution of your property. These are just a few of the reasons why many people want to avoid sending the estate, and oftentimes their family, through the probate process after their death.

To avoid the probate system entirely, you will need to use an estate planning vehicle other than a will to transfer property after your death. For example:

  • Life insurance: Life insurance policies generally pass outside of probate as long as there is at least one named beneficiary.
  • Retirement accounts: Similarly, retirement accounts, including IRAs and 401(k) plans, pass outside of probate as long as there is at least one named beneficiary.
  • Joint tenancy real property: If you own a home with your spouse (or any other individual) as joint tenants with right of survivorship (as opposed to tenants in common), your ownership interest will be “extinguished” upon your death and the remaining owner will own the property outright as a matter of law.
  • Joint tenancy bank accounts: Bank accounts may also be held in joint tenancy so that when one spouse (or account holder) dies, the other spouse (or account holder) is automatically the sole owner of the account.
  • Pay-on-death accounts: Selecting a pay-on-death beneficiary for bank accounts or investment accounts allows you to designate who your accounts will be transferred to upon your death without the need for probate.
  • Trusts: A living trust is a legal document that, much like a will, contains instructions for what you want to happen to your property when you die. But, unlike a will, a living trust can avoid probate at your death. While you place your property and assets (i.e., your family home) in the trust, you maintain control over all trust assets during your lifetime. When you are no longer alive, your property can be transferred to your designated beneficiaries in a timely manner without going through probate.

Trusts are a favorite of estate planners because they are simple, flexible and effective. Trusts can be used to easily transfer property to family members or charitable organizations at death. In some circumstances, trusts can also be utilized to decrease or minimize estate taxes.

If you would like to learn more about trusts or avoiding probate in general, call Lonich Patton Erlich Policastri to schedule a free half-hour consultation. Our attorneys are passionate about estate planning and have decades of experience handling complex estate planning matters, including wills and living trusts. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

Estate of Thomas Kinkade: The Handwritten Wills

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First, the cause of death. Then, the arbitration clause. Now, the mysterious handwritten wills. The unraveling of Thomas Kinkade’s estate has been like a daytime drama, with his wife of 30 years and his girlfriend of 18 months pitched against each other.

The “Painter of Light” apparently kept his family in the dark about two handwritten wills. The wills bequeath girlfriend Amy Pinto-Walsh a Monte Sereno home and $10 million cash “for her security” or to establish a Thomas Kinkade museum.* A hearing will be held in court to determine the validity of these handwritten wills, a.k.a. holographic wills. The following questions will need to be answered by the court, which are applicable to all holographic wills:

  1. Did he write the wills?
  2. Did he sign and date them?
  3. Was he coerced?
  4. Was he of sound mind?

Purported holographic wills include: a tractor fender, a cigarette carton, a bedroom wall, a napkin, a nurse’s petticoat, and an eggshell. Needless to say, this is not the ideal method of creating a legally secure document. The most troubling part about creating a holographic will without legal guidance is that this type of will is more susceptible to being denied probate.

You should to be able to rely on the document that guides the distribution of your estate. The attorneys at Lonich Patton Erlich Policastri have decades of experience handling complex estate planning matters. If you are interested in developing an estate plan or reviewing your current estate plan, contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information.

Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.

* The second will appears to modify the first will. See copy of “wills” with translations here: http://bit.ly/NbaLty.

When it Might be Appropriate to Have Your Parent Conserved

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Your parents have always been put together and independent.  However, as time passes and you notice them becoming forgetful or unable to handle their day-to-day affairs, you are unsure of how to proceed as their mental states begin to deteriorate.  Should they be conserved?

Generally, the legal definition of capacity is the mental ability to adequately function.  In California, the Probate Code allows a court to appoint a conservator of the person for a person who is unable to provide properly for his or her personal needs for physical health, food, clothing, or shelter; a conservator of the estate for a person who is substantially unable to manage his or her own financial resources or resist fraud or undue influence; or a conservator of the person and estate for a person described in both of the previous categories.

If a conservator is appointed, he will be responsible for managing your parent’s affairs.  The conservator does not have to be a family member, although it often is.  Once appointed, the conservator will owe a duty of care to your parent and will be held accountable by the court.

There are other options, however, if conservatorship is too extreme.  Sometimes, elderly parents realize they need assistance and ask for it.  In this scenario, families can avoid the expense and emotional turmoil of having a parent conserved and family members can assist parents with their finances or hire a professional.  Other options include creating a durable power of attorney for property or a living trust.  These documents generally appoint an agent or trustee to manage your parent’s financial affairs.

If you are interested in learning more about ensuring your parents are able to manage their day-to-day lives as they grow older, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

Partnering Your Prenups and Estate Plans

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Premarital, or prenuptial, agreements are usually associated with pre-marriage planning and divorce.  However, they also provide several benefits for estate planning.  Premarital agreements can protect one spouse from liability for the other spouse’s separate debts and help to implement other estate planning strategies.  When premarital agreements and estate plans are considered in concert, couples can maximize financial planning and estate planning goals and avoid potentially triggering unintended tax consequences or inconsistent estate planning.

In California, a community property state, a surviving spouse has a 50% interest in all community property.  This right supersedes the terms of a will but may be waived in a premarital agreement, which does not necessarily equate with disinheritance.  Waiving community property rights allows spouses to specify the manner in which their assets will be distributed and helps to ensure that estate plans will be carried out as intended.  This may be helpful, for example, in a family business setting.  If one spouse runs a family business with his or her children, a waiver of community property rights will allow the business to pass more easily to the children without the other spouse acquiring an interest in the business, through divorce or inheritance.

There are several other scenarios in which a premarital agreement may affect an estate plan.  Premarital transfers may trigger income and gift taxes; estate tax exemption opportunities for surviving spouses may be missed; and premarital agreements may not comport with estate plans for a family home.  Premarital agreements often provide for the disposition of the family home or give the surviving spouse a right to continue living there.  However, these provisions in a premarital agreement should be drafted such that they will not impede an estate plan’s ability to execute home-related strategies such as transferring the home to a qualified personal residence trust.

If you are interested in learning more about premarital agreements and estate plans, please contact the experienced family law and estate planning attorneys at Lonich Patton Erlich Policastri for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

Update: Gifts to Caregivers Prohibited

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Recall that gifts to caregivers are generally prohibited by law under California Probate Code section 21350.  (See blog: Gifts to Caregivers Prohibited noting what activities constitute “caregiving”).  However, section 21351, enumerates several exceptions to this general rule.  One of the exceptions—found in Section 21351(a)—provides that section 21350 does not apply if the transferor is related by blood or marriage to, is a cohabitant with, or is registered as a domestic partner of the transferee.  Cal. Prob. Code § 21351(a) (West).  The issue in a recent California case was whether this provision applied to a stepdaughter by marriage.

In Hernandez v. Kieferle (October 31, 2011), the Second Appellate District of California reviewed a probate court decision which invalidated an amendment to a trust designating stepdaughter Claudine Kieferle as the trustee and sole beneficiary of her stepmother Gertrude’s estate.  The designated beneficiary of a prior amendment, Gertrude’s next-door neighbor Florentina Hernandez, challenged the validity of the second amendment removing her as the trustee and principal beneficiary of the estate.  The probate court found for Florentina noting that section 21350 established a presumption that transfers to care custodians are the product of fraud, duress, menace, or undue influence and, since Claudine lived with Gertrude and cared for her in the evenings, Claudine was disqualified from taking under the trust.

In reviewing the lower court ruling, however, the Appellate Court reversed this decision and concluded that it was an error not to apply the exception found in section 21351(a).  The Court rejected the argument that the exception did not apply to Claudine because she was not an “heir”—where her stepmother’s estate did not actually contain property attributable to her father (who passed away eleven years prior)—and found that a person is the transferor’s heir if some intestate rule identifies the person as the transferor’s successor, regardless of whether the transferor’s estate includes the type of property distributed under the rule.  Therefore, the section 21351 exception applied and the second amendment was deemed valid allowing Claudine to remain as the trustee and sole beneficiary of Gertrude’s estate.

If you are interested in learning more about making amendments to a trust or creating an estate plan, please contact  the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

No-Contest Clauses in Trusts

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Trusts are incredibly useful estate planning instruments (see Testamentary versus Inter Vivos Trusts blog).  They can be drafted and administered in almost any way you want; they can even protect your heirs’ inheritance from creditors (see Spendthrift Clauses blog).  Another useful way to ensure that your estate is administered in a particular way is to include a “no-contest” clause in your estate planning documents.

A no-contest clause is a “provision in an otherwise valid instrument that, if enforced, would penalize a beneficiary for filing a pleading in any court.”  California Probate Code sections 21310-23315 govern these provisions and define a contest as a “pleading filed with the court by a beneficiary that would result in a penalty under a no-contest clause, if the no contest clause is enforced.”  The Probate Code also defines a “direct” contest, which, if brought with probable cause (as defined by statute) does not violate the no-contest clause.

Direct contests allege the invalidity of a protected instrument or one or more of its terms based on forgery; lack of due execution; lack of capacity; menace, duress, fraud, or undue influence; revocation of a will by statute; and/or disqualification of a beneficiary by statute.  However, it is important to note that a no-contest clause will only protect the instrument containing the no-contest clause and other instruments only if they were already in existence and expressly identified in the no-contest clause.  Accordingly, it is important to consult an experienced estate planning attorney to ensure your estate is protected from contests.

If you are interested in learning more about estate planning and protecting the administration of your estate, contact  the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

Executing an Estate: A Blessing or a Curse?

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Friends or family come into the role as the executor of an estate in different ways.  Some are asked by a friend or family member and are honored to have been considered.  Some find out they were designated as the executor only after that person’s passing.  Some step up to the plate amidst grief and sorrow while other surviving relatives mourn their painful loss.  Regardless, executing an estate is not an easy task; there are legal, and often times personal, repercussions if something goes wrong.

According to a recent Wall Street Journal article, “executorships gone bad” are rising.  There are a number of possible reasons for this increase but tough economic times may be the driving force.  As families struggle economically, disagreements over shares of inheritances or interpretations of wills are occurring more often.  This adds to the heavy burden already placed on executors of an estate.

An executor administers a will through the probate court process which can take years (if the decedent created a trust during their lifetime, this significantly simplifies the process for an executor).  The probate process includes accounting for assets, paying outstanding bills, and distributing property as indicated by the decedent’s will.  Depending on a number of factors, the probate process can take as long as three years for larger, more complex or contested estates.  While not impossible for a nonprofessional to handle, it is generally worthwhile for complex wills to be handled by a professional to avoid mistakes and contentious dealings between the executor and other family members.

If you are interested in learning more about the probate process or creating a plan to ensure your family members are well-prepared to handle your estate, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship

Single? Time to Start Your Estate Planning

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When most people think of estate planning, they think of the later stages of life—perhaps when a family is established or in preparing for the end of life in old age.  It is probably the last thing on a young, single person’s to-do list; but it should be at the top.

Single people are out on their own and need to understand how important it is to have estate matters squared away in case of death.  If not, tragedy may be followed by unnecessary trauma for the person who ends up managing the estate.  Singlehood is not reserved just for the young and carefree; it can happen to anyone at any stage in life.  According to U.S. Census Bureau data, singles have overtaken married couples as the majority population.  In 2010, singles represented fifty-two percent of all households.

There are a number of complex and emotional issues that could be avoided simply by planning ahead.  With couples, the law dictates that the spouse takes care of most issues, whereas singles have no option unless they so designate.  It gets especially complicated if minor children are involved as they cannot inherit until they turn eighteen.  Singles could benefit from establishing a will (to establish what would happen to assets), a durable financial power of attorney (to designate a person to handle financial affairs in case of incapacity), a medical power of attorney (to appoint a person to make medical care decisions), a living will (to specify what measures can be taken to sustain life in case of incapacity).

If you are interested in learning more about individual estate planning or creating a comprehensive plan to ensure that your family members are well-prepared to handle your estate, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

Estate Planning Bucket List: Managing Important Documents in Case of Death

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The last thing surviving relatives want to think about when a loved one passes away is managing the affairs of the deceased’s estate.  Amid the grief and sorrow, a comprehensive estate plan can help to eliminate these uncertainties and confusion over the probate administration and assist surviving relatives in handling their painful loss.

It is also imperative that family members are aware of where to find an estate plan and other important documents.  The Wall Street Journal’s “25 Documents You Need Before You Die” highlights the ramifications of unorganized estate planning documents and notes the most important documents to keep handy.  It provides a thorough guide on the steps to take to ensure your estate plan is carried out.

If you are interested in learning more about individual estate planning documents or creating a comprehensive plan to ensure that your family members are well-prepared to handle your estate, please contact the experienced estate planning attorneys at Lonich Patton Erlich Policastri for further information.  Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results.  While this post may include legal issues, it is not legal advice.  Use of this site does not create an attorney-client relationship.

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Phone: (408) 553-0801 | Fax: (408) 553-0807 | Email: contact@lpeplaw.com

LONICH PATTON EHRLICH POLICASTRI

Phone: (408) 553-0801
Fax: (408) 553-0807
Email: contact@lpeplaw.com

1871 The Alameda, Suite 400
San Jose, CA 95126

Located in San Jose, Lonich Patton Ehrlich Policastri handles matters for clients in northern California, specifically San Jose and Silicon Valley. Our services are available to anyone within the following counties: Santa Clara, San Mateo, Contra Costa, Santa Cruz, Monterey, San Benito, and San Francisco. For a full listing of areas where we practice, please click here.

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