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California trust and estate administration encompasses the legal procedures for managing and distributing an individual’s assets following their demise. This process typically involves a court-monitored probate or a non-probate administration, such as a trust administration.

In California, when an individual passes away with a will, their estate usually undergoes probate. During this probate process, a court supervises the estate’s administration, which includes settling debts and taxes, identifying heirs and beneficiaries, and distributing assets per the will’s stipulations.

Alternatively, if the deceased established a trust, the trust administration process may be employed as an alternative to probate. During trust administration, the appointed trustee oversees the assets within the trust and ensures their distribution to beneficiaries, precise terms specified in the trust document.

Regardless of whether the estate follows probate or trust administration, California law imposes specific fiduciary obligations on the executor or trustee. These duties include acting in good faith and in the best interests of the beneficiaries, ensuring the proper administration of the estate or trust, and complying with all legal requirements, such as filing tax returns and settling any outstanding tax obligations.

Turn to OC Trial Group for quality trust and estate administration in Orange County. Call us at (949) 270-3424 or fill out our online contact form today to schedule your free initial consultation.

Why OC Trial Can Handle Your Trust and Administration Case

Our team of highly skilled attorneys possesses a unique blend of expertise, dedication, and local knowledge that sets us apart in the field of trust and estate administration in Orange County. With years of collective experience in navigating the intricate legal landscape, we understand the nuances and intricacies that come with administering trusts and estates, specifically in our vibrant community. We’re dedicated to customizing our services to match our clients’ unique requirements and goals, making sure we pay close attention to every detail. Our extensive network within Orange County, spanning financial institutions, real estate professionals, and other key stakeholders, further enhances our ability to deliver comprehensive and effective representation. When you choose us to handle your trust and estate administration case, rest assured that our attorneys possess the expertise, experience, and local connections needed to secure the best outcome for you and your family.

What Is Trust Administration in California?

When someone passes away in California with their assets held in a trust, the transition of their assets and properties into an estate for distribution follows a distinct legal process known as trust administration. Unlike probate, which is commonly associated with other jurisdictions, trust administration in California involves a systematic review and execution of the trust's provisions.

In California, the trust administration process encompasses crucial tasks such as validating the trust document, appointing a successor trustee, identifying and assessing assets, settling debts and tax obligations, and ultimately distributing the estate in accordance with the decedent's wishes or California law.

Given the potential for complexities and delays in the trust administration process, it is advisable to seek guidance from a knowledgeable trust administration attorney before initiating the process. This legal professional can provide valuable insights, navigate potential challenges, and ensure a thorough and efficient administration of the trust in adherence to California regulations.

What Powers Does a Trustee Have During Trust Administration in California?

In the capacity of a trustee in California, the initial step involves a meticulous examination of the trust instrument to determine the extent of powers bestowed upon the trustee. Even if the trust instrument imposes limitations on these powers, it is essential to recognize that the courts possess the authority to lift such restrictions. The exercise of powers must align with the prudent investor and prudent person standards, as detailed above, all while safeguarding the best interests of the beneficiaries.

It is crucial to note that the mere grant of a power does not automatically mandate its exercise. When deciding whether to wield a particular power, the trustee's paramount consideration should always be the well-being of the beneficiary.

Under the California Probate Code, the trustee's powers encompass various key aspects:

  • The power to collect and hold property.
  • The power to continue a business.
  • The power to invest in "any kind of property."
  • The power to buy or sell property.
  • The power to pledge trust property for a loan.
  • The power to subdivide and develop land.

Additionally, California law extends further powers as may be necessary for the trustee to fulfill duties effectively. For comprehensive guidance on navigating and utilizing trustee powers in California, consulting with an experienced legal team is recommended. The dedicated professionals are committed to ensuring the trustee's actions align with legal standards and serve the best interests of the beneficiaries.

Common Mistakes Made by California Trustees

When fulfilling the pivotal role of a trustee in California, it's crucial to be aware of common pitfalls that can arise during trust administration. Whether you are a trustee who needs advice on complying with their duties or a beneficiary seeking to redress a trustee’s failure to comply with their duties, OC Trial Group’s experienced trust administration attorneys are here to assist you in avoiding the common pitfalls encountered during trust administration in California. Some of the common pitfalls made by California trustees during the administration of a trustee include:

Failing to Keep Beneficiaries Informed

One prevalent mistake trustees make is insufficiently informing trust beneficiaries about trust administration matters. Neglecting the duty to keep beneficiaries reasonably informed can lead to complications. Trustees must communicate essential information to enable beneficiaries to enforce their rights under the trust or address any breach of trust. This includes providing complete and accurate information when requested and planning for an annual report, even if not explicitly asked for.

However, a trustee does not have to comply with a beneficiary’s request to keep them informed in any of the following situations:

  • Trust instrument waives the duty to report or account (court intervention possible in case of a material breach).
  • During the time the trust is revocable.
  • When a beneficiary has waived the right to an account or report and hasn't revoked the waiver.
  • In cases where the beneficiary and the trustee are the same person.

Beneficiaries requesting information should provide sufficient advance notice, and if copies of trust records are desired, the cost of copying may be charged to the trust.

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Entrusting OC Trial Group with your Trust and Estate Litigation matter provides you with the assurance that your goals will be prioritized, ensuring client focused representation. 

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Why Choose OC Trial Group?

  • A Personalized and Tailored Approach

    Our accomplished attorneys prioritize your goals and meticulously craft a winning strategy custom-made for your success.

  • Offering Free Initial Consults

    Learn how we can help during a free consult. You gain the assistance of a top-rated, dedicated, and results-driven team.

  • Our Track Record Speaks for Itself

    We strive for favorable outcomes and aim to alleviate your burden by shouldering the weight of your case, making your life easier.

Insufficient Trust Bookkeeping

A common oversight of a trustee is underestimating the importance of meticulous trust bookkeeping. The trustee's internal financial records, whether as basic as a checkbook or as intricate as a double-entry bookkeeping system, are integral. Beyond mere bookkeeping, trustees must actively track both principal and income, often managed through a fiduciary account.

Not Saving Records

When it comes to the records of the deceased, the surviving spouse often grapples with the question: "How long do I have to keep checkbooks, passbooks, tax returns, and other important papers?" The answer depends on whether the records pertain to the period before or after death. Typically, records linked to the period before death should be retained for five years, especially if the assets underwent an adjustment to their income tax basis upon the deceased spouse's death. However, for assets without a new income tax basis, these records should be kept indefinitely, as they will be essential for income tax reporting purposes upon the eventual sale or transfer of assets.

For records concerning the post-death period, i.e., the administrative trust, prudent practice dictates retaining them for the term of the trust plus an additional five years. Subtrust records should adhere to a similar retention period. In certain instances, it makes sense to consider indefinite retention, particularly when subtrusts involve contingent, minor, or unborn beneficiaries, as the statute of limitations for potential lawsuits may extend over many years. Additionally, records related to the valuation of assets in the survivor's estate and those justifying decisions made in funding trusts should be retained until after the passing of the surviving spouse.

Regardless of other considerations, trustees might find it beneficial to preserve skeletal records, such as copies of the federal estate tax return, appraisals of illiquid trust property, fiduciary accounts, and income tax returns. With the advancement of document storage technology, including options like hard drives, cloud storage, and USB flash drives, trustees can efficiently store all or part of the trust books and records, addressing concerns about cost and storage space.

When deciding to discard trust records, a proactive approach involves offering them first to one or more of the distributees of the assets. This action not only demonstrates consideration but may also serve as a defense if trustees face criticism in the future for not retaining certain records.

What Is the Probate Process in California?

When someone passes away in California with their assets not held in a trust or some other form of non-probate asset, the transition of their assets and properties into an estate for distribution necessitates a legal process known as probate. In California, probate courts meticulously oversee this process, ensuring the proper distribution of estates and addressing disputes related to will and estate plan validity, the appointment of a personal representative, property identification and valuation, debt settlement, tax obligations, and property distribution in accordance with the deceased's wishes or California law. Given the potential complexities and delays, seeking guidance from a probate lawyer before initiating the estate opening is highly advisable.

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  • What is Financial Elder Abuse in California?

    Financial abuse is comprehensively defined by the Welfare and Institutions Code and it encompasses various actions, including when a person or entity engages in the following activities:

    1. Taking, concealing, appropriating, obtaining, or retaining any interest in real or personal property with wrongful intent, the aim to defraud, or both.

    2. Assisting in any of the aforementioned actions.

    3. Employing “undue influence.”

    This definition ensures that a wide range of financial abuse situations are covered. In assessing whether undue influence was exerted, consideration of the following factors is necessary:

    1. The vulnerability of the victim.

    2. The apparent authority of the influencer.

    3. The tactics employed by the influencer.

    4. The fairness or equity of the resulting outcome.

    This holistic approach is designed to thoroughly evaluate potential instances of financial abuse. It’s worth noting that recent legal decisions have reinforced the significance of these considerations in cases involving financial abuse, highlighting their crucial role in determining the presence of undue influence.

  • Are There Any Presumptions of Financial Elder Abuse in California?

    According to Welfare and Institutions Code, a person or entity is conclusively presumed to have engaged in actions like taking, concealing, appropriating, obtaining, or retaining property for wrongful purposes when, among other factors, they “knew or should have known that this conduct is likely to be harmful to the elder or dependent adult.”

    This introduces a dual approach that combines subjective and objective elements to assess whether the conduct could result in harm to elders or dependent adults, encompassing both personal harm and harm to their property interests. The subjective knowledge requirement necessitates evidence of the individual’s actual state of mind, while the objective test seeks to determine whether a reasonable person would recognize that the conduct could likely cause harm, either to the victim personally or their property interests. This approach ensures a comprehensive evaluation of potential financial abuse situations.

  • What is a Taking Under the Financial Elder Abuse Statutes in California?

    According to Welfare and Institutions Code, the terms “takes, secretes, appropriates, obtains, or retains” are clarified when an elder or dependent adult is deprived of any property right. In simple terms, if an elder or dependent adult is deprived of their interest in real or personal property, the defendant’s actions become legally actionable. The Welfare and Institutions Code further elaborates that these actions, such as taking or secreting, can occur through various means, including by agreement, donative transfer, or testamentary bequest, regardless of whether the property is held directly or through a representative of the elder or dependent adult.

    In California case law, we find further insight into what constitutes a “taking”:

    1. It has been determined that the lawful foreclosure of the plaintiff’s property interests did not amount to financial elder abuse as it did not involve “wrongful use” of the property.

    2. It has also been determined that utilizing an invalid power of attorney to make property adjustments and encumber an elder’s property constituted financial elder abuse.

    3. A taking has also been found when an insurance agent restructured policies that impacted an elder’s estate plan. Even though the policyholders had transferred their interest in the policies to the trust years earlier, the increased cost to the plaintiff’s trust and the harm to property previously conveyed to the trust constituted a property taking by the settlors.

    The Welfare and Institutions Code seemingly suggests that a taking can occur when an elder or dependent adult’s property is subject to a “testamentary bequest.” While this broadens the scope of the Elder Abuse Act, typically a bequest does not deprive an elder of any property interest and merely establishes an expectancy in the beneficiary. However, the Act may apply when the testamentary plan effectively deprives the elder of the right to make an alternative disposition, either due to the form of the plan or the elder’s subsequent incapacity to make alternative arrangements, effectively removing the right to dispose of property. In such cases, the remedies under the Act may be applicable even when the elder retains other indicators of ownership, including property possession.

  • What Remedies Are Available for a Prevailing Plaintiff in a Financial Elder Abuse Action in California?

    i. Attorneys Fees and Costs in Addition to Compensatory Damages

    Attorney fees and costs, in addition to compensatory damages and all remedies provided by law, are available. If a defendant is found liable for financial abuse by a preponderance of the evidence, the court shall award attorney fees and costs. This award encompasses the cost of services by a conservator devoted to the litigation of a financial abuse claim.

    It’s important to note that the remedy of costs, including attorney fees, is not contingent on an award of damages specifically for financial abuse. The plaintiff must demonstrate that the defendant committed financial abuse. Attorney fees are granted to the plaintiff exclusively. However, it’s essential to understand that attorney fees do not cover trustee fees as additional costs.

    In financial abuse cases, attorney fees are unilaterally awarded to the plaintiff. Furthermore, if all of the plaintiff’s claims, including the elder abuse claim, stem from a single transaction, attorney fees are not awarded to the defendant, even in non-elder abuse claims. Further, the fee shifting provision for attorney fees does not extend to other costs of the lawsuit.

    In summary, understanding the scope of financial abuse claims is crucial, as these claims can be valuable given the broad application of the Welfare and Institutions Code. Attorney fees are exclusive to plaintiffs and extend to claims arising from the same transaction addressed in the elder abuse action.

    The provision in the Welfare and Institutions Code that states “all other remedies otherwise provided by law” encompasses various legal actions, including those related to contracts, wills, and trusts. Even actions aimed at invalidating testamentary documents may make attorney fees and compensatory damages available under the Code.

    ii. General Damages for Pain and Suffering After Death

    Upon demonstrating by a preponderance of evidence that a defendant bears responsibility for financial abuse, and with clear and convincing proof of their reckless, malicious, fraudulent, or oppressive actions, it becomes possible to seek general damages for pain and suffering even after the victim’s passing. These damages can be pursued against an employer or principal without the need to establish authorization, ratification, or the involvement of a managing agent, which distinguishes it from cases involving “neglect” or “physical abuse.”

    It’s worth noting that recent statutory changes in Code of Civil Procedure § 377.34 have seemingly rendered the pursuit of pre-death pain and suffering damages in elder abuse cases obsolete. These changes allow for the recovery of such damages in various cases, including those of ordinary negligence or intentional tort, irrespective of the heightened culpability standards in elder abuse cases. Hence, it is advisable for plaintiffs to consider including claims of ordinary negligence alongside claims under the Code. Additionally, to circumvent the limitations of MICRA, plaintiffs should also consider incorporating allegations of intentional tort in conjunction with their claims under the Code.

    As per the statute, only claims for punitive damages in financial abuse cases are subject to the standards delineated in the California Civil Code. All other remedies provided by law can be pursued upon demonstrating financial abuse by a preponderance of evidence. If financial abuse is established with clear and convincing evidence, pre-death pain and suffering damages can be awarded, without the necessity of meeting the criteria set by the California Civil Code for punitive damages against an employer. This distinction creates a notable legal issue.

    It is especially important to remember that for living victims of financial elder abuse, remedies specifically available in financial abuse cases include compensatory damages, attorney fees granted exclusively to the plaintiff, and reimbursement for conservator expenses. However, it’s crucial to note that trustee expenses are not recoverable as costs.

    iii. Financial Abuse of Incompetent Victim

    When financial abuse targets an elder or dependent adult who lacks the capacity as defined under Probate Code Section 812 or is deemed to be of unsound mind, as defined by Civil Code Section 39, the individual responsible for taking the property is obliged to return it upon demand, which may be made on behalf of the elder or dependent adult. Failure to comply with this demand can lead to the application of remedies outlined in the Welfare and Institutions Code, including the possibility of incurring attorney fees and costs.

    Notably, if financial abuse targets an elder or dependent adult who lacks the capacity, there is no necessity to establish wrongful use, fraud, undue influence, or similar elements to prove financial abuse. When the property has been taken from an individual of unsound mind, and the demand for property return is inadequately met, the legal remedies for financial abuse become applicable. In essence, the individual who took the property is exposed to potential legal consequences solely by demonstrating that they failed to adhere to the request for property return or the restoration of the property interest to the victim.

    However, it remains unclear how this section applies to cases where mentally incapacitated or impaired victims did not transfer property interests but instead executed a will or other testamentary document directing the transfer of property. In such scenarios, only an expectancy, as recognized under property law, would have been established. Yet, when a will is executed, it sets in motion a process leading to the property transfer. Since the capacity standard for making a will is relatively low, and the capacity threshold under the Welfare and Institutions Code is higher, one could likely seek remedies under the Welfare and Institutions Code even for a valid testamentary bequest.

  • What Are the Typical Fact Patterns for Financial Elder Abuse in California?

    The spectrum of potential schemes that may fall under the purview of financial abuse remedies is remarkably diverse, making comprehensive coverage challenging. Nonetheless, each of these schemes generally exhibits characteristics of fraud, undue influence, and/or mistake. Here are some typical examples:

    1. Family-Related Deception or Exploitation: Family members can sometimes resort to deceptive tactics to obtain a direct transfer of money or property or secure a favorable position within a testamentary document.

    2. Misconduct by Caregivers: Caregivers, especially those providing in-home care, may engage in theft or deceitful practices involving property or monetary assets.

    3. Misconduct by Lawyers or Accountants: Professionals in the legal and accounting fields may overstep boundaries in their interactions with elderly or vulnerable individuals, potentially leading to the loss of assets or property.

    4. Unethical Behavior by Bank Personnel: Individuals working within financial institutions may exploit the trust and reliance of elderly individuals who are open about their financial matters.

    5. Deceptive Practices by Insurance and Annuity Salespersons: The lucrative insurance and annuity industry may entice the trust and confidence of elderly clients who might purchase financial products like insurance policies or annuities when they do not actually need them. Consider the scenario of an 80-year-old individual purchasing a 25-year “guaranteed” annuity or a substantial life insurance policy with premiums that exceed their financial means.

    6. Actions by Mortgage Brokers: Elderly individuals with relatively modest fixed incomes may be lured into taking out mortgages on their homes, even when they cannot realistically afford them. This can occur, for instance, to purchase a “guaranteed” annuity, or the loan costs may be unreasonably high.

    7. Real Estate Dealings: Merely signing escrow instructions by a property owner with diminished mental capacity can be deemed financial abuse under the Welfare and Institutions Code.

  • Why Do You Need a Probate Litigation Attorney to Handle Your Financial Elder Abuse Case?

    Securing the services of a probate litigation attorney for your financial elder abuse case is vital for several reasons. These attorneys possess a specialized knowledge of elder abuse laws and are well-versed in probate and estate matters, making them experts in handling such complex cases. They bring valuable experience in dealing with intricate legal disputes involving multiple parties, financial transactions, and mental health-related issues. Moreover, probate litigation attorneys have access to a network of professionals to gather evidence and expert testimony. They can navigate court procedures effectively, aim for favorable settlements, and are dedicated to protecting the rights and financial well-being of elderly individuals, offering cost-effective solutions where possible.

  • When is the Best Time to Hire a Probate Litigation Attorney to Handle Your Financial Elder Abuse Case?

    Hiring a probate litigation attorney for your financial elder abuse case is most advisable as soon as you suspect or discover any form of financial exploitation or wrongdoing against an elderly individual. Acting promptly is crucial to preserve evidence, gather witness testimony, and build a strong case. In many cases, elder abuse can be ongoing, so addressing it swiftly can prevent further harm. Legal professionals can assist in assessing the situation, guiding you on when to take legal action, and working to protect the rights and assets of the elderly person involved. Don’t delay; consult an attorney as soon as concerns arise to ensure the best outcome in your financial elder abuse case.

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