Trust Case Summary:
As a result of the intervention of SBEMP, a recent court decision ordered a co-trustee in violation of fiduciary duties be removed from his position as Co-Trustee of the Trust.
Case Background:
BN’s brother died, leaving a trust naming her and his roommate (with whom he did not have a legal relationship) as Co-Trustees; and granting the roommate, WM, a life estate to remain in the house.
After several violations of fiduciary duties, BN petitioned to remove WM as a co-trustee.
The fiduciary violations included; but were not limited to: falsifying the decedent’s death certificate, with the intention of divesting the Trust beneficiaries from their inheritances; preventing BN from administering the Trust and performing her trustee duties (e.g., accessing the Trust-owned real property and documentation relating to the other trust assets and its obligations); and engaging in a campaign of hostility toward BN and the other Trust beneficiaries.
WM admitted he falsified his relationship on the death certificate and interfered with administration by not giving BN access to the information.
Decision:
The court ordered that WM provide BM with all information in his control necessary to determine the assets of the Trust, income of the Trust, expenditures of the Trust, and expenses of the Trust for proper accounting.
The court ordered WM to allow access to the property sufficient to allow BN, or her designated agent, to photograph or video record the property and all of its contents for the purpose of identifying and marshaling the assets of the Trust and to allow for a proper appraisal and accounting.
The court also removed WM as Co-Trustee of the Trust and BN is appointed sole Trustee.
For more information or to request a consultation please contact the law offices of SBEMP (Slovak, Baron, Empey, Murphy & Pinkney) by clicking here.
SBEMP LLP is a full service law firm with attorney offices in Palm Springs (Palm Desert, Inland Empire, Rancho Mirage), CA; Costa Mesa (Orange County), CA; San Diego, CA; New Jersey, NJ; and New York, NY.
DISCLAIMER: This blog post does not constitute legal advice, and no attorney-client relationship is formed by reading it. This blog post may be considered ATTORNEY ADVERTISING in some states. Prior results do not guarantee a similar outcome. Additional facts or future developments may affect subjects contained within this blog post. Before acting or relying upon any information within this article, seek the advice of an attorney.
Special Needs Trusts
Most parents want to leave assets to their children when they die. If an individual with a significant cognitive disability receives assets, they may not have the capacity to make good decisions about how those assets are used and they may become ineligible for important federal and state resources and services. The individual can lose Social Security Income (SSI) and Medicaid and the assets may also be subject to recoupment by Medicaid (a.k.a., Medi-Cal) or by the State if the individual is receiving residential services.
Upon realizing this, parents decide to disinherit the child with disabilities, leaving everything to the non-disabled children with verbal instructions to use part of the inheritance for the benefit of the sibling with disabilities. While this may appear to be a good idea, it can have equally negative results.
For example, the non-disabled child may not use the inheritance on their sibling’s behalf, and is under no legal obligation to do so. Even if the non-disabled sibling uses the assets exactly as the parents intended, they can be claimed by creditors, can have negative tax consequences on the non-disabled sibling, and can be subject to equitable distribution in the event of divorce.
Avoid Negative Consequences
To avoid these negative consequences, it is recommended that parents establish a special needs trust. A special needs trust can protect the assets while; at the same time, making the assets available to protect and enrich the life of the person with a disability without jeopardizing benefits available from the government. A special needs trust is a unique legal document that contains a set of instructions describing how assets placed into trust will be administered on behalf of a person with a disability. It must be carefully worded and is best written by professionals familiar with disability services and programs.
Parents and other family members can use a special needs trust to hold assets for a disabled person. Even families with modest assets should establish a trust; typically, such trusts are not funded until one or both parents die. A special needs trust can be funded through life insurance or estate assets distributed through one’s Will. So long as the assets have never vested in the person with a disability, the special needs trust need not contain a provision reimbursing Medicaid and other providers.
Trust Funds Law
Trust funds can be used to purchase independent professional opinions as necessary, fill in gaps in services, provide additional recreation and other amenities, pay for a private residential placement or buy a vehicle used to transport the beneficiary of the trust.
At the death of the beneficiary, any remaining trust property is disposed according to the instructions written in the trust document by the donor. For example, property might go to other family members or to a charity. SBEMP, LLP frequently works with families to establish special needs trusts as part of their estate plan.
The governing regulations for special needs trusts can be found at 42 U.S.C. § 1396p.
For more information or to request a consultation please contact the law offices of SBEMP (Slovak, Baron, Empey, Murphy & Pinkney) by clicking here.
SBEMP LLP is a full service law firm with attorney offices in Palm Springs (Palm Desert, Inland Empire, Rancho Mirage), CA; Costa Mesa (Orange County), CA; San Diego, CA; New Jersey, NJ; and New York, NY.
DISCLAIMER: This blog post does not constitute legal advice, and no attorney-client relationship is formed by reading it. This blog post may be considered ATTORNEY ADVERTISING in some states. Prior results do not guarantee a similar outcome. Additional facts or future developments may affect subjects contained within this blog post. Before acting or relying upon any information within this article, seek the advice of an attorney.
If you or a loved one has special needs, you may want to help get them a special needs trust. However, before going out and trying to get one, you first need to understand what it is. A special needs trust is a certain amount of funds which help to improve the quality of life for those living with special needs. (more…)
Creditor claims in California are a detailed and intricate part of probate law. If you fail to comply exactly as the rules state, you will lose any claim against the estate.
What is a Creditor Claim?
A creditor claim is any type of demand for a payment. It means if anyone owes you money and then that individual dies, you have to file a creditor claim. Creditor claims are for liabilities and debts incurred by the individual that died. It’s required to be filed in a probate court. It must also be served by a specific time to the representative of the decedent’s estate.
What is the Claims Procedure?
The creditors claim procedure can be invoked by filing notices in the newspaper. A notice can also be mailed to the creditor. There are different time stipulations for each regarding how long creditors have to file a claim. If any of these claims are not filed correctly with the trustee, the creditor may lose rights to the claim.
How is the Claim Approved?
After a claim is filed, the trustee has 30 days to deny or approve this particular claim. If the claim is denied, it’s necessary to act quickly if the creditor wants to file a lawsuit. Because of how complicated filing claims and understanding all aspects of the law can be, it’s crucial to have a lawyer. Our Coachella Valley probate attorney can help when it’s time to file a creditor claim.
A Financial Power of Attorney is a person who is able to make financial decisions for you if you become incapacitated and unable to make decisions on your own behalf. The power is given by producing a legalized document that shows you allow another person to make financial decisions on your behalf. The person you chose to act on your behalf is considered your agent or attorney-in-fact.
Can I Set Limitations?
You can set limits for your agent. The thing to consider is what needs to be handled while you’re unable to act on your own. These things can include your personal expenses – monthly and annually, real estate, investments, asset management, benefit collections, insurance, and hiring legal representation.
If you have a separate medical agent for medical decisions, keep in mind that the financial agent needs to be updated by the medical agent to make decisions smoother.
How Is The Agent Created?
It is recommended to use the simple form for the state you’re in, or you could schedule a consultation with our Palm Springs trust and estate law firm. We can assist in the entire process, including having the document notarized with appropriate signatures. If real estate is involved, the state may require the agent to place a record on file with the local land and records office. It is also advised to let your bank know who your financial agent is.
When Does It Start?
The first thing is to decide is whether or not the power will be durable. If the power of attorney is not durable, and you become incapacitated, then when you can recover, this power is lost and a new agent document would need to be issued.
The document goes into effect as soon as it is signed. If you only want it to go into effect when you are incapacitated then you need a “springing” agent. In this case, you must be certified as incapacitated by a doctor. You can make this type of power of attorney durable also.
Financial decisions can only be made for you if you are incapacitated. If you want someone to make decisions for you after death, you will need to name them as executor in your will. There are several other ways the financial power of attorney can end, such as divorce, not being able to reach the agent, the court invalidates the document, or you can revoke it personally. It is best to also name alternate agents in the event something happens to an agent.
Probate is the legal method by that the fiduciary (executor) of the estate ultimately settles all affairs of a deceased dearest. It is typically more sophisticated for the executor of an estate, who has a fiduciary obligation and who has been entrusted with the responsibility of overseeing an estate’s assets while facilitating the methodical process of probating the estate.
Estate planning attorneys may work with financial experts to help customers create legally-binding trusts related to the disbursement of money and assets.
Great legal representatives can often provide advice for a better distribution of an estate’s assets. Going forward, legal documents can be drafted and utilized to discharge debts (like mortgages and loans) upon the death of an individual. This aids in avoiding the creation of any undue burden upon family members.
Case update from the NJ State Bar Association:
38-2-5185
In the Matter of the Estate of Mary Jane Lynch, N.J. Super. App. Div. (Suter, J.A.D.) (19 pp.)
Decedent executed a will and declaration of trust wherein her personal property was to be equally distributed to her two children, appellant-daughter and appellee-son. The residuary estate was left to the family trust and the assets there were divided equally between the siblings. (more…)
After the death of an estate owner, the estate is taxed whenever the property is transferred. In order to limit estate taxes, the individual can give gifts prior to death. There are several things you should know regarding how gifts are taxed according to estate tax law. (more…)
What is Probate?
The term ‘probate’ means ‘proof.’ The term probate in the legal system is proof that the will is ironclad in a court of law. A separate court, called probate court, examines the will to determine how ironclad it is. Strong wills divide assets based on what the deceased wanted. Wills with loopholes, no wills, or wills that excludes assets will follow the rules based on state probate laws. (more…)