Omitted Spouse

The marital status of a person occasionally changes over time. For example, a person could be married one year, divorced the next year and then re-marry the following year. With the change in marital status, there are estate planning implications that may arise. One such issue is the beneficial interest, if any, of a subsequent spouse in the other spouse's estate. The relevant law provides that "if a decedent fails to provide in a testamentary instrument for the decedent’s surviving spouse who married the decedent after the execution of all of the decedent’s testamentary instruments, the omitted spouse shall receive a share in the decedent’s estate" per CA law. Probate Code §21610. However, a surviving spouse does not automatically qualify as an omitted spouse.    

A recent unpublished appellate opinion centered on a surviving spouse's claim to be an omitted spouse.

Oswaldo Herrador, a widower, married Rose Herrador in 2015. Oswaldo had executed a marital trust with his prior spouse, Gloria Herrador, in 2010. The trust was funded with a fourplex in Daly City, CA and a residence in San Bruno, CA. Gloria passed away in 2010 and Oswaldo passed away in 2022. In 2023, Rose filed a petition requesting her share of Oswaldo’s estate as an omitted spouse. The petition alleged that Oswaldo “neglected to create and execute either a Trust or a Will to provide for Rose. Oswaldo also failed to provide for Rose otherwise, commensurate with her spousal share," by naming her as beneficiary "on any account or insurance policy, or granting her an interest in title to either of his two real properties located in San Mateo County."  

Oswaldo’s children filed an objection which “disputed that Rose was an omitted spouse since Oswaldo provided for her in a separate testamentary instrument, his "Last Will and Testament," which governed his assets in El Salvador and was subject to probate in El Salvador (El Salvador Will). It also alleged, inter alia, that Rose was not an omitted spouse because Oswaldo designated her as the sole beneficiary of his Wells Fargo Bank account."

“On April 15, 2024, the trial court held a hearing on the motion for summary adjudication. Afterward, the trial court granted the motion, ruling, Petitioner is not an omitted spouse having been named as a beneficiary under decedent Oswaldo Herrador's testamentary instrument, namely his last will and testament governing his assets in El Salvador, executed after his marriage to Petitioner."

Rose appealed the trial court’s decision and this decision was affirmed on appeal.

Herrador v. Herrador, San Mateo County Superior Court case no. 23-PR0-00365 

Post-Death Business Operations

A successor trustee occasionally is tasked with operating a decedent's business post-death. For example, I've had clients in which the decedent leased rental properties, operated a marketing corporation, operated a painting business, operated a consulting business, etc. The successor trustee has basically three options at their disposal. First, the successor trustee can continue to operate the business. In the case of leasing rental properties, past clients have sometimes taken this approach. Second, the successor trustee can sell the business to a third-party. If the business involves leasing rental properties, selling the business, i.e. selling the underlying real estate, is a common approach. Third, the successor trustee can cease business operations. If the decedent operated a sole proprietorship, past clients have typically ceased business operations because the business was intimately tied to the decedent and had limited market value. Whatever the decision made by the successor trustee, they are required by CA law to act in the best interests of the beneficiaries.   

A recent unpublished appellate decision found that the successor trustee had breached their fiduciary duty by continuing to operate the decedent's business post-death.

"Mark contends the trial court erred in finding he breached the Trust by continuing hard money lending after Howard's death.

Mark argues he had a duty to keep the disputed funds productive. (§ 16007.) But a trustee has a duty to invest trust funds prudently. (Estate of Collins (1977) 72 Cal.App.3d 663, 669.) The trial court could reasonably conclude that hard money lending is not appropriate for a fiduciary. Mark even acknowledged that it is a risky business.

Mark claims that section 4.05 of the Trust authorized him to continue his hard money investments, which provides:

"Section 4.05. On any final or partial distribution of the assets of the Trust Estate and on any division of the assets of the Trust Estate into shares or partial shares, the Trustee may distribute or divide such assets in kind, may distribute or divide undivided interests in such assets, or may sell all or any part of such assets and make distribution or division in cash or partly in cash and partly in kind. The decision of the Trustee, either prior to or on any division or distribution of such assets, as to what constitutes a proper division of such assets of the Trust Estate shall be binding on all persons in any manner interested in any trust provided for in this Declaration."

Section 4.05 of the Trust governs distribution of Trust assets. Nothing in the section authorizes Mark to engage in an inappropriately risky enterprise."

Braaten v. Braaten, San Luis Obispo County Superior Court case no. 19PR-0393

Estate Tax in 2026

Since the estate tax exemption amount is currently pegged to inflation, the IRS recently announced the exemption amount for 2026 as detailed below: 

Year                   Amount Excluded        Maximum Tax Rate
 
2001                   $675,000                      55%

2002                   $1M                             50%
 
2003                   $1M                             49%
 
2004                   $1M                             48%
 
2005                   $1M                             47%
 
2006                   $2M                             46%
 
2007                   $2M                             45%
 
2008                   $2M                             45%
 
2009                   $3.5M                          45%
 
2010                   Repealed                      0%
 
2011                   $5M                             35%
 
2012                   $5.12M                        35%
 
2013                   $5.25M                        40%
 
2014                   $5.34M                        40%
 
2015                   $5.43M                        40% 
 
2016                   $5.45M                        40%  
 
2017                   $5.49M                        40%         
 
2018                   $11.18M                      40%   

2019                   $11.4M                        40%  

2020                   $11.58M                      40% 

2021                   $11.7M                        40% 

2022                   $12.06M                      40% 

2023                   $12.92M                      40% 

2024                   $13.61M                      40%

2025                   $13.99M                      40% 

2026                   $15M                           40%

Opening a Probate in CA

Probate can arise in two situations in CA. First, a decedent can pass away while domiciled in CA. Second, a decedent can pass away while domiciled outside CA but own property in CA. For example, a decedent could be a domiciliary of Phoenix, AZ at death but own a house in Needles, CA. In either scenario, a probate court in CA has jurisdiction over the decedent's estate. 

A recent unpublished appellate opinion touched upon opening a probate in CA.

"Decedent and her husband, Ernie Musko, established the Musko Family Trust in 2007, with their four children as beneficiaries and their home in Pennsylvania as the only trust asset. They amended the trust in 2010, removing their son, David, as a beneficiary. Ernie died in 2012. According to appellant, after decedent experienced a "serious health crisis" in 2017, she moved from Pennsylvania to live with appellant in California. Decedent died in Santa Monica, California on May 13, 2023 and was a resident of Los Angeles County at the time of her death."

"In September 2023, appellant, in propria persona, filed a petition for probate of lost will in Los Angeles County Superior Court."

"In April 2024, appellant filed a second petition, seeking to "determine whether trustor's handwritten instruments constitute an amendment to, or revocation of, the revocable living trust." 

"At the July 15, 2024 hearing, the court indicated it was inclined to deny the petitions because "the only asset is the real property and the real property is located in Pennsylvania, and this Court does not have jurisdiction over real property in Pennsylvania." Appellant responded that the court "does have jurisdiction because even though the property is located in Pennsylvania, the decedent was domiciled here in Los Angeles County." Appellant argued that "Pennsylvania would not have jurisdiction to determine whether or not these handwritten documents constitute wills because the decedent was not domiciled in Pennsylvania." The court replied that "the case law says that as to in rem jurisdiction, when we're talking about something that is like real property, that it has to be within the borders of this city," citing Taylor v. Taylor (1923) 192 Cal. 71, 76 (Taylor). The court concluded that the decedent's domicile in California "doesn't necessarily mean that this Court has jurisdiction of whatever is in the trust or estate if that . . . real property is located outside of this state." The court accordingly denied the petitions with prejudice and denied objectors' motions as moot."

The trial court's decision was reversed on appeal. 

"As relevant here, when an interested person files a petition for probate in California, the court has subject matter jurisdiction if it finds as a "jurisdictional fact" that either "the decedent was domiciled in this state or left property in this state at the time of death." (§§ 8000, 8005, subd. (b)(1)(B).) "Domicile" for this purpose means the state where decedent resided with "the intention to remain either permanently or for an indefinite time without any fixed or certain purpose to return to the former place of abode." (Estate of Phillips (1969) 269 Cal.App.2d 656, 659, quoting DeYoung v. DeYoung (1946) 27 Cal.2d 521, 524; see also Estate of Wardani (2022) 82 Cal.App.5th 870, 883.) "Property" is "anything that may be the subject of ownership and includes both real and personal property and any interest therein." (§ 62.)^[3]" 

Estate of Musko, Los Angeles County Superior Court case no. 23STPB10480 

Will Revocation by Cancellation

When a client seeks to write a new will invariably the question of what to do with the prior will arises. There are two ways under CA law to revoke a will, express revocation or cancellation. Probate Code §6120. The former is typically used as most wills includes a clause that the will revokes all prior wills. For the latter, a recent partially published appellate case focused on revocation by cancellation.

"In this will contest, siblings Anush Boyajian and Robert Boyajian assert competing documents regarding their deceased mother's testamentary intent—respectively, a will signed in 2006 and a document signed in 2018. The court ruled for Robert, concluding the 2018 document "canceled" the will, thus revoking it. (Prob. Code, § 6120, subd. (b) (section 6120(b).)^[2]

Anush contends the trial court erred because revocation by cancellation must occur by physical alteration of the will—not by a separate, stand-alone document. Robert disagrees but also asserts the revocation was valid pursuant to section 6120, subdivision (a) (section 6120(a)), because the 2018 document qualified as a "subsequent will."

In the published part of this opinion, we conclude California law (1) requires a physical alteration of a will to effect a revocation by cancellation, and (2) a stand-alone revocation does not constitute a subsequent will unless it also transfers property upon death. The court thus erred by giving effect to the 2018 document.

Robert cross-appeals, claiming the record required the trial court to find Anush procured the 2006 will through undue influence. In the nonpublished part of this opinion, we find the court reasonably found there was no undue influence. Thus, we reverse and remand for the court to enter a new judgment giving effect to the 2006 will."

Estate of Boyajian (2025) _____ Cal.App.5th _____. 

In terms of physical alteration of the will to effect revocation by cancellation, another appellate case provided the colorful details in which the testator revoked their will.

"At trial, Anne Marie Meier testified that she was a very close friend of decedent. One night in 2005, decedent was discussing "estate planning," and he asked Meier to "get a piece of paper and a pen." He then dictated the terms of the 2005 will. Meier wrote that document in her handwriting "word for word" from decedent's dictation. She handed it to him, "he looked at it and he signed it." Decedent told Meier that this was his last will and testament. Moreover, in front of the witnesses, he urinated on the original copy of the 1997 will and then burned it." (emphasis added).

Estate of Stoker (2011) 193 Cal.App.4th 236, 240.

Missing a Court Hearing

One circumstance that always surprises me is when a party will attend some court hearings but not others. Suffice to say, there are consequences for not attending a court hearing, especially a trial. A recent unpublished appellate decision was based on a non-appearance by unrepresented parties.

"The court set a trial on the petition for July 9, 2024. At a status hearing on June 18, 2024, the court ordered the trial remain set for July 9. Andrea and Symone personally appeared at the status hearing.

On July 8, 2024—the day before the trial was set to begin—Andrea and Symone filed a motion to compel responses to their discovery requests. According to the motion, Christopher failed to respond to requests for admissions and the production of documents, which Andrea and Symone purportedly served in April 2024. Andrea and Symone requested an order compelling responses and for sanctions against Christopher. It is not clear whether the court ruled on the motion.

Andrea and Symone did not appear at the trial the next day, July 9, 2024. The court found they had received notice at the June 2024 status hearing, and it went forward with the trial without them. After Christopher presented his evidence, the court declared the December 2020 amendment to be invalid. The court overruled Andrea's and Symone's objections. It denied without prejudice Christopher's elder abuse claims, request for restitution, and request for punitive damages.

The next day, Andrea and Symone filed a notice of appeal."

"As we understand their arguments, Andrea and Symone contend the probate court erred by going forward with the trial in their absence and without having provided them notice. Andrea and Symone's arguments are premised on the claim that the probate court granted their motion to compel discovery "on or about" July 8, 2024—the same day they filed the motion—and ordered Christopher to provide responses "not later than January 6, 2025." According to Andrea and Symone, the court clerk told them the trial would be continued in light of the court's discovery order. They believed the trial had been continued automatically, so they did not appear on July 9, 2024."

"Andrea and Symone's due process argument is premised on their contention that the probate court granted their motion to compel discovery the day before the trial and gave Christopher until January 2025 to respond to their requests. However, the record on appeal does not contain such an order. Nor does the probate court's case summary reflect that the court issued any orders on July 8, 2024. Andrea and Symone's opening brief on appeal states the order is attached as "Exhibit B." However, Andrea and Symone did not attach any exhibits to the brief they filed in this court." 

As one can imagine, the Court of Appeal affirmed the trial court's decision. 

Booker Family Trust, dated August 12, 2003, Los Angeles County Superior Court case no. 21STPB11517.