Financial Elder Abuse

Under Welfare & Institutions Code §15610.30(a)(1)–(3), financial elder abuse occurs when an individual

"(1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.

(2) Assists in taking, secreting, appropriating, obtaining, or retaining real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.

(3) Takes, secretes, appropriates, obtains, or retains, or assists in taking, secreting, appropriating, obtaining, or retaining, real or personal property of an elder or dependent adult by undue influence, as defined in Section 15610.70."

A recent unpublished appellate opinion focused on the issue of financial elder abuse. The trial court ruled that respondent had committed financial elder abuse and awarded the petitioner $318,000 in compensatory damages and $50,000 in punitive damages. The respondent appealed the trial court's ruling of financial elder abuse. The appellate court agreed with the trial court's finding of financial elder abuse.

"From 2015 through 2017, under the guise of providing comfort and care, Baik repeatedly misrepresented to Mr. Tak that the government could seize his condominium before or after his death unless he created a trust. Fearing the loss of his home and worrying about his ability to reside in it for the rest of his life, Mr. Tak acted upon Baik's misinformation to create a trust.

Subsequently, in March 2017, Baik actively facilitated Mr. Tak's creation of the Trust by driving him to We the People and paying Yi for her services. As a result of her efforts, Mr. Tak signed a slew of complicated legal documents, which he could not read or understand. He believed that, by creating the Trust and signing those documents, he was protecting his home from government seizure and ensuring his testamentary wishes would be carried out. Instead, Mr. Tak unwittingly granted Baik the exclusive rights to his entire estate, including his condominium, upon his death. Two months later, Baik quelled any concerns Mr. Tak may have had by assuring him, in writing, that she would carry out his wishes by distributing $100,000 to his church and $50,000 to Hwang when he died. Her actions taken following Mr. Tak's death, however, reflect that this promise was false.

Rather than following Mr. Tak's testamentary wishes, Baik immediately commenced efforts to sell Mr. Tak's condominium as quickly and surreptitiously as possible. Less than two months after his death, she sold the condominium to a distant family member through a closed sale, after initially concealing the transaction from Hwang. Ultimately, through the relationship she formed with Mr. Tak, her campaign of misrepresentations causing him to fear the loss of his home and believe she would carry out his testamentary wishes, and her active efforts to ensure the Trust's creation, Baik pocketed nearly $200,000 from the sale of Mr. Tak's home, as well as $9,700 from his life insurance policy. As a result of her actions, Mr. Tak's wishes remain unfulfilled: Hwang and Mr. Tak's church have been deprived of gifts they would have received had Baik not kept the entirety of his estate.

On this record, we conclude there is substantial evidence to support a finding that Baik took and retained Mr. Tak's property with the intent to defraud and by undue influence. Thus, the trial court did not err by concluding Baik committed financial elder abuse under section 15610.30, subdivision (a)(1) and (3)."

In the Matter of: Grace S. Hwang, Los Angeles County Superior Court case no. B325870

Duties to a Non-Client?

A lawyer owes various fiduciary duties to a client. These include the duty of loyalty, confidentiality, competence, etc. A list of these duties can be found in the California Rules of Professional Conduct (CA Attorney Ethics Rules). 

However,  a lawyer generally does not owe such duties to a non-client. Moore v. Anderson Zeigler Disharoon Gallagher & Gray (2003) 109 Cal.App.4th 1287, 1294. Furthermore, an attorney does not owe a duty to non-clients to ascertain a client competence's when making a trust or will revision. Id. at 1290.

In Moore, decedent's children sued the estate planning attorney for malpractice. Just prior to his passing, decedent was in poor health. According to the appellate opinion "by June 2000 Clyde was extremely sick, debilitated, and confused. Clyde had undergone chemotherapy and was under the influence of powerful medications, including pain medication." Nevertheless, the attorney drafted and decedent executed an amendment to his trust. The amendment was executed on June 21, 2000 and decedent passed away on June 23, 2000. Hence, at most, decedent had 48 hours to live when he executed the amendment. 

This amendment reduced the distribution to some of the children. Litigation then ensued between the beneficiaries. 

Surprise surprise.

Once the litigation had settled, they then sued the estate planning attorney and his law firm for malpractice.   

The plaintiffs, non-clients, sought to impose a duty on the attorney to ascertain decedent's mental capacity and since decedent was extremely ill, the attorney acted negligently in "failing to 'assure, confirm and document' that Clyde had capacity and was competent to execute his will and trust amendments."

The Moore Court rejected imposing such a duty, finding that determining "testamentary capacity is often difficult and the potential for liability to beneficiaries who might deem any investigation inadequate would unjustifiably deny many persons the opportunity to make or amend their wills." 

"Factors which might suggest lack of testamentary capacity to some attorneys do not necessarily denote a lack of capacity. It has been held over and over in this state that old age, feebleness, forgetfulness, filthy personal habits, personal eccentricities, failure to recognize old friends or relatives, physical disability, absentmindedness and mental confusion do not furnish grounds for holding that a testator lacked testamentary capacity." (Estate of Selb (1948) 84 Cal.App.2d 46, 49."  

Undue Influence involving a California Trust

One method in which a testamentary instrument can be voided is if it is the product of "undue influence." California case law says that undue influence is dependent upon the facts and circumstances of the situation. Sparks v. Sparks (1950) 101 Cal.App.2d 129, 135. Thus, there is no set of elements which need to be established in order to show that undue influence has occurred.

However, there are situations which suggest a showing of undue influence. These include the following: (1) unnatural provisions cutting off from any substantial bequests the natural objects of the decedent's bounty; (2) dispositions at variance with the intentions of the decedent, which he or she may have expressed both before and after execution; (3) relations between the chief beneficiaries and the decedent that afforded the chief beneficiaries an opportunity to control the testamentary act; (4) a mental or physical condition suffered by the decedent that permitted the subversion of his or her freedom of will; and (5) the chief beneficiaries' active procurement of the contested instrument. (Estate of Lingenfelter (1952) 38 Cal.2d 571, 585.

An example of undue influence occurred in the case Arnold v. Fuller, Los Angeles Superior Court Case No. BP122665. Thelsey Fuller was the father of five children, Robert Fuller, Doris Fuller, Shirley Ritchey, Sandra Arnold and Steven Fuller. Prior to forming his trust, Mr. Fuller expressed his intentions to evenly divide his trust estate equally amongst his five children. Consequently, Mr. Fuller executed a trust on July 23, 2008 which evenly distributed his trust estate to his five children.

Only two months later on September 16, 2008, Mr. Fuller curiously amended the distribution clause in his trust. It read: "On the settlor's death, the remaining trust estate shall be disposed of as follows: [¶] Shirley C. Ritchey shall be given the amount of forty dollars ($40.00), Sandra Arnold shall be given the amount of forty dollars ($40.00), Steven A. Fuller shall be given the amount of ten dollars ($10.00). [¶] The remaining trust estate shall be distributed as follows: [¶] Robert Fuller shall be given fifty percent (50%) of the trust estate. [¶] Doris Fuller shall be given fifty percent (50%) of the trust estate." 

Hmmm.............

Shirley Ritchey and Sandra Arnold filed a petition to have the September 16, 2008 amendment voided, citing undue influence. The trial court determined that such amendment was the product of undue influence and voided the amendment. This judgment was upheld on appeal in an unpublished decision.  

An undue influence case can usually be easy to spot. For example, the cases I've seen involved a tortfeasor befriending an elderly person who amends their trust or will to the benefit of the tortfeasor at the cost of cutting out their children and/or grandchildren from his or her estate. Where there is smoke, there is usually a fire.......     

What is a Will

The most recognizable estate planning document is the will. Wills have been around for centuries although the relevance of wills has steadily declined due to the advent of trusts. Regardless, wills still play an important role in the estate planning process as most individuals do not need a trust to efficiently and effectively transfer their estate upon their passing. Here are some frequently asked questions in regards to wills. For reference, a “testator” is the person who writes the will. 

1. What is a will? 

A will is a “document by which a person directs his or her estate to be distributed upon their death.” Black’s Law Dictionary (8th Edition, 2004). 

2. Who can write a will? 

In order to write a will, testamentary capacity, the individual must be 18 or more years of age who is of sound mind may make a will. Prob C § 6100.

Clearly the first requirement, the age restriction, is a simple requirement that requires little explanation. An individual is either at least 18 years old or not.

As for the “sound mind” aspect, it is usually evident where a person lacks the capacity to write a will. Furthermore, there is a presumption that any adult has the capacity to write a will. Prob C § 810. 

Regardless, there are occasions where the individual lacks testamentary capacity and the will’s nullification follows. For example, in one case an uncle left his estate to his attorney and his banker (quite possibly the most vilified employment combination around) rather than his nephew because he believed that his nephew had killed his mother even though the nephew had not yet been born at the time of her death. Estate of Martin (1969) 270 CA2d 506. 

3. Does a will have to be written in English? 

No, surprisingly a will does not have to be written in English in order for it to be probated. Estate of Jepson (1918) 178 C 257, 172 P 1107 (German); Estate of Guerrero (1986) 183 CA3d 723 (Spanish). However, the English language translation must be attached to the petition for probate of the will in the foreign language. Prob C § 8002(b)(2). 

4. How many pages is a will? 

A will’s length is dependent upon the testator’s ambitions. Some testators have elaborate plans as to how to distribute their estate which could take many pages to write. Whereas other testators have simple ideas for their estate’s distribution which only require a few pages to spell out. The wills that I have written are usually around 5 pages. 

5. What property can be disposed of in a will? 

A will governs the disposition of assets held solely in the testator's name that are not governed by beneficiary designation. Furthermore, if the estate is named as the beneficiary or if no designation has been made, a will can direct the distribution of such assets. 

6. When does a will become effective? 

A will becomes effective upon the testator’s death. This is in contrast to a revocable trust which becomes effective during the lifetime of the person who wrote the trust. 

7. Can I revoke a will? If so, how? 

Yes, a testator may revoke a will through two methods. A testator may revoke a will via a subsequent written instrument or through the mutilation of the previously executed will. Prob C §6120.

All the wills I write include an introductory clause which states “I revoke all wills and codicils that I have previously made.” This ensures that any client of mine will not have to worry about multiple wills floating around at the time of their passing. 

8. Can I amend a will? If so, how? 

Yes, a will can be amended. The name used for this amending document is a codicil. A codicil is a testamentary document that supplements, amends, qualifies, or republishes a prior testamentary document. Estate of Benson (1944) 62 CA2d 866. A valid codicil is part of the will to which it refers, and both instruments are construed together as one. 

9. Can a will create a trust? 

Yes, a will can create a trust. A will that creates a trust is called a testamentary trust. The necessary elements for creating a testamentary trust are identical to creating a revocable trust. 

10. Which person administers the will? 

The person entrusted with administering the will is the personal representative. 

11. Does California recognize an oral will? 

No, California does not recognize oral wills. The four kinds of wills allowable in California: witnessed, holographic, statutory and uniform international, all require that it be in writing. So please do not create a video outlining your testamentary desires, it will not work. 

12. Is a will notarized? 

No, wills are not notarized. 

No competent California attorney will tell you to get your will notarized. The reason for this is because the most common type of will, a witnessed will, requires the attestation of two witnesses. Thus, in the eyes of the law, a notary’s signature will not qualify as two witnesses. 

13. Who should witness my will? 

Any person competent to testify to the requisite facts may act as an attesting witness. Prob C §6112(a). However, there are legal consequences if the witness doubles as a beneficiary. Hence, it is prudent to have disinterested witnesses sign the will in order for a bequest to not be invalidated on the grounds that an interested witness signed the will. Of note, Probate Code §6112 does not prescribe an age requirement for a witness. In light of this, it is prudent to have the witness be at least 18 years old because minors are not exactly the most reliable witnesses. 

14. Are wills ever read? 

Yes, wills are read on television shows and in the movies.

In the real-world, however, wills are never read. Instead, wills are deposited with the local probate court. Therefore, the will because a public document whereby any person is free to inspect the will for their personal contentment. 

15. Does an attorney have to assist in the drafting of the will? 

There is no requirement that an attorney assist in the drafting of a will for a testator. A testator is free to draft a will absent the assistance of counsel. However, it is a criminal offense, namely a misdemeanor, for anybody other than an active member of the California State Bar to dispense legal advice in this state to an individual who is thinking about writing a will. Bus & P C §§ 6125-6126.

On a few occasions I have been asked to review a will that was written without the assistance of a lawyer. All of these wills were either not legally sufficient or drafted erroneously. For example, one will lacked the necessary number of witnesses while another will disposed of property outside the testator’s estate.

The people who write wills without the assistance of counsel are almost always motivated by economic reasons. There is nothing inherently wrong with being frugal. However, the problem is that these wills often fail to meet legal sufficiency or incorrectly dispose of the testator’s estate. Consequently, the testator will end up having to pay more money in the end because the previously made mistakes will need to be corrected and only then can a new will be drafted.