Influence or Undue Influence?

One method to invalidate a revocable transfer on death deed (TOD) is by proving undue influence. Obviously the beneficiary of a TOD will have some influence over the drafter of the TOD. For example, in the case of a child and parent, the child may converse with the parent, care for the parent, buy groceries for the parent, pay bills for the parent, take the dog out for a walk, etc. These interactions between the child and parent certainly give the child influence with the parent. Still, the threshold question is whether the influence is undue or not. If undue influence, the free will of the parent is overcome by the influence of the child. 

A recent unpublished appellate decision articulated the difference between "influence" and "undue influence."

"I find that Ms. Vosburgh influenced Ms. Fries, gave her information regarding, perhaps, Mr. Gribbon's misdeeds from the past; gave Ms. Fries information about the check writing that, again, and I'm not taking this for the truth, but this is information that Ms. Fries received, whether she believed it or not or whether it is true or not, that is not for me to determine, but this is the information she had.      

And I do believe that Ms. Vosburgh informed Ms. Fries of the check writing, that it was Mr. Gribbon who wrote himself checks; that it was Mr. Gribbon who — I'm trying to choose my words regarding the bird. I know there was some argument whether it was stolen, sold, boarded, all of those things, but taken away from Ms. Fries, and she was not happy about that. She did not consent to that.      

And, also, regarding her apartment being emptied when she came home, again, I'm not accepting those as, necessarily, the truth, but . . . that [information] was otherwise provided to Ms. Fries.      

And based on [that] information, and I even thought about this, essentially, whether they be true, whether they be disinformation, misinformation, it was information that she had, and the question is, having [that] information, whether it be true or not, whether it be mis-, dis-, or lies, when she had [the] information, was she of her free mind, her own volition? Did she voluntarily, knowingly, intelligently make a decision to, nonetheless, give both properties to Ms. Vosburgh? And based on the evidence that I have, that Ms. Fries was actually upset with Mr. Gribbon, whether it be the bird, whether it be because of the checks, the emptied out apartment, that she was upset with Mr. Gribbon, she did not want to communicate with Mr. Gribbon, she did not want to — I think one of the . . . statements that was given was she did not want anything to do with Mr. Gribbon, again, whether that be based on truth, misinformation, that's how she felt.      

And based on the feeling, based on the belief, then she did execute a transfer of that deed on her own free will, voluntarily, intelligently, informed, or without duress or coercion, and I do believe that it was. So based on those, I do feel that the Petitioner, Mr. Gribbon, has failed to meet his burden to show that Ms. Fries otherwise executed the [TODs] September 2nd, 2019, that she was under undue influence.      

I believe she was influenced, but whether it was "undue," I do not find that it was."

Gribbon v. Vosburgh, Riverside County Superior Court case no. PRRI2100639; PRRI2200180 

Signing a Will

In order to be validly executed, a will needs to be signed by the testator, by some other person in the testator’s presence and by the testator’s direction or the testator's conservator pursuant to a court order. Probate Code §6110(b). Typically the signatory on the will is that of the testator. In a will contest, the genuineness of the testator's signature can occasionally be at issue. A recent unpublished appellate decision touched upon the testator's alleged execution of her will.

"After decedent Diane Carreira died on August 26, 2022, appellant Emily Mendoza petitioned to admit to probate a document entitled "Power of Attorney and Last Will and Testament of Diane Carreira," dated August 23, 2022. The probate court determined that the will was not valid because Carreira had not signed it. The court found in the alternative that, even if Carreira had properly executed the document, it was still invalid under the conclusive presumption of fraud or undue influence that applies when the drafter of a will is also a beneficiary." 

Typically a handwriting expert is retained to opine as to whether or not the testator in fact signed the will. This case was no different.

"Mendoza testified that she drafted the will during a phone call with Carreira on the Monday before Carreira died. Carreira "pretty much" told her what to put in the will, although Mendoza "added details," including names and terminology. Mendoza testified that she took the document to Carreira, who signed it while inclined in bed. Mendoza said she was familiar with Carreira's signature and recognized the signature on the will as being hers." 

"Substantial evidence supports the probate court's finding that Carreira did not sign the will that Mendoza proffered. Lilinoe-Davis's expert witness testified that Carreira's signature was not genuine based on several characteristics distinguishing the signature on the will from other known exemplars of Carreira's signature. These distinguishing characteristics were not explained by Carreira's illness or the fact that she purportedly signed the will in bed. Lilinoe-Davis also provided her own lay opinion that the signature on the will did not resemble Carreira's signature. The testimony of these two witnesses provided substantial evidence that the signature was not genuine. Mendoza emphasizes her own testimony that she saw Carreira sign the will, but it was within the probate court's purview to weigh the conflicting evidence. (Estate of Clark (1949) 93 Cal.App.2d 110, 119 [handwriting expert testimony provided substantial evidence to reject will, despite contrary testimony of other witnesses]; Estate of Kisling (1945) 68 Cal.App.2d 163, 166-167 [handwriting expert testimony and court's own examination of signature were substantial evidence to overcome contrary testimony of two witnesses].)"

Estate of Diane Carreira, Siskiyou County Superior Court case no. SCCV-CVPB-2022-973 

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