Beneficiary Notification - Prob C § 16061.7

An issue when litigating a matter is timeliness. Sometimes a litigant can be premature while other times the litigant can be tardy. It is rarity though for a person to be both too early and too late in the same matter. Amazingly, such was the case of a litigant named Edward Bridgeman who wanted to challenge the validity of amendments to his father's trust.  Bridgeman v. Allen, CA Court of Appeal, 2013    

Henry and Kathleen Bridgeman created a revocable trust, naming themselves as co-trustees and their son Edward Bridgeman as beneficiary. Following Kathleen's death, Henry became sole trustee. "In 2004, Henry was diagnosed with dementia and possible Alzheimer's disease. In February or March of 2005, Donna Allen began taking care of Henry. In March 2005, Henry signed an amendment to the Trust, naming Allen as the sole beneficiary and successor trustee. Henry also appointed Allen as his attorney in fact on a durable power of attorney and advanced health care directive."

Edward filed a petition to invalidate this amendment. However, his petition was dismissed because he lacked standing as the trust was still revocable. The trial court's ruling noted that the dismissal did not prohibit a future filing by Edward.

In July 2011, Henry passed away and Beverly Brito, having replaced Ms. Allen who had been removed as trustee, served notice to Edward per Prob C § 16061.7. This notice contained the phrase, as required by California law, "you may not bring an action to contest the trust more than 120 days from the date this notification by the trustee is served upon you." Prob C § 16061.7. Edward, who was living out of state, receive this notice in July 2011.

On November 17, 2011, more than 120 days after notice was given, Edward sought relief to have his claim not be barred by the statute of limitations. Edward's attorney made a clerical error so the filing was actually not filed until until November 21, 2011. The trial court denied his claim as it was not within the 120-day window. On appeal, Edward argued that since he was an out-of-state resident, an extra 10 days should apply to the statute of limitations. CCP § 1013.

The Court of Appeal rejected this argument because it found that CCP § 1013 is the default rule and the probate code had a specific rule for providing notice. Thus, in terms of the statute of limitations, Prob C § 16061.7 was controlling, CCP § 1013 was not. In the words of opinion "Read together, the plain language of these statutes provide that an action to contest the trust must be filed within 120 days from the date the notification by the trustee is served (§ 16061.8), service may be by mail (§ 1215, subd. (a)), and mailing is complete and may not be extended when the notice is "deposited in the mail." (§ 1215, subd. (e).)"

Ultimately, Edward's claim was rejected as he had not timely filed within the applicable statute of limitations. His deadline to file was November 8, 2011 and he had filed on November 21, 2011. Thus Edward was surprisingly too early and too late with his filings in the same case.

Revoking a Will

Occasionally a person will change their mind in life about something, e.g. what kind of career they want, where they want to live, when should they retire, what should they eat for dinner that night, etc. Equally true is that a person might decide to revoke their will and write a new one. The key is that the person correctly revoke their will so there is no confusion when they pass away. This is done to avoid the unenviable position of where the executor is confronted with competing wills and they are not sure which one is controlling.

California law provides for 2 methods to revoke a will, revocation by a subsequent written document or by destruction. Prob C § 6120.

For the former, a prior will can either be cancelled through written revocation,  such as by writing "I revoke all wills and codicils I have previously made" in the subsequent will or by writing a subsequent will that is inconsistent with the prior will. The prudent maneuver is to revoke the prior will via written instrument rather than by writing a totally new will because it avoids the need to interpret competing wills once the testator passes away. In short, it is best not to leave the will's interpretation to chance. 

For the latter, a will is revoked by being burned, torn, canceled, obliterated, or destroyed, with the intent and for the purpose of revoking it, by either (1) the testator or (2) another person in the testator's presence and by the testator's direction.

A real-life example of how one testator decided to revoke their will involved the estate of Steven Wayne Stoker. Estate of Stoker (2011) 193 CA4th 236. In 1997, Mr. Stoker executed a will and a trust. However, a few years later, Mr. Stoker had what could be described as a change of heart. According to the opinion, 

"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."

To be clear, this colorful revocation by Mr. Stoker need not be replicated. Burning the will was sufficient alone. Presumably Mr. Stoker was unaware that his zealotry was not required by the California probate code. A simple "I revoke my prior will" on the 2005 will probably would have sufficed. Regardless, Mr. Stoker's unique method of revocation was effective and his 2005 will (which was the subject of the appeal) was admitted to probate instead of his 1997 will. Naturally I would probably never advise a client to revoke a will this way.

Gift Causa Mortis

Hollywood often portrays the decrepit man, sitting in his deathbed, dictating to close confidants his last thoughts as his life slowly fades away. If this person makes a gift during this time, it is a "gift causa mortis." A key aspect of this gift is that it is considered revoked "if the giver recovers from the illness or escapes from the peril." Prob C § 5702. 

For example, Pops Winter was of the ripe old age of 85. He resided in Campbell, CA and lived in a California ranch home. One day Mr. Winter, known as old man Winter to the neighbors, was gardening in his backyard. His grandson, Shecky Winter was mowing the back lawn while Mr. Winter was tending to the rose bushes. Shecky, a loveable clutz of the highest order, proceeded to lose control of the lawn mower causing it to crash into Mr. Winter. The blades of the lawn mower eviscerated the lower body of Mr. Winter. Shecky, aghast that he had caused this tragedy, rushed to the aid of his grandfather. 

Mr. Winter had always worn an Omega watch which he had received for years of service with the city council of Campbell. Mr. Winter knew that Shecky was a likeable grandson who had been befallen by unfortunate brakes in his life. Having pity for his grandson and knowing that his life on earth was close to extinguishing, he took off his watch and handed it to Shecky, telling him to "take and enjoy it." Surprised by the generous gesture, Shecky accepted the gift and thanked his grandfather profusely. Shecky had usually worn cheap imitation watches, he often was hoodwinked into believing that the "Rolex" he purchased from the guy in the Wal-Mart parking lot was genuine. Upon seeing the accident, a neighbor called 911 and Mr. Winter was rushed to the local hospital. Due to the wonders of modern science, Mr. Winter miraculously recovered from his seemingly mortal injuries. 

Since Mr. Winter had recovered from the ostensibly fatal injury, the gift to Shecky, his Omega watch, was revoked. Thus, Mr. Winter was within his legal rights to request the return of the watch from Shecky. However, Mr. Winter declined to do so because the author wants to have a happy ending to this hypothetical. 

Professional Fiduciary Fees

A series of articles in the San Jose Mercury News chronicled the large fees professional fiduciaries charged their clients in conservatorship matters. Since a professional fiduciary often charges at least $125 per hour for their services, many conservatees were often aghast at the lofty cost. The series of articles prompted the Santa Clara County Superior Court to modify the local rules governing professional fiduciaries in such cases. The California legislature has also weighed in on the issue, AB 1339 (Maienschein).

According to the California legislative counsel "This bill would require that when a petition to appoint a conservator or a temporary conservator is filed, and the petitioner or proposed conservator is a professional fiduciary, as defined, the petition also include the petitioner’s or proposed conservator’s proposed hourly fee schedule or another statement of the petitioner’s or proposed conservator’s proposed compensation from the estate of the proposed conservatee for services performed. The bill would provide that provision of that schedule or statement shall not preclude a court from reducing the hourly fees or other compensation."

The thrust of this bill is to provide notice to all parties of the professional fiduciaries fee schedule whereby a large fee will not materialize out of the shadows. 

For example, a conservatorship is needed for a young man injured in an auto accident. The injured victim receives a large settlement  from the at-fault party's insurance company and a conservatorship is needed to safeguard the estate. His family is unable to handle the legal responsibilities of being a conservator. Instead a professional fiduciary is appointed conservator. The professional fiduciary then goes about doing the required tasks of being a conservator. When the annual accounting is required for the conservator, the professional fiduciary notes his hourly rate, $150 per hour, and the amount of hours worked, e.g. 100. The conservator's family is completely unaware of the fee schedule because in court filings such is not required prior to the professional fiduciary's appointment. The conservator's family is then floored upon seeing that the professional fiduciary is petitioning for a $15,000 fee.  This bill would require that the professional fiduciary provide notice of their fee schedule prior to appointment so as to avoid "sticker shock" for the conservatee and their family down the line.

This bill sailed through the California legislature, a 37-0 vote in the state senate and a 78-0 vote in the state assembly. The bill now sits on Gov. Brown's desk awaiting his signature.