Estate of Michael Jackson

It is hard to believe that Michael Jackson passed away practically a decade ago. He passed away on June 25, 2009. 

Simply put Michael Jackson was a world-famous musician. He still is my sister's favorite musician. I can remember listening to his music as a child during the 1980s on a boombox that was playing a cassette tape. How times have changed.............

Following Mr. Jackson's passing, 4 individuals came forward to assert a claim against his estate. The claimants alleged that Mr. Jackson had promised them a share of a new company during a meeting on June 1, 2006 in Japan.  

However, no claim was immediately filed after the co-executors had been appointed on November 10, 2009 to administer Mr. Jackson's estate. 

Instead, according to the unpublished appellate opinion, "[o]n December 20, 2012, El-Amin wrote to the executors advising them of the June 1, 2006 meeting and claiming that at that meeting Jackson had made promises to appellants of ownership interests in his company and had stated how those supposed equity interests would be allocated."

This prompted the co-executors into action. 

"On January 28, 2013, the executors filed their "Petition for an Order Determining that the Estate of Michael Joseph Jackson Is the Sole Member and Owner of the Michael Jackson Company, LLC," pursuant to Probate Code section 850 (the Petition), by which they sought an order confirming that "the Estate is the sole member and owner of the [LLC] and that no other person has an interest in the [LLC]." The Petition noted that Jackson had been listed as the sole member of the LLC on the Estate Inventory and Appraisal, filed in 2011."

"On May 7, 2013, Morris and El-Amin filed a complaint in the Los Angeles Superior Court, seeking damages for Jackson's alleged repudiation of the claimed joint venture among the parties which they alleged had been formed at the meeting in Tokyo to determine the value of their interests in the claimed joint venture and to obtain damages for its breach."

The probate petition and civil action were eventually consolidated. 

"Following a multi-day bench trial on the Petition in the probate court and posttrial briefing, on March 27, 2017, the trial court issued a 27-page minute order containing its credibility determinations, findings of fact and legal rulings. The court determined the Estate was the sole owner of the LLC."

On appeal, the appellate court affirmed the trial court's decision.

The crux of claimants' case was the delayed filing. Mr. Jackson passed away on June 25, 2009. Code of Civil Procedure § 366.2 generally imposes a strict 1-year deadline to file a claim against a decedent's estate. No exception to Code of Civil Procedure § 366.2 applied to this matter, so the claimants needed to file their claim by no later than June 25, 2010. Unfortunately for the claimants, their claim was filed after June 25,  2010 and so their claim was time-barred.

Filing a Will

It is seldom a prudent decision to delay filing a document. The law imposes a statute of limitations on parties to submit documents in a timely fashion or else their claim is time-barred. The following unpublished appellate opinion highlights what happens when a party waits too long to file: 

"Appellant Gregory Smith challenges the court's determination that his attempt to introduce a copy of a holographic will into probate of the estate of his mother, Helen Louise Smith, was untimely under Probate Code section 8226. Section 8226, subdivision (c)(1), requires the proponent of a will to petition for probate within 120 days of an order determining the decedent to be intestate. Here, Gregory filed a petition for probate of the holographic will over 11 months after the court determined Helen died intestate. Despite the late filing, Gregory appeals the court's decision that the filing of the petition was untimely even assuming Gregory was entitled to the benefit of equitable tolling to extend the statute of limitations period."

The following excerpt encapsulates Mr. Smith's problem:

"The trial court assumed that attorney Schultz's possession of the holographic will for roughly six months served as an impediment to Gregory's filing the petition for probate. The trial court even further assumed that the tolling event continued until Gregory's March 24, 2016, meeting with Lee, after he received the will back from Schultz on March 7, 2016. At that meeting, Gregory was expressly advised by the estate attorney to get his own attorney if he wished to proceed on the holographic will. Even so, over 120 days passed before Gregory filed the petition for probate. Using the latest possible date of March 24, 2016, the 120-day filing deadline expired on July 22, 2016, and Gregory filed the petition on August 3, 2016.  

At the time of the March 24, 2016, meeting, Gregory was in personal possession of the holographic will. The trial court found that Lee advised Gregory to obtain his own counsel to act should he wish to pursue his rights to admit the holographic will into probate. No impediments prevented Gregory from petitioning the court at that time. His delay of more than 120 days in filing the petition evinces a lack of diligence separate and apart from any impediment created by Schultz. Despite having possession of the holographic will and express notice from Lee that he needed to act should he wish to enter the holographic will into probate, Gregory failed to act promptly."

Estate of Smith, Tuolumne County Superior Court Case # PR11349

Equitable Estoppel

When a litigant desires to seek legal action, timeliness is key. A party is generally obligated to seek redress within a certain period of time. This is known as the statute of limitations.

For example, Code of Civil Procedure § 366.3(a) provides that "[i]f a person has a claim that arises from a promise or agreement with a decedent to distribution from an estate or trust or under another instrument, whether the promise or agreement was made orally or in writing, an action to enforce the claim to distribution may be commenced within one year after the date of death, and the limitations period that would have been applicable does not apply." Therefore, the aggrieved party has 1 year to commence an action following the decedent's death. If filed after 1 year, the claim is considered time-barred because the statute of limitations has run. 

However, there is an exception to this rule. The doctrine of equitable estoppel "comes into play only after the limitations period has run to preclude a party from asserting the statute of limitations as a defense to an untimely action where the party's conduct has induced another into forbearing to file suit." (McMackin v. Ehrheart (2011) 194 Cal.App.4th 128, 140. This doctrine consists of four elements: "(1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury." City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 489.

For purposes of illustration, assume that Danny orally promised Billy that he would bequeath his home to him in a will. Danny thereafter had a change of heart and bequeathed the property to his neighbor Fred and named Fred the executor. Danny then died on May 10, 2010. Fred intentionally stalled in lodging the will until 1 year had elapsed. He eventually lodge the will on June 2, 2011.

Fred was aware of Code of Civil Procedure § 366.3(a) so he thought by delaying probate until after the statute of limitations had run, he would not have to worry about Billy's claim. When Billy periodically asked Fred about the matter, Fred told him that he was still searching for the will. Billy believed Fred as they were acquaintances. 

These facts could potentially give rise to an equitable estoppel claim if Billy pursues an action against Fred, as executor of Danny's estate.

First, Fred knew the pertinent facts regarding Danny's will, i.e. he received the property not Billy. Second, Fred knew that Billy would believe him about the will's erroneous disappearance because of their relationship. Third, Billy was not able to procure a copy of Danny's will so as to be made aware of the situation. Fourth, by believing Fred's false statements about the will, Billy suffered an injury as any claim he could make would be time-barred since more than 1 year elapsed after Danny's passing.  

Probating a Lost Will

When a person who wrote a will, the testator, passes away the will needs to be lodged with the appropriate probate court in California. If the person was domiciled in California at death, the county of domiciliary has jurisdiction. For example, if the decedent was a domiciliary of Campbell, CA at death, Santa Clara County Superior Court would be the proper venue for the will lodging.  

Naturally, a problem arises when the original will cannot be located. This can result from a number of scenarios, e.g. the testator lost it, the testator accidentally destroyed it or the testator gave the will to a forgetful person, etc. I've heard  attorneys erroneously state that the original will is required to commence probate. However, Probate Code § 8223 holds otherwise.  

Probate Code § 8223 reads: "the petition for probate of a lost or destroyed will shall include a written statement of the testamentary words or their substance. If the will is proved, the provisions of the will shall be set forth in the order admitting the will to probate."

For purposes of illustration, assume that Tom penned a will. He gave the original will to his friend Carl, the sole beneficiary and nominated executor of Tom's estate. Tom was concerned that his overbearing niece, Allison, his heir, would try to pressure him into making her the sole beneficiary of his estate. Tom's attorney also retained a copy, albeit a duplicate copy.

Tom eventually passes away and Allison commences probate. She argues that since no will can be found amongst Tom's possessions at his home, he died intestate, i.e. without a will. Therefore, as next of kin, she should be appointed administrator and sole beneficiary of Carl's estate. Unfortunately Carl was horribly disorganized and simply could not find the will amongst his belongings when he heard that Tom had died. Still, Carl remembered that Tom had hired an attorney to write his will. Carl calls the attorney and explains Tom's passing. Seeing no ethical issue, the attorney agrees to release the will to Carl. He then petitions the court to be appointed executor in light of Probate Code § 8223. That is, even though the original will was essentially lost, the duplicate original was sufficient because Carl convinces the court that he simply misplaced the original will. Carl does this through his own declaration and the declaration of the attorney who wrote Tom's will.

Executor of a Will (Letters Testamentary)

A statement I commonly hear, albeit erroneous, is where a person mentions that a relative or friend passed away and they are now the executor after reading their will. However, this hypothetical person is misinformed in terms of California probate law. An executor is only appointed following a court order. Simply by reading a will and seeing you are the nominated executor does not automatically make you the appointed executor of an estate. There is a process in becoming the executor.

In order to become appointed executor of a testator's estate, such person has to petition for probate with the appropriate superior court. If the decedent resided in California, "the proper county for proceedings concerning administration of the decedent’s estate is the county in which the decedent was domiciled, regardless of where the decedent died." Probate Code § 7051. If the testator was domiciled in Monte Sereno, CA but died in Auburn, CA, the proper county to petition for probate would be Santa Clara County not Placer County. Usually determining the decedent's domicile is relatively easy, you just figure out where the decedent lived permanently. Domicile is just a fancy way of saying "permanent residence" or "permanent home." Granted a permanent residence can change over time but you can only have 1 permanent residence at a time. Just try me on this one.

When a person petitions for probate, they submit to the probate court various judicial council forms and a copy of will. Form DE-111, the main document, will ask basic background information about the decedent such as where they resided, if they were married, if they had children, when they passed away, the approximate value of their estate, if they had a will, etc. The judicial council forms can be found here. 

If all the appropriate forms have been correctly submitted, an order for probate will be granted (Form DE-140) and at that point, an executor will be appointed (Form DE-150). If an executor is appointed, DE-150 is completed as letters testamentary. 

Once appointed executor, such person can deal with third-parties on behalf of the decedent's estate. Although third-parties will ask for a copy of letters testamentary as evidence of the executor's authority to act. For instance, a bank will ask for a copy of letters testamentary if the executor desires to access the decedent's account there.         

Proof of Death - Probate

When a person passes away, his or her estate might require probate. Probate is commonly defined as the judicial process where a person's assets are collected, their debts paid and the balance distributed to their beneficiaries. The typical probate in California can range from 7-12 months depending on the county. The last two probates I handled took 10 months (Sacramento County) and 9 months (Santa Clara County).  Unfortunately the California legislature has not placed a priority on the California judicial system and budget cuts have caused staff reductions and court closures which have severely affected timely probate administration. The attorney fees for probate are basically set by statute and are based off the value of the estate. See Probate Code § 10810. Attorneys seldom handle a probate for less than the statutory fee given the amount of work required to probate an estate.  

The threshold figure for probating an estate is greater than $150,000 in California "probate assets." Rather than devote this post to what constitutes "probate assets" I will instead focus on a peculiar omission of the probate process.

One of the first questions I am asked by an executor is how many death certificates to order. The standard response is 10 death certificates. This answer is prompted by the fact that ordering death certificates can be a lengthy process unless the executor is willing to go to the county recorder in-person. So one errs on the side of caution.

Various entities require that a death certificate be presented to them in order to validate that the decedent has in fact passed away. For example, a bank will typically require that a death certificate be presented to prove that the account holder has passed away. Consequently, the account will be frozen or transferred, the bank will not let the account continue as is. However, I have noticed that banks and other entities have increasingly become agreeable to a copy of the death certificate. Hence, the executor does not have to give up one of those hypothetical 10 death certificates.

Very oddly though, there is no requirement that a death certificate be filed when probating an estate. 

Judicial council form DE-111 is the form used to begin a California probate. Nowhere on the form does it require that a death certificate be attached to the petition. Form DE-111 simply asks for the date of death and the decedent's address at the time of death. Although form DE-111 does require the petitioner to sign a declaration under penalty of perjury that the contents of the petition are true and correct. Still, it is hard to believe that no death certificate is needed during probate given that it is a judicial process. From personal experience, out of the 4 probates I have handled in the past 2 years, at no point did the probate court ask for proof of the decedent's death. A simple filed statement that the decedent had passed away was sufficient.

Estate of Sobol - Standing to Challenge a Will

The California probate code requires that only a certain class of individuals can challenge a will. In legalese, this is known as standing. 

An individual who wishes to contest a will must be considered an “interested person." Prob C §48(a). An “interested person” is defined as an heir, devisee, child, spouse, creditor, beneficiary or any other person having a property right in or claim against a trust estate or decedent's estate that may be affected by the proceeding, any person having priority for appointment as personal representative, or a fiduciary representing an interested person. Prob C §48(a). For example, a beneficiary of a subsequent will has standing to contest an earlier will that affects their bequest. Estate of Powers (1979) 91 CA3d 715. Although, “the meaning of ‘interested person’ as it relates to particular persons may vary from time to time and shall be determined according to the particular purposes of, and matter involved in, any proceeding." Prob C §48(b). 

A recent California Court of Appeal decision addressed the standing issue for an ex-executor involving a very large estate. Estate of Sobol ____ Cal App. 4th ___ (2014).

On December 23, 2010 Sonia Sobol drafted a will which named Jay Rose as her executor and a trust which also named Jay Rose as trustee. On September 27, 2012, Ms. Sobol amended her will and replaced Jay Rose as the executor with her bankruptcy attorney Terry Shaylin along with Dolores Diehl and Maria Da Costa-Iyer. Ms. Sobol passed away a few months later on December 15, 2012. The estimated value of her estate, per the opinion, was $22M. 

The executors of the 2012 will then filed a petition to have the will admitted to probate. Mr. Rose objected to the petition, arguing incapacity, fraud and elder abuse. Mr. Rose's intent was to invalidate the 2012 will and have the 2010 will become the operative instrument. The petitioners demurred to his objection, stating that Mr. Rose lacked standing to challenge the will’s validity. In particular, the petitioners asserted that Mr. Rose was not an “interested person” as defined by the California probate code and therefore lacked standing to challenge the validity of the 2012 will. The trial court sustained the demurer without leave to amend, thereby essentially dismissing Mr. Rose’s objection. This decision was then appealed to the California Court of Appeal. 

The Court of Appeal found that Mr. Rose was simply a former executor who otherwise had no affiliation to the estate. He was not a beneficiary of Ms. Sobol’s will, nor was he an heir, i.e. next of kin via intestate succession. Hence, Mr. Rose lacked the requisite standing necessary to contest Ms. Sobol’s 2012 will and his objection was properly dismissed by the trial court. 

Lodging of a Will - Probate Code §8200

When a testator passes away, i.e. a person who wrote a will, California law requires the custodian of the will to deliver such to the clerk of the superior court of the county where probate may be initiated. Probate Code §8200. For example, if the testator was a domiciliary of Los Gatos, CA, the custodian of the will would lodge it with the Santa Clara County Superior Court at the 191 N 1st Street courthouse in San Jose. 

The custodian could be a relative, neighbor or the testator's attorney. 

The additional requirement of Probate Code §8200 compels the custodian to mail a copy of the will to the executor, if their whereabouts are known, and if the executor's whereabouts are unknown, the custodian is to mail a copy to a beneficiary, if their whereabouts are known.

AB-2166, a proposed bill in the California legislature, seeks to reduce the obligations on the custodian. AB-2166 would amend Probate Code §8200 such that the custodian would only have to comply with one of the above obligations. That is, the custodian would only have to either (1) mail a copy to the executor or beneficiary or (2) lodge the will with the superior court. If the custodian chooses to deliver the will to the executor or beneficiary, the following notice would need to be included in at least 10-point font:

“As the successor custodian of the decedent’s will, you have a duty pursuant to Section 8200 of the Probate Code to deliver the will within 30 days of receipt to the superior court of the county in which the estate of the decedent may be administered. Additionally, if you are not the person named in the will as executor, but know the whereabouts of the person who is named in the will as executor, you are required to mail a copy of the will to the person named as executor.” 

The rationale behind the bill was to make it easier for the will to be filed. If the custodian is not named in the will as either an executor or beneficiary, they still have to pay $50 to the superior court to have the will lodged. Although the probate code expressly permits the custodian to be reimbursed for this expense, probate typically takes 6-12 months to complete. Hence, repayment of the $50 is by no means immediate. This bill would allow the custodian to shift the responsibility of lodging the will to the executor or beneficiary, parties who have a greater financial interest in seeing the will lodged and probated. Yes, humans are motivated by financial considerations. Shocking I know. 

It is probably that this bill will pass given that there is no opposition on file and is sponsored by the Trusts and Estates Section of the State Bar of California. Still, only time will tell if this bill becomes law. So please do not assume that AB-2166 is current law.

Personal Representative - Executor, Administrator or Administrator with Will Annexed

Using the appropriate term is important in law. While certain terms are inter-changeable, e.g. president and chief executive, other legal terms are not so flexible. For instance, in the probate context, the person entrusted with administering a decedent's estate, the personal representative, can have multiple labels but each label derives from a particular circumstance.

The term "personal representative" means "executor, administrator, administrator with the will annexed, special administrator, successor personal representative, public administrator acting pursuant to Section 7660, or a person who performs substantially the same function under the law of another jurisdiction governing the person’s status."Prob C § 58(a).

Three common labels in terms of describing a personal representative are (1) executor, (2) administrator and (3) administrator with the will annexed. As mentioned, each of these terms relate to a specific situation that allows the person to serve as the personal representative albeit from different routes.

Executor

The executor is the person named in the will to administer the estate.

When appointed, the executor is provided letters testamentary.

Still, the executor must be appointed by the court in order to serve as the executor. It is not automatic that the executor will be appointed. For example, the proposed executor may have predeceased the decedent, is unable to be located or lacks the competency to handle the rigors of probate.

This is probably the term the general public has the most familiarity with out of the three terms. Furthermore, many people erroneously conflate the term "executor" and "trustee"  though the former relates to a will and the latter relates to a trust. While the roles entail similar duties they are nonetheless mutually exclusive terms.  

Administrator

The administrator is the person who administers the estate when the decedent died intestate, i.e. without a will. 

When appointed, the administrator is provided with letters of administration.

Typically the administrator is the child of the decedent because they are an heir and therefore have priority to be named administrator. From personal experience, a probate case I had last year involved an intestate decedent who was survived by her children. Whereas the daughter was the only child interested in handling her mother's probate, she was appointed administrator.    

Administrator with the Will Annexed

The administrator with the will annexed is the person who administers the estate because no executor was named in the will or the proposed executor(s) decline to act.

When appointed, the administrator is provided with letters of administration with will annexed.

This can be seen as a hybrid of the first two because a will has been written but nobody, for whatever reason, can serve as the executor. Hence, the administrator is selected by who has priority via intestate succession, i.e. next of kin, as in the case of an administrator.  Prob C §§8441, 8461.  
  
Clients

The use of the correct term when describing the personal representative is important because when a client calls with a question about probate, their title can provide quick insight into their situation. For example, if a client says they are the executor, then I immediately know that there is a will. 

Who Can Initiate Probate?

To begin probate, California law specifies which persons are eligible to do so. Typically the petitioner is seeking to become the personal representative, the person who will represent the interests of the estate.  Depending on who the person is, the personal representative can be known by the following terms: (1) executor, (2) administrator, (3) administrator with the will annexed, (4) special administrator, (5) successor personal representative, or (6) public administrator. Prob C §58(a).

According to California law, "any interested person may commence proceedings for administration of the estate of the decedent by a petition to the court for an order determining the date and place of the decedent’s death and for either or both of the following: (1) Appointment of a personal representative. (2) Probate of the decedent’s will. Prob C § 8000. The question then becomes, what is the definition of an "interested person."

Consequently California law defines the phrase "interested person" to be the following individuals: (1) an heir, (2) devisee, (3) child, (4) spouse, (5) creditor, (6) beneficiary, or (7) any other person having a property right in or claim against the estate of the decedent that may be affected by the proceeding; (8) any person who has priority for appointment as personal representative; and (9) a fiduciary representing an interested person. Prob C § 48. 

Naturally the question then becomes what constitutes an heir, creditor, etc. The following are definitions of an heir and devisee.

An heir is a person who would inherit the decedent's estate if the decedent did not write a will pursuant to the laws of intestate succession. Prob C § 44. This is a fancy way of saying that a person's estate goes to their next of kin if they did not write a will. For example, John, a widower was a wealthy land-owner who resided in Los Gatos, CA. He had 3 children, Heathcliff, Hugo and Henry. John despised lawyers because he believed them to be devilish and avarice. Consequently, John never planned his estate and he died without having penned any estate planning instrument(s). His 3 sons, as heirs, would each be entitled to commence probate proceedings in Santa Clara County because they would inherit his estate through intestate succession.

A devisee is a person named in a will as the beneficiary of either personal and real property or both. Prob C § 34. For instance, from the above example, if John had wrote a will and named his son Heathcliff as the beneficiary of his Rolex watch, then Heathcliff would qualify as a devisee.    

How long does probate take?

It is well-known that probate is a very long judicial process. The following are some of the required steps to be taken in probate, though the process for each estate is unique.

First a personal representative must be appointed by the court. Second, following appointment of the personal representative, they must inventory the decedent's assets and have them appraised. Third, the personal representative must satisfy all valid outstanding claims against the decedent's estate. Fourth, the personal representative must petition the probate court to terminate the probate proceeding, i.e. petition for final distribution. 

A natural question then is, how long should probate take?

Depending on which county, probate typically takes between 7-12 months to complete. One reason for the gap is because some courts have a clogged probate calendar so hearing dates are scheduled far in advance. In particular, I have heard from other attorneys that Los Angeles County has a lengthy waiting period when filing new probate cases. Furthermore, sometimes it is difficult to locate beneficiaries or assets. Without a distinguishing description, a beneficiary can easily become ostensibly "anonymous." For instance, if the beneficiary's name is John Brown, it might be cumbersome for the executor to ascertain which John Brown the testator was referencing in their will.

It should be noted that there is no accelerated probate process. At the very least, 6 months are taken up by 3 steps. First, a petition for probate is typically calendared at least 1 month in advance. Second, the window to file a creditor claim is 4 months months. Third, a petition to distribute the estate is typically calendared at least 1 month in advance as well. Thus the beneficiary of an estate has to wait at least half a year, whether they like it or not.

However, the California probate code imposes a deadline to either close the account or provide a status report once a personal representative has been appointed.

Probate Code § 12200 reads:

"The personal representative shall either petition for an order for final distribution of the estate or make a report of status of administration not later than the following times: 

(a) In an estate for which a federal estate tax return is not required, within one year after the date of issuance of letters.

(b) In an estate for which a federal estate tax return is required, within 18 months after the date of issuance of letters. 

Thus, a beneficiary does not have to wait an indefinite period of time without recourse. 

For example, in early 2013, Thomas writes a will and passes away on August 15, 2013. In the will, Thomas names his neighbor Enzo as the executor and bequeaths his entire estate, which consists of a $600,000 home in Campbell, CA and a $50,000 bank account, to his nephew Boris. Enzo applies to become the executor and is appointed such on November 1, 2013 by the probate court. Upon becoming executor on November 1, 2013, Enzo needs to either petition to close the estate or file a status report by November 1, 2014. The reason that Enzo is not given 18 months is because no estate tax is due for Thomas' estate. The estate tax threshold in 2013 is $5.25M, which Thomas' estate obviously falls below. Thereby 12 months, instead of 18 months, is used as the measuring window of time.   

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.

Holographic Will

A person should not expect the best results when they haphazardly do anything in life, estate planning is no different.

Estelle Elsa Manwell was a wealthy Californian. According to court documents, she owned real estate in Contra Costa and El Dorado County worth $1,238,848. On March 23, 2011, she executed a holographic will which bequeathed her estate to her 5 living children. For reasons unknown, her will was attested to by 9 witnesses (Author's comment: this is very peculiar, (a) a holographic will need not be witnessed and (b) even a type-written only requires 2 witnesses).  In terms of the real property, the will stated "I do not want any of my property sold outside of my family for a minimum of 20 years." Finally, the will did not nominate an executor nor mention bond. On March 25, 2011, Ms. Manwell passed away. 

There are notable problems with this situation. 

First, the most obvious defect is that there is no trust involved and there decedent owned real estate. Consequently, Manwell's estate must be probated and typically the only "winner" during probate is the attorney because they are handsomely paid. For an estate worth at least a $1M, the attorney can collect a statutory fee of $23,000. Meanwhile, the beneficiaries have to endure a costly and lengthy procedure, namely probate. 

Second, the will did not mention who would have priority to be administrator. Since the children all have equal priority, there existed the potential for conflict because the administrator can be compensated the same amount as the attorney. Consequently, court filings reveal that the children did in fact engage in adversarial proceedings to determine who would be administrator of their mother's estate.

Third, the will called for a lengthy restraint on the alienation of the estate's real property. In other words, the homes could not be sold for a long period of time after the decedent's death. I commonly advise clients to not insert such a clause in their trust because managing property is very expensive. The annual upkeep of a property, e.g. maintenance, property taxes, utilities, etc., is easily thousands of dollars. By essentially hand-cuffing the beneficiaries to the property, they deprive them of liquidity because they are not allowed to sell. I think clients like to keep "the farm in the family" because of the sentimental feelings attached to the property. This is an understandable feeling. Years of familial memories are deeply inter-twined with the property: birthdays, parties, holidays, family meals, etc. Still, the children do not automatically hold firm these same feelings. Hence, I like the notion of providing the children the option to keep or sell the residence. Thereby, the trust would omit a clause about keeping the real estate in the home.

Clearly Ms. Manwell knew that her demise was shortly coming, her will was written only 2 days prior to her death. It is logical to then assume that Ms. Manwell was trying to make the best of her situation. The problem is that sometimes it is too late to fully address all the issues. Despite her will, Ms. Manwell's estate is currently being litigated in probate court and her passing was over 2 years ago. Thus, it is doubtful that Ms. Manwell would be pleased with what that has ensued following her passing. The probate matter is replete with various motions, many of a bizarre nature, and does not appear to be resolved anytime in the foreseeable future.  

Ademption by Satisfaction

When a beneficiary under a will receives their inheritance prior to the testator's death, the question then becomes whether or not the devise is satisfied. This is known as ademption by satisfaction. 

For reference, ademption is defined as property that was listed in the person's will that is not in his or her estate at the time of their death. Black's Law Dictionary 8th ed. (West Group, 2004). Of note, when I was in law school, the term used for ademption by satisfaction was "advancement." Other jurisdictions may use the latter term instead of the former.   

California Probate Code § 21135 states that if one of the following conditions occurs, then ademption by satisfaction is triggered:
(a) Property given by a transferor during his or her lifetime to a person is treated as a satisfaction of an at-death transfer to that person in whole or in part only if one of the following conditions is satisfied:
(1) The instrument provides for deduction of the lifetime gift from the at-death transfer.
(2) The transferor declares in a contemporaneous writing that the gift is in satisfaction of the at-death transfer or that its value is to be deducted from the value of the at-death transfer.
(3) The transferee acknowledges in writing that the gift is in satisfaction of the at-death transfer or that its value is to be deducted from the value of the at-death transfer.
(4) The property given is the same property that is the subject of a specific gift to that person.

For example, Thomas Hobbs, a widower without any children, wrote a will that included a gift of $25,000 to his neighbor Bobby Winghart. The balance of his estate went to his friend, a famous author, Samuel Langhorne Clemens. Thomas named his uncle Elvis Hobbs as executor. 

Thomas was a wealthy man and had amassed a large fortune at the time of his death. He owned multiple properties having been a successful entrepreneur in Silicon Valley. Yet when Thomas died, his estate was illiquid, i.e. it lacked cash resources.  Thomas had tirelessly sought investments and believed that a bank account was a poor asset-maximization vehicle. Thus, his estate did not have sufficient funds to initially provide for Bobby's gift. 

One day, following Thomas' death, Elvis began sorting through Thomas' possessions. When going through Thomas' desk, he discovered that Thomas had given Bobby a gift of $25,000 the year before he died. The check read on the memo line "$25k is worth more today $25k tomorrow, enjoy!" Armed with this information, Elvis believed Bobby's gift had already been satisfied.

Elvis then filed a petition in probate court to determine entitlement to Thomas' estate, arguing that Bobby's gift had adeemed. Elvis argued that since Thomas' gift of $25k to Bobby matched the amount stated in the will and the check referenced the will, ademption by satisfaction should occur. The probate court agreed and ordered that Bobby take nothing from Thomas' estate as he had already received his inheritance.  

Probate Referee

When a petition for probate has been filed and granted, the estate's personal representative is entrusted with collecting the decedent's assets and appraising them. While the personal representative may appraise some of the items, certain items require the expertise of a probate referee.

For reference, the probate referee is appointed once the order for probate has been granted. See Q6 - Form DE-140.   

The personal representative is to appraise the items in
Prob C § 8901. These include:

(a) Money and other cash items. As used in this subdivision, a “cash item” is a check, draft, money order, or similar instrument issued on or before the date of the decedent’s death that can be immediately converted to cash.

(b) The following checks issued after the date of the decedent’s death:

(1) Checks for wages earned before death.

(2) Refund checks, including tax and utility refunds, and Medicare, medical insurance, and other health care  reimbursements and payments.

(c) Accounts (as defined in Section 21) in financial institutions.

(d) Cash deposits and money market mutual funds, as defined in subdivision (b) of Section 9730, whether in a financial institution or otherwise, including a brokerage cash account. All other mutual funds, stocks, bonds, and other securities shall be appraised pursuant to Sections 8902 to 8909, inclusive.

(e) Proceeds of life and accident insurance policies and retirement plans and annuities payable on death in lump sum amounts.

The probate referee appraises all other property which typically includes real property, business interests, stocks, etc. Prob C § 8902.

The probate referee is entitled to a fee of 1/10 of 1% of the total value of the property for each estate appraised. Prob C §8961(a). The minimum fee is $75 and the maximum fee is $10,000, although the maximum fee can be increased upon the judge's discretion. Furthermore, the probate referee is allotted reimbursement costs for associated expenses, e.g. travel costs. Prob C §8961(b).   

The following is a hypothetical example of the inventory and appraisal process.

Danny Decedent, a widower, lived at 650 Rosewood Court Los Altos, CA 94024 and had 1 savings account at Star One Credit Union. The aforementioned constituted Danny's entire estate. Danny wrote a will that named his neighbor Jim Rogers as executor. When Danny died in 2013, Mr. Rogers probated the will in Santa Clara Superior Court. Upon being named executor of Danny's estate, Mr. Rogers completed his portion of the inventory and appraisal, i.e. he appraised the value of Danny's Star One account. Mr. Rogers then mailed the appraisal to the probate referee. 

The probate referee went to 650 Rosewood Court to appraise the home. The probate referee appraised the value of the home at $1M. Thereafter, the probate referee mailed his report back to Mr. Rogers and submitted a fee request of $1,000 for the appraisal and $25 for travel costs. Mr. Rogers then filed the completed inventory and appraisal with Santa Clara Superior Court in order to satisfy this probate requirement.  

Filing a Will

Humboldt Superior Court

When a person passes away and has written a will, certain duties arise. For example, the custodian of the original will must lodge it with the probate court within 30 days of learning of the testator's death. 
Prob C §8200(a). If the custodian fails to do so, he or she is liable "for all damages sustained by any person injured by the failure." Prob C §8200(b).

The custodian is the person in possession of the will. This person may or may not be the will's executor.

The will is to be delivered to "the clerk of the superior court of the county in which the estate of the decedent may be administered." Prob C § 8200(a)(1). For instance, if the decedent resided in Los Altos, CA (my hometown), his or her will would be lodged with the clerk of the Santa Clara County Superior Court. Prob C §8200(a). The exact courthouse is located in San Jose at 191 N 1st Street. Some counties only have 1 courthouse, such as Modoc, whereas larger counties, such as Santa Clara, have multiple courthouses. A quick check of the county's website will reveal the location of the courthouse where the will should be filed.

Furthermore, the custodian is to "mail a copy of the will to the person named in the will as executor, if the person’s whereabouts is known to the custodian, or if not, to a person named in the will as a beneficiary, if the person’s whereabouts is known to the custodian." Prob C § 8200(a)(2).

In the past, no filing fee attached to the lodging of the will. That is, the will could be lodged free of charge. On a couple of occasions I lodged the will of a deceased testator as a favor for the family of the former client because I occasionally go to the local superior court. However, effective June 27, 2012, a filing fee attached to the lodging of the will. The relevant law reads, "the fee for delivering a will to the clerk of the superior court in which the estate of a decedent may be administered, as required by Section 8200 of the Probate Code, is fifty dollars ($50)." Govt C §70626(d).

Once filed, the will becomes public record. Thus, the general public is free to inspect the will if they so desire. A copy of the will may also be obtained for a fee. Some wills may be read online through the website of the Alameda County Superior Court. 

Safe Deposit Box

Many people utilize a safe deposit box to store valuable items. A person might keep a prized piece of jewelry, an antique watch or their passport in it. What is also commonly found in a safe deposit box is an original copy of a person's will and trust. A will and trust are one of the few legal documents where an original is generally required. I always tell clients to store their will and trust in a safe deposit box, assuming they have one, because it is a secure location.

Frequently, a person will own a safe deposit box in his or her name alone.  Since the asset is held in their name alone, there is the initial concern that access will be prohibited once they pass away. However, the probate code has been amended to allow access to the safe deposit box for specified reasons for certain people. The following explains how a person can gain access to the safe deposit box and what they may remove.

First, the person seeking access must have a key to the box. Prob C § 331(a). It is not enough if the person is a relative or friend of the decedent, he or she needs a key to gain access. Next, this person must showing the bank both of the following (Prob C § 331(b):   
 

(1) Proof of the decedent’s death. Proof shall be provided by a certified copy of the decedent’s death certificate or by a written statement of death from the coroner, treating physician, or hospital or institution where the decedent died.

(2) Reasonable proof of the identity of the person seeking access. Reasonable proof of identity is provided for the purpose of this paragraph if the requirements of Section 13104 are satisfied.

In short, the person needs to show a death certificate and a driver's license to the bank.

Upon satisfaction of Prob C § 331(b), the bank is required to do the following:

(1) Keep a record of the identity of the person.

(2) Permit the person to open the safe deposit box under the supervision of an officer or employee of the financial institution, and to make an inventory of its contents.

(3) Make a photocopy of all wills and trust instruments removed from the safe deposit box, and keep the photocopy in the safe deposit box until the contents of the box are removed by the personal representative of the estate or other legally authorized person. The financial institution may charge the person given access a reasonable fee for photocopying.

(4) Permit the person given access to remove instructions for the disposition of the decedent’s remains, and, after a photocopy is made, to remove the wills and trust instruments.

In short, the person can remove the decedent's will and trust from the safe deposit box but must make a copy of each. 

Then, the person is to deliver all wills found in the safe deposit box to the clerk of the superior court and mail or deliver a copy to the person named in the will as executor or beneficiary as provided in Section 8200. Prob C § 331(e).

However, this person is not given carte blanche in regards to removing items. The last part of Prob C § 331 states:

(f) Except as provided in subdivision (d), the person given access shall not remove any of the contents of the decedent’s safe deposit box.

Thus, if the safe deposit box had a large sum of cash, an Omega watch or the keys to a Ferrari in it, the person would be prohibited from taking these items. The personal representative would be the appropriate party to remove these items from the safe deposit box. A person is appointed the personal representative of a decedent's estate only after filing various documents with the probate court.