PROBATE COURT WORK
Even thoughtful and carefully made estate plans can go wrong. Beneficiaries can come to loggerheads among themselves or with your successor trustee. An unexpected situation can arise that raises questions about the terms of your plan. Rules can change in ways that cause a trustee legitimate doubt about how to proceed. A trustee might make a truly bad decision, become incapacitated or simply fail to act.
California probate courts are uniquely empowered to deal with these issues. In an ordinary court of law, the judge must make decisions based on settled interpretations of the law. But the probate court is a court of equity, which means the judge has discretion to do whatever he or she thinks is fair (or “equitable”) in the situation. This is encouraging, on one hand, because probate judges usually work hard to determine what you intended when you made your plan. It is troubling, on the other hand, because probate court matters are usually decided by the judge, not by a jury, which means the judge’s personal world view can play heavily.
If your primary estate planning document is a will, then every aspect of administering your estate will be subject to court approval. One of the biggest advantages in using a trust is that the probate court should not be involved in your affairs. There is a disadvantage in this. If you want to ask for a court’s review of a trust matter, it can be difficult to get it in front of a judge.
Here are some common probate court proceedings with which we can help.
Petition for Instructions. The California Probate Code allows a beneficiary or a trustee to file a petition asking the probate court to give instructions about the operation of a trust. These petitions often address situations that simply are not covered in terms of the trust, as when a beneficiary develops a substance abuse problem and it no longer seems wise to distribute substantial assets to that beneficiary. But these petitions are also useful when interested parties disagree about how a particular issue should be resolved. For example, one beneficiary might want a piece of real estate in the trust sold, but another beneficiary wants it preserved.
Accountings by a Trustee. Trustees are required to keep all beneficiaries informed of the financial status of the trust. They are required to give certain beneficiaries detailed reports about the cash flow of a trust. When a trustee refuses to give the required accounting information, beneficiaries can ask the court to order the trustee to account.
Protective Proceedings. One of the top objectives of estate planning is keeping your affairs out of court, but sometimes involving a court is the best way to protect a person’s interests. An aging family member who has become unable to make responsible choices is at risk of abuse, and a conservatorship may be the family’s best alternative for avoiding such abuse. If a conservator is appointed, then he or she can bring the authority of the court to bear in efforts to reverse or prevent financial elder abuse.
Trust Contests. Sometimes, it is not clear which documents accurately reflect a person’s intentions. Sometimes, a set of documents are obtained through undue influence, duress or menace. Sometimes, a person’s mental capacity begins to diminish and he or she signs conflicting instructions. When it is not clear which instructions should be followed, the situation becomes a trust contest, as beneficiaries and/or trustees take different positions.