ATTORNEY NEWSLETTER
Trust Contests: Challenging Invalid Trusts and Trust Amendments
Trusts and Trust Amendments Can Be Part of a Financial Elder Abuse Scheme
Many Californians, especially seniors, create trusts to hold their assets in part to avoid a lengthy probate process following death. In most cases, the settlor (creator of the trust) can change or amend the trust during his or her lifetime. When a settlor suffers from cognitive impairment, a greedy caregiver, spouse or boyfriend or girlfriend may try to turn the settlor’s diminished capacity to their own benefit by arranging an “amendment” to the trust that benefits them at the cost of the settlor’s own children or family members. The San Francisco and Alameda attorneys at Evans Law Firm, Inc. trusts and financial elder abuse attorneys at Evans Law Firm, Inc. litigate trust contests vigorously and represent heirs against those who take this advantage of seniors. If you or a loved one has been a victim of financial elder abuse or exploitation of a senior with respect to his or her trust in San Francisco, Alameda County or elsewhere in California, contact our trusts and financial elder abuse attorneys at (415) 441-8669 and we can help.
Once a settlor dies his or her trust becomes irrevocable. There is a very limited time period following the settlor’s death during which the trust or any amendments to it can be challenged. Cal. Probate Code Section 16061.7 (within 120 days of the trustee’s notice to the heirs that a trust has become irrevocable). Because your ability to challenge any trust arrangement that a caregiver or other financial predator has orchestrated is so short, you should contact a financial elder abuse/probate lawyer, like the attorneys at Evans Law Firm, immediately upon receipt of any notice or preferably before if you suspect a problem. Our litigators can prepare a trust contest which is filed in the Probate Court of the county with jurisdiction over the trust. Remember, however, that the time period for bringing a trust contest is very short so contact an attorney as soon as you suspect a problem or receive any notices.
Capacity Issues
Challenging a trust generally turns on the settlor’s competence or mental capacity and other factors such as the undue influence of another, fraud, or duress. Our litigators have seen repeated fact patterns of caregivers, second spouses or new girlfriends or boyfriends of senior take unfair advantage of a senior’s failing capacity to get their hands on the senior’s estate. Our litigators know how to investigate and prepare for challenging these arrangements in court.
The senior’s competence is the primary issue here. See Probate Code §§ 810 et seq. (Legal Mental Capacity). The mental capacity required to create or amend a trust is often referred to as “Contractual Capacity,” because legally a trust agreement is a form of contract. Under California Probate Code Section 811, the contestant must prove a material functional impairment by offering evidence of a mental function deficit that “significantly impairs the person’s ability to understand and appreciate the consequences of his or her actions with regard to the type of act or decision in question.” Cal. Probate Code § 811(b) (emphasis added). Such a showing typically requires testimony from an expert witness. A settlor who is unable to understand and appreciate the following is not competent to make a trust or execute a trust amendment:
- The “rights, duties and responsibilities created by, or affected by the decision,”
- The “probable consequences for the decision maker and, where appropriate, the persons affected by the decision,” and
- The “significant risks, benefits, and reasonable alternative involved in the decision.”
Cal. Probate Code Section 812.
Unfortunately, there are persons ready to take advantage of a settlor’s diminished capacity, and get themselves and their own family members inserted into the trust as trustee and/or beneficiary despite the settlor’s lack of understanding what is going on. Once appointed trustee by dubious amendment, these persons may breach the fiduciary duty they owe (to the settlor, trust and true beneficiaries) by embezzling or commingling funds, failing to transfer assets into the trust in accordance with the settlor’s direction, failing to administer and dispose of the trust assets in accordance with the settlor’s instructions, and putting their own financial interests first, or losing or mismanaging trust property.
Remedies
All of this misconduct may constitute (1) grounds for challenging the trust or amendments, (2) breach of fiduciary duty on the part of the successor trustee who caused the instruments to be executed, and (3) financial elder abuse. California law provides a variety of remedies for each of these causes of action. The remedies include compelling the trustee to account for trust assets and to restore to the trust any assets wrongfully taken out of it. Cal. Probate Code §§ 850 et seq. and 17200 et seq. Economic damages and punitive damages are also available to the injured party. Cal. Probate Code § 16440. Trustee misconduct may also constitute financial elder abuse against senior settlors and the Probate Code allows the injured senior to pursue remedies for elder abuse as well. Calif. Probate Code § 16442. In such cases, plaintiffs can pursue the remedies available under the California Elder Abuse and Dependent Adult Civil Protection Act, Welf. & Inst. Code § 15600 et seq., including mandatory attorneys’ fees and costs and extra damages to the injured senior or heirs in certain circumstances. Cal. Welf. & Inst. Code § 15657.5.
Contact Us
If you or a loved one has been a victim of financial elder abuse or a breach of fiduciary duty by a caregiver, spouse or other party by an invalid trust arrangement in San Francisco, Alameda County or elsewhere in California or, contact Ingrid M. Evans and the other Evans Law Firm trusts and financial elder abuse attorneys at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys have experience with complex securities cases, arbitrations, and mediations; and complicated financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We also handle cases involving physical and financial elder abuse, other types of qui tam and whistleblower cases, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.
