Trusts & Estates Law Blog

Focus on Fiduciaries: What Fiduciaries Need to Know About the Attorney-Client Privilege

Posted in Estate and Trust Planning, Fiduciary
Businesswoman on phone

Last month, my Weintraub colleagues and I had the pleasure of speaking at the Professional Fiduciary Association of California annual conference on the topic of the attorney-client privilege and its application to clients serving in a fiduciary capacity (trustee, executor, conservator, agent, etc.).

Most people have a cursory understanding of what the attorney-client privilege does – it keeps communications between clients and their attorneys confidential and free from discovery, which fosters honest and complete communication between client and lawyer – but many individuals don’t realize that there are important limitations and exceptions to the privilege, particularly for those serving as fiduciaries. These crucial limitations and exceptions apply regardless of whether the fiduciary is a professional fiduciary or simply an individual who is administering a trust or estate or serving as a conservator for a loved one or friend.

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A Case Lesson in “What Not To Do” When Billing as a Conservator

Posted in Case Alerts, Estate and Trust Planning, Fiduciary

Based on recent appellate cases, one of which is discussed below, the court’s scrutiny of conservators’ conduct and, specifically, private fiduciaries, is seemingly on the rise. Private fiduciaries acting as conservators should always remain focused on performing and charging only for those services that are consistent with the best interests of their conservatees. California case law continues to refine that understanding.

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And You Are? Long Lost Relatives Need to Prove Up Their Entitlement to Inherit

Posted in Case Alerts, Estate and Trust Planning

Under California law, the laws of intestacy control who inherits when a person dies without having prepared a valid will or trust. These rules can be complicated particularly as remote or even unknown blood relatives may have a claim to assets of the decedent’s estate. However, these long lost relatives often must prove up their entitlement to inherit from the decedent’s estate.

The California Probate Code has a procedure in place to determine who is entitled to inherit from the decedent as set forth under California Probate Code section 11700 et seq. Filing a petition under this section is particularly useful when there is uncertainty as to the actual heirs of the decedent’s estate.

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FirstMerit Bank, N.A. v. Diana L. Reese

Posted in Trust

Weintraub attorneys wrote the following case alert for the State Bar of California Trusts and Estates Section regarding FirstMerit Bank, N.A. v. Diana L. Reese. The case alert may also be found on the website for the State Bar of California under Trusts and Estates Section, New Case Alerts.

FirstMerit Bank, N.A. v. Diana L. Reese
Filed November 19, 2015, Fourth District, Div. Two
Cite as E061480

FirstMerit Bank sought to enforce a money judgment against Reese by applying for an order under Code Civ. Proc., § 708.510 assigning Reese’s interest in two trusts to FirstMerit, and an order restraining her from otherwise disposing of her right to payment under the trusts. The trial court denied the motion because a debtor’s interest in a trust is specifically not subject to such an assignment order.

The court of appeal affirmed. The only means by which a judgment creditor may enforce a money judgment against a beneficiary’s interest in a trust is by a lien under Code Civ. Proc., § 709.010. However, such an order must be sought from the court with jurisdiction over the trust. In this case the trusts were administered in Ohio. Therefore, even if FirstMerit had utilized the correct procedure, the California court had no jurisdiction to impose such a lien. http://www.courts.ca.gov/opinions/documents/E061480.PDF

Gary D. Rothstein to join Weintraub Tobin

Posted in Estate and Trust Planning, Probate and Elder Abuse Litigation, Trust

Weintraub Tobin is pleased to announce that Gary D. Rothstein has joined our San Francisco office as Of Counsel.

Gary comes to us Weintraub from a national law and consulting firm. Gary has extensive experience with all aspects of trust administration, probate matters and estate planning.

With offices in San Francisco, Beverly Hills, Newport Beach and Sacramento, Weintraub Tobin attorneys utilize cutting edge ideas and innovate approaches to reach our clients’ business objectives. We are committed to providing clients with exceptional service and encourage everyone to visit our website at www.weintraub.com to learn about the full range of legal services we provide.

Please join Weintraub Tobin in welcoming Gary to our team!

U.S. Supreme Court Ruling Regarding Inherited IRAs Highlights the Benefits of IRA Trusts

Posted in Taxation

Last Thursday, the United States Supreme Court ruled in Clark v. Rameker that funds held in inherited individual retirement accounts (IRAs) are not “retirement funds” for bankruptcy purposes.

In October 2010, the Clarks filed for bankruptcy and claimed that Heidi Clark’s $300,000 inherited IRA was exempt from their bankruptcy estate under Section 522 of the Bankruptcy Code (which provides that tax-exempt retirement funds are exempt from a bankruptcy estate). The bankruptcy trustee and creditors objected to this, taking the position that the funds were not “retirement funds” within the meaning of Section 522. The Bankruptcy Court agreed with the trustee and creditors.

The district court ruled that inherited IRAs are exempt because they retain their character as retirement funds, but the US Court of Appeals for the Seventh Circuit reversed that ruling. The Supreme Court agreed with the Seventh Circuit, holding that the funds in an inherited IRA are not set aside for the debtor’s retirement and, thus, are not “retirement funds” under the exemption in Section 522.

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Estate Planning 101: What is a “Sweetheart Trust?”

Posted in Estate and Trust Planning

HilaryLWhen discussing your estate planning needs with your attorney, after you discuss basic terms and concepts, your attorney will likely talk to you about the different types of revocable living trusts that may be appropriate for you.  If you are married, this may include a discussion about a revocable living trust structure commonly referred to as a “Sweetheart Trust.”

The Sweetheart Trust derives its name from the high level of control and discretion the surviving spouse maintains after the death of the first spouse. Initially, while both spouses are alive and competent, either spouse can revoke his or her share of the trust and the terms of the trust can usually be modified with the consent of both spouses.  When one spouse dies, all trust assets remain in the same revocable trust for the lifetime of the surviving spouse.  During the surviving spouse’s lifetime, he or she can terminate the trust, change its terms, add or remove beneficiaries, and otherwise manage the trust as he or she sees fit.  Because the surviving spouse has complete and absolute control over the trust after the first spouse dies—in essence, an unconditional gift—this type of trust is called a Sweetheart Trust. Continue Reading