Dana Cannon | Long Beach Estate Lawyer

FAZZI v. KLEIN - 190 Cal.App.4th 1280 (2010)

Norma Jean Klein and her husband, Lloyd, created a joint revocable trust called the Klein Family Trust in 1987, and executed pour over wills. Norma and Lloyd served as co-trustees during their lives. Under the terms of the Trust, on the death of either spouse, the survivor as trustee was to divide the trust assets into three sub-trusts, two of which became irrevocable at the first spouse’s death. Norma and Lloyd's children and stepchildren were named as remainder beneficiaries of the irrevocable sub-trusts. The Trust instrument contained a no-contest clause. The Trust instrument designated Norma’s other son, Michael, as successor trustee in the event that Norma and Lloyd ceased to act as Trustees. Lloyd died and Norma became sole trustee. In November of 2008, Christopher filed an application for safe harbor determination under California Probate Code former section 21320 whether his proposed petition constituted a contest to the trust. Christopher’s petition sought: (1) removal of Norma as trustee for cause; (2) a determination that the provisions designating Michael as successor trustee only applied to the original trust and not to the irrevocable sub-trusts, but that if the designation did apply to those trusts, a determination that Michael was unfit to serve and disqualified from serving as successor trustee; and (3) appointment of a professional fiduciary as successor trustee of the irrevocable sub-trusts. The trial court granted Christopher’s safe harbor petition on the grounds that the sub-trusts did not contain a no-contest clause or incorporate the no-contest clause contained in the original trust by reference. On appeal, the California Court of Appeals reversed the trial court and found that the intent that the no-contest clause apply to the sub-trusts was implicit in the Trust, noting that because the original trust was revocable, a contest was never a possibility during the joint lives of the settlors. The court similarly rejected the argument that the successor trustee provisions did not apply to the sub-trusts, and refused to find that Michael was unfit to serve because of his lack of necessary education or his hostile attitude toward Christopher, noting the importance of the settlors’ choice of a trustee. The court agreed that Christopher’s request to remove Norma for cause did not violate the no-contest clause because the Trust contained no prohibition or provision at all on an action to remove an individual trustee for cause. The court noted that even if the no-contest clause at issue had specifically prohibited any action to remove a trustee, the provision would have been unenforceable because a trustee cannot hide behind a no-contest clause and commit breaches of fiduciary duty.

hink having a handwritten Will is good enough? It may be, but what if it’s not?

The Second District of the California Court of Appeals has recently held that missing specific language from a Will can render your intended bequest invalid. In Re: Estate of Eimers (B09), the Court affirmed a ruling from the Los Angeles Superior Court which held that a Will cannot be modified by court order to add missing language specifically referencing a power of appointment. Despite Mr. Elmer’s handwritten Will clearly stating that he intended to make a gift, the Court found that he failed to include a specific reference to the power of appointment which Mr. Eimers was attempting to exercise. Based on the requirements set forth in the underlying Trust and in the California Probate Code, Mr. Eimers’ Will could not be modified to fulfill his intended gift. As a result, Mr. Eimers’ handwritten Will was ineffective for his intended gift.

2956

Don’t wait until it’s too late to have an estate plan that sets forth your wishes. Contact Cannon Legal Firm today for a free consultation to review your existing estate plan or to create a new one. We are offering special package rates for a limited time.

COURTS.CA.GOV