One of the frequent questions asked of Buffington Law Firm's trust and estate litigation attorneys is whether a successor-trustee of a revocable "living" trust can be removed by a court action. As discussed in recent Blog articles, California living trusts are designed to operate without court supervision. The notion is that after the trustors (the person or persons who created the trust, e.g. husband and wife) have passed away, one or more designated successor-trustees will have the power under the trust instrument to carry out the provisions of the written trust instrument. When this process works as the law intends it is often cost-efficient and quick, and avoids the cost of probate.
Buffington Law Firm's trust dispute attorneys have frequently assisted clients in dealing with problems involving the removal of problem successor-trustees or the need to force the dissolution of a trust. One form of trust that is particularly prone to trust disputes are so-called "Dynasty Trusts."
Buffington Law Firm's team of trust dispute litigation attorneys has decades of experience in dealing with problem situations involving California Living or "revocable" trusts. Many of the problems that we are asked to solve deal with situations in which, for some reason or another, the trust was not wound up and terminated with the assets promptly distributed to the beneficiaries.
Buffington Law Firm's Trust dispute attorneys have broad experience in dealing with cases in which a trust successor-trustee is failing to properly carry out his or her duties as trustee. As many people know, trusts are a legal device that can allow a decedent's estate to avoid probate. Essentially, a trust allows a successor-trustee to distribute the trust assets and otherwise administer the trust without the involvement of the probate courts. Probate can be an expensive and time-consuming legal process and trusts lighten the courts' workload and can lower administrative expenses by avoiding probate.
Buffington Law Firm's trust litigation team won a significant courtroom victory in a 2017 case "Orange Catholic Foundation versus Rosario Arvizu." In this case, Buffington Law Firm defended the trustee of a trust, Rosario Arvizu, against various breach of fiduciary duty claims by other beneficiaries of the trust, i.e. the Orange Catholic Foundation and the Diocese of Orange. The trial court rendered a verdict in favor of Mrs. Arvizu. The trial court found that as trustee she had been confronted with a very difficult situation, had acted in good faith, and the court had the power to exercise its discretion under Probate Code Section 16440(b) to excuse any of her errors as trustee as an exercise in equity. After the trial the Petitioners appealed to the California Court of Appeal, arguing that the trial court had abused its discretion and lacked the power under the Probate Code to excuse what it argued were violations of the trust terms by Mrs. Arvizu. Buffington Law Firm represented Mrs. Arvizu on appeal.
Buffington Law Firm's trust litigation team has broad experience in litigating trust disputes. In last week's Blog article we noted that a recent Court of Appeal case, Barefoot v. Jennings, will provide controlling authority requiring significant changes to how certain types of trust disputes must be litigated. Specifically, the holding in that case will deprive certain disinherited persons, or persons deprived of their future positions as trustee, of standing to challenge a trust amendment that affects them under Cal. Probate Code Section 17200. In the past this statute has been the authority for perhaps most trust contest disputes in California. This will now change for some of the most common types of trust disputes, specifically in situations where a trust amendment allegedly procured by undue influence or other improper means purports to disinherit a litigant. Standing is a Consitutional requirement for bringing a lawsuit. For many trust contests, the powerful Cal. Probate Code Section 17200 will no longer provide a basis for bringing suit for lack of standing by the disinherited person.
Buffington Law Firm's Trust Litigation team has noted some important trends concerning trust litigation during 2018. In California trust litigation has become vastly more common in recent years because most families utilize trusts rather than wills to transfer their legacies. In former decades the most common way for family legacies to transfer to the next generation was by will, and courts were well-adapted to handle this burden through the probate system. However, in California wills have largely died out in favor of revocable or "living" trusts as the preferred vehicle for transferring a legacy. The courts have struggled to keep up with this relatively new trend. In some counties it has become notoriously difficult to move a trust dispute case to trial simply because of the backlog of cases in the probate division. In some counties only a relatively few judges accept trust litigation cases. This has sometimes led to delays and frustration for litigants and attornies alike.
Buffington Law Firm's Trust dispute and breach of contract attorneys often deal with issues of mental capacity when representing parties in cases involving disputes involving the validity of trusts. As discussed in last week's Blog article, the mental capacity to make a will is generally held to be a lower standard than is the standard for mental capacity to make a contract. So the question arises, which standard applies to the capacity to make a Trust. After all, in California and many other states trusts are becoming much more common as the means for persons to carry out their testimonial intents. Probate Code Section 6100.5 sets forth the standard for determining capacity to make a will. On its face this statute only applies to wills and not trusts.
Buffington Law Firm's Trust and Elder Law attorneys are sometimes faced with situations that deal with the issue as to whether a person has the mental capacity to make a contract or, alternatively, testamentary capacity -- the ability to make a will or trust. To the layperson this may seem straightforward -- it may seem as though a person either has mental capacity or he or she does not. However, under the law, generally, the required mental capacity to make testamentary decisions is lower than the mental capacity required to make contracts.
Buffington Law Firm's civil litigation attorneys often utilize formal Mediation as a tool to conclude business litigation, real estate litigation, or trust dispute cases. Mediation can be a very cost-effective and efficient way for our clients to achieve their objectives without the cost, stress, and uncertainty of trial.