USA – CALIFORNIA Trends and Developments Contributed by: Jennifer Jordan McCall and Paul Fraidenburgh, Pillsbury Winthrop Shaw Pittman LLP
potentially constitute a dangerous trap for a client and should be cautiously guarded against. Building relationships with doctors and friends (who would later testify to the client’s competence if needed) and obtaining a baseline record of cognitive ability from a qualified expert can protect one’s client, particularly when there is a potential enemy who could seek to control their assets alleging incompetence and using the Conservatorship Proceeding as an offensive tool. Nursing-home considerations Occasionally, a client is placed in a nursing home against their choice by a spouse who alleges that the client cannot care for themselves. This approach can be taken to an extreme when the client is not really in need of continuous medical assistance. In some cases, the nursing home in which the client is placed is not a high-quality one, lacking quality medical care. The client can then succumb to numerous medical issues and may not live very long. Loved ones should be on hand to advocate for the client to be placed in a good-quality medical facility, to ensure that long- term care insurance is in place, or to provide express instructions that the client must remain at home with around-the-clock nursing if they are unable to care for themselves. Will and revocable trust estate planning documents In another recent California case, a very wealthy cli - ent lived alone. While he had attempted to create a will with his estate planning attorney, he did not com - plete the process. He died without any clear record of which estate planning documents he intended to use to control his vast estate. Litigation arose among the intestate heirs who thought that he had died intestate and other beneficiaries who produced a document which they asserted was a hand-written – or holo - graphic – will. Without adequate records as to whether that holographic will was valid, and without the client having completed his official estate planning docu - ments, the case was poised for extended litigation. Fortunately, the parties reached a settlement, avoid - ing years of potential protracted and expensive litiga - tion. In this case, the impact of taxes on the various beneficiaries’ interests was a key tool in reaching a settlement.
This highlights the importance of ensuring that one’s clients have their wills and trusts up to date and that the originals are carefully safeguarded in a vault at the lawyer’s office. This can alleviate uncertainty as to what their wishes actually are when they die, and can mitigate the possibility of foul play if documents that control a vast amount of wealth are neither safe - guarded nor certain to be valid. California Supreme Court weighs in on trust modification methods Since the Fourth District Court of Appeal’s decision in Haggerty v Thornton(2021) 68 Cal.App.5th 1003 , California courts have been divided on how revocable trusts may be modified. Haggerty held that unless a trust explicitly states that a particular method of modi - fication is exclusive, the statutory method under Pro - bate Code Sections 15401 and 15402 remains valid. Section 15401 allows revocation either by the method stated in the trust or by a signed writing (excluding a will) delivered to the trustee during the settlor’s life - time. If the trust expressly makes its method exclu - sive, that method must be used. Section 15402 states that a revocable trust may be modified using the revo - cation procedure unless the trust provides otherwise. Unlike 15401, it lacks language requiring exclusivity, leading to inconsistent rulings. Contrary to Haggerty , appellate courts often previ - ously required adherence to the trust’s modification method, even if not labelled exclusive. On 8 Febru - ary 2024, the California Supreme Court resolved this conflict, adopting Haggerty’s reasoning. It ruled that the statutory method applies unless the trust clearly makes its own procedure exclusive. Accordingly, settlors wishing to limit trust modifica - tions to a specific method must include explicit lan - guage in the trust declaring that method as the sole procedure. Without such a statement, modifications may be made via signed, non-testamentary writing delivered to the trustee during the settlor’s lifetime.
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