It is not surprising that trust and estate disputes continue to increase. The number of people entering retirement age is increasing. The mobility and transience of American society are accelerating. The amount of people who have remarried with children from a prior marriage is expanding. Those trends mean that more people than ever are becoming elderly with diminishing capacity, an absence of close family members nearby to care for them, and the potential for disfavoring heirs in asset distribution. Experienced and knowledgeable retired judicial officers offer their service as private judges to determine disputed issues in a case. The initial reaction of many parties is that the cost of a private judge is prohibitive. The cost, however, may turn out to be less than the cost of proceeding in the superior court.
It’s critical that the couple understand and adhere to the rules governing their acts. Married clients often establish a Family Trust to control the disposition of their assets During their lifetimes, clients may transmute (that is, change the form of) property, whether from separate to community, from community to separate or from the separate property of one spouse to the separate property of the other spouse. A transmutation isn’t valid unless made in writing by an express declaration that’s made, joined in, consented to or accepted by the spouse whose interest in the property is adversely affected. The writing must contain language that expressly states that the characterization or ownership of the property is being changed.
Many trustees employ counsel to provide advice on dealing with and responding to inquiries from beneficiaries. Trustees may believe that their communications with and advice from counsel are confidential and cannot be disclosed to the beneficiaries without their consent. The recent court decision in Fiduciary Trust International of California v. Klein (2017) 9 Cal. App. 5th 1184 is a cautionary tale that warns trustees against assuming that all communications with an attorney are confidential.
Tax-deferred exchanges of commercial or investment real property are a common strategy for real estate owners. Federal courts have taken a pro-taxpayer approach in allowing taxpayers to structure these exchanges. California has not until recently.