Debunking Estate Plan Misconceptions, with Casey Reagan

0:00 Oh, here we go live. So, [clears throat and cough] one of the Well, it's very important to have a an estate plan and one of the goals of an estate plan is to avoid probate and litigation. The reality is, and this is a big misconception that I come across, is that having an estate plan does not avoid litigation. We're excited to have today

0:19 [clears throat] Casey Reagan from one of the biggest probate litigation firms, biggest probate firms, specialist in Los Angeles, Keystone Law Group. Casey, true or false, having an estate plan will avoid litigation?

0:34 Yeah, I think that's false because litigation will result if there's any dispute whether you have a trust or you have a will or you don't have anything in place, it's possible for litigation to result with a full estate plan in place. I think that misconception really comes from talk about the probate court and avoiding probate. it's true that a trust will avoid probate. A trust can be administered outside of the court system, whereas a will has to be administered through the court system. That doesn't mean that a trust is not going to end up in the court system if there's a dispute between beneficiaries or malfeasance by the trustee or even a dispute over what the terms of the trust are.

1:17 It And another misconception [clears throat] is, I think, that 90% of time, if there's enough money in a trust, somebody's going to file something about something to get some money out of it. Is that just what it appears or is that true?

1:36 Well, it's it's hard to say from my perspective because I don't see the cases where everything goes right, you know, I'm in this in this line of work in a probate litigation firm, every case we get into our firm for the most part, you know, unless it's a standard administration case that we're just assisting the trustee with doing their job with, any litigated case, which is primarily what I work on, something went wrong with the communication, with the timing of the distribution, with what who is supposed to get what, you know, those are those are what I see. I see the cases that end up in our in our law firm. But, I think, you know, most likely most trusts are handled well between the family and you know, are it avoids some of these disputes, but that doesn't mean, you know, that things don't escalate pretty easily in a lot of situations that might seem copacetic at first. it's very easy for it to spiral into a bad situation.

2:40 So, it sounds to me that the trust administration routine cases are down the hall and they come down [laughter] to you when there's a problem. You know, I it's nice when I do get to work on one of those. it's nice to help a trustee you know, get it get it administered properly and there's no dispute and all the beneficiaries are you know, in line with what the trustee is doing, but yeah, most of my cases that I'm working on are not that situation. They're they're a litigated case where there's some dispute between either beneficiaries themselves or the trustee and the beneficiary.

3:14 So, it seems to me again, this is just a truism that I see in [clears throat] that, you know, even if money, enough people, somebody's going to sue somebody for something. I imagine a good [clears throat] portion of your business are things that you see the litigate because somebody didn't do something they could have done to avoid opening themselves up. So, what would you say are one or two of the more common missed opportunities or mistakes made that open people up to litigation in a trust situation?

3:40 Well, that's a great question. I think communication is very important and sort of a misconception that I'm the trustee, so I'm in control, and my word is, what you have to follow, and what I say goes. I think a lot of people see it that way, and that's not really how it works. you have fiduciary obligations to everybody, and part of that is keeping them informed, the beneficiaries. Transparency is extremely important if you're a trustee, and really fairness is extremely important as trustee, and I think that is where, from the trustee perspective, where opportunities can be missed if there's a lack of transparency and a lack of communication, even if you're doing everything else right, that breeds suspicion in the beneficiaries, and that can escalate, you know, a molehill into a mountain pretty easily.

4:39 So, it would seem to me some of the primary then things to do with, like, the initial disclosures that are missed, as far as, you know, who is, entitled to distributions, or who's entitled to more information. Talk a bit about the timing and how those become important during litigation.

4:55 Yeah, so, when [clears throat] when somebody passes away, really the most of the time in a living trust, the trustor, the creator of the trust, is also the trustee, up until their time of death. Sometimes that changes if, that person loses capacity prior to their death, or something along those lines, but generally, you know, it's going to be let's call it one of the parents, you know, cuz that's usually what we're seeing, who is who is the trustee up until death. Then, it follows the terms of the trust in terms of who's the successor trustee. Some people name two of their kids, some people named all of their kids, some people name one of their kids, and, that's where that person's job becomes very important. You got to look at what are my parents' assets, you know, gather that information. Are those assets titled in the name of the trust? One thing that's very important, a lot of times it happens to be that a one of the beneficiaries, you know, often a child of the trustor, is living in a real property that the trust owns, and sort of how does that play out in terms of are they going to try to buy everybody else out of that property to keep it, or are how do we get them out of there if you know they're not willing to do that or they don't have the means to do that. and that's where you start to see the disputes arise. But really, you know, and then you'll have trusts a lot of times that they get changed maybe even in the last 5 years of somebody's life, even in the last month of somebody's life, you know, you'll have a trust that gets changed.

6:36 As long as it's all above board and done properly, a change to a trust is completely valid, but if you're changing it to give one person more than another, you know, that's going to cause issues. So, really the successor trustee takes over, they've got to provide notice of what the true trust terms are to the people who are entitled to notice, and that's both the beneficiaries and the heirs. So, if let's say one kid gets disinherited completely for whatever reason, the [snorts] trustee still has to send notice to that person of what the terms of the trust are. So, they will know they've been disinherited, and then that triggers a time window where they have 120 days to challenge those trust terms. And sometimes when somebody has nothing to lose, like a situation like that, they'll they'll go ahead and try to challenge. you know, there's a lot of talk about no contest clauses, and those only really work or have a deterrent effect if a person is already a beneficiary of the trust. Maybe they're getting less than somebody else, [clears throat] but they're getting something. if you're if you're out of the trust completely, you're not risking anything in terms of the no contest clause to go challenge it. So, that's something that, you know, just in the estate plan done by the trustors, the trustee can find themselves in a very hairy situation through no fault of their own just based on what, you know, their parent or their friend or whoever the relationship to that trustor was did with respect to their beneficiaries.

8:16 You know, and while there are a lot of legitimate challenges to trust, I've also Pete Cubbage used to go to court every day and then and I still go court, you know, occasionally. I was there this week and you see, you know, I would say frivolous objections that it's so easy though to file form. Of course, you know, and the judge is going to if it's wrong going to tell you what to do is right or they're going to, you know, kind of guide you in this free resources and such that it seems it's so simple for objections that might be trivial to kind of gum up the works and it's so expensive litigation that it almost forces some sort of a settlement that would be unfair maybe mathematically, but that's just kind of how the system works. Right?

9:00 Yeah, there's a lot of incentives that are not necessarily virtuous incentives in the legal system. there's incentives to make money where you're not entitled to anything just because, like you said, the expense of the process is great and really a beneficiary can cause problems out of things that are relatively benign. And [snorts] then you see it on the opposite side where the trustee is, you know, really not doing their job properly and the beneficiary is stuck footing their cost of litigation and the trustee is not you know, there's it takes a while to get a trial. You got to really build up your case and do discovery, you know, between the parties to build up the facts. You got to get an accounting from the trustee that can reveal financial mismanagement and things like that. All of that is very expensive and you know, you see people on both sides who are sort of the innocent party depending on the facts of the case, you know, who are losing out because of just the nature of the system. So, I would say it cuts both ways on that and there is definitely some negative incentives in the court system, just the litigation system and I don't think this is a you know, specific to trust and estates law. I think this [clears throat] happens in a lot of forms of law, unfortunately, but it's really the best system we have to try to resolve this stuff because otherwise, there are so many situations that would go unseen that are truly and deeply unfair and unjust that need to be resolved through this process.

10:46 I get phone calls from [clears throat] people who claim to be you know, being cheated out of a trust and some sound, you know, like that's the case and certainly they throw a few facts out that to me go, "Wow, that sounds really bad." Like, you know, the trustee didn't send them any notices ever and they're not making any distributions on large properties. But I warn them. I say, "Look, you know, to go forward, there has to [clears throat] be probably you know, you know, and I'm just kind of curious for some guidance from you on these numbers and of course, every firm is different. Some do contingencies, some don't. But I always tell them, you know, if it's a contingency, it has probably be at least a million dollars that you can make a good case you're entitled to that you're going to fight for or you probably have to have about $100,000 cash to get to a trial. Are those numbers fair guidelines? I'm again, it's not saying this is your minimum at your firm, but in general those numbers sound and I people are so astounded when I say that.

11:38 Yeah. But nobody's ever told me as an attorney, "Oh, no, I'll [laughter] do it for less." Yeah, I you know, I think it's hard to say because every it's such a case-by-case thing. With contingency, you know, you want to if you have a strong case, you should be able to find an attorney, whether it's my firm or another firm. If you have a strong case and there's enough at issue there, you should be able to find an attorney who would take it on contingency, but it's not that that is a fit for every firm.

12:12 Right. there are there are plenty of attorneys in this area of law though, plenty of very good attorneys who, you know, do that type of work. And with costs, you know, paying out of pocket, the hourly cost, it is it is high and there's different tiers to it and different levels of expertise, but you know, it is it is something like you have to look at it like an investment. Do I want to invest this money for, you know, some percentage chance that, you know, it depending on what your lawyer tells you the strength of the case is and, you know, if they've assessed it properly, which is, you know, what's we really want to make sure we do for our clients. that it's an investment into that potential result that you're looking at. So, it's not like that money's going down the drain. but I do encourage clients to really look at it economically and take the emotion out of it as much as they can, which it's very difficult to do, understandably. It's, you know, it's not really a reasonable request from my end because this is extremely emotional stuff, you know, it's it's your parents, your brothers, your sisters, your loved ones and everything involved, the whole family history involved that, you know, I'm only seeing one little snippet of as your attorney.

13:31 But that's the only way I can give you know, this is what it's really worth to do what you're doing. doing is you know the dollars and cents of it emotion of it to you. I look at it from that economic perspective and get clients to look at it from an economic perspective as to what it whether it's worthwhile.

13:58 I think the other thing having been a plaintiff in a case a while ago, not probate, but civil case [clears throat] and then seeing also clients involved in the process I don't think anybody ever understands how much time is involved, how much paperwork is involved. You know, you get served with interrogatories and you're you know, called for depositions and you know, I now know nowadays more hearings are able to be done online, you know, more routine type hearings and such or matters and such than past. But it's still a big commitment of time. How do you counsel clients who are considering litigation as to what's involved cuz if you have a full-time job, you can't get off of it or you're running a business or you're taking care of a large family, it's a big commitment to litigate I think anyway so I you know, I mean control over when the litigation really happens.

14:44 That that's absolutely true. You don't have control. You're really putting in the hands of the court system. And sometimes you don't have control over whether you know, you'll you will be involved in litigation. We represent petitioners who are you know, equivalent to a plaintiff and respondents who are equivalent to a defendant. the defendant respondent side, you know, they don't get to control whether they're in litigation. They're in it because somebody tells them they're in it because they've sued them. So yeah, that really the what we do is try to set expectations up front for this is going to be a process. this is how things usually go. Every case is different, you know, there's outliers on both sides. Some cases get settled in two months. That's very rare. Some cases I just went to trial on a case that had been in this law firm since 2016. So, you know, that shows you that the whole gamut is is run. You know, you have a case that was somebody died 10 years ago and it just got to trial. For very various many reasons that, you know, some of them are good reasons. It just certain situations that it takes that long to get there. But, you know, if you're looking at if standard sort of length, we try to show those guidelines. Could be two years till you get to a trial from the time you file a case. Could be three years.

16:07 That's generally what we're we're looking at in terms of the time it takes to do the discovery that's necessary and then with the court's trial calendar to get your case set for trial. Those two factors combined, that's that's generally how long it takes. But, you know, we try to we always try to resolve a case before trial if possible.

16:30 Mhm. If there's any chance to do so, we will try to resolve a case with a mediation or with a court offered program. They have things called mandatory settlement conferences in a lot of courthouses in California and that type of program works well for certain types of cases. Mediation works well for other types of cases and that's that's the best way to take control of the time of a case is to go into mediation with a good faith mindset of resolving the case.

17:06 I track all the data for probate in LA County cuz that's where I operate, you know, primarily and you know, when people ask me, "How long does probate take?" I can say, "Well, you know, the average in LA County is two years." And I can I have data that supports that. That's the average. Now, there's some that take 30 years and some that take a you know, a year and a half. There's not many less than a year. Even though you might say well, it should not take longer. I can tell you the average is over 2 years. I imagine your firm being as prolific as it is, you guys must have some very valuable data that would allow you to set expectations for clients that individual firm you know, individual practitioners or small firms don't have. I would think that'd be really valuable and kind of a vision into the market as well as being able to help your clients understand what their expectations are.

17:51 Yeah, I think we have a lot of experience here. You know, we have seen all [snorts] sorts of cases all over the state. And yeah, LA is sort of our home court and that's you know, where we do the most cases. So, I do think you know, we have a good idea of how the case will progress in you know, a certain courthouse cuz every courthouse is different on that. so, yeah, we you know, and I think we have good relationships with other lawyers that you know, statewide as well and generally that we try to be professional and try to try to establish you know, that that expertise and that is part of that expertise is the experience that that we've gained over the years. And yeah, we have about 25 attorneys or so now and every partner and senior attorney here has practiced probate for many years. In some cases, you know, decades. In other cases, you know, 5 to 10 years or more. So, it's it's just you know, the firm's been around itself since 2014, but in that time it's really [snorts] gained a lot of experience and establish itself in within this probate area of law.

19:11 Yeah, I mean I know I've seen firm different attorneys. You and I have never worked together, but I've worked with other attorneys in your firm and when recently he joined he's been in the program before Stephanie Gregoire, for example, joined. So, I think you guys have a tremendous reputation and I think that size you know, there's some individual practitioners who are amazing, but I also just feel like the size of having so many cases in your firm must give you some advantage. you know, I know there's a kind of rule of thumb in criminal law that about 90% of cases get pled out. they don't go to trial as a general rule nationally. I also know that civil cases about 90% get settled as well. Do you have any insights of what percentage of litigation that gets filed you know, in probate as well ends up? I mean, obviously I won't you give away any trade secrets, but it seems to me the vast majority it's like a it's kind of I feel like it's kind of like a rubber band gets tighter and finally it snaps and there's a settlement. Sometimes it's early, sometimes it's, you know, during discovery and sometimes it's right before the hearing. Do you have any sense of what those numbers are that you can report or share with us? What percentage gets filed?

20:14 I think that I think that 90% number is a very good rule of thumb in terms of how many litigation cases end with a settlement versus ending with a trial or a dispositive hearing like a motion for summary judgment or even just a dismissal. really you know, I it's in it's because of what you talked about expense and things like that. it's really in everybody's best interest to try to resolve a case most of the time. If you have a somebody on the other side who is not looking at it fairly where they're fairly evaluating the risks of trial to get to a settlement, sometimes you have no choice but to go to trial. and when you do that, you know, it gets much more expensive just because there's so much time involved in that. But it's also all or nothing, you know, it's out of your hands. And the parties have lost the ability to control what happens at that point. It's all up to the judge. And the judge may make a decision that is a complete victory for one party that the other party is blindsided by. They may make a decision that, you know, gives a partial victory that you may have been better off, you know, getting a compromise resolution at mediation with.

21:37 So, in any event, you know, it's not worth the risk of losing, which is there in every single case. It doesn't matter how strong you feel your case is going to trial, there is a risk of losing. You absolutely do not know if a curveball will happen or how somebody will testify or how the judge will perceive the evidence differently than you, and they may very well be right, and you may be have been looking at it incorrectly. you know, you cannot ever guarantee a victory in trial. So, that risk alone makes it, you know, extremely valuable to try to take control and settle the case. Not to mention the time involved with going to trial and the peace of mind that comes with ending a case. That's another thing that I can't tell you the price of, but I try to, you know, impress that upon clients as you've seen what this takes. I mean, you talk to yourself about being a litigant. It's not a fun experience for most people. you have to have a certain mindset, like be like a lawyer like me maybe to have fun in it. And it you know, it's it's stressful, it's hard, and you know, negative things come up, negative feelings come up, and ending that has a value of its own that, you know, people need to factor in when thinking about resolving a case.

22:57 Yeah, I think that's going to be the hardest part for your business. I would imagine on one hand and I know you work again for a top firm, you're a litigator, you have to have I would imagine very strong technical legal skills, knowledge, you know, abilities and all that. On the other hand, if 90% cases are going to settle at some point, you're talking to somebody and talking to them about their life and making choices and those are soft communication skills. They're like at the opposite end of the spectrum. You know, how much do you work on that? How much how does that factor into your practice? you know, how important is that? Is that something that just comes with time with success over time?

23:35 Yeah, I think that's something you build in experience. You learn how to earn client trust. Part of earning client trust is doing that technical legal work successfully that you're talking about. Showing them your expertise and showing them you know, that the other side has something to worry about when we're on when we're we're on your side. and that experience is what helps you communicate to your clients, you know, some of the tougher things or the things that you know, the softer factors, the communication factors. The those factors really it comes down to trying to meet somebody where they're at. Every person has their own story, own experience, own you know, perspective on the circumstance and just showing empathy and trying to understand where they're coming from is a the best way to allow yourself to get through to them and persuade them you know, maybe to go a direction that they weren't initially thinking of, but that you think is best for them. And sometimes clients disagree with you and that's okay. I as long as I've advised you of what, you know, the risks are of going one way versus the other and you still want to take the direction that, you know, maybe is isn't the direction I would choose, we're happy to do that if that's what you want to do, as long as you're well apprised of, you know, the risks. Obviously, we're not going to do anything that we disagree with, you know, in terms of the law, or the facts that can't be supported, but and we'll tell you know, it's probably time for you to find somebody else in that situation to represent you. but we are going to, you know, the client is is controls the litigation.

25:33 They're the ones who make the decisions and they don't always have to be the decisions that we think they should make. You know, and just to circle back to kind of what it takes to start litigation, money, and contingencies and all that, I always advise prospective clients when they talk to an attorney, they think they're looking to just to hire an attorney that's going to help them. I tell them, they're also hiring you as the litigant. You know, they're going to invest their firm or you personally a lot of money and time in your case, and they're probably looking to see are you the kind of person who's going to stick this out? Are you honest? If there's something that is negative, will you at least tell me so I can work around it? And to me, I feel like they're interviewing and they should be. I imagine it's just good practice interview the prospect as well to make sure they're somebody that you want to work with. Talk a little bit about what you look for when you make those initial When you get those initial calls, "Hey, I had this case. I'd like to talk to you about it." What are some of the things that are important to you in making a decision? Obviously, the case and there has to be money, but how do you assess the litigant as to whether it's somebody you want to work with?

26:35 Yeah, I think like I said, I think you can never judge a book by its cover, but as long as the person is telling you something that's backed up by some other verifiable information, whether it's documents they're sending you or public records of property ownership and things like that, you know, you take you take them at their word and generally if somebody is communicating an issue to you that they need help with, whoever they are or wherever they're coming from, you know, we represent people from all walks of life and all different circumstances and I think we're we're pretty open generally, but we're not always the right fit for everyone when you talk about, you know, cost or contingency things like that. Some cases aren't a fit for our firm. That's just the reality of it. there's there's other attorneys out there who may be able to help in situations like that, but I think if those factors line up, generally, you know, if a person is if what they're saying is backed up by, you know, the information they're providing you, the physical or the primary source information, then you they have an and they have an issue that you can help them with, then that's that's the person we want as a client. it you know, other than that, that that's really primarily it. you know, as long as you're upfront with us, that that's the biggest thing that that is important and I think what you mentioned about honesty, that's absolutely the thing that I want the most out of a client is be upfront with the negative aspects of you know, what will go against you, what could cut against you.

28:20 And they may not even know what those are until we've had conversations about, you know, how the law treats their situation, but as long as you're honest with me, you know, I can work with the facts. That that's what that's most important. you know, not every client will we know that right away, but I think most of the people we take on, you know, we do a good job of trying to understand that at the early stages.

28:48 And just coming to bring it to fine point, when a prospect calls you about a potential case, is the information they're giving you at that time protected and private or is it subject to oh, you're you know, you're you're trying to be representing some other party in the case or it can be disclosed down the road?

29:04 Yeah, that's that's a great question. You know, if they're calling for a consultation and they speak to an attorney, a lot of times that information can be protected. And we have a lot of parameters in place if somebody on one side of the case calls us for a consultation and we either determine they're not a fit or you know, they decide not to use us and then somebody from the other side of the case ends up calling us, you know, it's a it's something called an ethical screen where attorneys can the attorney that talked to that person and the information they receive can be completely screened away. you know, in some circumstances there it can't be avoided that they it's a conflict, you know, you can't represent the new party, but we have a lot of procedures in place to comply with the ethical rules in California on how to properly handle admissions of clients and potential conflicts between a you know, prospective client and a current client.

30:07 Well, Casey, obviously your wealth of knowledge we've gone for a long time. I'm a little bit over time and your hourly rate I have to wrap things up. So, just kidding. You're nice enough to this for free to educate us. I just want to you know, thank you. for those who are interested in getting more information, Casey is a senior counsel at Keystone Law Group, which is I don't know how these things rank out, but certainly one of the largest probate focused law firms in Southern California. I've worked with a number of their attorneys, seen a number of them in court and just you know, a very fine company. and Casey's primarily focused litigation, but they also do probate administration and trust administration. other members of the firm handle that. If you want more information, just contact info is below. [phone number shown on screen] is the phone number and [email address shown on screen] and the website is, keystone-law.com. You can get more information. Casey, thank you so much today for joining us today and sharing with us so much information about litigation and the costs and the risks and the opportunities and what it takes to find the right person for the right outcome. I really appreciate your time today.

31:09 I appreciate you having me on, Bill. This was a great experience and it was, wonderful to have this conversation with you. Thank you very much. Thank you. Information, this is Probate Weekly. We get together every episode, most often with, probate attorneys. In this case, probate litigation specialist to go a little deeper on the litigation aspects, which I think is really important to understand. Hope you enjoyed. I'd love to get your feedback, comments, like this, subscribe, send me a question, send me a comment. If I can help in any way, reach out @billgrossprobate on social media and as always, make today your best day ever. Thanks so much.