Grounds for Contesting a Will or Trust, with Mat Wrenshall

0:02 So, probate can be challenging enough. you might find out that you think you're an heir to some property or assets and then somebody else has a will, somebody else has already open probate case and says there's a trust involved and that's where the litigation starts and that's where you need to have really experts. And I literally just yesterday was on the phone with a prospective client crying about his real estate because he had he had an attorney who wasn't even a probate specialist, let alone a litigator, let alone one of the u biggest litigation firms in Southern California probate. Really lucky to have today Matt Wrenshall from RMO and Matt so I know that there's a number of different issues. What are the most common areas that you can contest a will or trust when something's happened that you think is not what the deedent really wanted? Yeah. So I mean there's a number of grounds for contesting a will or a trust and you know primarily I think the focus that we what we focus on I think most is you know either lack of capacity where the trust or the person who is you know having the willpar lacks the necessary capacity to have executed the trust or executed the will. And the other one we see a lot of is claims of undue influence where a third party has perhaps unduly influenced a the trust or the testador to prepare a trust or a will that is not consistent with what the trust or the testator you know actually wants. so I think those are the two primary areas.

1:45 I mean there are other area there are other grounds upon which you know you can contest a will or a trust. So that can include things like fraud you know duress or menace and duress is something that usually goes way beyond undue influence like somebody has locked up the trust and says I'm not going to let you out until you change the trust in my benefit. and menace is threatening to engage in that kind of behavior. there's also you know the ground to contest one another ground to contest is mistake and that's essentially where a person might be signing a document thinking it's something else. examples I've seen in the law include you know a person signing a mortgage I'm sorry signing a trust thinking it's a mortgage. So that's a reason why you know the trust or the will might be knocked out. And then finally, there are these statutory limitations on transfers to certain parties that the legislature has identified as you know the presumption might shift if they are named as beneficiaries in a trust or a will and that can include you know the actual drafter of the donorative instrument. So the drafter of the trust, the drafter of the will, typically if they are named in the trust or the will, the presumption is going to shift and they will need to demonstrate, you know, that they are allowed to inherit. There are ways around that. I mean you can get certificates of independent review. other examples include, you know, a care custodian of the donor. So this is usually the caregiver who you know might meet certain statutory definitions and again the burden shifts to that caregiver to demonstrate that there was an undue influence. so it's it's more about presumption shifting there but you know once the presumption shifts it's very difficult to climb your way back up.

3:44 So those are the primary grounds and I'm happy to talk about any of those if you have any questions. Yeah, one of the classic cases I like I said I literally had yesterday was a man has a relationship with somebody and buys property from him. There's a I'm sorry gets property gifted to him I should say granted and no evidence of any exchange. So I guess you would call it a gift absent some sort of consideration and you know whatever reasons that he claims and then several weeks later family finds out about it talks to the grand tour says he doesn't have capacity immediately rush to create a conservatorship and then file suit for undue influence. So you know even if somebody is declared incompetent there's a time period before they are declared that they might be incompetent right and then there's a time before that where it's legally too cloudy to judge. So what are kind of the defining issues of you just be you know two weeks sounds really short to me my presumption would be well two weeks if two weeks two weeks ago if you're incompetent today two weeks ago you're probably incompetent but that's not a medical decision that's just my gut reaction. what's the legal standard on the time period? What's

4:58 Right? So, that's a slightly different I mean that that fact pattern is a little bit different than what we are usually dealing with. So, that that's more like a financial elder abuse situation. and those are a little bit more complicated to bring by family members just because often, you know, you're right, Bill, like the person might need to be conserved and then the conservator can take action or if the person has a power of attorney or has, you know, advanced healthcare directive. When that springs into place, then the attorney in fact under the power of attorney can take action to protect the living person. I think you know it becomes even more difficult obviously once somebody has died and there are indications of undue influence. So I mean I think you want to just start with you know basic principles right so how do you even know what the trust or what the will says right I mean somebody has died somebody you might not even have that close of a relationship with or somebody you do have a relatively close relationship with you may not know what that trust instrument says. So if it's a will under California law the will needs to be probated before any sort of distributions can be made. So,

6:13 I always want to see this twice. I always excuse I'm sorry, one second. But this is the biggest misconception that I deal with and I'm not an attorney. I'm a real estate broker. But the idea that a will escapes probate or gets you around probate. And the answer is in California, a will is like a ticket to go to probate. Maybe you get a better seat, but you're going to go to the probate court to get your will administered or executed.

6:33 Yeah. So, I mean, as you know, there's there's three levels, right? So, you have you can die with nothing. So you die in test date and at that point the state tells the executive how to distribute your assets. You can die with a will and again like you said that requires going to probate and having the will probated and you know there are costs that are associated with that. There's a sort of time component cost that's associated with that. It takes some time to you know get the will administered. And then California law is very you know beneficial and that you can avoid these things by simply just having a trust but I think like you said Bill that's not necessarily a ticket to avoiding court altogether

7:19 That too the idea of the trust is you know let's say a trust dies the successor trustee needs to provide notice to the beneficiaries and the heirs of that person who has died within I'm sorry I think within 60 days of the person dying. So it's a very short time frame and the notice needs to include the trust instrument itself. And then if you are a beneficiary or you know maybe an heir who might not be a beneficiary, you have 120 days after receiving that notice with the copy of the trust instrument to contest the trust essentially. So it's a really short turnaround and this is why I think it's important for people to understand that you know if something looks strange you know like if suddenly the trust instrument that you're looking at names the nurse who's been taking care of the deedent for the last you know six months. That's something really worrying and you should talk to a lawyer about that because you know again like that might fall within these categories of prohibited transfers of the legislature has announced or there might also be evidence of some sort of undue influence. so it's a decision that has to be made really quickly and that's also true of the probate process for a will. So, you're going to get notice that the will is being probated.

8:44 If that will has terms that seem unusual or problematic based on, you know, your understanding of what the testator might have wanted, then you need to take action and go to court and, you know, begin the process of contesting. the time frame is a little bit more generous in terms of the probate process than in terms of the trust process because you know we do have this very limited statute of limitations under the probate code for trust contests but I mean the question becomes all right let's say you get that problematic trust and you have to make this decision quickly and I think you know this is one of these things you don't want to walk into blindly because you know first of all getting involved in litigation can be very expensive. Second of all, it can be very time consuming. And then third, there are sometimes issues regarding the triggering of a no contest clause, which is a provision that's included in the trust that essentially in is intended to have an effect on a beneficiary where they will be dissuaded from contesting the trust. Usually the situation is maybe a beneficiary gets a small amount of money and then if the beneficiary contests then that beneficiary is could lose whatever he or she is going to get you know under the trust itself. So the idea is it's supposed to have this interorum effect.

10:15 I mean it's a little complicated because you know it requires probable cause you know probable cause is involved. there are other categories that you can contest that you know might fall within the no contest clause but just things you need to consider prior to filing a trust contest. So you know I just think that you don't want to go in assuming that this is necessarily the best thing to do. And then final point about the trust is let's say you get a trust that looks problematic. You know you've got these 120 days to contest. You retain a lawyer. often a lawyer, a good litigator is going to be able to maybe stretch out that time period. You know, it's possible to get a tolling agreement with council for the successor trustee and you might have a little bit more time, but again, you just need to be mindful of these deadlines. So, I don't know if that's answered your question.

11:11 There was a bit of a long answer. No, it's great. I know that you mentioned there's two different notices if you are would be normally be a heir at law you're a child of the deedent or something like that

11:28 Right that or you are a beneficiary of the trust that you're required to get the notice of their of the death and there is a trust and then you mentioned there's a second disclosure which is that if requested you're entitled to a copy of it and I know there's different strategies in some cases and Different attorneys have different strategies they use as their default. Some automatically send everybody who would be init law the full trust so that the 120 days starts with the 60 days and others say no we'll give them the 60 days and if they don't ask for it then they've they've perhaps you know we'll run out the clock at some other point when they ask when they ask for it. What's your strategy on the disclosures when there's somebody who may be there might be it might be a dispute you know they might be not getting what they think is their fair share. Do you purposely give it to them up front to flush that out? Do you make them request it in order to hope they don't request it, they lose their rights?

12:19 I think it's better to provide the notice. I mean, I've had cases where provide the notice right away. I don't think there's any strategic value in delaying and I think it just makes things more complicated down the line. and you want to know about this potential contest sooner rather than later if you are a successor trustee. So, and there's there's just really no reason to try to, you know, play strategic games with your obligations as the successor trustee because you are a fiduciary and you have these obligations to the beneficiaries of the trust.

12:57 Now I mean question whether you know somebody who has been disinherited, do you have obligations to them? There's a lot of interesting case law about that in California. So definitely not something that we want to delve into here, but I think the trustee does need to be very mindful of his or her fiduciary duties and I just don't think gamesmanship is worth engaging in because it's going to look bad, you know, with the court. And I've had cases where, you know, the 16061.7, which is the provision of the probate code that requires these notices. I've had cases where these notices go out, you know, very long after somebody has died, and it's just it's not good. I mean, it just shows that the trustee is not doing his or her job, and it really sets the trustee up for a petition for removal, and that's something a trustee really should want to face. so yeah, that that's kind of my thinking. I don't think there's any strategic value there. I see you know regularly because I get involved when there's litigation. So maybe a special minister is called in because there's litigation, there's two parties fighting. So I often see the conflict. I don't see the resolution. I often see a case where there's claims against the trustee for not acting appropriately and motions to remove them or change the trust successor trustee. How common is it that those are successful? It seemed like that's a pretty high bar to get over because the deedent maybe named them, right?

14:36 They might be act but at the same time they might be completely acting inappropriately. so what you know how often does it happen? How difficult is that to actually get somebody removed as a trustee?

14:46 So an actual removal is difficult and tends to require some kind of evidentiary hearing. But probate codes, probate courts rather, at least in California, you know, they have powers of equity. And so the probate court is faced with very serious allegations of trustee misconduct. And even though they might just be allegations, you know, some probate judges are willing to suspend a trustee, you know, while some of these allegations are sorted out. Now, if that happens often, well, not often, I would say you suspend a trustee and you know, you might look to see who the successor trustees are. If that seems like that's going to be more of a problem, the court might appoint a third party professional fiduciary to deal with some of the issues. But so the court is not going to just remove a trustee on an initial petition or maybe on an exparte request for removal, but the court might suspend the trustee. And I think suspending the trustee is a really useful tool that the court has in trying to remove the oxygen from the dispute because you know it's it's remarkable Bill how often problems are caused by trustees intrigence.

16:14 So, you know, sometimes getting that intransigant trustee out is a way to, you know, get to a resolution. Yeah. Yeah. Now, there's certain people they just dig in their heels and

16:25 Yeah. Especially when they're it's pointed out that maybe they're not doing the right thing. So, who wants to admit they're wrong? I mean,

16:33 Exactly. I'm married. My wife would accuse me of that. I'm not gonna [laughter] not gonna talk about that much more. Okay, we'll move on. so talk about we touched initially on a question I had on capacity and that relates undue influence also is you know somebody's capacity if they're influenced talk about capacity like is there is there a moment in time that one magically crosses that occurs legally when they're declared but as you're going back in time and looking at prior actions is there a particular standard or threshold that that that we look at or is it just more a matter preponderance of evidence and each case is so different that you really can't talk about. It just seems to me that by default if you if you announce somebody as being incompetent, you would assume there's a period of time before that they also were before the court got around, you know, they file petition that takes months. how does that work legally in terms of actions prior to the pronouncement and or the filing,

17:33 Right? Well, to take a step back. So, under California law, there's a presumption that all people have capacity. And even if you are suffering from physical or mental illness, you are it's presumed that you have capacity. Now, capacity depends on sort of the circumstances of the act that's being done. So you know like capacity to marry is very low and you know testamentary capacity which is applicable to wills is relatively low. Now when you're coming to questions about capacity regarding trusts that becomes a little bit more complicated because it depends a bit on the complexity of the trust instrument. So the courts have determined in California that capacity for the creation of a trust or the restatement of a trust is a sliding scale. So the more complicated the document might be the higher level of capacity might be required.

18:38 Now summarize that just make sure I understand this. the capacity to make a decision. I'm going to give this to my son and not that son or I'm going to give this property now through a granted is lower than the capacity required say to sign a more complicated trust and all the affiliated documents with that that somebody who does that has to be a little sharper a little more together.

19:01 Correct. So for a test like just the baseline testimeamentary capacity there's three things you look to. So the person has to understand the nature of the testimeamentary act. So the person has to understand that what he or she is doing is signing a will. The person has to you know understand and be able to recall the nature of his or her property. So understand that he or she is signing a will and that the property that he or she owns is going to be affected by this will after he or she dies. And then finally, the person signing the will needs to be able to remember and understand his or her relations to living descendants, his or her spouse, his or her parents, and those affected by the will. So essentially, you need to understand one that you're signing a will that's going to affect your property, and it's going to have an effect on people that you might be related to. And that's like a pretty low bar to be honest. I mean now there are people like obviously if you're completely incapacitated you're not going to be able to clear that bar. But the question then becomes you know when you are dealing with a trust sometimes the court will look at a trust and if it's a very simple trust almost akin to a will the court might apply more of a testimentary capacity test for that person. But the more complicated it gets, the court's going to look for a higher level of capacity, which is, you know, typically treated as contractual capacity.

20:36 So, you know, I'll just run through these quickly. I mean, the person has to understand the rights, duties, and responsibilities created by or affected by the decision. The person has to understand the probable consequences for the decision maker and when appropriate, the person's affected by the decision. And then he or she also has to understand the significant risks, benefits and reasonable alternatives involved. So I mean as you know like sometimes trusts can be extremely complicated. You know you can have assets that are going to be going to subtrust after a person's death and you can have assets that are going to be going to held in trust for you know some relatives or distributed outright for other relatives. And you know, it just it gets complicated. And I think the court's going to want to see evidence that this person understood what they were doing. Now, the problem with capacity claims in the same way that there are problems with undue influence claims is like, well, how do you test a person's capacity when they've died? And the way this is often done is, you know, you have an estate planner who hopefully has kept good notes. So, you can look at the estate planner's notes. you can depose the estate planner and try to understand you know what this person's kind of situation was when the trust was executed or when the will was executed.

21:55 That's one way of doing it. Another way to shore up or to attack capacity is to use you know expert medical opinion evidence. So you might have that person's medical records which you can obtain after they have died and then you get a gerontologist or some other kind of doctor who deals typically with you know elderly people to make a decision or a determination or provide an opinion. Sorry they're not making a determination because they're not the factfinder providing an opinion as to whether or not that person had capacity. So that's usually how it works. Now I've seen cases where a person will go see I'm sorry a testtor or a trusttor will go to a doctor and get confirmation from that doctor that they have capacity prior to executing a trust that's great but that doesn't necessarily mean that that's going to be a shield against litigation after that person is done

22:57 And then on the flip side a mere grantee would be pretty low thresholds to come back later and say you had a new influence because it's less capacity required than a will or less capacity required than a trust for sure then that sounds like a more challenging bar to get to in order to invalidate some you know and claim elder abuse I guess or undue influence.

23:21 Yeah. I mean I think at that point you'd be saying more that would be more of like an undue influence claim or a financial abuse claim. you know, you've just whoever has received the gift or the property, I think you was what you had

23:36 Used as an example before that they have somehow unduly influenced a person to do this. but again I think you know

23:46 Transfers during the person's life are challenging to unwind and that's because the person is still alive and that is going to be the person that's going to have standing to bring an elder abuse claim or you know bring some kind of other claim. So, you know, first steps often in those situations are, you know, having it determined that that person lacks capacity and then trying to unwind it. It then

24:17 The issue of litigation always like any business, it gets down to money and price. I think when people call me, you know, my presumption is they're calling because they already talked to an attorney and they didn't like the answer they got. though sometimes not you know the most common cases they go to an attorney you know they call somebody they trust their family member in this case was a landlord and so oh yeah Joe's a great attorney well he might be the world's greatest constitutional scholar he might be up to be the next Supreme Court justice right

24:47 But that doesn't mean he can help you in probate court in Los Angeles County today that's just those are two different people I don't as great as they might be they're not going to help you yet there's still a business consideration where you know litigation as you mentioned is expensive and somebody has to pay for it and somebody has to pay for the money up front whether it be the client or the firm investing the money and then somebody has to get paid at the end. talk a bit about that because on one hand you know I know that you want good business other hand you can't afford to help everybody for free and because these things take time and investment you're you're in a firm where there's business decisions made you know what kind of criteria should a client look to how much do they need to have cashwise andor how much an issue to make it make sense to consider

25:36 Yeah I mean that's a great question and it obviously depends on every individual ual. But [clears throat] I mean, I don't think it's worth fighting over, you know, $50,000. And I think most people would recognize that.

25:52 I think one issue with probate disputes though is there's a lot of emotion wrapped up in the dispute.

26:02 Yeah. And you know especially say it's a child of a parent and they believe the parent has been unduly influenced or that the parent lacked capacity. I mean the question becomes you know when is it not worth pursuing litigation and that again really comes up you know that's a decision that needs to be made by the client. But you know these kinds of cases can go on for a long time. it can be a little bit frustrating. and it's just expensive to litigate. I mean, just, you know, especially if you're not able to get to some kind of resolution first. Now, in California at least, you know, we do have one, I'm sorry, talking about the judges toolkit. One tool in the judges toolkit is they [clears throat] are allowed to order parties to mediation. And sometimes we will help a client, you know, prepare a petition or a client's being sued and the strategy is to try to get it to an early mediation to try to get things resolved at the outset. Now, I mean, sometimes that strategy doesn't make sense because you don't have enough information to go mediate at the outset, but you know, it's a way of I think the courts recognize that that's a way of saving litigation costs. But, yeah, I mean, it's it's a so there's sort of like I said, there's a time investment component as well on top of the cost component. And,

27:32 You know, litigation, I think, for a lot of clients can be like a second part-time job. like you do have to work very hard and you have to collect documents, you have to understand what's going on

27:42 And I don't know that clients are often necessarily ready for that or you know once the ball starts rolling that they want to keep participating in that. So that's something I just always make very clear to my clients. and then I think again you got to be realistic about what's going on if you're looking at a situation like this. So, you know, a couple years ago, I had a case where we were representing the niece of a deedent who had had a trust and who had made the beneficiaries of the trust his neighbors across the street, which, you know, looks kind of suspicious. And then, you know, as we're delving into it more, it turns out that the neighbors across the street had been very close to the guy, had been very friendly with him, and almost treated him like family member. and you know he didn't really have that significant of a relationship with a niece. So I think people need to be realistic about what their relationships look like as well before they decide you I'm sorry what their relationships with a trust or a test look like you know before they decide to take on litigation. When people call me, I tell them in general, you can always consult an attorney and pay for the time, but in general, if you're going to go through litigation, you're going to end up having to put up about at least $100,000.

29:02 Yeah. Or have at contest at least a million dollars that you're willing to pay a contingency fee to the firm to consider representing you. Are those fair numbers?

29:11 I think that's right. And I know it's I there are kind of eye watering numbers, but I mean this is just how it is these days, especially with these kinds of disputes.

29:23 Yeah. I mean, I wish the courts were not as backed up as they are, but they're very backed up. And you know, it just takes the longer time frame you have until you get to a trial just means that more costs can be incurred through litigation. so yeah, I mean I think you know having an understanding of the mechanics of the lawsuit is very important in making a decision as to whether it's worth pursuing. But again, like there's an emotional component and I completely recognize and acknowledge that

30:00 I tell sometimes that's more important. Yeah. I also tell Clint when you talk to I'm sorry I didn't mean to interrupt. I think we have a little gap there in the technology. I also tell clients when they when they talk to an attorney about representing them in litigation. It's not like other attorney relationships where there's a number of good choices. I always say you're really looking for the right attorney to represent you because you're going to be doing a lot of work over probably years to resolve this. And in addition to their legal technical ability and their resources, there has to be a relationship and they have to be a fit. And it's to me it's more like dating for marriage than it is any other business. And that you have to make sure that you find the right person and not just settle for somebody because they'll take the case. And it can be work to you know I know that people come to me and they don't present the case to the attorney properly. So they don't get attention or they go to the wrong attorneys who decline the case because it's not appropriate for them. Right? If you're not a litigator, you're not going to take a probate litigation case unless you get $100,000 cash at least. and there are litigators who will do it on contingency, but they have has to be framed in a way that's presented to them properly. If you if you're ranting and raving about your brother, nobody wants to be around somebody like that. So,

31:13 Yeah, you know, if you were if you're coaching a family member looking for an attorney, maybe another jurisdiction that you don't service, what would you is that on target and what would you tell them as far as advice on how to get the right the right relationship and the right attorney?

31:26 I mean, that's a great question and it's one that's very difficult for me to answer. I mean, I often do refer cases out because, you know, we might have a conflict. it's it's way more common than you might even expect. I mean, somebody will reach out to us and then another party from the same family might reach out to us and we're not just not able to do anything about it. And usually my referrals are to people that I trust and believe in and think are going to be able to help these people. it's and it's I don't want to say you it's kind of a wish or a hope that that relationship is going to flourish. you know just as you know when I take on a client you know I'm anticipating the client's going to be forthcoming and you know receptive to listening to my advice things like that. Yeah, I mean I know I represented I referred a case to your firm to Scott and I came back they had a conflict. I thought that's kind of odd. How could that be? But you know when you work for a firm you do a lot of business that's one issue. he was nice enough to refer somebody I think who's also very good. So that's part of the process. I don't think clients again appreciate the nature of this business and how you have to protect their interest by not getting into conflicted situation.

32:44 Right? Because the last thing you need and not to get off into the you know culde-sac of conflicts but I mean we are very mindful of ensuring that there is no conflict because the last thing you need is you know you've started the representation and then suddenly you're faced with some kind of disqualification motion

33:05 Because your opponent called the firm and provided you know very basic information regarding the case. And look, I mean, my philosophy for conflicts is it's always better to just withdraw. So,

33:24 But yeah, I mean, I think it's it's just important to understand that, you know, I'm not able to take every case because these conflicts are very real and obviously these sorts of disputes involve large numbers of people who might have an interest in the particular trust or the will. And you know, they're calling lots of lawyers sometimes.

33:46 And I think the key phrase that that you said I remember is that these conflicts happen more often than people understand. I just don't think clients understand the complexity and the breadth of it. And that's a real part, too. Well, look, I've got a little overtime here, so I apologize. Fascinating conversation. Matt, I really appreciate you taking time with us today. if you're interested in getting more information from Matt Oops, I lost my spot here. Why am I not able to get Let's take that off. Okay, there we go. If you want more information from Matt Wrenshall, why am I not able to get There you go. There's his contact information. If you want more information, you can reach out to him [phone number shown on screen] and he is at rmolawyers.com. we've had other attorneys from the firm as well, one of the best firms in Southern California in probate specifically. Matt Wrenshall is our guest today. Matt, thank you so much Jay for sharing a lot of his details. I think not just on the litigation but also on the business side of it that I think clients need to understand in order to be able to reach out more effectively. So, thank you so much for your time. I really appreciate it.

34:49 No, Bill, thanks for having me on the on the podcast. I really appreciate it and yeah, looking forward to seeing the final product. Great. And for the rest of you, this is Probate Weekly. We get together every week and we interview attorneys. Not often as detailed or experienced as Matt, but I thought it was great today. I thought I learned a lot about the process of finding the right probate litigation attorney when you have litigation, what that can look like and the challenges. if I can help anyway, if you didn't get his phone number or something, call reach out to me. I'd be more glad to make an introduction. you can reach me at Bill Gross Probate on social media. As always, make today your best day ever. Thanks so much.