Welcome to the Weintraub Resources section. Here, you can find our Blogs, Videos, and Podcasts, in which Weintraub attorneys regularly provide insights and updates on legal developments. You can also find upcoming Weintraub Events, as well as firm and client News.

With Right of Survivorship – or Perhaps Not?

In advising clients regarding the rights afforded to joint tenants on a bank account, most practitioners would say that the agreement with the financial institution generally would control, with the surviving joint tenant succeeding to the funds remaining in the account on the death of the other joint tenant. California’s Multiple-Party Accounts Law (Prob. Code, §§ 5100, et seq.) governs ownership of accounts with multiple parties and the disposition of those accounts upon the death of one of the parties to the account. Probate Code section 5302, subdivision (a) provides, in pertinent part, that, “Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intent. (Prob. Code, § 5302(a).) Subdivision (c) further provides that, “A right of survivorship arising from the express terms of the account or under this section, a beneficiary designation in a Totten trust account, or a P.O.D. payee designation, cannot be changed by will.” (Prob. Code, § 5302(c).)

Probate Code section 5303 goes on to set forth how the form of the account can be changed once it is established: “(a) The provisions of Section 5302 as to rights of survivorship are determined by the form of the account at the death of a party. (b) Once established, the terms of a multiple-party account can be changed only by any of the following methods:

(1) Closing the account and reopening it under different terms.

(2) Presenting to the financial institution a modification agreement that is signed by all parties with a present right of withdrawal. If the financial institution has a form for this purpose, it may require use of the form.

(3) If the provisions of the terms of the account or deposit agreement provide a method of modification of the terms of the account, complying with those provisions.

(4) As provided in subdivision (c) of Section 5405 (which relates to payment as discharging the financial institution based on specific written instructions).

What happens if the deceased joint tenant states in a will that he or she expressly does not want the account to pass by right of survivorship and, instead, wants the account to pass as set forth in the will? The California Court of Appeal, Fourth Appellate District, Division Three, addressed that question in the case of Placencia v. Strazicich (2019) 42 Cal.App.5th 730. In Placencia, Ralph Placencia, the father of three daughters, established a joint tenancy account with Franklin Fund almost 24 years prior to his death. The account was opened as a joint tenancy account with right of survivorship in Lisa, one of his daughters. Lisa never contributed any funds to the account. Ralph executed a will shortly before his death in which he expressly stated that he wanted to “remove” Lisa as the “beneficiary” of the account and, instead, have all three of his daughters be the beneficiaries, with the funds deposited into his trust (of which the three daughters were the sole and equal beneficiaries) and to be used to pay off the mortgage on his residence.

After Ralph’s death, Lisa transferred the funds in the joint tenancy account into an account in her own name. Naturally, a dispute arose among the sisters as to several matters, including the ownership of the account after Ralph’s death. At trial, the court concluded that the will, and conversations Ralph had with his brother-in-law confirming that intent, amounted to clear and convincing evidence that Ralph intended to revoke Lisa’s right of survivorship in the account. Lisa appealed the trial court’s decision.

The Court of Appeal acknowledged that “at first blush,” the statutory scheme would seem to support Lisa’s position. After all, the expression of Ralph’s intent was contained in his will and subdivision (c) of Probate Code section 5202 specifically states that the right of survivorship arising from the express terms of the account cannot be changed by will. The court found that the “key to harmonizing” these two statutes lies in the “distinction between the express terms of the account and the beneficial interests in the account.” (Id., at p. 738.)

The appellate court looked at Probate Code section 5201, which stated that the provisions of “Chapter 3 (commencing with Section 5301) concerning beneficial ownership as between parties . . . are relevant only to controversies between these persons and their creditors and other successors, and have no bearing on the power of withdrawal of these persons as determined by the terms of account contracts.” (Ibid., emphasis in original.)

In the court’s opinion, the distinction between these two terms – the terms of an account and the ownership of beneficial interests – is key to interpreting section 5303. The court determined that the terms of a multiple-party can be changed only by utilizing one of the methods listed in Probate Code section 5303. By contrast, the court stated, Probate Code section 5302 concerns the beneficial interests as between the parties to the account: “Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties as against the estate of the decedent unless there is clear and convincing evidence of a different intent.” (Ibid., emphasis in original). The court found further support for its determination, by pointing out that subdivision (d) of Probate Code section 5302 contains the following “catchall”: “In other cases, the death of any party to a multiparty account has no effect on beneficial ownership of the account other than to transfer the rights of the decedent as part of the decedent’s estate.” (Id., at p. 739, emphasis in original.) The court went on to say that the fact that the catchall is “explicitly framed in terms of the ownership of beneficial interests strongly suggests that subdivisions (a) through (c) also concern the ownership of beneficial interests.” (Ibid.)

The court viewed Probate Code section 5303 as applying to the obligations of the financial institution to pay the funds to the surviving joint tenant in accordance with the account agreement and Probate Code section 5302 as applying to a claim that the decedent’s estate may have for the funds against the surviving joint tenant.

But, what about the fact that subdivision (e) of Probate Code section 5302 specifically states that the “right of survivorship” cannot be changed by a will? The court addressed this by stating that the will is not effective to change the “right of survivorship” agreement as between the deceased joint tenant, the financial institution, and the surviving joint tenant. However, the will can be considered as evidence of the decedent’s intent as to the disposition of the funds in that account as between the surviving joint tenant and the decedent’s estate. This, the court stated, would be consistent with the “modern trend toward favoring the decedent’s intent over formalities.” (Id., at p. 41, citing Estate of Duke (2015) 61 Cal.4th 871.)

The appellate court did not agree with the trial court’s decision that the funds in the account were to be administered as part of Ralph’s trust. Rather, the terms of Probate Code section 5302, subdivision (d) required the funds to be part of Ralph’s personal estate.

As stated in the Placencia opinion, the courts are continuing the trend towards recognizing the decedent’s intent, including examining evidence that previously would not have been admitted at trial. While in Placencia, the statement in the will did not have the effect of changing the terms of the account so that the financial institution would have been compelled to pay the account directly to Ralph’s executor, it did evidence Ralph’s intent that Lisa not succeed to the account and that, instead, it be included as part of Ralph’s estate.

Given that the court looked at Ralph’s will for the purpose of determining intent, practitioners should not limit their examination of a decedent’s papers exclusively to the will. It seems reasonable to conclude that, had Ralph signed a letter to Lisa telling her that he had no intention of her succeeding to the account as a surviving joint tenant and, instead, wanted it shared with all of his daughters, the result would have been the same.

Webinar: Estate Planning in 2020 – What You Need To Know About Estate Planning Now

On May 6, Kay Brooks presented What You Need to Know About Estate Planning Now, hosted by the Capital Region Family Business Center.  This webinar covered important aspects of estate planning in 2020, including considerations highlighted by the current pandemic.

The presentation addressed:

  • Immediate steps you can take to benefit your family and enhance your estate plan
  • The key documents you want to have in place to protect yourself and your loved ones
  • New features that could improve your revocable living trust agreement
  • How to coordinate your estate plan with your business succession plan
  • Specific logistical challenges occurring now and how to address them

A recording of the webinar can be viewed on the Capital Region Family Business Center website.

Dead Men Tell No Tales and Other Issues with Contracts to Make a Will

First, what is a contract to make a will?

A contract to make a will is exactly as it sounds.  It is an agreement to provide for a person as part of a decedent’s will.  The terms of the agreement could be as simple as a promise to provide services in exchange for a specific cash gift as part of a decedent’s will.  For example, Elizabeth may promise to provide caregiving and household services to William in exchange for William’s promise to provide her with $250,000 upon his death.  When William dies, hopefully his will has a provision leaving a specific cash gift of $250,000 to Elizabeth.  If not, then there has been a breach of the agreement.  The agreement can become substantially more complex, particularly when real property is the subject of the agreement.  Instead of agreeing to pay Elizabeth $250,000 in exchange for her services, William may promise to leave his house to Elizabeth.  Again, when William dies there may be a breach of the agreement if William’s will contains no provision instructing that his house be given to Elizabeth.

A contract to make a will in California can be oral or in writing.  The cases litigated often relate to oral agreements which are difficult to prove.  Further, the terms of the oral agreement may be so uncertain and indefinite that the agreement is incapable of being enforced.  In the above examples, the agreement between William and Elizabeth is potentially vague.  What are the specific terms of the agreement? What is the duration of the agreement? Does Elizabeth have to provide services for William’s lifetime?  What happens if Elizabeth ceases providing services or dies first? Would this simple agreement be enforceable if there were no writing?  These questions make litigation of these matters a near certainty.

The many issues relating to promises to make a will

How do you prove the existence of an oral agreement?

The ability to enter into an oral contract to make a will leads to many problems as the courts attempt to enforce valid agreements, while still trying to effectively dispose of fraudulent agreements.  It can be challenging to prove the existence of an oral agreement under any circumstance.  The ability to bring an oral contract to make a will claim may lead to parties performing legal contortionism in order to adequately plead the existence of an agreement which may be enforceable in a court of equity.  In the context of a contract to make a will claim, it is even more challenging to prove or disprove the existence of an agreement as generally one of the parties to the contract is deceased.  Thus, at least one material witness cannot testify, and, if the agreement is oral, there is no writing to substantiate the alleged agreement.

The statute of frauds requires most agreements to be in writing to prevent people from concocting agreements which do not exist. (See Cal. Civ. Code § 1624.)  When an agreement involves real property, a writing becomes even more important due to the presumption that the owner of legal title to the property is the owner of the full beneficial title. (See Cal. Evid. Code § 662.)  If your name is on the deed, there is a legal presumption that you own the property.  The statute of frauds is important for a reason.  The formality of a writing requirement dramatically reduces the likelihood that a person could simply invent a fake agreement and enforce such an agreement to his or her benefit.

California Probate Code section 21700 sets forth the criteria for when a contract to make a will can be enforced.  Absent the existence of a writing, a contract to make a will can be established by clear and convincing evidence of an agreement that is enforceable in equity.  This is the highest evidentiary standard in civil litigation.  The idea is that if there are enough indicia of an agreement, then even an oral agreement will be enforced.  However, claimants with little to no evidence (likely because the agreements are imaginary or completely contrived) may be able to get out the starting gates with a scintilla of evidence of an agreement, which may or may not be enforceable in equity.  Depending on the evidence and the unique facts surrounding the purported agreement, an evidentiary hearing may be warranted.  On the other hand, persons with completely legitimate agreements which were never memorialized in writing may be protected from an unfair or inequitable result due to his or her failure to comply with the statute of frauds.  This is particularly true when, for all intents and purposes, the parties acted as though there was an agreement.

How do you know when there is a breach of the agreement?

You will often not be able to tell whether the decedent lived up to his or her side of the deal until the decedent has died and the decedent’s estate plan (or lack of estate plan) is revealed.  If you were supposed to be in the decedent’s estate plan, but were not included, and are also not an heir of the decedent, you may never even receive notice of any proceeding regarding the decedent’s estate or any administration of the decedent’s trust.

Essentially, the decedent’s promise is akin to Popeye’s friend Wimpy’s promise that “[he’ll] gladly pay you Tuesday for a hamburger today”.  You will often not be able to tell whether the decedent lived up to his or her side of the deal until some future time.  With respect to Wimpy, the telling time period is when Tuesday comes and goes without any payment by Wimpy for the hamburger.  With respect to a decedent’s promise to provide for another upon his or her death, it is normally only when the decedent has died that one can determine whether the agreement was honored by the decedent.  At that point, the decedent has likely already received something of value (just like Wimpy with the hamburger) and may not be particularly inclined to honor his or her promise in the future.  Like in the cartoons, Wimpy may promise to pay for his hamburger on Tuesday, but he simply will not be around on Tuesday when the debt should be collected.  This makes enforcement of the debt challenging.

Of course, there are always exceptions, but it can be difficult to determine when such a promise is breached.  Certainly, if Wimpy did not pay up on Monday, he would likely not be in breach of the agreement.  However, if Wimpy stated on Monday that he was moving across the country, had no intention of ever paying for his hamburger, and had in general taken steps in contravention of his promise to pay for the hamburger, it may be possible to enforce the agreement prior to waiting until Tuesday.  Likewise, a decedent can typically create or revise a will up until his or her death, and is not generally in breach of his or her agreement until the decedent’s death.  However, if the decedent promised to give a house to a person under the decedent’s will, and then actively tried to sell it prior to the decedent’s death in contravention of the agreement, it may be possible to enforce this promise prior to the decedent’s death.  Clearly, breach of such a claim is largely fact specific.

Should you try to enforce the agreement?                                                   

Many wills and trusts contain express language in which the decedent states that he or she has not entered into any contracts to make a will.  Thus, enforcement of the agreement may very clearly be in contravention of the decedent’s existing estate plan.  As such, a party trying to enforce a contract to make a will should be mindful that enforcement of such a claim may be a creditor’s claim, i.e. a claim for liability of the decedent.  If the claimant already inherits under the decedent’s estate plan, the claimant should evaluate whether such a claim would trigger enforcement of the instrument’s no-contest clause.  In addition to incurring expenses of litigation, it may not make sense to enforce such a claim if there is a risk of losing one’s inheritance if the no-contest clause is triggered.  It is important to timely evaluate and bring such a claim as various statute of limitations or other time bars may be in effect to prevent a person from bring a contract to make a will claim.

How do you enforce the agreement? 

Remedies can include money damages or quasi-specific performance.  If the decedent promised to leave a specific sum of money, then money damages would be appropriate.  If the decedent promised real property or something otherwise unique, then quasi-specific performance may be the preferred remedy, so that the person can obtain exactly what was promised, i.e. the real property or other unique asset.  However, if money damages will adequately compensate for the breach, then enforcement of the promise in equity is unlikely.


Contracts to make a will can be difficult claims to prove and enforce. While this litigation can be frustrating when it appears that an agreement has been fabricated and the decedent is no longer around to testify to contradict the fraudulent claim, with the help of experienced trusts and estates litigators these claims can be successfully defeated.  Further, in the event that there is simply no writing memorializing a valid agreement, experienced trusts and estates litigators can aid in bringing such a claim so as to hopefully circumvent the statute of frauds.

When Do You NOT have the Right to Remain Silent? Conservatorship Proceedings and Equal Protection Clause Claims

Thanks to Law and Order, we’re all familiar with the beginning of a person’s Miranda Warning: “You have the right to remain silent.  Anything you say can and will be used against you in a court of law.”  What many may not know, however, is that this is a right only afforded to those involved in criminal proceedings.  In civil cases, there is no constitutional right to refuse to testify.  Historically, this has been intended to ensure that our criminal justice system—which can deprive a person of their freedom, property, and even their life—remains accusatorial, not inquisitorial.  A civil matter, on the other hand, is meant to resolve disputes between individuals and does not threaten the same consequences, so public policy favors bringing forth the information that a person’s testimony offers , even if it is against his or her self-interest.

A recent case, however, raised the somewhat murkier question of what standard should apply in conservatorship proceedings.  Under the Lanterman-Petris-Short Act (the “LPS Act”), if a person is found to be gravely disabled as the result of a mental disorder and unable to provide for his or her own food, clothing, and shelter, he or she may be committed to an involuntary conservatorship.  In this situation, a conservator makes all decisions regarding the person’s living situation, finances, and medical care, and in some cases the conservatee may be confined to an institutional care setting.  In the Conservatorship of the Person and Estate of Bryan S. [Citation] (Conservatorship of Bryan S.), the proposed conservatee, Bryan, argued that he should not have been forced to testify at his conservatorship trial.  Bryan claimed that he was similarly situated to those found not guilty by reason of insanity and those subject to sexually violent predator and mentally disordered offender proceedings, all three of which classes have been found to have the right not to testify.  Under the equal protection clause of the Constitution, Bryan argued, he should be entitled to the same rights.

While the history and nuance of the equal protection clause is extremely complex, at its most basic, it is meant to ensure that the state applies its laws equally to all.  The threshold question of whether equal protection principles apply is whether the state has adopted a classification that affects two or more similarly situated groups in an unequal manner.  In regards to potential conservatees under the LPS Act, the California Court of Appeals clarified in the Conservatorship of Bryan S. that such individuals are not similarly situated to individuals facing commitment as a result of criminal acts related to a mental health condition.  Therefore, LPS Act conservatees are not similarly situated and not entitled to refuse to testify at their conservatorship trials.

As the court explained, the LPS Act was designed to provide prompt evaluation and treatment for individuals with mental health disorders and to provide them with individualized treatment, supervision, and placement options, including being placed in non-institutional settings with family or friends, if appropriate.  The LPS Act is meant to protect public safety, but also to protect people with mental health disorders from criminal acts.

While Conservatorship of Bryan S. clarifies that a LPS Act conservatee cannot refuse to testify at his or her trial, it also confirms that, consistent with prior case law, a prospective conservatee will not be compelled to answer questions that may incriminate him or her in a criminal matter.   So while the right to remain silent does not apply in all settings, it is absolute in its protection against self-incrimination, at least for criminal acts.

Casebriefs – How Recent Decisions Could Impact You

In our monthly department meetings, the trusts and estates group at Weintraub keeps current by reviewing recent cases and discussing how they could affect our practice. See below for some highlights from the past few months:

Pena v. Dey – When is Self-Help Enforceable?

(Filed August 30, 2019)

The gist:

James Robert Anderson established a living trust in 2004, which he amended in 2008. He was diagnosed with abdominal cancer and brain cancer in 2011. After his diagnoses, Anderson became closer with an existing friend, Grey Dey, who eventually moved in with Anderson and provided care to him until Anderson’s death in May 2014.

In February 2014, Anderson contacted a new attorney, requesting changes to his trust. Anderson sent the attorney a marked up copy of a section of the first amendment that created fifteen separate trust shares of varying percentages to be distributed to different beneficiaries. Anderson altered eleven of those gifts, adding notes in margins, and attached a separate list of beneficiaries to divide the largest share. Anderson wrote a note to his attorney on a Post-it note that read, “Hi Scott, Here they are. First one is 2004. Second is 2008. Enjoy! Best, Rob.”

There’s No Place Like Home – Heightened Evidentiary Standard for Moving Conservatees from Their Personal Residence

Frequently when a conservatorship proceeding is commenced, the proposed conservatee is residing in his or her personal residence. Having a conservatorship established can be a distressing experience for a conservatee who has awareness of the effect of such a proceeding. One primary concern may be whether there is going to be a change to living arrangements with which the conservatee has been familiar, sometimes for decades. Naturally, it is commonplace for a conservatee to express that they “don’t want to go to a care home.” In recognition of the need to affirmatively preserve the right of conservatees to remain in their own personal residence, the California Legislature passed an amendment to existing law which applies a higher evidentiary standard before a conservator may move a conservatee from his or her personal residence.

Living in the Personal Residence. Under existing law, it is presumed that the personal residence of the conservatee at the time of the commencement of the conservatorship is the least restrictive appropriate residence for the conservatee. That presumption may be overcome by a preponderance of the evidence. As of January 1, 2020, the presumption that the personal residence of the conservatee at the time of the commencement of the conservatorship is the least restrictive appropriate residence for the conservatee may be overcome only on a showing of clear and convincing evidence, which is a higher standard.

Important Tax and Estate Planning Update

You may have heard by now that the Gift and Estate Tax exemption amount was increased by the Tax Cuts and Jobs Act of 2017, which became effective on January 1, 2018. This article is to highlight some of the key estate planning issues under the new tax law.

In 2019, the Gift and Estate Tax exemption as adjusted for inflation is $11.4 million, and in 2020, the exemption amount will be increased to $11,580,000. Historically, this is the highest the exemption has ever been. The exemption will continue to increase incrementally due to a built-in inflation adjustment until January 1, 2026, when, absent an act of Congress, the exemption will be decreased to about $6 million. The value of a decedent’s estate in excess of the available exemption upon death will be subject to a 40% estate tax.

This dramatic increase (and future expected decrease) in exemption poses a range of estate planning issues which affect all clients, regardless of the amount of your wealth. There are also some opportunities for tax savings.

What Aretha Franklin’s Estate Teaches Us About the Pitfalls of Handwritten Wills

Typically, only those of us who are trusts and estates attorneys geek out over the fascinating problems that handwritten wills create. But when those wills were written by a music icon worth $80 million, suddenly this topic is intriguing to a much broader audience. Aretha Franklin died on August 31, 2018. Her family was confident that she died without a will, but on May 3, 2019, the personal representative of Franklin’s estate discovered three separate documents, each of which may constitute a valid handwritten (or in legal terms, “holographic”) will. Now, the previously uncontested estate has divided Franklin’s family and is likely headed to litigation. Below are a few common pitfalls of holographic wills that are issues in Franklin’s estate.

Holographic wills may not comply with legal requirements. Most importantly, holographic wills have legal requirements, too. Only about half the states in the United States recognize holographic wills. What’s more, each state may have different requirements for a holographic will to be considered valid. Most require that the will be in the handwriting of the testator (the person writing the will), but some states include other requirements. For instance, Michigan (where Aretha Franklin’s estate is being administered) requires that the will be dated. California does not require a date but does set out some rather specific guidelines on the validity and interpretation of a document if it is undated. The personal representative of Franklin’s estate has petitioned the court for instructions regarding the “validity and admissibility” of the purported holographic wills, stating that her counsel is “unsure as to whether or not these documents meet the legal requirements” under Michigan law to constitute valid holographic wills.

The handwriting may be difficult to read. Almost as important as meeting the applicable legal requirements, a holographic will that is difficult to read can cause endless problems. You can read Franklin’s holographic wills (first, second, and third) to see just what a difficult task this can be. Unfortunately, sometimes even those with perfect penmanship can’t avoid this pitfall. Sure, the handwriting may be clear at the time the document is written. But depending on the writing implement, paper, and storage of that document, it may become difficult to read over time. This can happen to a typewritten or professionally prepared will as well, of course, but is far more common with handwritten wills. One of Franklin’s wills was written on a few pages of a spiral-bound notebook, left in the notebook, and hidden under her couch cushions – not exactly prime storage of an important legal document.

The language may be unclear or legally insufficient. Even if it’s possible to read the words in a holographic will, a common pitfall of holographic wills is that the language may be difficult to understand – either it is difficult to understand the plain language meaning of a sentence, or it is difficult to understand the intended legal effect. Franklin’s wills contain both problems. Franklin wrote in tangents, left notes in margins, and drew arrows across the pages of her holographic wills. It can be difficult to follow her train of thought, much less decipher whether she accomplished the legal effect she intended.

Even if a holographic will contains language that is understandable, it may not be legally sufficient to have the desired effect.

For example, in Franklin’s 2014 holographic will, she clearly attempts to provide in some manner for her son Clarence, who has special needs. But it is not clear what she intends for him to receive, or how she intends for that to be managed. She states that her other three sons “must” check on him once a week, “report” to her executor, and “give him   $  .” She may have intended to establish some formal manner in which her three sons provide ongoing care and even financial support to Clarence, but it is simply not clear. A similar pitfall of holographic wills that is incredibly common is when the testator uses precatory language – meaning she expresses something as a wish or hope when she intended it to be a requirement.

It can be difficult to determine if changes were made. In Franklin’s estate, one of the biggest issues currently pending before the court is who should be her personal representative. Franklin’s niece, Sabrina Owens, was appointed upon agreement of the family before the holographic wills were discovered. But since their discovery, one of Franklin’s sons (Kecalf Franklin aka Kecalf Cunningham) has petitioned for his own appointment as personal representative based on Franklin’s most recent holographic will that appears to nominate him to serve. Yet, the provision appointing him appears to have listed Kecalf, another son (Teddy), and Owens (though it is difficult to decipher), to all serve together and Teddy’s and Owens’s names are crossed out, leaving only Kecalf. This gives rise to many questions about when those names were crossed out, who crossed them out, and (going back to our last pitfall) what effect was intended. Kecalf has hired a forensic handwriting expert to inspect the 2014 holographic will, and the court has authorized this expert to examine the document. Kecalf selected an expert who specializes in dating inks, certainly because it will be important for Kecalf to prove that the entire 2014 holographic will was written at the same time.

Typically, the battle to become personal representative might not become as heated as this. But Franklin’s estate requires the personal representative to handle a large number of outstanding projects, including television and movie negotiations, valuation of Franklin’s music catalog, music and publishing rights; so this task is sure to be one that lasts a long time, pays very well, and stands to have a huge effect on Franklin’s legacy. Just imagine the fight that would ensue if a crossed-out provision made a significant difference in the distribution of a valuable estate.

They can lead to more litigation than a professionally drafted will. All of the pitfalls above lead to the same problem – holographic wills can raise unanswered questions. In that case, it inevitably means that they are susceptible to legal challenges, beginning with whether they are even valid and then parsing through the intention behind every term. If the matter goes to trial, distribution of the estate could be delayed years. Hiring an attorney to draft an estate plan can help to avoid all of these pitfalls.

Focus on Fiduciaries: What Fiduciaries Need to Know About the Attorney-Client Privilege

Last month, my Weintraub colleagues and I had the pleasure of speaking at the Professional Fiduciary Association of California annual conference on the topic of the attorney-client privilege and its application to clients serving in a fiduciary capacity (trustee, executor, conservator, agent, etc.).

Most people have a cursory understanding of what the attorney-client privilege does – it keeps communications between clients and their attorneys confidential and free from discovery, which fosters honest and complete communication between client and lawyer – but many individuals don’t realize that there are important limitations and exceptions to the privilege, particularly for those serving as fiduciaries. These crucial limitations and exceptions apply regardless of whether the fiduciary is a professional fiduciary or simply an individual who is administering a trust or estate or serving as a conservator for a loved one or friend.

If you are serving as a fiduciary in any capacity, it is important that you know when your communications with your attorney are private and when they are not. Here are the Top 12 Takeaways from our presentation “Here Today, Gone Tomorrow: A Fiduciary’s Guide to the Attorney-Client Privilege”:

  1. Attorney-Client Privilege and the Successor Trustee: The attorney-client privilege vests in the office of the trustee and not in the individual serving as trustee. Therefore, a successor trustee can obtain any confidential communication between a previous trustee and his or her attorney. This exception to the attorney-client privilege (“the Fiduciary Exception”) often comes as a shock to trustees who think that all communications with their counsel are privileged under all circumstances. Moreover, any provision in the trust document that tries to limit the Fiduciary Exception is void for public policy when the previous trustee is alleged to have committed acts of intentional misconduct, gross negligence, or reckless indifference.
  2. There Is a Work-Around to the Fiduciary Exception: Remember, the Fiduciary Exception to the attorney-client privilege applies because the privilege belongs to the office of trustee, and not to the individual. Therefore, if a trustee retains personal counsel and pays for the attorney’s services out of his or her own pocket (and not from the trust), then the Fiduciary Exception does not apply and the attorney-client privilege is preserved. So if you are a trustee and you want to ensure that your communications with your counsel are confidential, then you should retain personal counsel. Otherwise, be aware that your communications will be discoverable by a successor trustee.
  3. Trust Beneficiaries Are Not Entitled to a Trustee’s Confidential Communications: Although a successor trustee is entitled to confidential communications between a previous trustee and his or her attorneys, beneficiaries of the trust are not entitled to these communications and cannot compel discovery of them. However, as the holder of the privilege, the successor trustee can decide to share a predecessor trustee’s communications with the trust beneficiaries.
  4. Executors Are Also Subject to the Fiduciary Exception: Just as with trustees, the attorney-client privilege belongs to the office of Executor and a successor executor can obtain the confidential communications that any previous executor had with his or her attorney.
  5. An Executor Holds the Attorney-Client Privilege Belonging to the Decedent: If the Decedent had communications with an attorney during his or her lifetime, the Decedent’s attorney-client privilege over those communications transfers to the duly-appointed Executor. But once the estate is closed and the Executor is discharged, the attorney-client privilege is extinguished and any communications the Decedent had with his or her attorney are no longer privileged.
  6. Conservators Are Also Subject to the Fiduciary Exception: As with trustees and executors, a successor conservator can obtain all communications between a predecessor conservator and his or her attorney from the successor conservator. The attorney-client privilege transfers to the successor conservator.
  7. A Conservator Also Holds the Attorney-Client Privilege for the Conservatee, Unless There Is a Conflict of Interest: If a conservatorship is in place, the conservator holds the conservatee’s attorney-client privilege unless there is an actual or apparent conflict of interest between the conservator and conservatee. For example, if a conservatee wishes to terminate the conservatorship and the conservator opposes the termination, the conservatee will retain his or her attorney-client privilege with respect to the termination action. But if the conservatee is sued by a third-party, the conservatee’s attorney-client privilege will be held by the conservator, and not the conservatee.
  8. The Rules for Attorney-Client Privilege for Guardians Are the Same as for Conservators: As with conservators, the attorney-client privilege follows the office of guardian and successor guardians can obtain privileged communications between a former guardian and his or her counsel. Also, a guardian holds the attorney-client privilege of his or her ward, unless there is an actual or apparent conflict of interest between the guardian and the ward, in which case the attorney-client privilege remains with the ward.
  9. Agents Under Powers of Attorney: The Fiduciary Exception would also apply, meaning that a successor agent would be able to obtain communications between a former agent and his or her attorney.
  10. Invoices for Services Performed Are Confidential Under Certain Circumstances: Attorney invoices for a fiduciary client are protected by the attorney-client privilege when there is active litigation. The reason is that information set forth in the invoices can provide insight into litigation strategy, the discovery of which would provide an unfair advantage to the opposing party. What is unclear under current law, however, is how far the attorney-client privilege extends for non-litigation services, as with attorney invoices for services such as trust administration. Depending upon the circumstances, these invoices may or may not be privileged. Trustee billings are not entitled to any attorney-client privilege except to the extent that they include attorney-client privileged communications or attorney-work product. Any time entries that disclose such communications or attorney-work product should be redacted to prevent the privilege from being inadvertently waived.
  11. Other Common Exceptions to the Attorney-Client Privilege: There is no accountant-client privilege and only a limited privilege for non-attorney tax practitioners for “tax advice.” Moreover, tax return preparation services rendered by an attorney are not protected by the attorney-client privilege. There is also no privilege between fiduciaries and third-parties such as appraisers, accountants, and the like, but the privilege does apply for communications between the attorney and such third-parties if the third-party’s services are necessary to provide information to the attorney to provide legal services to the client. Thus, if the fiduciary wants to ensure that communications with the third-party provider remain confidential, the attorney, and not the fiduciary, should retain the provider. Finally, there is no attorney-client privilege for communications by a client who seeks legal assistance to plan or to perpetrate a crime.
  12. Beware of Waiving the Attorney-Client Privilege: Even where the attorney-client privilege applies, it can be easily waived. Any disclosure by the client of his or her communications with counsel can be the basis of a waiver, even where the client did not intend to waive the privilege. (A client’s overshare on social media of an attorney’s advice has been determined to waive the privilege.) It is important that you consult with your attorney about how to ensure that all privileges remain intact.

The foregoing list demonstrates some, but nowhere near all, of the nuances that impact communications between fiduciaries, whether professional and non-professional, and their attorneys. If you are serving as a fiduciary, it is critical to understand these nuances so you know when your communications are protected by the attorney-client privilege and when they are not.

If you would like a digital copy of our presentation materials, please feel free to email me.

A Case Lesson in “What Not To Do” When Billing as a Conservator

Based on recent appellate cases, one of which is discussed below, the court’s scrutiny of conservators’ conduct and, specifically, private fiduciaries, is seemingly on the rise. Private fiduciaries acting as conservators should always remain focused on performing and charging only for those services that are consistent with the best interests of their conservatees. California case law continues to refine that understanding.

In the recent case of the Conservatorship of Presha, the Court analyzed one professional fiduciary’s fee request of $12,621.60. If any of you thought that a relatively low amount of a fee request could help avoid intense court scrutiny, think again. The court in Presha went to great lengths to shave off just over $5,000 from the fiduciary’s request, ultimately landing at $700 per month – a somewhat arbitrary “reasonable” number – for a total of $7,000 in approved fees.

By way of background and as many already know, private professional fiduciaries are entitled to “just and reasonable” fees for the services they provide for a conservatee. Either the services must actually benefit the conservatee or the fiduciary must have a good faith and objectively reasonable belief that they will benefit the conservatee. Fees are usually paid from the conservatorship estate only after court approval under the Probate Code. As a general guideline, the California Rules of Court Rule 7.756 sets forth the factors that the court will consider in determining what is “just and reasonable” compensation:

(1)The size and nature of the conservatee’s or ward’s estate;

(2)The benefit to the conservatee or ward, or his or her estate, of the conservator’s or guardian’s services;

(3)The necessity for the services performed;

(4)The conservatee’s or ward’s anticipated future needs and income;

(5)The time spent by the conservator or guardian in the performance of services;

(6)Whether the services performed were routine or required more than ordinary skill or judgment;

(7)Any unusual skill, expertise, or experience brought to the performance of services;

(8)The conservator’s or guardian’s estimate of the value of the services performed; and

(9)The compensation customarily allowed by the court in the community where the court is located for the management of conservatorships or guardianships of similar size and complexity.

In the case of the Conservatorship of Presha, Christine Davidson was the court-appointed conservator of the person and estate of Lorraine Presha from 2009 to 2015. Ms. Presha died in March 2015. In June 2015, Ms. Davidson filed a combined petition for approval of the sixth and final accounting and for conservator’s fees in the amount of $12,621.60. The court took issue with many of Ms. Davidson’s billing entries and was concerned about the duplication of entries and charging different clients for the same actions. That concern ultimately led the Court to, on its own, investigating into 15 other concluded matters in which Ms. Davidson had sought fees, essentially to evaluate the extent of her double billing and other inappropriate billing practices.

During one of the hearings, the court gave one example of a questionable entry that read: “Received, reviewed, and filed. Notice of changes from Security Bank, re in form of changes in bank fees, terms, and effective date.” In response, the court commented:

“the Court doesn’t want to be petty or feel petty, but we all get that little slip of paper once in a while from the bank that says, ‘We have exciting new changes to the terms of your account.’ And then you look at it and what they have done is increased the punishment for a bounced check from $20 to $22. We all glance at those papers and we throw them away. Why this estate has to pay $12 for glancing at that and throwing it away is a big question.”

During the same hearing, the court went on to question:

  • Why fees were being charged for confirming that a bank statement went to the correct mailing address when it was clear Ms. Davidson received the bank statement herself;
  • Why Ms. Davidson charged for meeting with a financial advisor to discuss how laws related to the “Affordable Care Act” taxes would affect her clients and whether the charge appears in 30 or a 100 clients’ billings.
  • Whether Davidson’s charge for 24 minutes to take a check to the bank was legitimately billed – “Is that the only check she took to the bank? Or did she take a hundred checks from a hundred clients? In which case, it was four hours billed if you add them all up, and did it take four hours to go to the bank. Or did she do the foolishness of taking this [one] check.”

In the court’s examination of 15 other matters in which Ms. Davidson provided services, the court notes further questionable billing practices. For example, the court found that on one particular day, eight disabled clients in eight separate cases were each billed two-tenths of an hour for receiving telephone calls from the bank – Was this all billing for the same phone call? The court also pointed to a similar example where eight clients were billed for a total of 3.6 hours of meeting with a bank manager on the same day. The list went on.

Despite Ms. Davidson’s arguments to the contrary, on appeal, the court found that the trial court’s scrutiny, in particular, the investigation into 15 other matters, was proper. It held that because Ms. Presha’s estate was being potentially abused by an agent of the probate court (Ms. Davidson), it was precisely the type of case where it could invoke its broad powers under the Probate Code to regulate and control the discharge of Ms. Davidson’s duties. The appellate court affirmed that the trial court had the ability to investigate the propriety of the conservator’s billing practices and affirmed the judgment for reduced fees in the amount of $7,000.

The case is certainly a cautionary tale for private fiduciaries and worth a read for those who want to see more of the specific types of questionable practices that concerned one judge enough to investigate further. It may be prudent to re-evaluate one’s billing and filing practices to ensure that duplicative billing practices are avoided and that the best interests of conservatees is always in mind while performing and billing for services.