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Mental Capacity to Make Wills and Trusts

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For someone to create a valid will or trust, the individual must be of “sound mind”, which is a term for determining mental capacity. If an individual is determined to lack sufficient mental capacity, then any document that individual signs is invalid under California law. Under California law, there are different laws for determining mental capacity based on whether an individual is signing a will or a trust. This article will examine the role mental capacity plays in estate planning.

Mental Capacity Required for Wills

California law presumes that everyone has the mental capacity to make a will. As a result, it is up to the individual challenging the legitimacy of a will based on mental capacity to pursue these matters in court. To make a will, an individual must be at least eighteen years old and of sufficient mental capacity. The mental capacity required to make a will in California is considered the lowest. The mental capacity law for wills require an individual to understand several things:

  • The individual must understand that he or she is creating a will.
  • The individual understand what property the individual owns.
  • The individual must understand the relationship the individual has to the beneficiaries that are named in the will.
  • The individual must not suffer from mental disorders with symptoms that include delusions or hallucinations.

Mental Capacity Required for Trusts

The mental capacity required to make a trust is higher than the capacity required to make a will. The mental capacity required to create a trust dictates that an individual understands the following:

  • The rights, duties, and responsibilities created or affected by the decision.
  • The probable consequences for the decision maker in addition to the various individuals who are influenced by the decision.
  • The significant risks, benefits, and reasonable alternatives created by the trust.

Mental Capacity and Estate Planning

Have the loved ones in question examined by medical care providers. Due to the differences in standards, individuals who display any signs of memory loss or dementia should be evaluated by a primary care provider for mental capacity. While a person with the beginning stages of dementia likely has the capacity to create a will, that individual likely does not have the capacity to create a trust. It can be particularly difficult to determine exactly when an individual’s mental capacity is no longer fit to make either a will or trust because individuals are often resistant to admit a decline in mental aptitude. Have estate planning devices in place by the time mental capacity is affected.

If you have any questions about mental capacity might influence an individual’s ability to write a Will or Trust, contact a seasoned and experienced California estate planning lawyer today.

The Purpose of No Contest Clauses

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One of the primary goals of estate planning is to reduce the disputes that occur among a deceased individual’s loved ones. While there are many ways to achieve that goal, these methods often include ensuring that all proper requirements are followed when executing documents, including carefully drafting trust terms and keeping estate planning documents unambiguous. When a family member feels that they were unjustly treated as a beneficiary, estate planners utilize a “no contest” clause. This article will examine some essential information about “no contest” clauses in California.

Purpose and Explanation

A “no contest” clause is term in a will or trust that can penalize a beneficiary if he or she files a contest with the probate court. A “no contest” clause provides that a beneficiary loses all inheritance from the estate plan if the beneficiary seeks to invalidate any of the estate plan’s provisions or documents. “A no contest” clause aims to discourage litigation by beneficiaries who are unhappy with litigation and require the beneficiary to choose between accepting the gift provided in the estate plan and losing one’s inheritance.

When No Contest Clauses Apply

While “no contest” clauses are rarely used to disinherit beneficiaries, these clauses still apply in cases where the requirements of the California probate code apply. To meet these requirements, the following standards must be met:

  • Triggering Event: Individuals who undertake a “no contest” action must describe in the complaint an action that is specifically listed in the types of triggering events. Triggering events include direct contests of a document or attempt to directly overturn a will, trust, or creditors’ claims, and challenging the characterization of property as either community or separate.
  • Probable Cause: An individual who files a no-contest clause must file this action with probable cause of success.

Disinherited

Individuals who do not meet established standards can be disinherited from legal actions.

Examples of Bad Trustees

Parties filing “no contest” actions must remember that there is no basis to disinherit a bad trustee simply for breaching a duty to the trust. This lack of basis means that trustee cannot have legal action brought against them simply for engaging in breach of a trust. As a result, the burden is on individuals filing the lawsuit to prove the case at trial.

Recent “No Contest” Clause Law

There are two substantial and recent California laws dealing with “no contest” clauses. In 2002, the California Supreme Court decided a case that upheld the requirement of probable cause in pursuing “no contest” clause cases in California. In 2013, in another case, the California Supreme Court limited the types of cases against which “no contest” clauses are applicable. These laws are largely remembered for shaping the current requirement for a “no contest” clause-based legal action in California.

If you are curious about the role of a “no contest” clause in estate planning, contact a seasoned and experienced California estate planning lawyer today.

Essential Advice for Selecting an Executor

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Individuals traditionally select family members to serve as the executors of their estates. Sometimes, however, family situations become complicated after the death of a loved, like the current situation involving the estate of Muhammad Ali. Individuals hope to be able to count on their family members during a difficult time. Selecting an individual, however, to serve as the executor of one’s estate is a large responsibility. This article will provide some tips in selecting an executor for one’s estate.

  • An Executor Should Be Trustworthy. It is imperative that an executor be trustworthy because he or she will be exposed to a variety of financial secrets. He or she will be responsible for reviewing the assets of the estate, determining the deceased individual’s liabilities, and paying off the deceased individual’s debts.
  • Anticipate Potential Conflicts. Consider whether naming an individual as executor will create any potential conflicts among loved ones.
  • Economical Decisions are Necessary. Individuals must make sure that estates do not lose value prior to successful distribution.
  • Choose Someone Capable of Handling the Responsibility. An executor must have a great capacity for organization, be attentive to detail, meet deadlines, and perform other tasks. An individual should be selected who will be able to best fulfill these responsibilities.
  • Do Not Decide Executors Based on Emotional Connections. Do not let your emotional connection to an individual determine who you choose to act as executor. Not every beloved family member possesses the skills requisite to become an executor.
  • Ensure That Your Executor is Diplomatic. In deciding who to serve as executor, select an individual who would be diplomatic in nature while acting as executor.
  • Executors Must Be Organized. The individual who is named executor will be tasked with a variety of detailed assignments including making lists of assets and ensuring that timely distributions for estate taxes are made.
  • Executors Should Be Sensitive. Executors should be sensitive and compassionate enough to ensure that a deceased individual’s last requests are successfully carried out.
  • Make Sure an Individual Knows You Have Named Him or Her as Executor. If you do decide to name an individual as executor of an estate, make sure this individual is informed of your decision. Make sure that alternatives are lined up as well.
  • Make Sure an Individual Named as Executor Has all the Information. If you do decide to appoint either a family member or another loved one as executor, make sure the individual is given the contact information for a reputable estate planning attorney who can assist in ensuring that the executor’s duties are properly carried out
  • Realize There are Other Options. Individuals should know that if they cannot find someone to satisfy all of these qualities, other choices exist including naming a bank or financial institution as executor. Individuals can also ask an estate planning attorney to partner with the individual who is named as an executor.
  • Sometimes a Professional is the Best Choice. You might be unable to select a third party to serve as executor and instead select an attorney or other professional to act as executor of your estate. In this case, make sure you know what fees must be paid into your estate.

Appointing an executor can prove to be a difficult task. If you are faced with naming an executor or have any questions for an estate planning lawyer, contact a seasoned and experienced California estate planning lawyer today.

Estate Planning for the Never Married

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Married couples and parents usually have an easy time determining who will inherit their assets. An increasing number of Americans are faced with the situation of passing away without either spouses or children in place. In an article published last year, the New York Times reported that it is wiser for unmarried individuals to make the difficult choice of deciding to whom their estates will go rather than allowing them to go to distant relatives that they barely know. According to the Pew Research Center, statistics reveal that 20% of adults age 25 and older in 2012 had never married, which is an increase from 9% in 1960. Meanwhile, the number of women age 40 to 44 who have no children has increased from 10 % in 1976 to 15% in 2014. This article will discuss some essential advice for unmarried individuals during estate planning:

  • Explain Your Decisions: To prevent adverse legal actions and to ensure that your exact plans are carried out, it is wise and helpful to provide an explanation of your decisions. This type of overly thorough explanation is particularly helpful in cases where there is an unequal distribution of assets to persons with reasonably similar relationships to the testator of a will.
  • Need: Need is a potential good factor to decide how much to give a beneficiary.
  • Regularly Review Your Estate Plan: Individuals who are not married and do not have children should review estate plans at regular intervals to identify areas in which changes to the estate plan are desired. They might include third parties that they were close to at one time but lose touch with over time. In other situations, the financial circumstances of a beneficiary might change, which could signify a need to rewrite an estate plan so that individuals who are in greater need are awarded greater amounts.
  • Understand the Decisions Often Made By Others in Similar Situations: In similar situations, individuals who pass away at younger ages tend to select longtime companions, nieces and nephews, siblings, parents, and friends as beneficiaries. Older individuals who pass away in similar situations tend to select charities.
  • Use Clear and Concise Terms: Individuals without spouses or children must be definitive and clear about who should receive what parts of their estates. When there is not a clearly specified order, the state usually makes strict decisions regarding genealogical rules of inheritance. These types of decisions also tend to take an extended amount of time.

If you are unmarried, crafting an estate plan can be a difficult exercise, so do not hesitate to contact a knowledgeable and seasoned California estate planning lawyer today.