Simon Law

Five ways trustees may breach their fiduciary duty

2022-04-05T06:46:12Z

Trustees carry a heavy responsibility when they administer the trust of a person who has died. After all, they’re tasked with ensuring that the wishes of a deceased individual are carried out and that the terms of the trust are adhered to so that beneficiaries receive that to which they are entitled. In that regard, trustees are considered fiduciaries, meaning that they must put the interests of the trust and its beneficiaries first. That might sound simple enough, but the truth of the matter is that trustees are accused of wrongdoing all the time. When the fiduciary duty is alleged to have been breached, then litigation may follow shortly thereafter.

How does one prove a breach of duty?

First off, it’s important to note that the person who alleges that a breach has occurred has the burden of proof. So, if you’re a named beneficiary of a trust and suspect that the trust has been mismanaged, then the onus is on you to gather evidence to support your position. As you navigate your case, you’ll need to look for signs that the fiduciary wasn’t acting in your best interests. But how do you go about doing that? You may want to consider each of the following situations that may be present in your circumstances:

Commingling of assets: A trustee should keep the trust assets separate from his or her own. If the assets become commingled, then it can be difficult to determine where the trustee’s assets end and where the trust’s assets begin. This can leave you and the trust facing significant losses. So, if you suspect that trust assets have been commingled, which may be evidenced by the trustee’s sudden acquisition of expensive items, then you should investigate the matter further.
Missing assets: A telltale sign of improper management of trust assets is missing assets. If you and the trustee can’t locate assets, then there’s a good chance that the trustee did something with them that he or she shouldn’t have done, like selling them and retaining the proceeds for himself or herself. That’s why it’s critical that you pay close attention to the trustee’s accounting.
Inadequate accounting records: In far too many instances, the trustee fails to properly account for the trust’s assets. They may improperly document payments and investment income, or they may fail to document important financial transactions altogether. This can cloud the financial position of the trust and cause you to suffer financial losses.
The trust funds are being blown: The trustee is required to manage trust assets in a prudent fashion. If the trust is losing funds too quickly, then you should start asking questions about where the money is going.
The trustee has conflicts of interest: The trustee should also be acting in an impartial fashion, ensuring that he or she is abiding by the terms of the trust. In some instances, though, the trustee shows clear favoritism towards certain beneficiaries, which could put you at an unfair financial disadvantage.

Be prepared to litigate your case

Although some cases involving breach of the fiduciary duty settle, a significant number of them end up heading towards litigation. With that in mind, you need to be prepared to present your case in court. This means crafting persuasive legal arguments that confidently apply the law to the facts at hand. Doing so in these matters can be complicated and confusing, but you can take the guesswork out of your case by working closely with a legal advocate who is skilled in this area of the law. To learn more about the duties of the trustee and what to do if you suspect that the fiduciary duty has been breached, then please think about discussing your circumstances with an experienced legal team.

Estate planning for end-of-life issues

2022-03-02T11:52:17Z

As we age, we often become more concerned with end-of-life issues. After all, many people have preferences about what type of care they want and who they want making decisions for them if they are in a coma, in a vegetative state or are dying. Two estate planning documents that address these issues are a living will and a health care power of attorney.

A Living Will also known as an Advance Medical Directive

In a living will, you will specify what types of medical care and end-of-life treatment you want if you are dying or in a vegetative state. For example, you can state whether you want CPR to be performed, if you want to be put on a ventilator, if you want to receive artificial nutrition and other comfort care treatments. These are very personal decisions and there is no one-size-fits all answer. Still, it is important to have a living will so your loved ones are not left guessing what you would want during a time that is understandably very stressful and emotional for them.

Health care power of attorney

A durable power of attorney for health care is a document in which you select a person to make health care decisions on your behalf if you become incapacitated. This may be because you are in a coma or a vegetative state or are otherwise incapacitated. It is important to discuss your decision with the person you want to fulfill this role to ensure they are willing and able to do so. The person you choose should be familiar enough with you that they can make the decisions you would have made if you could. Health care power of attorney works hand-in-hand with a living will.

Other considerations

There are other supplemental documents you may want in your estate plan for end-of-life care. For example, you may want a DNR (do not resuscitate) order, a DNI (do not intubate) order and a form stating whether you want to be an organ donor. In the end, with advance planning and a comprehensive estate plan, you can ensure your final wishes will be met.

How difficult is it to change a custody agreement from a divorce?

2021-09-15T18:36:00Z

Life goes on, even after divorce. That can mean a career move, an altered financial situation, a new relationship or needing to take care of a sick relative. Once a new normal has set in after the divorce is final, parents may feel that it will be challenging to request a change in the agreement or court order, especially when they have to revisit old issues with their ex. But when there are custody issues, parents will usually do what it takes to keep a presence in their children’s lives. In California, in any move-away request the court must consider the child’s needs above any inconvenience or difficulty to the parent that a relocation may create. It is important to understand the legal issues that can arise for both parents and what is possible when making the request.

What the law allows

In California, parents have a right to change an existing divorce decree that involves moving a child, unless the move would negatively impact the child’s welfare or rights. In ruling on a move-away request, the court will consider factors that are in the best interest of the child, including:’

the welfare and safety of the child
the age of the child and the child’s wishes if of the age of maturity
how much time the child will spend with the other parent
how the move will impact the time the child will spend with the custodial parent or primary caregiver

In addition, the court will also consider if the reason for the move is legitimate and how far away the parent will be.

Resolving conflict for the sake of the children

For most parents, any conflict that affects their ability to see their children becomes a hot-button issue. In an amicable divorce, the parents may be able to come up with an agreement on their own when their circumstances have changed. They would then submit this joint stipulation to the court for approval. More often, however, changes to existing orders can become contentious and require court intervention to resolve. Above all, it is not a good idea for one parent to relocate a child without an approved court order, as the penalties can be severe. When the court hears a case involving a move-away request, the burden of proof lies with the parent who objects to the move, not the parent requesting the change, to make the case that such a move would be detrimental to the child.

The procedure

The relocating parent must get written consent, or provide written notice, of any intention to move the child for over 30 days. If the other party does not agree to this request, a scheduled hearing in court will allow them to voice their objections in front of a judge, who will then decide the merits and either reject the motion or grant the request with a new custody or visitation order.

Five estate planning mistakes to avoid

2021-07-19T09:44:45Z

Estate planning is a process that can be hard to start. Many Californians intend to prepare estate plans, only to push it off for as long as they can. There are many reasons people do this, but one is that it can be hard to think about what will happen when they are no longer alive. However, not creating an estate plan and then suffering an unexpected death, illness, or injury can be a recipe for legal trouble. This post will identify five common mistakes individuals make with regard to their estate plans, how simple solutions can help keep them on track. No one who reads this post should interpret its contents as legal advice, but all readers with questions about this post can speak with their local estate planning attorneys for guidance.

Mistake #1: No estate plan

As mentioned, a big mistake in estate planning is not having an estate plan. Without an estate plan, a person may not have a mechanism for sharing how and to whom they want their assets passed when they die. They may not leave instructions for how their minor children should be cared for or who may make decisions for them if they become incapacitated. Not having an estate plan leaves a lot up to chance, which may not be best for all individuals.

Mistake #2: Not considering tax consequences

High value estates can be taxed when a person dies. However, there are estate planning strategies that can reduce the size of an estate so that it is not taxed. If a person does not plan, they cannot avoid otherwise avoidable costs.

Mistake #3: Not changing an estate plan

An estate plan should be fluid because people experience change in their lives. For example, when a Minnesota resident goes through a divorce, they may no longer want their ex to benefit from their estate. Estate plan updates may be necessary after divorces, marriages, deaths, and births of family members.

Mistake #4: Not picking a good administrator

When a person dies, an administrator will become an important person in the completion of the decedent’s end of life financial and legal matters. They will oversee probate and other processes necessary to settle the decedent’s affairs. The wrong administrator can mean trouble, delays, and costs for an estate that should be distributed to beneficiaries.

Mistake #5: Not using an attorney for estate planning matters

It can be tempting to try to prepare estate planning documents like wills and powers of attorney on one’s own. However, mistakes in these documents can lead to their invalidation. If a person’s testamentary documents are not accurate and properly executed, they may not serve their intended purposes when the individual dies. Estate planning attorneys are the right professionals to help men and women who are ready to prepare their estate plans.

Estate planning and tax considerations

2021-06-10T20:28:43Z

When developing a comprehensive estate plan, individuals seek to eliminate familial disputes over valuable property. Unfortunately, surviving loved ones might face financial challenges based on their inheritance. In certain situations, the heir might face tax consequences based on numerous factors. An estate plan is a set of documents used to distribute assets and specify end-of-life decisions. Generally comprised of a will, trust, and powers of attorney, the estate plan offers peace of mind to both the testator and the beneficiaries. Unfortunately, based on the value of the estate, there might be taxes associated with an inheritance.

Inheritance tax versus estate tax

Even though both might commonly be referred to as “death taxes,” the two are quite different. An estate tax is imposed on the estate as a whole – payable by the estate itself rather than the beneficiaries. This tax can be imposed by either the state tax authority or the federal government. Conversely, the inheritance tax is based on the value of a specific gift and it is payable by the beneficiary. Many individuals include provisions in the estate plan designed to cover the cost of any inheritance tax that could arise. As with other ancillary costs such as travel expenses or the cost of shipping physical assets, an estate plan can include specific terms designed to minimize the tax burden loved ones might face. While California does not currently have an inheritance tax, this is a state’s option rather than a federal mandate. The regulations can be revised at any time. It is wise to consult with an experienced estate planning attorney who can provide the answers and guidance you need in your unique situation.

Welcome To Our Blog

2021-04-22T22:31:03Z

We established this blog to share stories and information about topics relevant to our practice. Our intent is to regularly provide posts highlighting legal issues of local, state and national interest that we think you will find interesting. Check back later for updates.