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Answers to your estate planning questions.
Contest Clauses can be valid in California. A No Contest Clause would cause someone who is contesting the Will without a valid reason to do so to lose whatever his or her inheritance might be. So, if the court finds that a contest is not brought in good faith or with valid reasons (even if the reasons are later found to be false), the contestant will lose whatever the Testator provided for him or her under the terms of the Will.
Is this still valid under California law?
Ken P.
I am not sure what you mean from how you have phrased the question. The no contest clause can only be enforced if the contesting beneficiary did not have reasonable cause to bring the contest. Also, what is allowed to be contested has been tightened up so that essentially the contesting beneficiary is alleging the trustor lacked capacity, was subject to undue influence, or there was fraud involved in the transaction.
As an example, the request for an accounting from the trustee would not be a challenge subject to a no contest clause since it is not challenging the actions of the trustor but is instead questioning the actions of the trustee after the trustor has passed away or become incapacitated.
Dennis M. Sandoval
California Estate Planning and Elder Law attorney
My father-in-law appears to be getting dementia and his son needs to make decision. He lease an apartment and he wants his son to be able to make decision regarding rental, handling his bank accounts and medical issues.Will a Durable power of attorney be enough? Or does he need to be a Conservator?
Thank you for your time.
L. B.
If your father-in-law has sufficient mental capacity at this time to execute a financial power of attorney (sometimes called a Durable Power of Attorney for Finances), that would be an excellent solution to allow his son to be able to assist him with his finances. He should also consider an Advance Health Care Directive and HIPAA Authorization Form if he would like his son to be able to assist with medical and personal decisions like where he lives when he no longer has capacity to make these types of decisions himself. The level of mental capacity needed to execute a financial power of attorney is the same as entering into a contract. This means that your father-in-law would have to understand the extent of his wealth and that, by executing the power of attorney, he is allowing his son to assist him with his finances. The level of mental capacity needed to execute an Advance Health Care Directive is the amount of understanding needed to understand medical procedures and consent to medical treatment.
A conservatorship is appropriate for these types of situations, but if his father still has sufficient mental capacity to execute a power of attorney and advance health care directive, they are much less expensive solutions to the problem.
Thank you for taking the time to submit your question and for assisting your husband with providing assistance for his father. Contact us at 951-787-7711 if you would like to schedule an appointment for your father-in-law to discuss his estate planning options.
Dennis M. Sandoval
California Estate Planning and Elder Law attorney
My sister and I are joint power of attorney for an incapacitated aunt. Her condo will be going up for sale. My sister sold and donated some of her house items, jewelry, and furniture. She and my mother took the money for what was sold. Are they entitled to this? Doesn’t the money need to go into my aunt’s bank account? If they kept the items from her house like jewelry, are they allowed? If they don’t sell it, what do they do with it? Also, I am the executor of the will, but I don’t think it relates to this issue.
P.B.
Thank you for your question about powers of attorney and your duties as agent.
You are correct in that your sister and mother should not have kept the money from the sale of the personal property. It should have been deposited in your aunt’s bank account. An agent under a power of attorney is a fiduciary, meaning that you owe total loyalty to the person you are acting on behalf of and are to avoid conflicts of interest where possible. You are definitely prohibited from benefiting from the income and assets of the principal and you are not supposed to co-mingle your assets with your aunt’s. So, your mother and sister should return that money and deposit it into your aunt’s bank account and it should be used solely for your aunt’s benefit while she is alive.
If your mother and sister also removed personal property like jewelry, they need to return that also. If your aunt still has mental capacity, she can designate where she wants it to go now. If she does not have mental capacity, you should hold on to the jewelry and disburse it upon your aunt’s death according to what her Will says. If your aunt runs out of funds and it is necessary to sell the jewelry in order raise money to support her, you should do so.
You can go here for more information about powers of attorney. If you need more assistance with fulfilling your duty as power of attorney agent for your aunt, you can call my office to schedule an appointment to discuss your situation. The number to call is 951-787-7711.
Dennis M. Sandoval
California Estate Planning and Elder Law attorney
