Our fathers trust was amended to include his caregiver. Before the caregiver amendment, not all children were to inherit evenly. Now the caregiver is to inherit 75 percent, and the children have a rest and residual clause that reads the reminder is left to my children and lists all names. We think the children were made evenly to make sure that the caregiver’s gift wouldn't be challenged. The caregiver has let us all know if we contest, that he will take us out of the trust with the No Contest Clause, and has also said that he had to convince our father to leave things evenly. Is this amendment the product of undue influence or the will of the caregiver? Is this amendment valid? Father was in his late 70’s and there was no independent certificate of review but was drawn by an attorney.
Please proceed carefully here. One factor of undue influence is a close relationship the grantor, which it would appear the caregiver had with your father. However, if the amendment was drafted by an attorney, that means, most likely, the caregiver did not draft the amendment, which assist the caregiver in the undue influence analysis.
There is really no way to answer your question as to whether the amendment was product of undue influence at this point. If the amendment was the product of undue influence, or if your father did not have capacity at the time the amendment was executed, then the amendment would not be valid. Bottom line, this is a complex analysis that will require review of the trust document, the amendment, and inquiry into the factual circumstances regarding the execution of the amendment.
I strongly recommend speaking with an estate planning attorney about this before proceeding. Please remember that the no-contest clause is always lurking in the background and could preclude the challenger of the trust from an inheritance they were entitled to receive. In addition, unless the trustee's powers are suspended, the trustee can, and most likely will, use trust assets to defend the lawsuit (this assumes that you are not the trustee). As you can see, this matter can and most likely will get rather complicated. You need to seek out an attorney immediately to determine if it is worth while to challenge the amendment to the trust. Best of luck.
Not having any knowledge regarding this issue, I can't say whether this amendment is the result of undue influence. Assuming your father has the legal capacity to make the changes you've mentioned, they are valid, IF, no intervening issue invalidates it, e.g. fraud, undue influence, mistake, etc. The best protection you have against these possibilities is the LEGAL REQUIREMENT that in order for this amendment to take effect, your father must have an independent attorney review the requested changes and certify that your father has the legal capacity to make this change, and that no intervening issues are present. Needless to say, if an independent legal opinion/certification was NOT gotten, the amendment would not likely stand. Hope this helps.
I agree with the advice of my colleagues here. If your father has capacity, has not been unduly influenced or a victim of elder abuse, it is possible that his trust changes could be valid. It is worrisome, however, that the care giver is advising you as to the trust’s no contest clause or that he had to convince your father to divide things evenly. Such involvement in your father’s estate planning is clearly outside of his duties as a caregiver.
Provisions for distribution under legal instruments such as a trust are sometimes referred to as “donative transfers”. Probate Code Section 21350(a) (6) states, “Except as provided in Section 21351, no provision, or provisions, of any instrument shall be valid to make any donative transfer to any of the following:… (6) A care custodian of a dependent adult who is the transferor.” In other words, a provision in your father’s trust in favor of the caregiver (called a “care custodian”) is presumed under the law to be invalid.
Exceptions to this presumption are found in Probate Code 21351. Subsection (b) states, “The instrument is reviewed by an independent attorney who (1) counsels the client (transferor) about the nature and consequences of the intended transfer, (2) attempts to determine if the intended consequence is the result of fraud, menace, duress, or undue influence, and (3) signs and delivers to the transferor an original certificate in substantially the following form, with a copy delivered to the drafter….” As Attorney Greenwood advised, an independent attorney should have been retained to certify as to your father’s requisite testamentary capacity and to ascertain that your father was not making the changes as a result of undue influence, duress or overreaching by the caregiver. Since you indicated that there was no independent review, it is likely that the presumption of invalidity would apply to this amendment to your father’s trust.
You really need to consult with a probate attorney who can review the terms of the amended trust and the entire circumstances with you.
There is always some risk in a direct contest but assuming the presumption applies (there are confusing exceptions) and you have probable cause to institute the contest my advice would probably be to "go for it."
The down side is each contestant stands to lose at most 1/4 of 25% of the trust but if you have probable cause, you will not lose anything except the cost of the contest. The caregiver has a lot more to lose than the children and if the caregiver fails to rebut the presumption of undue influence the caregiver will be ordered to pay all costs of the proceedings, including reasonable attorney’s fees.
The exact facts, especially surrounding the execution of the restated and amended trust, will ultimately determine who is successful. Good luck.
I generally agree with the above answers, but Rosemary's is the most complete. I would add that my understanding is the law Rosemary quotes was enacted because of prolific caregiver financial abuse of elders. I would not amend a will/trust to name a caregiver instead of natural heirs without a cert of independent review. I know most of the attorneys in the Fresno Estate and Trust Section of the Bar and would venture to say they wouldn't either. In fact, I seem to recall the subject of caregiver amendments coming up in one of our Section meetings in the past year or so and everyone was very aware of the problems it poses.
I wouldn't worry too much about the no-contest clause. If you're worried about violating it and being disinherited, don't. There is a safe harbor provision that allows a petition to see if your dispute would violate the no-contest clause. Your attorney can take you through that process. Also, no-contest clauses are not the iron-clad things they used to be. California courts today lean in favor of allowing people to exercise their rights.
I would absolutely get counsel. Your risk will be the fees.
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