Protecting Clients in Anticipation of Estate or Trust Litigation: What To Do Until Help Arrives Pt. 1

University of California Continuing Education of the Bar
Estate Planning & California Probate Reporter
February 1992

Part 1


Non-litigating estate planners and probate attorneys are sometimes called on to represent clients during the early stages of actual or potential estate and trust related litigation. There is often a period of time between the first signs of litigation and the appropriate time for retaining a litigation specialist. During this period the practitioner must take the steps necessary to protect the client and to position the case so that the litigator will be unhampered by previous procedural mistakes if the dispute is not resolved at an early stage.

Will and trust contests, disputes over ownership and distribution rights, disputes over fiduciary appointments, and accounting and surcharge matters are some of the most frequently encountered proceedings where familiarity with Probate Code and other procedural and discovery rules can be critical.

It is equally important for the attorney to be sensitive to the major ethical issues that arise with unusual frequency in these situations due to family relationships of the parties, the fiduciary obligations of trustees and personal representatives, or both.

This article addresses many of the problems that frequently arise at the threshold level of estate and trust disputes. It is intended to provide practical guidance and general suggestions as to available strategies and procedures. The article is published in two parts. The first part contains discussions of ethical problems and proceedings related to decedent estates. The second part, which will appear in the April issue of the Reporter, will discuss trust proceedings and discovery issues.

Ethical Considerations

Duty of Competence

The probate, estate planning, and trust law practitioner (referred to in this article as “the practitioner” in distinction from “the litigator”) is an attorney who, in addition to having skill in those areas of the law, may have some greater or lesser level of experience in litigation, depending on the overall nature and history of his or her practice. Some practitioners are skillful and comfortable in contested matters. Others, however, frequently discover that the demands of specializing in estate and trust work conflict with developing or maintaining litigation skills, and many estate planners simply have little inclination to do so even if time permits.

Whatever the practitioner’s particular circumstances, the practitioner needs to be realistic about his or her own litigation skills, scrupulously avoiding violation of the Cal Rules of Prof Cond 3-110 requirement to perform legal services competently.

In this context, the practitioner needs to be particularly careful to avoid being lulled into delaying retention of a litigator due to the relative informality of probate litigation. Litigation in the probate department has a way of appearing not quite as litigious as the “real thing.” Deadlines for filing responsive papers are generally more informal (and often not even embodied in local rules).

Discovery deadlines are often worked out informally among the parties. Minor contested issues are sometimes determined on offers of proof. And the atmosphere of the probate department may be more relaxed, more forgiving, and less intimidating.

As a result, the litigation skill required to represent a client in the probate department can be something of a “moving target.” With respect to any stage of the proceeding, there may be no opposition, mild opposition, energetic opposition, or all out war. Making matters worse, the level of difficulty can change quite quickly in many counties, where the time required in the probate department to obtain a date for a full blown contested evidentiary hearing may be as little as five or six weeks.

On the other hand, delay in retaining a litigation specialist may be prudent in many circumstances. Escalation of minor disputes in not always inevitable and clients are properly concerned about expense of litigation.

Duty To Avoid Conflicts of Interest

Trust and estate administration is a fertile field for attorney conflict of interest. Conflicts must be avoided out of fairness to clients, for disciplinary reasons, and because they increasingly serve as the basis for malpractice litigation. Common conflict problems include:

• Representation of more than one party in the current matter (e.g., more than one member of a decedent’s family).

• The possibility that the practitioner will be called as a witness (e.g., called to testify as to a testator’s competence or to interpret a will or trust).

• The possibility that the practitioner will become a malpractice defendant (e.g., there is a possibility that allegations will be made that the practitioner violated the standard of care in drafting an instrument).

• The practitioner formerly represented an opposing party.

Dual Representation

California Rules of Professional Conduct 3-310(B) provides that: “A member shall not concurrently represent clients whose interests conflict, except with their informed written consent.” According to Cal Rules of Prof Cond 3-310(F), “informed written consent” means “full disclosure to the client of the circumstances and advice to the client of any actual or reasonably foreseeable adverse effects of those circumstances upon the representation.”

Conflicts of interest through dual representation arise most often when the practitioner fails to make clear to all parties whom it is that he or she does, and does not, represent.

Dual representation of fiduciary and beneficiary. A frequent source of trouble is the beneficiary’s misunderstanding of the role of the “lawyer for the estate.”

Despite the opinions of many beneficiaries (and some practitioners), phrases such as “lawyer for the estate” are inaccurate at best. At worst, the understandings implicit in such phrases may result in attorney malpractice liability, professional discipline, and waiver of attorney-client privilege.

At least in California, it is now fairly clear that the “attorney for the estate” is actually the attorney for the personal representative, acting in that person’s capacity as a fiduciary. Goldberg v Frye (1990) 217 CA3d 1258, 1268, 266 CR 483, 489, reported at 11 CEB Est Plan R 122 (Apr. 1990) (“such retention [of the attorney by the personal representative] constitutes the counselor the attorney for the fiduciary, and not the attorney for the estate, its beneficiaries, its creditors or others who may be interested therein. … It is of course the purpose and obligation of both the fiduciary and his attorney to serve the estate.”)

This being the case, the practitioner is confronted with a conflict of interest problem if the attorney also represents a beneficiary. Similarly, although it is not truly a “conflict problem” (yet may arise to the level of a fraud problem), the practitioner may have various liability risks if the beneficiary is allowed to believe that the practitioner represents the beneficiary. Consider, for example, the implications of a beneficiary’s claim that the beneficiary did not investigate and challenge the fiduciary’s accounting because the beneficiary believed that the practitioner was looking after the interests of the beneficiary with respect to the account.

In theory, the California Rules of Professional Conduct do not preclude dual representation of the fiduciary and a beneficiary, if the clients give their informed consent in writing, but the fiduciary, in particular, may be reluctant to give consent if properly and adequately informed of the probable loss of attorney-client privilege and the probable prejudice to the fiduciary if the fiduciary makes a mistake that comes to the attention of the practitioner.

In all events, warning signs of litigation should cause the practitioner to immediately review potential conflict problems. If the practitioner does not actually represent any beneficiaries, prudence dictates writing letters to beneficiaries or otherwise taking steps to make sure the beneficiaries understand this and cannot make contrary contentions later. If a conflict already exists, this fact may hasten the practitioner’s need to withdraw from the case or make sure the parties obtain independent counsel with respect to the dispute. Even if the practitioner obtained a conflict waiver at the beginning of the representation, a new waiver may be needed if the fact of the dispute requires providing more information to the clients regarding the disadvantages of the dual representation.

Dual representation of beneficiaries. Dual representation of beneficiaries also poses problems. Common beneficiary conflict situations include:

• Nonprorata funding of shares of an estate.

• A beneficiary claim of ownership of property which might also be claimed by an estate.

• A beneficiary’s use of an estate asset during administration without paying rent.

• Settlement of will contest claims when the represented beneficiaries do not have identical interests with respect to the value or character of their claims.

• Once again, the warning signs of litigation are a signal to review the conflict problems and make sure they are appropriately addressed.

Conflict When Estate Planner May Be Called as a Witness

It is possible that the practitioner who drafted a disputed will or trust will be called to testify as a witness to the capacity or intent of the testator or settlor. That attorney is prohibited from acting as “an advocate before a jury which will hear [that testimony] unless: … (C) The member has the informed, written consent of the client.” Cal Rules of Prof Cond 5-210. Because jury trials are not available for many types of trust and estate litigation, the rule may not literally apply. Nevertheless, it remains the case that the partisanship of the “practitioner as advocate” is unlikely to enhance the trier of fact’s opinion of the credibility of the “practitioner as witness.”

Conflict When Estate Planner is Potential Malpractice Defendant

In the early stages of a dispute that may later explode into full-blown litigation, the practitioner who drafted the will or trust that is under attack will often attempt to represent the parties seeking to uphold the document. This happens particularly often when the attorney who drafted the will is the same attorney who offers it for probate. Paradoxically that attorney is in a conflict of interest with his or her clients (those who will take under the document if it is upheld) even though both the attorney and the clients seek the same result. This is because the attorney has an interest in the subject matter of the litigation within the meaning of Cal Rules of Prof Cond 3-310(A), which provides:

(A) If a member has or had a relationship with another party interested in the representation, or has an interest in its subject matter, the member shall not accept or continue such representation without all affected clients’ informed written consent.

The problem here is that the attorney may be motivated to settle the case too cheaply. The attorney will presumably be more fearful of going to court than an attorney who did not draft the document because of the risk of a ruling that the document was invalid for lack of capacity, undue influence, lack of due execution, or otherwise. If it can be shown that it was the testator’s intent that certain beneficiaries take under the instrument and the instrument fails due to attorney error, the attorney could be liable to the intended beneficiaries under Lucas v. Hamm (1961) 56 C2d 583, 15 CR 821.

By contrast, if the practitioner brings about a settlement between the would-be beneficiaries and the contestants, the likelihood of a suit against the attorney is greatly reduced. As tempting as it is to remain involved in the dispute negotiations, the estate planner should not proceed without an informed waiver of the conflict of interest under Cal Rules of Prof Cond 3-310.

Conflict When Attorney Formerly Represented Opposing Party

California Rules of Professional Conduct 3-310(D) provides:

(D) A member shall not accept employment adverse to a client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment except with the informed written consent of the client or former client.

The effect of this rule is to create a presumption of a conflict of interest that can be overcome only by proof of a negative: that the attorney did not obtain any confidential information material to the employment. Even if the attorney can meet this burden of proof, if one of the adverse clients refuses to give informed written consent, prudence would dictate getting out of the case to avoid the appearance of impropriety and the malpractice exposure.

When the Personal Representative Has a Conflict of Interest

Frequently the practitioner will represent a fiduciary who has a conflict of interest. This commonly occurs when the fiduciary is a beneficiary of the estate, a creditor of the estate, or a surviving spouse or surviving business partner of the decedent. A detailed explanation of the ethical problems which may confront the practitioner is beyond the scope of this article, but practitioners are warned that the frequency of these problems does not justify failure to analyze them carefully and respond appropriately. Particular consideration should be given to:

• Review of the same ethical issues discussed above with respect to dual representation of a fiduciary and beneficiary particularly including the possible risk of defrauding beneficiaries if it is not made clear to beneficiaries that the practitioner is representing the personal representative’s individual interest and does not owe any duties to the other beneficiaries.

• The confusing questions raised in this context by the Cal Rules of Prof Cond 3-310(B) prohibitions against representation of clients whose interests conflict without informed written consent.

• Obvious issues pertaining to the source of funds to be used to pay the practitioner’s fees, and compliance with requirements for written fee agreements.

• The desirability or necessity of separate counsel to represent the client’s personal interests, particularly when the client wishes to maintain the attorney-client privilege with respect to communications.

• The risk of removal of the fiduciary for conflict of interest under Prob C §8502.

• The possibility of seeking appointment of a special administrator authorized to represent the estate only with respect to matters creating the conflict. Prob C §8540(b).

Attorney-Client Privilege Problem

Under many of the scenarios in which an estate planner or probate attorney will be representing a client at the early stages of a dispute, the client is a fiduciary such as a personal representative or a trustee. From the outset of such a representation, the practitioner needs to keep in mind that there is some legal authority for the proposition that a trustee can be compelled to disclose to beneficiaries any legal advice the trustee receives concerning the administration of the trust. See Lasky, Haas, Cohler & Munter v Superior Court (1985) 172CA3d 264,280,218 CR 205, 214, reported at 7 CEB Est Plan R 65 (Dec.1985).

(For a discussion, see Campesi, The Legal Framework for Trust and Estate Litigation, Estates and Trusts: Dispute Resolution and Litigation 133 (Cal CEB Program Handbook Sept 1991).) This conclusion is based on the trustee’s duty of disclosure. It is recognized that the rule does not extend to legal advice acquired by the trustee at the trustee’s own expense and for the trustee’s own protection. Restatement (Second) of Trusts §173, Comment b (1959).

The law on this issue is less than settled, but the mere risk of discovery should suggest prudence on behalf of both counsel and client in terms of avoiding the creation of documents which will cause embarrassment when blown up to poster size and taped on the wall of a courtroom.

In addition, the onset of litigation should prompt the additional precautions of: (1) establishing a separate file and time log for the litigation issue; and (2) executing a separate retainer agreement which clearly provides that the “client” is the individual as such, that the individual as such is the person responsible for paying the bill, and that the “matter” is the defense of beneficiary claims against the individual.

Decedent Estate Litigation

Will contests present major procedural and tactical problems for both the proponents of the will and the contestants. For a number of reasons, delay by either party can be prejudicial if the case is eventually litigated. On the other hand, the opportunity for a reasonable and early settlement can be lost if there are immediate contested proceedings over such things as the appointment of a special administrator. In those cases in which a will contest involves family members, the practitioner’s evaluation of strategies should also involve consideration of the apparent psychological needs of the potential litigants. The motivations for will contests are not always purely monetary.

Determining the Application of a No-Contest Clause

A frequent threshold problem in estate and trust litigation is the effect of a no-contest clause in the instrument or a related instrument. The scope of the problem has increased in recent years as document drafters have expanded the scope of these clauses. For example, it is now common to see coordinated no-contest clauses in wills and trusts under which the contest of one document constitutes a contest of the other.

Some practitioners go even further, providing that a dispute regarding the beneficiary designation of a nonprobate asset, such as life insurance or a pension fund, will result in loss of benefits under a will or trust. It is also possible for a clause to provide expressly that filing a creditor’s claim constitutes a contest.

For an elaborate clause covering almost every contingency imaginable, see Garb, Avoiding Trust and Estate Litigation, UCLA-CEB Estate Planning Institute 1, 24 (Cal CEB Program Handbook May 1991) and Estates and Trusts: Dispute Resolution and Litigation 7,31 (Cal CEB Program Handbook Sept 1991), to be included in the forthcoming Estate Planning 1991 (Cal CEB).

Even if a clause is not elaborate, the scope may not be limited to a direct attack on the validity of a will or trust. See, e.g., Estate of Kazian (1976) 59 CA3d 797, 130 CR 908, holding that a spouse’s suit against the estate claiming a community property interest in property was a will contest, because the will contained a declaration that the property was the separate property of the decedent.

Given the potential risks, practitioners taking actions that may trigger a no-contest clause should give thought to making use of Prob C §21320, which provides in pertinent part:

(a) If an instrument containing a no contest clause is or has become irrevocable, a beneficiary may apply to the court for a determination whether a particular motion, petition, or other act by the beneficiary would be a contest within the terms of the no contest clause.

If such a petition is desirable, it usually must be filed quickly in order to meet whatever deadline applies to the underlying petition or claim. Presumably an order determining that a no-contest clause does not apply can be relied on immediately. It is not listed as an appealable order under Prob C §7240, and the purpose of the statute would be completely subverted if a party could not rely on the determination in good faith.

There are two other points to be made here. First, Prob C §§21306 and 21307 declare that a no-contest clause is not enforceable in certain situations. These include: (1) claims of forgery, (2) claims of revocation, and (3) challenges with probable cause to provisions that benefit persons involved in drafting or witnessing the instrument or in giving directions with respect to its contents.

Second, the practitioner who is contemplating filing a contest notwithstanding the existence of a no-contest clause should carefully explain the consequences of the clause to the client. The explanation and the practitioner’s advice should be in writing in order to protect against a later claim by a disappointed client that the client was not adequately advised of the risks.

Prompt Filing of Will Contests

A will contest must be filed within 120 days after the will is admitted to probate. Prob C §8270. However, the contest can be filed before the will is admitted to probate, and there are benefits to doing so from the point of view of the contestant. Failing to contest before the will is admitted to probate results in a presumption in favor of the validity of the will. Estate of Ross (1962) 204 CA2d 82, 92, 22 CR 135, 141.

Delay may also result in the executor being entitled to payment of compensation and attorneys’ fees from the estate for defending the contest even if the executor loses, provided the personal representative acted in “good faith.” This was expressly authorized under former Prob C §902, pertaining to extraordinary compensation for personal representatives. Probate Code §902 was repealed effective July 1, 1991, and replaced with Prob C §10801. The new statute no longer mentions will contests, but the California Law Revision Commission comment following the new statute states that the “former list [contained in §902] was incomplete” and that “omission of the list is not intended to change the law.”

Finally, delaying a contest until after appointment of an executor will prejudice the contestant’s opportunity to have the estate administered by a special administrator. It is generally easier to block the appointment of an executor than to remove one.

Appointment of A Special Administrator

When the admission of a will to probate is blocked, at least temporarily, by the filing of a will contest, the appointment of a special administrator under Prob C §8540 is usually appropriate. The period of time between the inception of the litigation and its resolution, judicially or through negotiated settlement, can range from weeks to years. During that time, many if not all of the tasks necessary to complete the administration can be accomplished by the special administrator, minimizing delay in final distribution following the contest.

The selection of the person to serve as special administrator can have an important psychological impact on the litigation. For example, if the contestant is contending that the will is the product of undue influence exerted on the decedent by the named executor and the court permits the named executor to serve as special administrator, a subtle message is sent to all concerned that the court, at least for the time being, is not sufficiently concerned about the integrity of the nominee to preclude the nominee from serving in a fiduciary capacity.

The selection of the person can also be important in bringing about a quick settlement. If the would-be personal representative is confronted with the possibility of being deprived of control of the estate, that person may be quickly motivated to discuss settlement possibilities in a reasonable manner.

In view of the importance of the selection, the contestant should normally move for the appointment of a desired special administrator at the same time the contest is filed. If the practitioner intends to handle the hearing on the application without help from a litigator, the practitioner should be prepared to marshal some persuasive evidence to deprive the named executor of the post of special administrator.

In the authors’ experience, in the absence of a strong showing by the contestant, courts are inclined to install the named executor as special administrator, and failing that to appoint an independent third party. Contestants need to be advised of the modest chances for success in obtaining appointment of their nominee, and serious consideration should be given to recommending a clearly qualified independent third party.

Protecting Against Wrongful Transfers

Disputes frequently arise regarding ownership and rights of possession with respect to property in which the decedent had an interest. Roommates may claim or simply take tangible property, out-of-town relatives may misappropriate a “remembrance” after the funeral, “for convenience” joint tenants develop convenient memory problems, etc. As a result, occasions may arise when the necessity for immediate action is a factor in the practitioner’s choice to initiate legal action without awaiting retention of a litigator. This section describes some of the procedures available in these cases.

The Prob C §9860 Proceeding

Under Prob C §9860, the court has the power to adjudicate title and possession claims with respect to property claimed by an estate and a third party. The petition can be filed by the personal representative, the third party, or other interested person, at any time before the estate is closed. The proceeding can be used for a wide range of purposes, including: (1) obtaining a determination of whether a joint tenancy was created “for convenience”; (2) obtaining a determination of whether a gift or nonprobate transfer was procured by undue influence.

Although regular civil actions and quiet title proceedings can be used for these purposes, a Prob C §9860 proceeding may be a better choice in terms of convenience, speed, and the likelihood of obtaining a judge with experience in handling these types of issues. If the relief available under Prob C §§9860-9868 is too limited (e.g. because punitive damages might be available in a civil action for fraud), the practitioner can initially proceed under Prob C §9860, then later file a civil action and move to consolidate the civil action into the probate action.

If the need for initial action is urgent, a possible strategy is to initiate the probate procedure with an application for an ex parte appointment of a special administrator whose only authority will be to take whatever actions are necessary to protect the asset in question. (Seeking only limited authority helps minimize bonding requirements and should minimize judicial concern about acting ex parte.) The special administrator can then file the Prob C §9860 petition and any necessary application for a restraining order. If the proceeding involves title to real property, a lis pendens should be recorded.

Discovery Under Prob C §§8870-8874

Probate Code §§8870-8874 provide seldom used and somewhat obsolete discovery procedures to aid the personal representative or other interested person in gathering facts to reverse a wrongful transfer or to ascertain the location of assets. The procedures can still be useful in some situations, and it may well be the practitioner, rather than a litigator, who undertakes this initial discovery. Probate Code §8870 provides:

(a) On petition by the personal representative or an interested person, the court may order that a citation be issued to a person to answer interrogatories, or to appear before the court and be examined under oath, or both, concerning any of the following allegations:

(A) A deed, conveyance, bond, contract, or other writing that contains evidence of or tends to disclose the right, title, interest or claim of the decedent to property.

(B) A claim of the decedent.

(C) A lost will of the decedent.

Disobedience of such a citation may be punished as a contempt of court. Written interrogatories may be put to the person cited, as an alternative to requiring in-court testimony. Prob C §8871.

If at a witness examination it appears that the allegations in the petition for a discovery citation are untrue, the person’s expenses and attorneys’ fees must be charged against the petitioner or allowed out of the estate, in the court’s discretion. Prob C §8872(c). The personal representative (or other petitioner) should, therefore, be fairly certain of his or her position before using this procedure. If there is doubt, the personal representative may find it preferable to propound written interrogatories under Prob C §8871 or to obtain a citation compelling the person to account for possession or control of property under Prob C §§8873.

Neither of these devices pose the danger of an attorneys’ fees and costs award against the personal representative. Alternatively, the practitioner can file a Prob C §9860 proceeding, as discussed in the previous section, and take a deposition under CCP §2025. Discovery will be discussed in greater detail in the next issue.

The advantages of Prob C §8870 examinations are speed and attention grabbing. If the examinee fails to appear, a bench warrant can be issued. The procedure is particularly useful if there is concern that the proposed examinee may leave the jurisdiction. When culpability is clear and the amount in dispute is small, mere service of the citation to appear in court several days later may result in the examinee’s prompt reconsideration of the wisdom of withholding property or information. Local court policy should be checked in advance to determine whether the initial examination can be held out of the presence of the judge in a manner similar to a judgment-debtor examination. If so, the practitioner should arrange for a court reporter to be present for the portion of the examination conducted outside the courtroom.

Blocking Collection by Small Estate Affidavit

Small estate affidavit procedures provide considerable opportunity for persons to claim property which does not belong to them. These risks have been reduced in recent years by enactment of provisions that generally prevent collection by affidavit for 40 days after death. The 40-day rule, however, does not apply to automobiles and other motor vehicles transferred under Veh C §5910 (a 40-day rule does apply to vessels transferred under Veh C §9916 and mobilehomes transferred under Health & S C §18102), nor to employee compensation claimed by a surviving spouse under Prob C § § 13600-13606.

In all events, the affidavit procedures are not available if a proceeding is being conducted for administration of the estate. Thus, the usually adequate solution to the problem is an ex parte application for appointment of a special administrator, followed by a demand for transfer of the property to the special administrator.

Recording A Notice of Interest in Real Property

Under Prob C §13540, a surviving spouse can dispose of community or quasi-community real property if 40 days have elapsed since death and no interested party records a notice of interest under Prob C §13541. This statute is most relevant in situations in which children of a prior marriage are the beneficiaries under the will. The attorney for the children should always record, thus providing protection against both voluntary and involuntary transfers.

Attacks on Personal Representatives Removal Actions

Under Prob C §8500(a), any interested person may petition to remove the personal representative on the grounds specified in Prob C §§8502-8505. On filing the petition, the court issues a citation to the personal representative to appear and show cause why the personal representative should not be removed. The court may suspend the powers of the personal representative and make such orders as necessary to deal with the property pending the hearing. In rare cases a court will issue a citation on its own motion.

The removal petition may (and as a tactical matter should) be combined with a petition for appointment of a successor personal representative under Prob C §§8520-8525. Prob C §8500(a). An action seeking the removal of the personal representative may be resolved at any stage short of the conclusion of a full-blown court proceeding. Much depends on the motivation for the petition. Although many removal petitions are brought solely for the purpose of removing the personal representative, it is not uncommon to see a removal petition used as a leverage device designed to pressure the fiduciary to exercise discretion in a manner more favorable to a particular beneficiary.

Statutory grounds for removal petitions include waste, embezzlement, mismanagement, fraud, contempt of court, and failure to appear and account. If removal is to be based on waste, mismanagement, fraud, or neglect, the facts constituting such misconduct must be alleged in the petition with particularity.

If the removal petition is based on waste, mismanagement, fraud or neglect, the complexity of the factual and legal issues involved will normally require the representative’s counsel to obtain a stipulated or court ordered continuance and schedule for discovery and briefing. Discovery issues in estate and trust related litigation will be discussed in the second part of this article. Assuming a continued hearing, the petitioner should once again seek orders protecting property of the estate pending hearing, including such remedies as the deposit of funds in blocked bank accounts.

A court that was unwilling to issue such orders ex parte may be more inclined to grant the application at the time of the hearing that is to be continued. When a removal petition is filed, the attorney for the personal representative needs to give immediate attention to making sure that a bad situation does not become worse. In particular, the personal representative needs to be reminded that he or she occupies a fiduciary position which continues to require the ability to treat the beneficiaries fairly and to properly protect their legal interests.

It is extremely important that the personal representative avoid making any threats or other statements to the beneficiaries that could be used as evidence that the personal representative should be removed. Indeed this advice should be given all fiduciaries at the first sign of most disputes with beneficiaries.

Accounting Controversies

Under Prob C §10950(a), the court may order the personal representative to file an interim account on its own motion or on petition of an interested person. The court shall order the personal representative to account on petition of an interested person more than one year after the last account was filed or, if no previous account has been filed, more than one year after issuance of letters. Prob C §10950(b). The court has control over the time within which the personal representative must file the account. Prob C §10950(c).

The problems that give rise to demands for accountings can range from the benign to the horrific. The same can be said of the problems that the accounting reveals. Obviously, it may be necessary to involve a litigator in such a proceeding.

Generally, personal representatives are well-advised to avoid being ordered to account. Once there is clear evidence of a dispute in an estate administration, the personal representative should account voluntarily for the personal representative’s own protection. If this is done soon enough, one or more accountings may be settled and approved before family disputes rise to the level in which beneficiaries choose to contest the accounts.

Limiting IAEA Powers

When disputes arise with respect to a personal representative’s management of the estate but the court declines to remove the personal representative or otherwise limit the powers of the personal representative, the beneficiaries may choose to petition under Prob C §10454 to terminate any power of the personal representative to administer the estate under the Independent Administration of Estates Act (IAEA) (Prob C §§ 10400(10592).

Before doing so, the practitioner should assess the effectiveness of the alternative of simply objecting to notices of proposed action which propose undesired actions under Prob C §10587, or of applying for ex parte restraining orders preventing proposed actions under Prob C §10588. In all cases, the attorney for the beneficiaries should consider whether such steps truly prevent undesired actions. In some cases it may be necessary to give third parties notice of new limitations on the powers of the personal representative.

Proceedings Under Prob C §§11700-11705 To Determine Distribution Rights

There are a number of instances in which it may be necessary for an interested party to seek an order determining distribution rights. These include pretermitted heir claims, a wide variety of will construction problems, heir identity problems, and determination of intestate succession right of relatives of a predeceased spouse. See 3 California Decedent Estate Practice §24.36 (Cal CEB 1987). Although a number of these issues could be determined under a petition for a decree. of distribution, Prob C §11700 allows an earlier resolution of the issues.

NOËL M. LAWRENCE of San Francisco received her B.A. from the University of California (Berkeley) and her J.D. from the University of San Francisco. She is Co-Chair of the Litigation Subcommittee of the Probate Section of the San Francisco Bar Association and a Certified Specialist in Probate, Estate Planning and Trust Law. Her practice emphasizes estate and trust related litigation.

JAMES A. BARRINGER of Hyde & Drath in San Francisco received his B.A. from the University of California (Santa Barbara) and his J.D. from Hastings College of the Law. His practice emphasizes estate and trust litigation and estate planning and administration.

©1991 by The Regents of the University of California

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