$925K marital home was part of revocable trust which widow had right to change.
A case that could have deprived an elderly woman the benefits of owning the home she shared with her late husband has been resolved in her favor, returning to her the security she and her husband envisioned. Unfortunately, poor legal advice and the complexities of a blended family combined to cause lengthy and expensive litigation.
The Estate Lawyers’ client, Mrs. W (full name withheld), is the trustee of The W Family Trust and the surviving spouse of the decedent, Mr. W. Two stepdaughters (Mr. W’s children from a previous marriage), sued Mrs. W in Orange County Superior Court alleging she did not have the authority to disinherit them when she amended and restated the trust she had with her husband. The original trust had included the stepdaughters as 50% remainder beneficiaries of Mrs. W’s house upon her passing. The women claimed that Mrs. W was merely a lifetime beneficiary of the property – valued at $925,000 – and that their combined 50% interest was irrevocable.
The Estate Lawyers argued on Mrs. W’s behalf that the trust was entirely amendable and revocable, while the stepdaughters maintained that at least part of the trust was not. As part of their effort, the stepdaughters placed an improper lis pendens on the property, i.e., publicly announcing that ownership was the subject of litigation. This prevented Mrs. W, in her mid-80s, from selling the home, moving into a retirement home, or obtaining financing against her property for living or medical expenses. The Estate Lawyers successfully moved to expunge the lis pendens.
Had Mrs. W lost, her stepdaughters would have inherited a 50% interest in the property upon her death and potentially restricted her ability to use the home for any purpose, such as encumbering or selling it.
The Estate Lawyers settled all claims brought by the stepdaughters for $125,000. Mrs. W incurred some $150,000 in legal fees, all to protect about $460,000 worth of real property (i.e., 50% of the $925,000 house). However, Mrs. W now has full benefits of ownership and title as she and Mr. W intended, including the ability to leave her estate (including the house) to whomever she chooses. Currently, 80% will go to her nieces and 20% to her church.
Mrs. W. is represented by Evan A. Basakis, Senior Litigation Associate with The Estate Lawyers.
Takeaways
- Make certain you work competent estate planners or estate attorneys when establishing a trust. The incompetence of the attorney who set up the trust made way for the conflicts that could have been easily avoided. We at The Estate Lawyers frequently direct individuals to experienced and knowledgeable planners. Please feel free to contact us.
- Take extra caution when blended families are involved. A decedent’s children often dislike it when a new spouse comes into the picture. When they are written out of an estate or trust, acrimony and resentment can easily become litigation.