San Diego Divorce and Living Trusts
In San Diego County, there are thousands of divorced men and women. Many of these have had their Judgment of Dissolution and their Status as single restored and never changed their estate plan. All divorced or legally separated parties must have an estate plan after their status is changed to "single" or risk having some of their property not going to the beneficiary of their choice. A revocable living trust, for any divorced or legally separated party, is mandatory to protect their rights and try to obtain their legal goals. A revocable living trust is a legal document which is used to avoid probate fees and costs. However, it is also used for privacy in the distribution of an estate and to save time and be expedient in the disposition.
A recent case in the California Court of Appeals highlights this divorce and legal separation and estate planning interactions and inter dependency. The facts, briefly, are as follows. The author strongly encourages any reader who is divorced or legally separated and does not have an estate plan post judgment to immediately contact a licensed attorney in San Diego, California and have a consultation for an estate plan appropriate for each individual need.
The case is Colburn v Northern Trust, Co. and was published by the Court of Appeal of California, Second District, on May 25, 2007. In this case, an ex husband compelled his former wife and their children to a forced election of either enforcing their rights under an existing marital dissolution judgment by filing creditor's claims or relinquish those rights and take the gifts provided for them in his trust instruments. This was accomplished by the inclusion of a carefully drafted "no contest" clause in the trust itself. The Trial Court found that the former spouse and their children were creditors and that these claims would violate the no contest clause but than an order to show cause for modification of the child support due under the marital dissolution judgment would not. The trustees (Northern Trust, Co.) opposed both the request for an order eliminating the election and to obtain benefits both from the trust and the marital dissolution judgment. In this case, it is significant to note, both sides filed an appeal. The trustees wanted consistency and the former spouse and children wanted the election eliminated and to be able to take from both the marital dissolution judgment and the trust. The Court of Appeals agrees that it would be a violation of the no contest clause and reverse that an order to show cause would not.
The facts and circumstances of the above case are unique. No guarantee can be made as to the outcome of any legal matter. As such, a case by case analysis is necessary prior to filing any legal pleadings as the filing themselves can result in adverse consequences. In the above example, not filing for the safe harbor exception for a judicial determination with a no contest clause provision in the trust could have led to a judicial finding that the no contest clause would be enforced.
It is very expensive, time consuming and uncertain to have to litigate cases. This is even more complex with a family law matter is intertwined with an estate planning matter. It is important to have legal representation for the drafting of all estate planning documents. It is also important to consider law firms which practice in both areas. In our firm, we practice in family law and can implement strategies and techniques which protect our client's rights and try to obtain their legal goals.