Creating and Amending Trusts
Many Californians, especially seniors, create trusts to hold their assets in part to avoid a lengthy probate process following death. The trusts may be fully revocable by the individual creating the trust (known as the “settlor”) or irrevocable during the settlor’s lifetime. If revocable, the settlor can change or amend the trust provided he or she still has the legal capacity to do so. When a settlor is suffering from cognitive impairment or memory loss, the issue of capacity is a serious one and there are persons ready to turn the settlor’s diminished capacity to their own benefit. The San Francisco trusts and financial elder abuse attorneys at Evans Law Firm, Inc. represent settlors and trust beneficiaries harmed by those who take this advantage of seniors. If you or a loved one has been a victim of financial elder abuse or exploitation of a senior with respect to his or her trust in San Francisco or elsewhere in California, contact the Evans Law Firm, Inc. trusts and financial elder abuse attorneys at (415) 441-8669 and we can help.
The mental capacity required to create or amend a trust is often referred to as “Contractual Capacity,” because legally a trust agreement is a form of contract. In order to create a valid Trust, or execute a valid amendment or restatement of a trust, a person must be able to understand and appreciate the following:
- The rights, duties and responsibilities created by, or affected by the decision,
- The probable consequences for the decision maker and, where appropriate, the persons affected by the decision, and
- The significant risks, benefits, and reasonable alternative involved in the decision.
Unfortunately, there are persons ready to take advantage of a settlor’s diminished capacity, and get themselves and their own family members inserted into the trust as trustee and/or beneficiary despite the settlor’s lack of understanding what is going on. Once appointed trustee by dubious amendment, these persons may breach the fiduciary duty they owe (to the settlor, trust and true beneficiaries) by embezzling or commingling funds, failing to transfer assets into the trust in accordance with the settlor’s direction, failing to administer and dispose of the trust assets in accordance with the settlor’s instructions, and putting their own financial interests first, or losing or mismanaging trust property.
All of this misconduct may constitute both breach of fiduciary duty and financial elder abuse. California law provides a variety of remedies for those who have been injured as a result of a trustee’s breach of fiduciary duty. California Probate Code Section 16420 allows an injured party various remedies against an unscrupulous trustee. The remedies include compelling the trustee to account for trust assets and to restore to the trust any assets wrongfully taken out of it. Economic damages and punitive damages are also available to the injured party. Trustee misconduct may also constitute financial elder abuse against senior settlors and the Probate Code allows the injured senior to pursue remedies for elder abuse as well. Calif. Probate Code § 16442. In such cases, plaintiffs can pursue the remedies available under the California Elder Abuse and Dependent Adult Civil Protection Act, Welf. & Inst. Code § 15600 et seq. Under that statute, the court awards mandatory attorneys’ fees and costs and extra damages to the injured senior in certain circumstances. Calif. Welf. & Inst. Code § 15657.5(a) (“Where it is proven by a preponderance of the evidence that a defendant is liable for financial abuse, as defined in Section 15610.30, in addition to compensatory damages and all other remedies otherwise provided by law, the court shall award to the plaintiff reasonable attorney’s fees and costs. The term “costs” includes, but is not limited to, reasonable fees for the services of a conservator, if any, devoted to the litigation of a claim brought under this article.’)
If you or a loved one has been a victim of financial elder abuse or a breach of fiduciary duty by a trustee in San Francisco or elsewhere in California or, contact Ingrid M. Evans and the other Evans Law Firm trusts and financial elder abuse attorneys at (415) 441-8669, or by email at <a href=”mailto:email@example.com”>firstname.lastname@example.org</a>. Our attorneys have experience with complex securities cases, arbitrations, and mediations; and complicated financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We also handle cases involving physical and financial elder abuse, other types of qui tam and whistleblower cases, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.