orrison Law - Serving North San Diego and South-Western Riverside Counties (760) 724-9580

WHAT TO DO WITH OUTDATED ESTATE PLANNING DOCUMENTS
By Carl Morrison, Attorney at Law

As I review estate planning documents prepared years before, I often see in the binder or folder copies of trusts and wills that have been revoked and significantly changed. This raises the question of what to do with estate planning documents that are no longer valid?

Some have a difficult time parting with such documents, especially since they may have cost a pretty penny to obtain in the first place. Others like to keep them almost as if they were part of their personal family history. Then there are those who don't know what to do with the outdated documents so they just leave them in the folder thinking they'll make a decision later but then never do.

One wouldn't think it makes much difference. And it may not in many cases, especially where there is family harmony. But even then we all have heard the stories where the harmony ceased as soon as money became involved. Let me relate a recent case where the failure to destroy an old, no-longer-valid will resulted in a costly venture for the beneficiary of a trust.

"Grandpa" and "Grandma" had prepared many years ago a will leaving their estate in equal shares to their three children, including a niece they adopted as a daughter. Years later, in their advancing age, they offered to leave their estate - mainly a modest home on the coast - to any of their children who would move in and care for them until they died. None of the children accepted the offer. But a grandson who was approached did. He essentially gave up a good job and moved to Southern California to care for his grandparents, understanding that some day he would inherit the home.

Grandpa and Grandma then executed a poorly written living trust with a company that sells annuities leaving everything to their grandson and naming him as successor trustee upon their death.

About 10 years later, Grandma died, with Grandpa passing away a few years after that. Grandson, as successor trustee, transferred the home to himself and started to resume his life and career. But that was soon interrupted.

The adopted daughter, who lived out of an old Volkswagen bus and came home only when she needed money, filed suit in Superior Court asking that the trust be invalidated, claiming that Grandson had exercised undue influence on Grandpa and Grandma in getting them to leave the home to him. And, in addition to some medical records showing that Grandma was in the very early stages of dementia, Adopted Daughter presented a copy of the old will that she presumably found in the home when she returned from out-of-state for Grandpa's funeral. She now wanted the will probated and her one-third share of the estate.

A ton of witnesses, including the two sons, a clergyman, business associates and neighbors, all were prepared to testify that Grandpa and Grandma had told them of their wishes to leave the home to Grandson, and that Grandma was completely competent at the time she signed the trust.

As is customary, the probate judge referred the case to mediation. The mediator, a retired probate judge, told Grandson that his case was strong and that he probably would win at trial. But he also pointed out that, with attorney's fees and expert medical testimony, the cost of trial could be in excess of $100,000. Grandson ended up settling for a little more than half that, in addition to $10,000 in his own legal fees. Fortunately, Grandson was able to borrow the money from another relative to pay the settlement. Had he not been able to do so, he would have had to sell the home to do so.

Was keeping the old will a mistake? Should Grandpa and Grandma have anticipated that Adopted Daughter would not be happy with the provisions of the trust? Could the trust document been drafted differently to perhaps make it more difficult for Adopted Daughter to sue? Many would say the answer to all the questions is 'yes.'

Mr. Morrison practices law in Bonsall, Calif. He may be reached at (760) 724-9580.

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chmorrison@morrison-law.net