A recent decision by a Riverside County Superior Court judge may affect other California estate litigation cases where the decedent passed away in 2010. That was a unique year, as the federal government failed to levy an estate tax on any assets passed on by deceased loved ones. When estate planning documents are written in California, a portion of a person’s assets equal to the current estate tax exemption will usually be transferred into a bypass trust. The bypass trust is often set up for the benefit of a couple’s children or other heirs. The remaining, taxable estate is then normally placed into a marital trust for the benefit of a surviving spouse. By placing assets into a marital trust, estate taxes are deferred until the surviving spouse dies. Under this plan, however, all of a decedent’s assets would have passed directly into a bypass trust in California in the year 2010.
In the current case, Eileen and Leonard Tweten signed estate planning documents in 2008 that outlined how the couple’s $100 million in assets would be transferred following their death. In 2010, almost two weeks prior to Eileen’s passing, the couple amended their estate plan in order to ensure Eileen’s half of the couple’s wealth would transfer to the marital trust for the benefit of Leonard rather than the bypass trust as previously arranged. Following Eileen’s death, two of the couple’s three children challenged the amendment in court and argued their mother intended for her half of the couple’s assets to pass immediately to them. The children also argued their father exercised undue influence over their mother while she was essentially on her death bed.
Earlier this month, a Riverside County Superior Court judge tentatively ruled in favor of 85-year-old Leonard, holding that the assets would transfer to the marital trust until his death. According to the judge, Leonard will enjoy the income and benefits from the assets until his death. Following Leonard’s death, the assets that were placed into the trust by Eileen will then pass to the couple’s children. Because Eileen passed away in 2010, the sum placed in the marital trust will not be subject to an estate tax regardless of when Leonard dies.
Despite the California judge’s ruling, Leonard Tweten’s relationship with his children and grandchildren is reportedly now deeply fractured. The Tweten case demonstrates why it is important for everyone, especially families with a large net worth, to reconsider their estate plan on a regular basis. Because estate tax and other laws often change from year to year, it is a good idea to consult with an estate planning attorney every year.
If you have questions about the provisions of a deceased family member’s estate plan, contact the law firm of Ginzburg & Bronshteyn, LLP. Our knowledgeable Beverly Hills trust litigation lawyers are available to help clients throughout Southern California with all of their estate litigation needs. The hardworking and dedicated attorneys at Ginzburg & Bronshteyn represent clients in Hollywood, Los Angeles, West Los Angeles, Santa Monica, and Beverly Hills. To discuss your estate litigation matter with a capable attorney, do not hesitate to contact Ginzburg & Bronshteyn online or give us a call at (310) 914-3222.
Incapacitation and the California Estate Plan, Los Angeles Probate Litigation Attorney Blog, July 17, 2012
California Appeals Court Holds Trust Modifications Invalid Unless they Comply With Method Stated in Trust Instrument, Los Angeles Probate Litigation Attorney Blog, July 8, 2012
Family Feud Illustrates Importance of Revising Estate Plans Annually, by Ann Marsh, financial-planning.com