This is part of our series of posts written by John A. Hartog of John A. Hartog, Inc. in Orinda, Calif., and Shirley L. Kovar of Henderson Caverly Pum Charney LLP, in San Diego, Calif., co-authors of the LexisNexis® Matthew Bender® Practice Guide California Trust Litigation (March 2011).
In this post, Hartog explains why courts need to be more involved in trust matters. Hartog and Kovar recently appeared at seminars hosted by LexisNexis® in conjunction with the Bar Association of San Francisco, the Orange County Bar Association, and the North County Bar Association.
One of my observations about increased trust litigation is, ironically, the lack of court supervision, because many of these trusts have been created by people who have perceived the court process to be something wicked, an evil to be avoided at all costs. There is a profound lack of understanding among laypeople about the burden of serving as a trustee. So what is created is an assumption that the family member can serve as a trustee, A) because they did well in their finance class, or B) because they’re an accountant, or C) because they’re the oldest, or D) because they own a rental property and understand how to balance a checkbook. The result is that non-professionals who are appointed to serve as trustees often misunderstand their duties. When they are family members, they often rationalize that their appointment demonstrates that they were the preferred member of the family in the decedent’s eyes, and they use that as a justification to exercise their perception of the decedent’s preference for them to the detriment of everyone else.
Because of that emotional reaction on the part of these non-professionals, usually family members, the rest of the family grows restive because of the lack of communication and clearly what is happening here – and it’s very important to understand this – is that the whole trust administration, this post-death process, is tapping into lifelong family cycles of relationship. This undercurrent has a profound influence on the legal responsibilities that the law imposes. So we might have three siblings, one of whom doesn’t get along with any of the others, two of whom are allied against the third, and those relationships are accentuated because the parent is no longer there to serve as the shepherd, ringleader or referee, depending on the family dynamic. And so that creates the opportunity for litigation. We have these structures that are not subject to anyone’s supervision.
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