Attorney Bruce Givner – California Court Offers Life Lessons in Estate Planning

by Bruce Givner on August 14, 2012

“The California probate court has recently offered life lessons in estate planning,” said Los Angeles Asset Protection Plan & Estate Planning Attorney Bruce Givner.  In a "tentative" ruling the probate court held that two daughters could not receive their late mother's half of a marital trust set up by their parents.

The marital trust included a formula clause that gave their two daughters trust assets equal to the amount of applicable federal estate tax exclusion, and the balance to a marital trust for the surviving spouse.  This allowed the full amount of the exclusion to pass to the heirs tax-free.

In 2010, the federal estate tax exclusion was unlimited.  To prevent the whole estate from going to the two daughters, the Tweten’s marital trust was amended.  After Mrs. Tweten died, the two daughters petitioned the court to invalidate the amended trust on the grounds of forgery and incapacity.

Though the probate court threw out the amended trust, holding the document was not properly notarized, it still sided with Mr. Tweten.  "The intent of the parties was not reflected in the trust instrument for a death in 2010 but instead and as written completely thwarted their intent," the court stated.

“Unfortunately, if upheld on appeal, when the two daughters and any other heirs receive the trust assets upon Mr. Tweten’s death, they will now owe a huge amount of estate tax, instead of no tax,”  explained Givner.  “The life lessons in estate planning are that attorneys are no longer using formulaic clauses in trusts,” continued Givner.  “We are also reviewing trust documents, especially for large estates, every year.”

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles County.  Call Los Angeles Income Tax and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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