For many people, avoiding probate is a good idea. A recent controversy about state laws now provides yet another reason for doing so through careful estate planning. A recent article about California estate administration laws brought up an interesting Catch-22 in the process of administering a disabled or elderly person’s estate. In California, unlike most other states, the law allows attorneys who are appointed by the court as trustees of the estate to bill hours spent defending their fees against when the amount of the fees is challenged. The rule has been applied even when the fees are challenged by the beneficiary of the estate. State lawmakers have now assigned a task force to investigate and, if necessary, change California estate administration law.
The California law creates the bizarre situation in which an attorney is able to effectively use a beneficiary’s money to pay the fees of the attorney fighting a claim by the beneficiary. Not only does this penalize a person seeking to challenge the administration of an estate, even for good cause, it creates a situation in which a court-appointed attorney has no incentive to work efficiently or effectively in either the administration of the estate or the attorney’s defense of a challenge to the estate.
Defenders of the law claim that oftentimes challenges are brought against administrators for no legitimate reason, and these administrators may have to spend lots of time and money to defend these frivolous claims. The distribution of property in such delicate matters is inherently controversial, and many parties who are upset by the outcome may target the administrator, even without any evidence of wrongdoing.
The California law points out the need for sound estate planning, which includes the appointment of a trustworthy estate administrator to handle the affairs of a deceased or disabled executor, which can alleviate a lot of the legal unrest which is so often associated with a contested estate.
Source: Daily Democrat “California more permissible than others on letting attorneys tap elders’ estates,” by Karen Desa, Aug. 19, 2012