Estate Planning to Avoid Litigation, with Matthew Talbot
Careful, thoughtful planning can help avoid potential family disputes after death. Today I speak with Matthew Talbot of Talbot Law Group, P.C. about potential red flags planners should be on the look out for to avoid future litigation. In this episode, Matthew Talbot hits on these key ares:
1. Undue influence. Potential red flags that a vulnerable client may be under undue influence from family members (03:39)
2. Common estate litigation claims (05:45)
3. Best practices in potential undue influence situation (08:05)
4. Independent Attorney Certificate of Review (14:18)
5. Natural v. Non-natural dispositions (18:40)
Thank you to Matt Talbot for joining me on this episode. Contact Matt at 925-322-1795, or at his website talbotlawpc.com, if you or someone you know has questions regarding estate planning and/or estate/probate litigation.
This podcast is brought to you by McKenna Brink Signorotti LLP, a boutique law firm located in Walnut Creek.com. Find us at mckennabrink.com.
Transcript
Ryan Lockhart (00:02):
Hello, everyone. Welcome to I Know a Lawyer. I am your host, Ryan Lockhart. This podcast is brought to you by McKenna Brink Signorotti LLP. We are a boutique law firm located in Walnut Creek, California, where we handle legal issues ranging from tax, estate planning business law and civil litigation. You can find us at mckennabrink.com. Today. I am joined by Matt Talbot, the principle owner of Talbot law group, who is also located in Walnut Creek, California. Welcome to the show, Matt, how are you today?
Matt Talbot (00:31):
Oh, thank you so much for having me, Ryan. I really appreciate it. I'm doing fine enough. I hope that you're doing well, given everything and all the craziness.
Ryan Lockhart (00:38):
Yeah, Covid summer. I call it. So why don't you tell us a little bit about yourself and your firm's practice?
Matt Talbot (00:44):
Oh, sure. Well, I've been practicing in this field of estate planning, administration, litigation for 13 and a half years. I took and passed the bar when I was 24 years old. And so I've been doing exclusively this field. I opened my own practice, my own firm in 2015. So it's been all about five and a half years running off from, and as you stated, we're in Walnut Creek, we have four full time lawyers and several sort of independent contractor attorneys who help us from time to time on various things. And so we focus exclusively on a estate work, planning, admin litigation, elder abuse, medical and we're in court in Alameda and Contra Costa County almost pretty much daily.
Ryan Lockhart (01:31):
Yeah, I agree. I'm sure that's got its own challenges right now. And especially in a COVID
Matt Talbot (01:36):
Definitely, definitely. I've been doing a lot of estate planning making house calls, driving to people's homes to do notarizations. I got interviewed by ABC, ABC channel seven news back in April for doing that. And some of my clients who are doctors on the front lines of all this great,
Ryan Lockhart (01:53):
Good work. So working, if somebody wants to contact you where, how they, how do they get it?
Matt Talbot (01:57):
Well, our main phone number is (925) 322-1795. And of course they can go to the website either at talbotlawpc.com Or matthewbtalbot.com and contact us that way. And we're happy to schedule appointments and we can do it over zoom or phone or whatever.
Ryan Lockhart (02:16):
Great. So any of the audience you're looking for that you can see those links in the show notes, and it's a good segue because Matt, as an estate planner slash litigator I thought it was a good time for us to talk about estate planning to avoid litigation today. I know you have extensive experience in trust and estate litigation since I'm, I'm not really a litigator, but I am an estate planner. I thought it'd be a good time to talk about some potential red flags that we could be on the lookout for to avoid that litigation down the road.
Matt Talbot (02:46):
I mean, one of them have been talked about that. A lot of people are interested these days in putting an estate plan together due to current virus. And COVID-19, you've probably seen an uptick in interest. People are nervous and they just want to make sure that when they put it together, it protects them and it protects their family.
Ryan Lockhart (03:06):
Absolutely. I know I've had a lot of clients who obviously they're worried about mortality issues now with, COVID asking about the estate plan and I always ask those questions like, you know, is there any potential issues in the family that we should know about, especially with adult children. So what do you do when a client comes in and they say, they want to like maybe disinherit a child, or there's going to be some sort of difference of the distribution to different children. So children can be treated differently. How do you handle those types of situations?
Matt Talbot (03:39):
Well, me personally, since I do so much litigation, that that relates to that if someone were to come in, my policy and I'm being very conservative here is I don't even take those cases. So the number one thing that I can advise estate planning attorneys is to be very careful with that. If I were to take such a case, it's important to provide clear written evidence of the intent of your clients in the document itself. So they come in and they say, I want to cut out my son and I want everything to go to my daughter. Okay. Or vice versa or whatever it may be. The number one most important thing is the, why is the why of it justifiable or is the why of it because they lack capacity or they're susceptible to undue influence. And so that's the problem that attorneys who are litigating on the backend run into, why would somebody do this? Why would they cut out their daughter to favor their son? Maybe their daughter is a extremely wealthy person and their son is not. And so they want everything to go to their son. That's a reason that may make sense, but you just need to have that clarity. That's the most important thing because otherwise everyone's guessing years or even decades later at what mom and dad.
Ryan Lockhart (05:14):
Yeah. That's kind of the problem. Or at least the scariest part. I know as a planner is decisions made today, aren't really getting tested or maybe even discovered for 20, 30 years down the road. And you brought up a term that I want to kind of dive into a little bit, undue influence. You know, I think this is a term that people hear about a lot undue influence. Is this really the main, the main term or the main concept that people sue when it is trust and estate litigation happens? Is it mostly undue influence claims?
Matt Talbot (05:45):
I don't know, mostly, I don't know percentages, but I think it is a, a high one when you're talking invalidation, when people are bringing lawsuits over trust matters, that usually relates to one of a things. The document shouldn't be valid, the person managing the trust shouldn't be managing the trust. The person managing the trust has stolen money or mismanaged money, or there should be some assets in the trust that aren't in the trust. So those are the four main issues that you run into. And in regards to an issue of whether it should be valid, or if somebody was named or shouldn't be named, or if an asset should be in there, that's not in there. Maybe it was transferred out a common thread for these types of fights is that somebody applied pressure on mom or dad influence on mom or dad to cause them to do this thing. This person has the trustee transfer the house out of the trust before they died to distribute everything 100% to one kid and not the other. So undue influence runs through a lot of these different types of issues. And I can get into the legal mumble jumble of it. I don't know if your listeners, Ryan wants to get down to that granular level. I'm happy to do that. If that's what you want. I can also give a more high level explanation of it.
Ryan Lockhart (07:12):
I think the high level is what people are probably looking for now, because I know it as a term because I've heard from people this term undue influence they've heard about. And I think you just gave a great explanation of how undue influence as a legal concept can apply to various levels of potential litigation. Whether it's going to be invalidating the document itself or invalidating, maybe the appointment of a certain person who is trustee. I've always said the term trustee is probably the, one of the most apt in estate planning world because it is somebody they should trust to do the right thing. And there, even though there are these duties on the trustee, it really is a person who's in charge. And sometimes the wrongdoing, cause you mentioned, you know, are they siphoning off funds for themselves, mismanagement of funds, et cetera, that might not get discovered until somebody finally calls them to the carpet. And that's usually I know they run through, they have to go to court probably to get that disclosure in full, correct.
Matt Talbot (08:05):
Generally it does require some sort of court action. I often find in these cases, one of the family members in a more, how do I say this? I don't want to say the word bullying, but a more dominant position and the other. And they just think that the less dominant person will go along with the flow. And these things go back decades to when they were little kids and the older brother would beat up on the younger brother and fast forward 60 years, the older brother is continued to be up on the younger brother to the financial detriment, not physically, but financially. And so sometimes it requires the other brother or sister or whomever to sort of stand up and say, I'm going to go to court and investigate this, but I'm more than happy to give a high level sort of description of undue influence because influence happens everywhere.
Matt Talbot (08:52):
When I talked to my wife where she would go to dinner, I'm influencing her to go to this place or that place, right? That's not undue influence. It's just regular influence. But undue influence is to obtain something and appropriately, usually by pressure applied on a vulnerable person to get them to do or not do a thing and then not do a thing is important because they might say, well, I'm gonna put this well together to do it 50/50, or to do it this way or that way. And you might pressure them to not do that to your benefit. So sometimes it can even be not doing a thing and that's a nuance that can be lost on certain people. But if you are trying to put an estate plan together and you're concerned that there's pressure being applied by a child by one of the kids, maybe the most important thing to do from the lawyer point of view is meet privately with the elder, with your client and Ryan, you know, you're an expert in this field, so I'm sure you, you can sort of suss these things out and you do that.
Matt Talbot (09:59):
Also I've dealt with a number of cases in my career where the child was in the room or the child is writing emails, telling me the lawyer, what mom and dad wanted.
Ryan Lockhart (10:13):
Yeah. That's always a red flag.
Matt Talbot (10:15):
Very key. When we're talking about red flags, as you, as you raise Ryan, you have to be very careful that that the elder is able to handle this by themselves to the extent possible. And maybe the child drives them to the office, but then they wait in the car or they wait out, you know, they wait outside.
Ryan Lockhart (10:35):
Yeah, I think that's, that's one of my favorite hobbies like to say is dispelling myths. Regarding various aspects of the law that I'm in again, I usually do it on a tax side, but on the estate planning side, there's that, that myth that, you know, lawyers don't, they just, they're just estate planning. Lawyers are just going to do the plan. That's all they do. But there is an analysis that every good estate planner at least is going to make, especially if it's an elderly client, new one coming in, there's an analysis and a determination. You, I'm sure you make in your own mind as you talk to this person, you know, do they understand what we're really talking about? Because you know, various ethical duties, we have to, you know, as estate planning lawyers. But I think it's, you raise a great point about influence, influencing the person, the vulnerable person to not do something.
Ryan Lockhart (11:23):
Cause I know that's also a big area where maybe they wanted, you know, the elderly client wanted to put this or a plan in place. They have the idea of what that plan is going to say. But then the influence comes in and it ends up turning out differently because you know, they have conversations with their kids usually. So then after the death, mom's passed away now and the children find out, I know we don't do will readings like they do in the movies. It'd be kind of cool if they did. I'd like to do one once, but no, that's the surprise moment usually is when the disclosure finally happens of, Oh wow, this is what the estate plan actually says. Do you have any interesting cases about that? When you know, people, the children kind of get upset. Like once they find out what mom and dad's trust actually said, had many, many, many cases like that.
Matt Talbot (12:09):
As they get sort of ambushed and they're also emotionally vulnerable, because think about it, you just lost your mom, you just lost your dad. That's a devastating thing general. And then you find out that you're cut out of the will or the trust or whatever it may be. That can be a double whammy. That would be a double whammy. So I think for a lot of people, one of the reasons why we see increased fighting in the estate category is because they're already upset. They're already unhappy, they're already angry. And then they find out that their brother, they used to beat up on them when they were kids got all the money. So now they're, you know, sort of trigger, happy on filing that lawsuit. And so that's why it's really important for the estate planning attorneys to think ahead, what is going to happen here?
Matt Talbot (13:00):
And if they advised their client to not do something, they should send that letter. I advise you to not give it a hundred percent, but you really want to do this. If they think that the person lacks capacity. So in that letter, I request before we work together, you get a full medical evaluation. I have a case like this right now where the lawyer did a letter saying, you need to get a full medical evaluation before we will do anything. And then they took mom to a different lawyer who radically shifted everything. Well, that letter was powerful evidence to protect mom's true intent because that's often what attorneys are. We're trying to protect the intent of the elder from potential litigation. That's why doing things like putting in writing, sending letters to the elder that may show up later in discovery. If a litigation does come up, making sure that they keep the kid out of the room or as far away as possible and communicate directly with the parent, you know, or whomever the actual person is make sure that you explain to the person as much as humanly possible what's happening.
Matt Talbot (14:18):
And just think if someone comes to you, when they want to make a drastic shift, what is the likelihood or they come to and they say, Oh, my kids don't talk to each other. What is the likelihood that there's going to be fighting later? Right. Pretty high. And if you really think you can, it's necessary. You could have an independent attorney do a certification of review. That's not required unless they're a caregiver. I don't even get into the law there, but it's sometimes a best practice to have the client go to a third attorney, a third-party attorney to run through everything and get that certification of review. That's a document that says, I met with this person. I talked to them. They will walk me through the thought process. It makes sense to me. So now you're working to protect the intent of the elder and make sure that it's not going to get overturned in some trial or something along those lines.
Ryan Lockhart (15:17):
I'm glad you brought this up. I have used this method before and you know, of a case that we worked on or we know about together. There's been some other instances I wish I did do this learning lesson. You think, you know, it's a great tool because it it's just gonna want to protect what that client, the elderly person intent, let's preserve their wishes. That's why they went through this whole process anyways, if they understand what they were doing and every thing is above board. Yeah. We should take every step we possibly can to least cement that intent in place. So if it does get questioned later, you know, it's not just me as the estate planning attorney, come in and say, yeah, I went through various things with this client. This is what she wanted. But if there's that independent review, that's just another barrier for a potential litigant or claimant to try to overcome, to try to get that intent or that document tossed out. So I'm glad you brought that up cause I, yeah, that's a good lesson for me to learn to use that maybe some other situations that, you know, it may or may not be clearly warranted, but it just, it could make it better. So that's great
Matt Talbot (16:21):
If you're listening to this and you're, you know, you're not an attorney, I assume some people will listen to this may be estate planning attorneys, and some people listening to this, maybe members of the public who are just interested in estate planning and working maybe with Ryan or working with me or someone else. So you might want to request, if you're going to do something that's a non-natural distribution, then, you know, maybe request, Hey, can I get a certificate of an review? Can you refer me to an independent attorney? And it has to be as independent as possible. You know, if I refer the person to my friend, Ryan here, that is independent because I have no business relationship with Ryan, but if it's truly someone that I may not, that it might have an enemy or anything, but it's truly someone that's really independent that I don't maybe have a close friendship with, you know, how much of a friendship and they can say, Oh, well this was Matt's buddy.
Matt Talbot (17:12):
Just trying to, you know, seal the deal. Then I think that there's, that's something you may want to request. And that's the key issue, which is a non-natural distribution. There's definitely been times when people come in and the kids are involved, but they want to do a natural distribution. Cause it's very common that one child is close geographically and is doing all the work. And you have to try to make that difference. That delineation between, like I said, influence and undue influence the child may be influencing mom in a positive way and it might be appropriate to do the estate plan, even with the kids somewhat involved because it's going to be a natural distribution split evenly amongst the candidates. So that's the difference that any estate planning attorney has to determine does this seem like it makes sense under the circumstances as just a daughter or a son helping out mom and dad, and they just need a ride to the, to the office and maybe they're on a walker and they need help, you know, walking down the hall and things along those lines, or is it truly going to be a non-natural distribution that could be litigated and then you have to sort of re focus your approach to make sure that it's either protected or you send them away and tell them that you can't assist.
Ryan Lockhart (18:28):
I think this is a great final point to explore this a little bit. So can you just give a little bit more on this natural versus non-natural distribution? So what would be a natural distribution under, I guess, under the law?
Matt Talbot (18:40):
Well, that's great. So if you do nothing, you have no will or no trust, then the legislature assumes a will for you. Okay. This is called intestate succession. And Ryan, I'm sure knowledgeable about this, but some of the readers may the listeners, excuse me, may not be, but so it basically distributes, you know, you first see if they have a spouse and kids and if no spouse and kids, and it goes to your parents or no parents, it goes to your siblings and it keeps going down the list in sort of relations, getting more and more distant. And if you're truly an orphan and it goes to the state of California, which I've had I've had some cases like that. But so generally when people come in, if they did nothing, it would generally go to their kids. Okay. But and it's split, you know, two or three ways or whatever it is.
Matt Talbot (19:28):
So that's a natural distribution, but if they come in and they go, I want to cut my two kids. I have to give it to the one kid who's living with me. And I say, why? And they can't give me any reason. Then that's a non-natural distribution and it's no justification. And I have a client right now who unfortunately, as a poor, really as no spouse, no kids, a poor relationship with his parents. So if he did nothing, the distribution would go to his parents, which is, you know, not necessarily what he's looking to do. So that's a non-natural distribution if he gives it to this person, to that person or this entity or that entity, but there may be a justification. So if you see a non-natural distribution, not to immediate family and equal shares, that's a potential red flag. It may be appropriate.
Ryan Lockhart (20:22):
It's something that should be explored for sure. Because the one I hear about the most, I think is, you know, one of the children was the caretaker helping mom or dad, and they want some sort of unequal distribution because, you know, as a thank you for helping be the caretaker, you know, for the last 10 years of life or something like that, but great. Yes,
Matt Talbot (20:42):
Yes. And, and that's a possibility cause I do see that all the time. And if that happens, it's for the elder to do whatever possible, to tell as awkward as this may be to communicate in writing communication in writing to the children, that this is what they're planning to do and why. So that way there's no ambush when they die. There's full understanding that this is what they're doing and why. And the elder can ask for that. And the attorney needs a guide, the elder on that and make it clear in the draft, in the document so that there's multiple layers of protection for the elder and their intent.
Ryan Lockhart (21:22):
Great. Well, I think this is a great discussion, man. I appreciate you joining me today. And if anybody in the audience, if you, any of these types of concepts we talked about today, undue influence, non-natural distributions. If you or somebody you know, is coming across one of these types of issues, give Matt a call. Matt, want you to hit your phone number and website one more time.
Matt Talbot (21:42):
Firstly, thank you so much for inviting me on your show. I really appreciate it. My phone number is (925) 322-1795. And the website again is talbotlawpc.com or matthewbtalbot.com. And I'm always happy to help, but I do also have to say that Ryan is a very amazing attorney, a great attorney, the checks in the mail, as they say. And if you're looking for guidance, you know, especially on the tax side, which is something that I don't have the expertise for just, you know, being honest. Cause that's important for me to be honest with clients about what I am and they're not good at Ryan has that expertise with the estate planning. That's a really killer combo for anybody. So again, Ryan, thank you so much for inviting me on,
Ryan Lockhart (22:27):
Oh no, my pleasure. Thank you. This, I thought this one went great, very smooth, very good conversation and really good information for the audience out there because estate planning is, like you said, in COVID environment, it's a big issue. And so as long as people are doing it, they shouldn't rush to do the plan just to get it done. If there are careful steps that should be taken. And so I really appreciate your approach to really taking care of the client and their intent and walking them through the process in a correct manner. Cause not, as we know, we know some other estate planners who don't do these, take the care that they probably should. There's a lot of us that a lot of them out there, but anyways, so thank you very much to Matthew Talbot for joining me today and thank you everybody have a good week.