Opinion
D074067
09-24-2019
Conservatorship of the Person and Estate of CARLOS VELASCO. JAVIER VELASCO, as Conservator, etc., Petitioner and Respondent, v. ALEXANDRA VELASCO, a Minor, etc., Objector and Appellant.
Murray Law, Thomas N. Murray; Goodwin Brown Gross & Lovelace and Craig Gross for Objector and Appellant. Hughes & Pizzuto, Laurie E. Barber and Anne M. Rudolph for Petitioner and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2018-00006370-PR-CP-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Robert C. Longstreth, Judge. Affirmed. Murray Law, Thomas N. Murray; Goodwin Brown Gross & Lovelace and Craig Gross for Objector and Appellant. Hughes & Pizzuto, Laurie E. Barber and Anne M. Rudolph for Petitioner and Respondent.
INTRODUCTION
Carlos Velasco executed estate planning documents, including a trust and a will, approximately seven months after the birth of his third child, Alexandra, in 2001. At the time, Carlos was married to Dennise, and his older two children were adults. The estate planning documents made Alexandra the sole residual beneficiary of Carlos's estate if Dennise predeceased him.
Because all the family members share a surname, we refer to them by first names.
In 2016, divorce proceedings began between Carlos and Dennise. In October 2017, a few months before the divorce was final, Carlos visited an estate planning attorney and directed the attorney to draft new documents dividing his estate equally among his three children.
In January 2018, weeks after the divorce became effective, Carlos was in a motorcycle accident that incapacitated him. Following the accident, Carlos's oldest son Javier, in his capacity as Carlos's conservator, filed a petition for substituted judgment, seeking to replace the 2001 will and trust documents with updated versions that Javier alleged represented Carlos's intentions. The court granted the petition over objections and ordered the execution of a substituted judgment trust and testamentary pour-over will.
Alexandra appeals the decision, contending the court committed an abuse of discretion because the evidence presented to the probate court did not satisfy the criteria required by the substituted judgment statutory scheme. (Prob. Code, § 2580 et seq.) We disagree and affirm the probate court's order.
All statutory references are to the Probate Code.
FACTUAL AND PROCEDURAL BACKGROUND
Carlos and Dennise were married in 1994. Carlos had two children from his first marriage, Javier and Arturo. In January 2001, Alexandra was born. Approximately seven months later, on July 31, 2001, Carlos and Dennise established the Carlos L. Velasco and Dennise Velasco Family Trust. The trust provided that upon Carlos's death, his assets would go to Dennise. It named Alexandra as the sole residual beneficiary. The same day, Carlos executed his will, which was a pour-over will leaving all of Carlos's estate to the family trust.
Dissolution proceedings between Carlos and Dennise commenced in July 2016. While the divorce proceedings were pending, Carlos met with estate planning attorney Richard O. Barndt on October 13, 2017. At the meeting, Carlos instructed Barndt to prepare a living trust and other estate planning documents, and he provided Barndt with adequate information for Barndt to prepare them. Specifically, Carlos told Barndt he wanted all tangible personal property divided equally between his three children, and the rest of the estate divided equally between the three children or their issue by right of representation.
On January 27, 2018, Carlos was in a motorcycle accident that left him incapacitated and without the ability to make legal decisions. Carlos and Dennise had previously reached an agreement to end the marriage effective January 1, 2018, and a few days later, on February 2, 2018, the court entered the order dissolving the marriage.
Javier was appointed as temporary conservator over Carlos's estate on February 9, 2018. He filed an ex parte petition for substituted judgment on March 6, 2018. In the ex parte application, he sought an order authorizing him to execute a new trust for Carlos, one drafted by Javier's attorney that distributed Carlos's estate in equal shares among the three children and was funded by Carlos's property. The application also alleged that Carlos had no will or other estate planning documents.
Dennise opposed the ex parte petition and clarified that a 2001 trust had been executed. The court denied the ex parte application because it concluded there was no emergency, and it appointed a guardian ad litem for Alexandra. The court also appointed a guardian ad litem for Carlos. The court appointed Javier as the conservator over Carlos's estate.
Javier filed a supplement to his petition for substituted judgment to execute a revocable trust. In his supplement, he explained that he was not aware of Carlos's pour-over will when he filed the initial petition, noted that the will was executed when Alexandra was an infant and Carlos was still married to Dennise, and argued the will proposed by the petition for substituted judgment reflected Carlos's testamentary intent shortly before the accident. Javier also sought authorization to execute a will drafted by Barndt.
Alexandra's guardian ad litem submitted a report explaining that Alexandra had no substantive knowledge of the issues involved in the dispute and confirming that Carlos did not speak to Alexandra about his intent for the distribution of his estate following his death. The guardian ad litem concluded it was in Alexandra's best financial interest that the petition for substituted judgment be denied because it would eliminate two thirds of the inheritance to which Alexandra would be entitled under the executed documents.
Carlos's guardian ad litem opined: "I believe a reasonably prudent person would choose to share his/her trust estate equally with each of their biological children. I also believe [Carlos] would himself want to do the same." He explained that he had reviewed Barndt's file and concluded that on October 13, 2017 Carlos desired to give his estate equally to his children. He noted that Alexandra was no longer an infant confronting the risk that her then 60-year-old father would die, and she would need financial support. And he explained that Carlos appeared to have a close relationship with each of his biological children.
On April 19, 2018, the court granted the petition for substituted judgment and authorized and directed Javier to execute the substituted judgment trust. The court also authorized and directed Javier to execute a new testamentary pour-over will for Carlos's benefit and authorized and identified the funds for the substituted judgment trust.
Alexandra timely appealed.
DISCUSSION
Probate Code section 2580 allows a conservator to petition for an order authorizing the conservator to take a proposed action to benefit the conservatee or estate, minimize taxes or the expenses of the conservatorship estate or the estate upon the conservatee's death, or to provide gifts for any purpose and to any charities, relatives, friends, or objects of bounty that would be likely beneficiaries of gifts from the conservatee. (§ 2580, subds. (a)(1)-(3).) The probate court has discretion to approve, modify and approve, or disapprove the proposed action, as well as to authorize or direct other action. (§ 2584.) Before exercising its discretion, the court must determine that the conservatee is not opposed to the proposed action, or if the conservatee is opposed to the proposed action, that the conservatee lacks legal capacity for the proposed action. (§ 2582, subds. (a)(1)-(2).) The court must also determine that the proposed action will have no adverse impact on the estate or that the remaining estate will be adequate to provide for the needs of the conservatee and those legally entitled to support from the conservatee. (Id., subd. (b).) The court takes into consideration all relevant circumstances in making this determination. (Ibid.) Section 2583 offers a nonexhaustive list of 13 relevant circumstances for the court to consider.
Section 2583 offers the following circumstances for consideration: "(a) Whether the conservatee has legal capacity for the proposed transaction and, if not, the probability of the conservatee's recovery of legal capacity[;] [¶] (b) The past donative declarations, practices, and conduct of the conservatee[;] [¶] (c) The traits of the conservatee[;] [¶] (d) The relationship and intimacy of the prospective donees with the conservatee, their standards of living, and the extent to which they would be natural objects of the conservatee's bounty by any objective test based on such relationship, intimacy, and standards of living[;] [¶] (e) The wishes of the conservatee[;] [¶] (f) Any known estate plan of the conservatee (including, but not limited to, the conservatee's will, any trust of which the conservatee is the settlor or beneficiary, any power of appointment created by or exercisable by the conservatee, and any contract, transfer, or joint ownership arrangement with provisions for payment or transfer of benefits or interests at the conservatee's death to another or others which the conservatee may have originated) [;] [¶] (g) The manner in which the estate would devolve upon the conservatee's death, giving consideration to the age and the mental and physical condition of the conservatee, the prospective devisees or heirs of the conservatee, and the prospective donees[;] [¶] (h) The value, liquidity, and productiveness of the estate[;] [¶] (i) The minimization of current or prospective income, estate, inheritance, or other taxes or expenses of administration[;] [¶] (j) Changes of tax laws and other laws which would likely have motivated the conservatee to alter the conservatee's estate plan[;] [¶] (k) The likelihood from all the circumstances that the conservatee as a reasonably prudent person would take the proposed action if the conservatee had the capacity to do so[;] [¶] (l) Whether any beneficiary is the spouse or domestic partner of the conservatee[; and] [¶] (m) Whether a beneficiary has committed physical abuse, neglect, false imprisonment, or financial abuse against the conservatee after the conservatee was substantially unable to manage his or her financial resources, or resist fraud or undue influence, and the conservatee's disability persisted throughout the time of the hearing on the proposed substituted judgment." --------
Not every circumstance found and considered by the trial court must be consistent with the action proposed in the conservator's petition for substituted judgment, and "no single circumstance, whether or not enumerated in section 2583, should necessarily control the superior court's substituted-judgment decision." (Conservatorship of Hart (1991) 228 Cal.App.3d 1244, 1269, 1265 (Hart).) Moreover, a court may grant the substituted judgment petition if it is satisfied "by a competent showing of all relevant circumstances, that in the last analysis the proposed action is what a reasonably prudent person in the conservatee's position would have done." (Id. at p. 1264.) Thus, the court substitutes its judgment for that of the incapacitated conservatee. (See id. at pp. 1251-1252.)
We review the probate court's decision for an abuse of discretion. (Hart, supra, 228 Cal.App.3d at pp. 1253-1254.) "An abuse of discretion occurs if, in light of the applicable law and considering all of the relevant circumstances, the court's discretion exceeds the bounds of reason and results in a miscarriage of justice." (Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, 894.) As the complaining party, Alexandra bears the burden of establishing an abuse of discretion. (In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 118.) Presenting facts which may allow for a difference of opinion does not establish an abuse of discretion. (Ibid.)
Alexandra does not establish that the probate court's order was an abuse of discretion. Before the court was evidence of the relationships and intimacy between Carlos and his three children (§ 2583, subd. (d)), information about Carlos's wishes (id., subd. (e)), the 2001 estate plan (id., subd. (f)), the conservatee's legal capacity (id., subd. (a)), and whether the conservatee, as a reasonably prudent person, would replace the trust and will if he had the capacity to do so (id., subd. (k)). The court also considered what Carlos likely would have done had he not been incapacitated.
Carlos's guardian ad litem reported that Carlos appeared to have a close relationship with each of his biological children (see § 2583, subd. (d)), which supports dividing the estate evenly.
There was concrete evidence that Carlos intended to change his will and trust based on Carlos's meeting with an estate planning attorney a few months before the accident. (See § 2583, subd. (e).) In that meeting, Carlos instructed Barndt to draft new documents that would split his estate equally among his three children, which indicates Carlos wanted his estate divided among his children. (See ibid.)
When Carlos executed the estate planning documents in 2001, his daughter was an infant, and he confronted the risk that he, a 60-year-old man, would die, and Alexandra would need financial support. However, by the time of the petition, Alexandra was 17 years old. Moreover, when he signed the documents, he was planning a lifelong marriage to Dennise; in light of the dissolution of their marriage, it is understandable that Carlos would want to change the disposition of his estate. The court acknowledged that the only executed documents dated back to 2001 (see § 2583, (f)), but it also noted that Carlos signed those papers when he was planning to be married for the rest of his life, and that was no longer the case in 2016 (see id., subd. (e)). Thus, the existence of estate planning documents did not necessarily weigh heavily against substituted judgment here. Indeed, Carlos's guardian ad litem opined that Carlos would have wanted his estate to be distributed evenly among his children, and there was evidence of Carlos's intention to divide the estate evenly shortly before his death but no evidence that he continued to favor Alexandra over her siblings. Although attorneys argued that Carlos's failure to schedule a meeting with Barndt to sign new documents suggested he did not intend to revise his disposition, the court declined to speculate about why Carlos had not yet scheduled a follow-up meeting. Based on the information before it, it was not error for the court to conclude Carlos or a reasonably prudent person in his position would want to revise the estate plan to reflect the changed circumstances.
The court also indicated that it would be reasonable for Carlos to divide his property equally among his children because the initial disposition, leaving everything to Alexandra, was unnatural and may have been a product of the marital relationship at the time. (See § 2583, subd. (k).) It also concluded it was not reasonable to think Carlos would have expressed his desires to Barndt in October 2017 only to have returned to his intentions from 2001 after the divorce was finalized in early 2018. Finally, there was some evidence that Carlos's health was improving, but there was no way to know when or whether Carlos would recover from his injuries. (See id., subd. (a).) The court expressed concern that if it did not grant the request for substituted judgment and Carlos passed away, there was a risk that his estate would be distributed in a manner that was not reasonable and did not reflect his intent. (See id., subds. (e) & (k).)
The relevant circumstances support the probate court's conclusion. Although the 2001 estate planning documents demonstrated Carlos's intent to devise the entire estate to Alexandra when she was an infant, the changed circumstances called that intent into question. Carlos had a close relationship with all three children and appeared to be planning to revise his estate planning documents to reflect that by dividing the estate equally among them. Given the evidence before it, the probate court did not abuse its discretion by concluding that a reasonably prudent person in Carlos's position would have revised the estate planning documents.
DISPOSITION
The order is affirmed.
Costs are awarded to Petitioner and Respondent on appeal.
HUFFMAN, Acting P. J. WE CONCUR: HALLER, J. GUERRERO, J.