Probate Litigation: Family Law And Probate Law Collide Where Widow Must Pay Support to Her Husband’s Previous Wife

In estate planning and probate, one sees the intersection of family law on a frequent basis. Late last year, the California Court of Appeal (Div. Three) held that a San Francisco-area widow must continue making support payments to her deceased husband’s previous wife. This case is now pending before the California Supreme Court. Kircher v. Kircher, 10 S.O.S. 6238.

This case shows the importance of consulting with an estate planning attorney at the time a marital or dissolution agreement is made. It is apparent that no one representing the husband or the new wife considered what would happen if the husband passed away. Perhaps the husband would have purchased separate insurance to provide for this continuing obligation or made some other changes to his trust. If the agreement or judgment is already entered into, it is still important to consult an estate planning attorney to provide for obligations under prior marital settlement agreements.

Div. Three said that the form of title in real property that passed to the widow (Wife 2) upon her husband’s death—joint tenancy—did not shield it from consideration when determining the extent of her personal liability for his obligation to pay Wife 1 support till she died. That ruling followed the panel’s conclusion, in an unpublished portion of its opinion, that the man’s written agreement to support Wife 1 until she died was sufficient to waive state law providing that such an obligation would normally terminate upon his death.

Wife 1 Bonnie Kircher, the former wife of San Francisco hotel and apartment house operator Vincent Kircher, sued Wife 2 Adelaide Kircher, his widow, when the latter stopped making monthly support payments in 2008, three years after her husband’s death.

Vincent and Wife 1 separated in 1970 following almost 10 years of marriage and entered into a settlement agreement in which he agreed to pay monthly support until either of the two died or she remarried. The two modified the agreement in 1987, agreeing to increase support and for payment of Wife 1's health insurance. The modified agreement provided that the obligation continued until Wife 1 died, remarried, or lived with another person “in a marital-like relationship” for 30 days, but omitted any language cutting off the obligation at Vincent Kircher’s death.

In 1998, Vincent Kircher married Wife 2 Adelaide Kircher and revised his will to leave his property to her upon his death. He also transferred title to three real properties to himself and his new wife as joint tenants, and continued to meet his support obligations while living. These properties had been separate properties.

Interestingly, if he had not transmuted them to community property, all of the value of the properties could have been used to pay Wife 1 instead of just his community share. Probate Code §13551 limits the liability of a surviving spouse for the deceased spouse’s debts to the fair market value of the deceased spouse’s separate property or his share of community property.

Upon his death in 2005, Wife 1 filed a creditor’s claim against his estate asserting a claim for past and future obligations under the modified agreement. Wife 1 filed a complaint against Wife 2 Adelaide Kircher three years later when Wife 2 terminated the ongoing monthly support payments while continuing to pay for the health insurance. Wife 1 claimed that Wife 2 was personally liable for husband's debts under Probate Code §13550-13552 and seeking damages and attorney fees for Wife 2’s breach of the modified marital settlement agreement’s terms.

Wife 1 sought a declaration that Wife 2 was obligated to continue to comply with the terms of the settlement agreement. Wife 2 argued that the support obligations could not be enforced against the real properties she held in joint tenancy with her late husband because a surviving joint tenant takes the property free of creditors’ claims.

In response, Wife 1 asserted that she did not seek a lien on the properties, only to impose liability for continuing payments up to the amount of the properties’ value, and Marin Superior Court Judge Verna A. Adams ruled in Wife 1's favor. The trial court judge Adams determined that calculation of Wife 2’s personal liability for her husband’s debts encompassed property held in joint tenancy, and that the support obligation to Wife 1 survived his passing, and the Court of Appeal agreed in an opinion by Justice Martin J. Jenkins.

Jenkins pointed out that the Probate Code provides that a surviving spouse is personally liable for the debts of a deceased spouse, and that liability is chargeable against property described in Sec. 13551. He said that the properties Vincent and Wife 2 held in joint tenancy fell within that section because the Legislature clearly intended for it to reach all property, including joint tenancies, so long as it could be characterized as community property or the decedent’s separate property.

Noting California’s presumption that property acquired by a married couple is community property, and explaining that characterization of property is not dependent on the form of title, Jenkins wrote: “At the time of decedent’s death, the property held in joint tenancy by Vincent and was presumed to be community property subject to rebuttal by Vincent that it remained his separate property. Either way, the property at issue falls within the ambit of section 13551."

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney, A Partnership. For a free 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

With respect to probate, Hank Moravec has over 20 years' experience as one of the best Los Angeles probate attorneys and Los Angeles probate litigation attorneys and is available should you need legal advice regarding your own or a family member's situation. For a consultation, You can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221 to request a consultation.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office.

The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. There is ample free parking adjacent to the firm's office.

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Estate Planning For Second Marriages: His, Hers and The Children From Prior Marriages

In a prior article, we discussed that second or multiple marriages are a factor in increasing the risk of probate litigation after either the husband or wife passes away. Married persons with children from a prior marriage must plan carefully if they want to minimize the risk of probate litigation and ensure that those children receive the assets intended for them.

As we mentioned before, as estate lawyers, we have an optimistic attitude that our clients’ marriages will work out. However, we have a pessimistic attitude when it comes to death since all of us will die someday. At that point, what happens to the estate if the surviving spouse remarries? What happens if the entire estate is left to the surviving spouse and he or she leaves the estate to only his or her children and disinherits your children? This is where good estate planning can be useful.

What are potential solutions to these issues in estate planning? Remember that each case is different and there are no cookie cutter or form solutions that work for every family. To create a legal and financial safety net for your family while honoring your choices is what we help our clients achieve.

1. Prenuptial/Premarital Or Postmarital Agreement. The prenuptial agreement (pre-nup) is one of the best ways to avoid probate litigation on death. If you are already married, a postmarital agreement can also be drafted. These agreements can also help avoid an expensive “forensic accounting” on the death of the first spouse.

Many people mistakenly believe they own certain assets as their separate property (perhaps simply because the asset was in existence before the marriage and/or is titled solely in their name) when, in fact, their property may have become community or marital property, in whole or in part, during the marriage. It is better for living persons to create the necessary documentation regarding the ownership of their assets, even if it involves a pre- or postmarital agreement, than to have family members fight over these matters on the death of their spouse or parent.

Although it is a personal decision, it may not be wisest financial decision for persons who own any significant assets to enter into a second marriage without a pre-nup. Even if the spouses in a second marriage are themselves happy to treat all assets on hand on the death of the first spouse as joint or community property, unless the proper legal documentation is in place, there is nothing to prevent one or more children of the deceased spouse from claiming otherwise after the death of their parent.

This is the classic probate court litigation case: children of the first marriage versus the spouse of the second marriage. If assets are not cleanly divided between the surviving spouse and the children from the prior marriage, problems can arise. Life insurance can sometimes be the best way to separate the interests of the deceased spouse’s children from the surviving spouse and provide for both of them. The use of trusts can help, but the trust must be carefully structured.

2. Use Life Insurance To Fund Children's Inheritance. One way to address this issue is to give the children of the first spouse to die a significant portion of their inheritance at the first death. In some cases, this benefit is funded by life insurance. The survivor can then leave all or most of their estate to their own children.
There may be reasons not to use this method where there are not enough assets in the estate to care for the remaining spouse for their lifetime or where there are estate tax issues at the death of the first spouse.
3. Trust For Surviving Second Spouse and Children
One method is to create a trust for the surviving second spouse which has significant assets. There are safeguards to prevent the trust from being depleted during the surviving spouse's lifetime.
The problem here is that the children and second spouse are both beneficiaries. Often, the surviving spouse is made the trustee or given the power of appointment of the trust. Probate litigation is more likely with plans that create a trust for the surviving second spouse:
(1) with the children of the first marriage as permissible current beneficiaries of the trust along with that spouse;
(2) that gives the surviving spouse a power of appointment over the trust, especially if the trust assets can be given to beneficiaries other than the decedent’s children; and
(3) in which either the surviving spouse or a child of the deceased spouse (or both together) is the trustee(s).
The stepchildren in these types of trust are generally unhappy unless the family relationship is harmonious and the planning and communication are idea. It is not an ideal to create a situation where the stepchildren are waiting around for the stepparent to die in order to receive their inheritance. If there is this type of trust, it is usually better to have an independent trustee, such as a bank or trust company, appointed rather than the second spouse or one of the children.
4. Other Solutions
We have created a myriad of solutions for our clients. The key is to have the plan that suits your personal family situation, your financial picture and takes into account your children and the new spouse. It is your choice on how to create a financial and legal safety net for your spouse and children from a prior marriage. We can help advise you on how best to achieve those choices while minimizing any future family infighting or the risk of probate litigation.
Any questions or comments should be directed to: hm@moravecslaw.com or (626) 793-3210.

Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation, in San Marino, California. He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his office is conveniently located for clients in the Los Angeles, Orange and San Bernardino Counties. The firm website is http://www.moravecslaw.com/