Thursday, April 16, 2020

Donkin v. Donkin (Cal. Ct. App. - April 3, 2020)

I certainly understand the desire to avoid estate taxes.  No one (particularly) likes paying taxes.  Even after you're dead.  So I get why the parents here created a bypass trust so their property could pass to their two children upon their respective deaths.  We call that planning.

And the trust here does not seem all that unusual.  Just your standard (to me, anyway) bypass trust that gives the property to both children once the parents are dead.

But look what happens.

The two kids fight about the resulting trust.  Not for months.  Not for years.  For basically decades.

And the fight continues to this day.

The father died in 2002.  The mother died in 2005.  If they'd have just passed all the property on to the two kids like usual, in 2005, that'd be the end of things.  No fights, no attorney's fees, just Mom and Dad's money to spend.

Instead, litigation.  Repeated, continuous, undeniably expensive litigation.  Litigation that resulted in a trip to the California Supreme Court, multiple rounds in the Court of Appeal, and so much work in the probate court that I can't even fathom it all.

All from a simple little trust.  All to try to avoid some taxes.

I'm not in a position to place blame.  Was it the parents' fault?  The lawyer's?  The kids'?  Not sure.

All I know is that there's this huge fight that's socially unproductive and undoubtedly deleterious to the relationship of the kids.  None of which the parents would have wanted.

If they'd have known what would have ultimately transpired, I bet they'd have just paid the taxes, if any.  Happily.