BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1784|
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CONSENT
Bill No: AB 1784
Author: Harman (R)
Amended: 4/30/02 in Assembly
Vote: 21
SENATE JUDICIARY COMMITTEE : 6-0, 6/18/02
AYES: Escutia, Ackerman, Haynes, Kuehl, O'Connell, Sher
ASSEMBLY FLOOR : 72-0, 5/16/02 (Passed on Consent) - See
last page for vote
SUBJECT : Wills, trusts and estate planning instruments:
rules of
construction
SOURCE : California Law Revision Commission
DIGEST : This bill adjusts the rules of construction
applicable to wills, trusts and other estate planning
instruments as recommended by the California Law Revision
Commission.
ANALYSIS : Existing law provides specific rules of
construction to be used by the courts as aids to
interpretation where the instrument being construed is
silent or ambiguous. These rules apply to wills, trusts,
deeds, and any other instrument. [Probate Code Sections
21101 et seq. All references hereafter are to the Probate
Code, unless indicated otherwise.]
This bill would modify the existing rules of construction
CONTINUED
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as follows:
1. Clarify that extrinsic evidence may be used to determine
the intention of a transferor. [Sec. 21102.]
2. Substitute the term "at-death transfer " for
"testamentary gift" in the rules of construction, and
define "at-death transfer" as a transfer that is
revocable during the lifetime of the transferor, and
would specifically exclude joint tenancy as a form of
at-death transfer entitled to special treatment under
the rules.
3. Delete all references to "beneficiary" in the rules,
substituting instead the term "transfer," which has been
used interchangeably with "beneficiary" to refer to the
donee of a donative transfer.
4. Repeal several provisions that are duplicative of those
found in other codes and that are therefore unnecessary
(e.g., delete Section 21106, which is a less complete
statement than its equivalent in Civil Code Section 686,
and delete Civil Code Section 1073, which is duplicative
of Section 21108), and repeal provisions that are
inconsistent, based on flawed presumptions, or no longer
serve a useful purpose. Other provisions would be
eliminated because they are redundant or they would be
consolidated into other relevant provisions.
5. Limit the application of a clause that requires the
beneficiary to survive a donor to gifts that remain
revocable during the life of the donor. [Sec. 21109(a).]
6. Directly state that a provision in an instrument
requiring the transferee to survive the transferor
constitutes an intention of the transferor that the
antilapse statute not apply. [Sec. 21110(b).]
7. Clarify that absent operation of an antilapse statute, a
failed gift passes in the transferor's estate, and that
in case of an intestacy, the applicable intestate
distribution is determined according to the general
class gift rules. Accordingly, the bill also would
clarify that a gift of "my estate" is to be treated as a
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residuary gift. [Sec. 21114.]
8. Recast the provisions governing determination of
beneficiaries entitled to take under a class gift in
conformance with the Uniform Probate Code. [Sec. 21114.]
9. Conform the rules relating to intestacy that interpret
class gifts to "heirs" and to "issues" so that the
determination is made under the intestate succession
laws in effect at the time the transfer is to take
effect in enjoyment. [Secs. 21114 and 21115.]
10.Establish an applicable standard for determining the
value of property selected to satisfy a pecuniary gift,
drawn from regulations of the U.S. Treasury. [Sec.
21118.]
11.Conform California law to provisions of the Uniform
Probate Code governing gifts of securities that have
changed in form (by merger, sale, reinvestment, etc.),
and limit their application to at-death transfers
generally. [Sec. 21132.]
12.Conform existing rules for construing the donor's intent
where the donor has made a specific gift of property but
the property is no longer part of the donor's estate to
the revised Uniform Probate Code provisions and address
a gap concerning ademption by satisfaction, where an
inter vivos gift of property to the beneficiary named in
the instrument is a satisfaction of that specific gift.
[Secs. 21133-21135.]
13.Make other technical changes and conforming revisions.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/20/02)
California Law Revision Commission (source)
Judicial Council
California Judges Association
ARGUMENTS IN SUPPORT : According to the CLRC, all of the
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existing rules of construction are based on previously
existing Probate Code provisions applicable to wills. "The
basic idea of the 1994 extension to trusts and other
instruments was to achieve uniformity among the common
estate planning instruments."
More problematic than the simple extension of the rules to
trusts and other instruments, is the extension of the same
rules to other forms of donative transfers, such as inter
vivos gifts, deeds, joint tenancy, and insurance policies,
the sponsor states. Because the Uniform Probate Code has
been updated since the last revisions to the California
rules of construction, the CLRC recommends that relevant
provisions be paralleled in California.
ASSEMBLY FLOOR :
AYES: Aanestad, Alquist, Aroner, Ashburn, Bogh, Briggs,
Calderon, Bill Campbell, Canciamilla, Cardoza, Chan,
Chavez, Chu, Cogdill, Cohn, Corbett, Correa, Cox,
Daucher, Diaz, Dickerson, Dutra, Firebaugh, Florez,
Frommer, Goldberg, Hertzberg, Hollingsworth, Horton,
Jackson, Keeley, Kehoe, Kelley, Koretz, La Suer, Leach,
Leonard, Leslie, Liu, Longville, Maddox, Maldonado,
Matthews, Migden, Mountjoy, Nakano, Nation, Negrete
McLeod, Oropeza, Robert Pacheco, Rod Pacheco, Papan,
Pavley, Pescetti, Reyes, Richman, Runner, Salinas,
Shelley, Simitian, Steinberg, Strickland, Strom-Martin,
Thomson, Vargas, Wayne, Wiggins, Wright, Wyland, Wyman,
Zettel, Wesson
RJG:jk 6/20/02 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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