BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1670|
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THIRD READING
Bill No: AB 1670
Author: Lara (D)
Amended: 6/25/12 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-2, 7/3/12
AYES: Evans, Corbett, Leno
NOES: Harman, Blakeslee
ASSEMBLY FLOOR : 52-15, 4/30/12 - See last page for vote
SUBJECT : Estates: administration
SOURCE : Executive Committee of the Trusts and Estates
Section of the
State Bar of California
DIGEST : This bill authorizes the court appointment of an
administrator nominated by a non-U.S. resident beneficiary
to administer a decedents estate. The provisions of this
bill sunset on January 1, 2016.
ANALYSIS : Existing law provides that, if a person dies
intestate, the court shall appoint an administrator as
personal representative. (Probate Code (PROB) Section
8460(a))
Existing law provides that a person is not competent to act
as a personal representative in any of the following
circumstances:
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1. The person is under the age of majority;
2. The person is subject to a conservatorship of the estate
or is otherwise incapable of executing, or is otherwise
unfit to execute, the duties of the office;
3. There are grounds for removal of the person from office;
4. The person is not a resident of the United States; or
5. The person is a surviving partner of the decedent and an
interested person objects to the appointment. (PROB
Section 8402(a))
Existing law provides that #4 and #5 above do not apply to
a person named as executor or successor executor in the
decedent's will. (PROB Section 8402(b))
Existing law provides that a person is entitled to
appointment as administrator in the following order of
priority based upon the relation to the decedent:
1. Surviving spouse or domestic partner;
2. Children;
3. Grandchildren;
4. Other issue;
5. Parents;
6. Brothers and sisters;
7. Issue of brothers and sisters;
8. Grandparents;
9. Issue of grandparents;
10.Children of a predeceased spouse or domestic partner;
11.Other issue of a predeceased spouse or domestic partner;
12.Other next of kin;
13.Parents of a predeceased spouse or domestic partner;
14.Issue of parents of a predeceased spouse or domestic
partner;
15.Conservator or guardian of the estate acting in that
capacity at the time of death who has filed a first
account and is not acting as conservator or guardian for
any other person;
16.Public administrator;
17.Creditors; or
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18.Any other person. (PROB Section 8461)
Existing law authorizes a court to appoint as administrator
a person nominated by a person otherwise entitled to
appointment or by the guardian or conservator of the estate
of a person otherwise entitled to appointment. Existing
law provides that if a person making a nomination for
appointment of an administrator is the surviving spouse or
domestic partner, child, grandchild, other issue, parent,
brother or sister, or grandparent of the decedent, the
nominee has priority next after those in the class of the
person making the nomination. Otherwise, the court in its
discretion may appoint either the nominee or a person of a
class lower in priority to that of the person making the
nomination, but other persons of the class of the person
making the nomination have priority over the nominee.
(PROB Section 8465)
This bill authorizes a court to appoint an administrator
nominated by a person who would otherwise be entitled for
appointment but who is ineligible for appointment because
he or she is not a United States resident.
This bill requires an administrator, who is nominated by a
non-U.S. resident, to reside in California to be eligible
for appointment as the estate administrator.
This bill provides that a court may, in its discretion,
deny the appointment of an administrator nominated by a
non-U.S. resident and appoint another person. In
determining whether to appoint the nominee, this bill
provides factors for the court to consider, which are not
limited to the following:
whether the nominee has a conflict of interest with the
heirs or any other interested party;
whether the nominee had a business or personal
relationship with the decedent or decedent's family
before the decedent's death;
whether the nominee is engaged in or acting on behalf of
an individual, a business, or other entity that solicits
heirs to obtain the person's nomination for appointment
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as administrator; and
whether the nominee has been appointed as a personal
representative in any other estate.
This bill provides that, if the court decides to appoint a
nominee of a non-U.S. resident, the court shall require the
nominee to obtain bond, unless the court orders otherwise
for good cause. This bill provides that any order for good
cause must be supported by specific findings of fact, and
shall consider the need for the protection of creditors,
heirs, and any other interested parties. Before waiving a
bond, the court shall consider all other alternatives,
including, but not limited to, the deposit of property in
the estate on the condition that the property, including
any earnings thereon, will not be withdrawn except on
authorization of the court.
This bill provides that a waiver of all of the heirs of the
requirement of a bond shall not constitute good cause.
This bill provides that, if the appointed nominee ceases to
be a California resident following his or her appointment,
he or she shall be deemed to have resigned as
administrator. Under this bill, the court shall not lose
jurisdiction of the proceeding by any resignation under
this subdivision.
This bill requires the nominee to submit personally to the
jurisdiction of the court.
The provisions of this bill sunset on January 1, 2016.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/6/12)
Executive Committee of the Trusts and Estates Section of
the State Bar of California (source)
California Rural Legal Assistance Foundation
Mexican American Legal Defense and Educational Fund
United Farm Workers
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OPPOSITION : (Verified 7/6/12)
California State Association of Counties
California State Association of Public Administrators,
Public Guardians, and Public Conservators
County of Los Angeles
Urban Counties Caucus
ARGUMENTS IN SUPPORT : The Executive Committee of the
Trusts & Estates Section of the State Bar of California
(TEXCOM), sponsor of this bill, writes:
A nonresident heir is currently prohibited from
nominating an administrator when a decedent dies
intestate (without a valid will) in California. That is
the case even though the decedent could have named a
nonresident to act as executor or provided a nonresident
with a nomination power in his or her will. For example,
suppose that a decedent had immigrated to the United
States from another country, was financially successful
and accumulated a significant estate, then died as a
resident of California leaving heirs only in that other
country. Those heirs would be prohibited from nominating
an administrator (even a United States resident) to
manage the estate, even though they stand to receive all
of the assets. The public administrator would then be
appointed, even over the objection of the family members
and would take its fees out of the assets to be received
by the decedent's family in that other country.
Redirecting assets that would otherwise pass to families
who reside outside of the United States, merely because
the decedent did not have a will, creates a fundamental
unfairness. Moreover, this deficiency in the law
deprives families of the right to select the person best
suited to manage the assets they stand to receive.
ARGUMENTS IN OPPOSITION : Opponents contend that allowing
a foreign beneficiary to nominate an administrator of their
choosing could have dire consequences for other
beneficiaries, who may not be aware of the decedent's
passing. As such, these beneficiaries may not receive
proper notice from the nominated administrator, who will
arguably have a conflict of interest with additional
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beneficiaries. Further, the opponents argue that, when the
nomination of an administrator is not challenged, a court
has little reason not to appoint the administrator. On
advice and documents submitted by this administrator, the
court can approve distribution of the decedent's estate to
foreign beneficiaries. In the event additional
beneficiaries, who may not have received proper notice of
administration of the estate from the nominated
administrator, come forward after probate of the estate,
the additional beneficiaries may be unable to recover
misappropriated estate assets from other beneficiaries in
foreign countries because the foreign nominee is not
required to submit to California jurisdiction.
Further, California State Association of Public
Administrators, Public Guardians, and Public Conservators
(Public Administrators) argue that:
Public Administrators are county employees who are
assigned by the courts to administer the estates of
decedents who die without a will or trust and when there
are no other relatives or heirs willing to administer the
estate. The Public Administrator's primary purpose is to
protect the estate from fraud or misuse and convey its
asserts to those rightfully entitled. Besides
identifying the rightful heirs, as prescribed by law, the
Public Administrator will pay creditors, including the
federal, state, and local governments, before turning
over any remaining assets to the proper heirs of the
Ýestate].
AB 1670 would impact Public Administrators both from a
policy standpoint as well as a fiscal. A person who
lives outside of the United States who is allowed to
nominate an administrator for an estate, as proposed in
AB 1670, is not subject to enforcement actions in our
judicial system. ? Furthermore, in these cases the
courts often appoint a Public Administrator to finalize
the proper resolution of an estate, even though a person
appointed by the initially identified heir administered
the estate throughout the original probate process. In
simple terms, the Public Administrator is left to clean
up the mess, with little or no hope of a proper
resolution or payment for their services because the
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assets are in a foreign country.
It has been argued that the rights of a potential heir to
appoint the person they choose to administer their
relative's estate should be the same for any person no
matter what country they live in. The problem with this
argument is that the probate process is supposed to
protect the interests of the decedent first ?, as well as
those of any creditors Ýand an] heir's interest ? is
secondary to the interests of the estate. ?
AB 1670 will allow profitable estates to be "cherry
picked" by others leaving the insolvent and difficult
estates to Public Administrators. Such a scenario will
exacerbate a significant fiscal hardship for Public
Administrator offices and counties in two ways. First,
the only source of offsetting revenue is removed and
second, the difficult and insolvent cases, where foreign
heirs could nominate, will still be left to Public
Administrators and County Counsels to administer,
literally a fiscal "double whammy".
ASSEMBLY FLOOR : 52-15, 04/30/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Bradford, Buchanan, Butler, Charles
Calderon, Campos, Carter, Chesbro, Dickinson, Eng, Feuer,
Fletcher, Fong, Fuentes, Galgiani, Gatto, Halderman,
Hall, Hayashi, Roger Hernández, Hill, Huber, Hueso,
Huffman, Jeffries, Lara, Bonnie Lowenthal, Ma, Mendoza,
Miller, Mitchell, Monning, Nestande, Norby, Olsen, Pan,
Perea, V. Manuel Pérez, Portantino, Skinner, Swanson,
Torres, Valadao, Williams, John A. Pérez
NOES: Conway, Donnelly, Beth Gaines, Garrick, Gorell,
Grove, Hagman, Harkey, Jones, Knight, Mansoor, Morrell,
Nielsen, Silva, Wagner
NO VOTE RECORDED: Blumenfield, Bonilla, Brownley, Cedillo,
Cook, Davis, Furutani, Gordon, Logue, Smyth, Solorio,
Wieckowski, Yamada
RJG:m 7/6/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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