BILL ANALYSIS Ó
AB 1670
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1670 (Lara)
As Amended June 25, 2012
Majority vote
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|ASSEMBLY: |52-15|(April 30, |SENATE: |21-16|(August 23, |
| | |2012) | | |2012) |
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Original Committee Reference: JUD.
SUMMARY : Allows a foreign heir to nominate an administrator of a
decedent's estate. Specifically, this bill :
1)Authorizes, until January 1, 2016, the court to appoint, as
administrator of a decedent's estate the nominee of a person who
would be entitled to appointment, or the nominee of the guardian
or conservator of that person, even if that person is not a
resident of the United States.
2)Requires an administrator, nominated by a non-United States
resident, to reside in California and provides that if
administrator ceases to be a California resident he or she will be
deemed to have resigned as administrator.
3)Provides that a court may, in its discretion, deny the appointment
of an administrator nominated by a non-United States resident and
appoint another person. In determining whether to appoint the
nominee, requires the court to consider, among other things,
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; and, 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 as administrator.
4)Provides that, if the court decides to appoint a nominee of a
non-United States resident, the court shall require the nominee to
obtain bond, unless the court orders otherwise for good cause, as
provided.
The Senate amendments add the limitations in 2) through 4) above.
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EXISTING LAW :
1)Provides that a person has no power to administer an estate until
that person is appointed as a personal representative.
2)Provides that a person is not qualified to act as a personal
representative under specified circumstances, including if the
person is not a resident of the United States. However, provides
that a person named as executor in the decedent's will has the
right to appointment as a personal representative even if that
person is not a United States resident.
3)Provides that if a decedent dies intestate (without a will), the
court must appoint an administrator as a personal representative.
4)Authorizes the court to appoint as administrator of a decedent's
estate the nominee of a person entitled to the appointment or the
nominee of the guardian or conservator of that person.
5)Sets forth individuals entitled to appointment in a priority list,
which begins with the surviving spouse and children, and includes
in priority order grandchildren, parents, other relatives,
conservator or guardian of the estate of the deceased, public
guardian and creditors.
6)Allows a court to appoint a qualified non-resident of California
as administrator of a decedent's estate, provided certain
requirements are met.
7)Allows the public administrator of the county in which an estate
is administered to petition for appointment as personal
representative of the estate if no person of higher priority has
petitioned and if the value of the estate exceeds $150,000.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar to
the version approved by the Senate, except without the restrictions
on the appointment of the administrator.
FISCAL EFFECT : None
COMMENTS : When someone creates a will, he or she can name an
executor in the will, whether or not a United States resident, who
has the right to be appointed as the personal representative and
administer the estate in court. When someone dies without a will,
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the court appoints a personal representative to administer the
estate. A personal representative must meet specified
qualifications, including being a resident of the United States.
The Probate Code lists persons who are entitled to appointment as
estate administrator, and that list is in order of priority.
Relatives, who are the legal heirs of the estate, receive high
priority, with the closest relatives, including spouses and
children, receiving the highest priority. If no relatives are
available, the court may next consider a guardian or conservator of
the decedent's estate, then the public guardian and finally
creditors of the decedent.
Current law provides that an heir otherwise entitled to appoint a
personal representative cannot do so if he or she is not a United
States resident, even though a decedent could appoint a non-United
States resident to serve in that capacity. This bill, sponsored by
the Trusts & Estates Section of the State Bar, allows for the
appointment of a person who is nominated by a non-United States
resident heir as administrator of a decedent's estate. The nominee
would have to meet not only the qualification requirements of
Probate Code Section 8402, including, that the person is a resident
of the United States, of the age of majority, not under a
conservatorship or guardianship, not a surviving partner of the
decedent if an interested person has objected, and not otherwise
incapable of discharging the duties of an administrator, but also
the additional qualifications, discussed above.
This provision allows foreign heirs of who are not residents of the
United States and therefore cannot themselves qualify as
administrator of a decedent's estate to nominate a trusted family
friend, lawyer, or even an institution known to the heirs, as
administrator of the estate, rather than the public administrator
who would surely be a stranger to the heirs. If so allowed, the
nominee would take priority over the public administrator for the
appointment.
In support of the bill, the Trusts & Estates Section of the State
Bar 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
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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. While the injustice of this result has
been recognized by the judiciary, only the legislature can
correct this problem.
Cases interpreting the statutory scheme for appointment of an
administrator when the heirs are non-United States residents have
been in conflict. In Estate of Kaussen (1987) 190 Cal.App.3d 1644
(but later unpublished), a decedent left his $26 million estate to
his partner and their four children, all residents of Germany. The
heirs then petitioned the court to appoint an administrator of their
choosing. The trial court appointed the public guardian instead
because the heirs were not United States residents. The court of
appeals, while acknowledging that the heirs could not themselves be
the estate administrator since none of them resided in the United
States, nonetheless reversed, finding that the heir's lack of
residency did not prevent them from nominating a personal
representative of their own choosing.
Four years later, the same court of appeals reversed course. In
Estate of Damskog (1991) 1 Cal.App.4th 78, the appeals court vacated
the appointment of the attorney and holder of a durable power of
attorney of a decedent and ordered the appointment of the public
guardian, despite the fact that the only heirs of the decedent, his
two sisters and the children of a deceased sister, residents of
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Norway, nominated the attorney. The court acknowledged that if the
sisters from Norway had the right to nominate, which as
non-residents they did not under existing law, their nominee would
have had priority over the public guardian. In a footnote, the
court referred to its decision in Kaussen, and stated that "the
policy considerations which informed our earlier decision are best
left to the Legislature." (Id. at 82, footnote 5.)
The Damskog court however explicitly stated that "Ýw]hile it makes
sense to require administrators to reside in the United States where
the probate court can exercise personal jurisdiction over them, if
need be, as they perform their duties, no such jurisdictional need
justifies a residency requirement for nominators. This very
persuasive argument is better addressed to the Legislature than to
the courts ." (Id. (emphasis added).)
Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334
FN: 0004435