BILL NUMBER: AB 1985	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 9, 2012

INTRODUCED BY   Assembly Member Silva

                        FEBRUARY 23, 2012

   An act to amend Section 21134 of the Probate Code, relating to
trusts and estates.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1985, as amended, Silva. Trusts  ans   and
 estates: construction of instruments.
   Existing law provides rules for the interpretation of wills,
trusts, deeds, and other instruments, which are to be used as
interpretive aids where the intention of the transferor is not
indicated by the instrument. Under existing law, if after the
execution of the instrument of gift, specifically given property is
sold, or mortgaged by a conservator or by an agent acting within the
authority of a durable power of attorney for an incapacitated
principal, the transferee of the specific gift has the right to a
general pecuniary gift equal to the net sale price of, or the amount
of the unpaid loan encumbrance on, the property.
   This bill would extend these provisions to any case in which
specifically given property is encumbered by a deed of trust,
mortgage, or other instrument. The bill would also apply these
provisions to property that is sold by a trustee acting for an
incapacitated settlor of a trust  established by the settlor as a
revocable trust  . The bill would further specify that a
transferee of a specific gift has the right to a general pecuniary
gift equal to the net sale price of the property without regard to
the payoff of any encumbrance  placed on the property after
the execution of the instrument of gift  or the amount of
the unpaid encumbrance on the property, as well as the property
itself.
   Under existing law, if an eminent domain award for the taking of
specifically given property is paid to a conservator or to an agent
acting within the authority of a durable power of attorney for an
incapacitated principal, or if the proceeds on fire or casualty
insurance on, or recovery for injury to, specifically gifted property
are paid to a conservator or to an agent acting within the authority
of a durable power of attorney for an incapacitated principal, the
recipient of a specific gift has the right to a general pecuniary
gift equal to the eminent domain award or the insurance proceeds or
recovery.
   This bill would extend these provisions to eminent domain awards
 , or insurance proceeds or recovery,  paid to a trustee
acting for an incapacitated settlor of a trust  established by
the settlor as a revocable trust  . The bill would also specify
that in those cases the recipient of the specific gift has the right
to a general pecuniary gift equal to the eminent domain award or the
insurance proceeds or recovery  , without regard to the
payoff of any encumbrance placed on the property after the execution
of the instrument of gift  .
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 21134 of the Probate Code is amended to read:
   21134.  (a) Except as otherwise provided in this section, if,
after the execution of the instrument of gift, specifically given
property is sold, or encumbered by a deed of trust, mortgage, or
other instrument, by a conservator, by an agent acting within the
authority of a durable power of attorney for an incapacitated
principal, or by a trustee acting for an incapacitated settlor of a
trust  established by the settlor as a revocable trust  ,
the transferee of the specific gift has the right to a general
pecuniary gift equal to the net sale price of the property without
regard to the payoff of any  such  encumbrance 
placed on the property after the execution of the instrument of gift
 , or the amount of the unpaid encumbrance on the property
as well as the property itself.
   (b) Except as otherwise provided in this section, if an eminent
domain award for the taking of specifically given property is paid to
a conservator, to an agent acting within the authority of a durable
power of attorney for an incapacitated principal, or to a trustee
acting for an incapacitated settlor of a trust  established by
the settlor as a revocable trust  , or if the proceeds on fire
or casualty insurance on, or recovery for injury to, specifically
gifted property are paid to a conservator, to an agent acting within
the authority of a durable power of attorney for an incapacitated
principal, or to a trustee acting for an incapacitated settlor of a
trust  established by the settlor as a revocable trust  ,
the recipient of the specific gift has the right to a general
pecuniary gift equal to the eminent domain award or the insurance
proceeds or recovery  , without regard to the payoff of any
encumbrance placed on the property after the execution of the
instrument of gift  .
   (c) For the purpose of the references in this section to a
conservator, this section does not apply if, after the sale,
mortgage, condemnation, fire, or casualty, or recovery, the
conservatorship is terminated and the transferor survives the
termination by one year.
   (d) For the purpose of the references in this section to an agent
acting with the authority of a durable power of attorney for an
incapacitated principal, or to a trustee acting for an incapacitated
settlor of a trust  established by the settlor as a revocable
trust  , (1) "incapacitated principal" or "incapacitated settlor"
means a principal or settlor who is an incapacitated person, (2) no
adjudication of incapacity before death is necessary, and (3) the
acts of an agent within the authority of a durable power of attorney
are presumed to be for an incapacitated principal  . However,
  there shall be no presumption of a settlor's incapacity
concerning the acts of a trustee  .
   (e) The right of the transferee of the specific gift under this
section shall be reduced by any right the transferee has under
Section 21133.