BILL ANALYSIS �
AB 1160
Page 1
Date of Hearing: April 9, 2013
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
AB 1160 (Wagner) -As Amended: March 20, 2013
SUBJECT : PERSONAL REPRESENTATIVES: ESTATE DISTRIBUTION
PROCEEDINGS
KEY ISSUE : IN ORDER TO PREVENT MISUSE OF AN ESTATE'S ASSETS,
SHOULD THE ESTATE'S PERSONAL REPRESENTATIVE BE REQUIRED TO
OBTAIN PRIOR COURT APPROVAL BEFORE PARTICIPATING IN A PROCEEDING
TO DETERMINE THE ESTATE'S BENEFICIARIES AND THEIR DISTRIBUTION
RIGHTS?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill, sponsored by the Conference of California Bar
Associations, limits, to what is necessary to assist the court,
a personal representative's role in a proceeding to determine an
estate's beneficiaries and their distribution rights. Personal
representatives who wish to participate in the distribution
determination proceeding, in that capacity, would be required to
make a showing of good cause and obtain a court order prior to
participating. According to the author, this eliminates the
unfair advantage now afforded to improperly motivated personal
representatives who today can use estate funds to finance
proceedings for their own benefit. This bill has no known
opposition.
SUMMARY : Requires a personal representative to obtain a prior
court order in order to participate in a proceeding to determine
distribution rights from a decedent's estate. Specifically,
this bill allows a personal representative, upon prior order of
the court on a showing of good cause, to file papers and
otherwise participate, as necessary to assist the court, in a
proceeding to determine beneficiaries and distribution rights.
EXISTING LAW :
1)Defines "personal representative" as an executor,
administrator, public administrator or a person who performs
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substantially the same function under the law of another
jurisdiction. (Probate Code Section 58. Unless state
otherwise, all further statutory references are to that code.)
2)Provides that a personal representative may commence and
maintain actions and proceedings for the benefit of the estate
and may defend actions against the decedent, the personal
representative, or the estate. Provides that a personal
representative is considered an officer of the court and
occupies a fiduciary relationship toward all parties having an
interest in the estate. (Section 9820; Estate of Justesen
(1999) 77 Cal.App.4th 352.)
3)Permits a personal representative to file papers and otherwise
participate in distribution determination proceedings "as a
party to assist the court." (Section 11704.)
COMMENTS : As a part of the probate of a will, the beneficiaries
must be determined as well as their distribution rights. This
proceeding may be initiated by the personal representative or by
any person claiming to be a beneficiary. Personal
representatives are not considered true adversaries in the
proceedings and have a duty to be fair to all those interested
in the estate, unless they are also beneficiaries or heirs.
(See Bodine v. Superior Court (1962) 209 Cal.App.2d 354, 360.)
A recent appellate case held that since the personal
representative is assisting the court they may be entitled to
have their litigation fees paid by the estate, even if they are
a beneficiary and acting in their role as beneficiary and not
solely in their role as personal representative. (Estate of
Bartsch (2011) 193 Cal.App.4th 885, 900.)
This bill, sponsored by the Conference of California Bar
Associations, requires that a personal representative of an
estate who wishes to participate in a distribution determination
proceeding in that capacity to first receive approval of the
court to do so. The author states that the "requirement of a
prior court order was added by the Legislature in 1976 to guard
against such self-interested representation by personal
representatives, and was removed without explanation as a part
of a general overhaul of the Probate Code." The author contends
that this bill will "restore the long-time requirement" of
personal representatives having to obtain a prior court order to
participate in the distribution proceeding at the estate's
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expense.
1988 Changes Based on Law Revision Commission Report : In 1988,
the Legislature eliminated the requirement that a court order be
obtained before a personal representative could participate in a
distribution determination proceeding. That change was based on
a 1987 California Law Revision Commission (CLRC) report
recommending revisions to the Probate Code, including the
restructuring of former Section 1081 into the current Section
11704. (20 Cal.L.Rev.Comm.Reports 1001 (1990).) The CLRC
described many of its proposed changes as generally restating
and reorganizing for clarity. While some of the changes were
substantial and substantive, the deletion of the prior court
order requirement was not specifically noted. In description of
the general changes to that section, CLRC wrote that there is
"nothing so unique about the determination made in such a
proceeding that requires rules that differ from the general
rules of civil practice that govern all other probate
procedures, or that precludes the court from making the
determination."
Author Believes Current Law Gives an Unfair Advantage to the
Personal Representative : In Estate of Bartsch, the appellate
court determined that the elimination of the prior court
approval requirement permitted a personal representative, who
was also a beneficiary of the will, to participate as a party to
assist the court in an entitlement to distribution proceeding
with the estate bearing the personal representative's costs.
(193 Cal.App.4th 885 at 895.) The author argues that this gives
a personal representative who is also a beneficiary of the
estate an unfair advantage over the other beneficiaries because
the personal representative will be able to litigate for his or
her own benefit, with the estate picking up the tab and
depleting funds available for the other beneficiaries.
This bill does not prevent a personal representative from
participating in the proceedings. Rather, it just requires
prior court approval, upon a showing of good cause. This will
allow a court to keep an improperly motivated personal
representative from participating in the proceedings at the
estate's expense. However, personal representatives who have
good cause to participate will still be able to do so. This
bill gives the court discretion to decide whether the personal
representative is needed to assist the court in the proceeding.
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REGISTERED SUPPORT / OPPOSITION :
Support
Conference of California Bar Associations (sponsor)
Opposition
None on file
Analysis Prepared by : Leora Gershenzon and Kelsey Fischer /
JUD. / (916) 319-2334