BILL ANALYSIS Ó
AB 548
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ASSEMBLY THIRD READING
AB
548 (Cristina Garcia)
As Introduced February 23, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
|----------------+------+--------------------+--------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, Cristina | |
| | |Garcia, Holden, | |
| | |Maienschein, | |
| | |O'Donnell | |
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SUMMARY: Allows a foreign heir to nominate an administrator of a
decedent's estate indefinitely. Specifically, this bill lifts the
sunset so that the following provisions exist indefinitely:
1)Authorizes 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 the
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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 a bond, unless the court orders otherwise for good
cause, as provided.
EXISTING LAW:
1)Provides that a person has no power to administer an estate
until that person is appointed as personal representative.
2)Provides that a person named as executor in the decedent's will
has the right to appointment as 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.
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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)Authorizes the court, until January 1, 2016, 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, subject to specified conditions.
8)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.
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.
Until 2013, California law provided 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. Recent legislation (AB 1670 (Lara), Chapter 635,
Statutes of 2012), created a pilot program to allow non-resident
heirs to nominate administrators of the estate. To protect
against any possible fraud, additional conditions were added to
the law which applied if a non-resident heir nominated the estate
administrator. These conditions include requiring that the
administrator reside in California during the entire estate
administration; requiring 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, whether the nominee is acting
on behalf of an entity that solicits heirs to obtain the person's
nomination for appointment as administrator; and requiring the
nominee to obtain a bond, unless the court orders otherwise for
good cause. The pilot program sunsets on January 1, 2016.
The Assembly Judiciary Committee is not aware of any instances
where the nomination by a non-resident heir during the course of
the pilot resulted in any harm to any interested party and neither
have the attorney organizations supporting this bill. This bill,
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sponsored by the Conference of California Bar Associations,
removes the sunset and allows non-resident heirs to nominate
administrators of the estate, subject to all the limiting
conditions in the existing pilot.
Case Law Demonstrates Difficulties with Law Prior to 2013:
Pre-2013 cases interpreting the statutory scheme for appointment
of an administrator when the heirs are non-United States residents
were 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
heirs' 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 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 have under
then-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 "[w]hile it makes
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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].) It
should be noted that an administrator appointed by the court,
whether public or private, is responsible to the court.
Analysis Prepared by:
Leora Gershenzon / JUD. / (916) 319-2334 FN:
0000093