BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 548|
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THIRD READING
Bill No: AB 548
Author: Cristina Garcia (D)
Introduced:2/23/15
Vote: 21
SENATE JUDICIARY COMMITTEE: 7-0, 6/9/15
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
ASSEMBLY FLOOR: 76-0, 4/9/15 - See last page for vote
SUBJECT: Estates: administrators
SOURCE: Conference of California Bar Associations
DIGEST: This bill removes the January 1, 2016, sunset, thus,
extending the authorization indefinitely, for a court to have
authorization to appoint an administrator nominated by a
non-U.S. relative to administer a decedent's estate.
ANALYSIS:
Existing law:
1) Provides that, if a person dies intestate, the court shall
appoint an administrator as personal representative.
2) Provides that a person is not competent to act as a personal
representative in any of the following circumstances:
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a) The person is under the age of majority;
b) 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;
c) There are grounds for removal of the person from
office;
d) The person is not a resident of the United States; or
e) The person is a surviving partner of the decedent and
an interested person objects to the appointment.
1) Provides that items (d) and (e) above do not apply to a
person named as executor or successor executor in the
decedent's will.
2) Provides that a person is entitled to appointment as
administrator in the following order of priority based upon
the relation to the decedent: a) surviving spouse or
domestic partner; b) children; c) grandchildren; d) other
issue; e) parents; f) brothers and sisters; g) issue of
brothers and sisters; h) grandparents; i) issue of
grandparents; j) children of a predeceased spouse or domestic
partner; k) other issue of a predeceased spouse or domestic
partner; l) other next of kin; m) parents of a predeceased
spouse or domestic partner; n) issue of parents of a
predeceased spouse or domestic partner; o) 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; p) public
administrator; q) creditors; or r) any other person.
3) Authorizes a court to appoint as administrator a person
nominated by any of the following persons:
a) A person otherwise entitled to appointment;
b) A person who would otherwise be entitled for
appointment but who is ineligible for appointment because
he or she is not a resident of the United States; or
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c) The guardian or conservator of the estate of a person
otherwise entitled to appointment. The nomination shall be
made in writing and filed with the court.
1) 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. Existing law further provides that if the
person making the nomination is not the surviving spouse or
domestic partner, child, grandchild, other issue, parent,
brother or sister, or grandparent of the decedent, the court
is authorized to 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.
2) Provides that if a person making a nomination for appointment
of an administrator is a person who would otherwise be
entitled for appointment but who is ineligible for
appointment because he or she is not a resident of the United
States, the court is prohibited from appointing a nominee who
is not a California resident to act as administrator. For
California residents nominated by a person who would
otherwise be entitled for appointment but who is ineligible
for appointment because he or she is not a resident of the
United States, existing law requires the court to consider
whether the nominee is capable of faithfully executing the
duties of the office.
3) Authorizes the court in its discretion to deny the
appointment of an administrator nominated by a non-U.S.
relative and appoint another person. In determining whether
to appoint the nominee, the factors the court may consider
include, but are not limited to, the following:
a) Whether the nominee has a conflict of interest with the
heirs or any other interested party;
b) Whether the nominee had a business or personal
relationship with the decedent or decedent's family before
the decedent's death;
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c) 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; and
d) Whether the nominee has been appointed as a personal
representative in any other estate.
1) Requires, if the court decides to appoint a nominee of a
non-U.S. relative, the nominee to obtain a bond, unless the
court orders otherwise for good cause, and any order for good
cause must be supported by specific findings of fact, and
requires the court to consider the need for the protection of
creditors, heirs, and any other interested parties. Before
waiving a bond, the court is required to 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. Existing law provides that
the waiver of all of the heirs of the requirement of a bond
shall not constitute good cause.
2) Requires, if the appointed nominee ceases to be a California
resident following his or her appointment, the appointed
nominee to be deemed to have resigned as administrator, and
maintains the court's jurisdiction of the proceeding
following that resignation.
3) Provides that by accepting appointment as personal
representative, the nominee submits personally to the
jurisdiction of the court.
4) Provides that the above provisions authorizing a non-U.S.
relative to nominate a California resident to be the
administrator of the decedent's estate sunsets on January 1,
2016.
This bill removes that sunset.
Background
In California, if a person dies intestate, the court must
appoint a personal representative to administer the decedent's
estate. Under existing law, only certain individuals, such as
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United States residents, may be appointed as an administrator.
(Prob. Code Sec. 8402(a).) A person (typically a relative and
potential heir of the decedent), who would otherwise qualify to
be the administrator, may nominate another person to be
appointed as administrator. Such nomination may occur because
the beneficiary may believe another person is more qualified to
act as the estate administrator.
Prior to 2013, a relative, who would qualify to be nominated as
an administrator but for the fact that the relative was not a
U.S. resident, could not nominate another person to administer
the decedent's estate. The problem with the residency
requirements for both the relative and the nominee was
demonstrated in the Estate of Damskog (1991) 1 Cal.App.4th 78,
in which the decedent died intestate and his two sisters,
residents of Norway, nominated an estate administrator. The
public administrator objected to the nomination. The court held
that California law required United States residency for both
nominators and administrators, and the court appointed the
public administrator to oversee the estate administration. The
court, having discussed the legislative history of the
nomination and appointment of administrator provisions,
determined that "although there is no explicit residency
requirement for the nominator in section 8465, she must herself
be 'entitled to appointment' and that entitlement depends on
United States residence under section 8402. Had the Legislature
wished to retain differing residency requirements for
administrators and nominators, it could easily have said so in
the same 'but for' language it used in 1967 about California
residency." (Id. at pp. 81-82.)
AB 1670 (Lara, Chapter 635, Statutes of 2012) was enacted in
response to the Damskog ruling and authorized court-appointment
of an estate administrator nominated by a foreign person. AB
1670 recognized the development of the global economy with U.S.
born beneficiaries now living and working in foreign countries.
Children of California residents who accept jobs in other
countries previously were prohibited from nominating an estate
administrator, who may be an individual known to the family and
who knows the wishes of the decedent better than the public
administrator. AB 1670 ensured that non-resident families of
the decedent had the right to select the person best suited to
manage the estate assets.
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AB 1670 sunsets on January 1, 2016. This bill removes that
sunset, thus, permanently authorizing a court to appoint an
administrator, who is nominated by a non-U.S. relative, to
administer the decedent's estate.
Comments
The author writes:
When someone dies without a will, the court appoints a
personal representative to administer the estate. The Probate
Code lists in order of priority the persons who are entitled
to appointment as estate administrator, with the closest
relatives (e.g., spouses and children), who are the legal
heirs of the estate, receiving the highest priority. The code
also generally permits a person entitled to appointment as
personal representative to nominate someone else to serve in
that capacity.
Until 2013, there was one major exception to the ability of a
person entitled to appointment to nominate a personal
representative: An heir otherwise entitled to nominate a
personal representative could not do so if the heir was not a
U.S. resident. Recent legislation (AB 1670 (Lara), Chapter
635, Statutes of 2012), allowed 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. This change
in the law is scheduled to sunset on January 1, 2016.
AB 548 would remove the sunset clause on the changes enacted
by the Legislature through AB 1670 of 2012, thereby making
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permanent the ability of heirs of an intestate California
decedent to nominate someone they know and trust as personal
representative for the estate - subject to all the protections
built into the law.
Prior Legislation
AB 1670 (Lara, Chapter 635, Statutes of 2012) - See Background.
AB 239 (Kaloogian, Chapter 175, Statutes of 1999) contained a
provision that was substantially similar to an initial version
of AB 1670. AB 239 originally failed passage in the Senate
Judiciary Committee but was approved after that provision was
deleted from the bill.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified6/11/15)
Conference of California Bar Associations (source)
Executive Committee of the Trusts and Estates Section of the
State Bar of California
OPPOSITION: (Verified6/11/15)
None received
ASSEMBLY FLOOR: 76-0, 4/9/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brown, Burke, Campos, Chang, Chau, Chávez,
Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, Olsen, Perea, Quirk, Rendon,
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Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
NO VOTE RECORDED: Brough, Calderon, O'Donnell, Patterson
Prepared by:Tara Welch / JUD. / (916) 651-4113
6/12/15 9:44:59
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