BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 105|
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THIRD READING
Bill No: SB 105
Author: Harman (R)
Amended: As introduced
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 5/5/09
AYES: Corbett, Harman, Florez, Leno, Walters
SUBJECT : Donative transfer restrictions: care
custodians
SOURCE : California Law Revision Commission
DIGEST : This bill repeals current provisions related to
restrictions on donative transfers to specified persons.
This bill instead establishes an express presumption of
fraud or undue influence if the donative instrument makes a
gift to the person who drafted or who transcribed the
instrument or to their family members, or makes a gift to
certain other disqualified persons, including a caregiver
or care custodian, and provide exceptions to the operation
of this presumption. It provides that the presumption may
be rebutted by preponderance of the evidence. Finally,
this bill defines "degree of kinship" or consanguinity for
the Probate Code.
ANALYSIS : Existing law presumptively invalidates any
provision or provisions of an instrument that makes a
donative transfer to certain disqualified beneficiaries.
Disqualified beneficiaries include:
CONTINUED
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1. The person who drafted the instrument.
2. Any relative, domestic partner, cohabitant, or employee
of the person who drafted the instrument.
3. Any partner, shareholder, or employee of a law firm in
which the drafter has an ownership interest.
4. Any person who stands in a fiduciary relationship to the
transferor, or any relative, cohabitant, or domestic
partner of the fiduciary.
5. Any care custodian of a dependent adult who is the
transferor, or any relative, cohabitant, or domestic
partner of the care custodian. (Section 21350 of the
Probate Code. All references are to the Probate Code
unless otherwise indicated.)
This bill repeals Section 21350 and related provisions, and
reenacts and recasts the provisions as Section 23160 et
seq., with the following changes:
1. It limits the definition of "care custodian" to a person
who provides services for remuneration, as a profession
or occupation.
2. It limits the definition of "dependent adult" to a
person who is over 18 years old and (a) who is unable to
provide for personal needs, or (b) who is unable to
manage his or her own finances or resist fraud or undue
influence.
3. It extends the definition of "interested witness" to a
will to include a person who is also a devisee of the
will.
4. It allows an attorney who drafted the donative
instrument making a gift to a care custodian to also
provide the independent attorney certification if the
attorney has no interest in the gift. It defines
"independent attorney" for this purpose.
5. It removes the presumption against "menace" and
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"duress," leaving only a presumption of fraud or undue
influence in the making of the donative transfer to a
disqualified person.
6. It updates the upper limit of the value of the donative
transfer exempt from the restrictions of Section 21350
to $5,000, if the transferor's estate is valued at or in
excess of $100,000 (to reflect increases in Section
13100).
7. It reduces the burden of proof, on the part of the
disqualified person against whom the presumption would
operate, from clear and convincing evidence that the
donative transfer was not the product of fraud, menace,
duress, or undue influence, to preponderance of the
evidence to rebut the presumption created by this act.
8. It continues the existing rule as to the effect of a
failed gift, but removes the exception for an intestate
share.
Existing law does not describe how degree of kinship or
consanguinity is determined for purposes of the Probate
Code.
This bill defines lineal kinship or consanguinity as the
relationship between two persons, one of whom is a direct
descendant of the other (parent and child, for example) and
by counting the generations separating one from the other.
This bill defines collateral kinship or consanguinity as
the relationship between two people who spring from a
common ancestor, but neither person is the direct
descendant of the other (thus siblings are related in the
second degree, an aunt or niece is related to the person in
the third degree, and a first cousin is related in the
fourth degree).
This bill contains various provisions intended to conform
the statutes to the changes made by SB 1264 (Harman),
Chapter 174, Statutes of 2008.
Background
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In 2006, the California Supreme Court in Bernard v. Foley
(2006) 39 Cal.4th 794 dealt with the presumptive invalidity
of donative transfers (gifts) made by dependent adults to
their caregivers. While the court majority agreed that in
Foley the transferees were caregivers who were subject to
the presumption of invalidity and that the caregivers did
not overcome the presumption, the Chief Justice, in his
concurring opinion, invited the Legislature to make an
exception to the presumption of invalidity when the gift
from a dependent adult to a caregiver predates the date of
the caregiving. Bernard v. Foley overruled two earlier
decisions holding that "care custodian" does not include a
personal friend. ( Estate of Kathryn McDowell (2004) 125
Cal.App.4th 659, 673-74; Estate of Dolores Davidson (2003)
113 Cal.App.4th 1035, 1048-50)
AB 1727 (Assembly Judiciary Committee), Chapter 553,
Statutes of 2007, was a cleanup bill to the 2006 Omnibus
Conservatorship and Guardianship Reform Act, and included
among its provisions a response to the Supreme Court's
invitation to clarify the rules relating to donative
transfer restrictions. However, the donative transfer
restriction provisions were deleted from AB 1727 and
referred to the California Law Revision Commission (CLRC)
for recommendations, since the CLRC was already studying
this subject. SB 105 implements the recommendations of
CLRC.
This bill also contains corrections to obsolete
cross-references to the no-contest clause provisions of the
Probate Code that were repealed by SB 1264 (Harman),
Chapter 174, Statutes of 2008. SB 1264 repealed the former
no-contest clause statute.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/7/09)
California Law Revision Commission (source)
ARGUMENTS IN SUPPORT : According to the author's office:
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"In 2007, AB 1727 attempted to address the issue of
donative transfers to caregivers, at the invitation of
the Foley , supra, decision. The Chief Justice, in his
concurrence opinion in Foley , suggested eliminating the
independent review requirements for caregivers to receive
testamentary gifts, when those gifts predate their role
as caregivers. Such legislation would, as stated by
supporters then, help ensure that the testamentary wishes
of dependent adults are carried out for caregivers with
whom they have had a pre-existing personal relationship,
while still helping prevent abuse in the case of other
caregivers.
"These provisions were deleted from AB 1727 and sent to
the California Law Revision Commission for
recommendations, since the CLRC earlier had been charged
with a study of the restrictions on donative transfers
via testamentary instruments and the presumptive
disqualification of certain classes of individuals from
becoming beneficiaries of donative transfers of a
dependent adult. The need to resolve the issue of
donative transfers to caregivers has not abated, thus the
CLRC has submitted their recommendations in SB 105."
RJG:mw 5/7/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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