BILL ANALYSIS
SB 1041
Page 1
Date of Hearing: June 22, 2010
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 1041 (Harman) - As Amended: May 6, 2010
PROPOSED CONSENT
SENATE VOTE : 33-0
SUBJECT : HEARSAY EXCEPTION: TRUSTS
KEY ISSUE : SHOULD THE HEARSAY EXCEPTION ALREADY AVAILABLE FOR
WILLS BE EXPANDED TO TRUSTS IN APPROPRIATE CIRCUMSTANCES?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill, sponsored by the Conference of California Bar
Associations, amends the Evidence Code to extend the hearsay
exception which already applies to wills when the decedent is by
definition no longer available to testify to trusts when the
same set of facts is present, namely, the trustor is
unavailable. This new hearsay exception would apply to a
statement made by a declarant who is unavailable as a witness
that he/she has or has not established a revocable trust, or has
or has not revoked his/her revocable trust, or that identifies
his/her revocable trust, or any amendment thereto. In support
of the bill, the author notes that in an era when many estate
plans are contained in trusts rather than in wills, it is
important to the courts to have available evidence as to the
existence of a living trust and to identify such a trust, if it
does exist. Often the best probative evidence is that of
statements made by the decedent while living. The existing law
works well for wills, he notes, and its expansion to include
trusts will improve the conduct of trials with regard to the
estate plans of decedents. There is no known opposition to the
measure, which is sponsored by Conference of California Bar
Associations and supported by the Judicial Council and the
Executive Committee of the Trusts and Estates Section of the
State Bar.
SUMMARY : Amends the Evidence Code to extend the hearsay
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exception already available with wills to trusts. Specifically,
this bill :
1)Provides, except as otherwise provided in existing law,
evidence of any of the following statements made by a
declarant who is unavailable as a witness is not made
inadmissible by the hearsay rule:
a) That the declarant has or has not made a will or
established or amended a revocable trust.
b) That the declarant has or has not revoked his/her will,
revocable trust, or an amendment to a revocable trust.
c) That identifies the declarant's will, revocable trust,
or an amendment to a revocable trust.
2)Evidence of a statement is inadmissible under the section if
the statement was made under circumstances that indicate its
lack of trustworthiness.
EXISTING LAW :
1)Provides that "hearsay evidence" is evidence of a statement
that was made other than by a witness while testifying at a
trial or hearing and that is offered to prove the truth of the
matter stated. Except as provided by law, hearsay evidence is
inadmissible. (Evidence Code Section 1200(a) and (b).)
2)Provides exceptions to the hearsay rule, including evidence of
a statement made by a declarant who is unavailable as a
witness that he or she has or has not made a will. (Evidence
Code Section 1260.)
3)For the purposes of the Evidence Code, provides that
"unavailable as a witness," means that the declarant is any of
the following:
a) Exempt or precluded on the ground of privilege from
testifying concerning the matter to which his or her
statement is relevant;
b) Disqualified from testifying to the matter;
c) Dead or unable to attend or to testify at the hearing
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because of then existing physical or mental illness or
infirmity;
d) Absent from the hearing and the court is unable to
compel his or her attendance by its process; or
e) Absent from the hearing and the proponent of his or her
statement has exercised reasonable diligence but has been
unable to procure his or her attendance by the court's
process. (Evidence Code Section 240(a)(4).)
COMMENTS : Under the hearsay rules of evidence, out-of-court
statements offered to prove the truth of the matter asserted are
inadmissible in court unless the actual declarant testifies or
the testimony fits into one of the categorical exceptions to the
rule. (Evidence Code Section 1200 et seq.) The general
exclusion of hearsay from evidence is premised on the notion
that out-of-court statements are inherently more unreliable than
live testimony. Specifically, hearsay statements are not made
under oath, the adverse party has no opportunity to
cross-examine the declarant, and the jury cannot observe the
declarant's demeanor while making the statements. ( People v.
Duarte (2000) 24 Cal.4th 603, 610. )
Courts developed categorical exceptions to the hearsay rule
because of the perception that certain statements are inherently
reliable despite the absence of direct testimony and because the
need for certain evidence outweighs the risks. (See Mathews,
Making the Crucial Connection: A Proposed Threat Hearsay
Exception, 27 Golden Gate U. Law Rev. 117 (1993).) For example,
statements made when the declarant knows he or she is about to
die or excited statements made without an opportunity to reflect
are considered more believable because the declarant has neither
the motive nor the time to fabricate the statement. (Evidence
Code Section 1240 (spontaneous, contemporaneous, or dying
declarations as an exception to the hearsay rule).) In general,
however, hearsay is presumptively unreliable.
In support, the author writes:
Evidence Code [Section] 1260 establishes [an] exception for
a statement made by a declarant that he or she has or has
not made or revoked a will, or which identifies such a
will. The basis for the exception, of course, is that in
most such situations the declarant is dead and therefore
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unavailable to testify.
In recent years, however, living trusts have become
increasingly common as a substitute for wills. However,
there is no corresponding exception to the hearsay evidence
rule for a statement made by a declarant that he or she has
or has not made or revoked a trust, or which identifies
such a trust, even though the same rationale for exception
exists (i.e., the fact that the declarant is very often
dead and therefore unavailable to testify).
In an era when many estate plans are contained in trusts
rather than in wills, it is important to the courts to have
available evidence as to the existence of a living trust
and to identify such a trust, if it does exist. Often the
best probative evidence is that of statements made by the
decedent while living. The existing law works well for
wills, and its expansion to include trusts will improve the
conduct of trials with regard to the estate plans of
decedents.
Revocable Trusts Serve As A Will Substitute : As explained in
Restatement Third, Trusts Section 11, Comment b, "the revocable
trust serves as a will substitute with respect to all or part of
the settlor's estate and has as its primary significance the
determination of the persons who will receive the trust
property, and in what interests, at the settlor's death.
Therefore, the standards applicable to wills are also applicable
in determining whether a revocable trust is valid or fails when
later challenged by persons who would otherwise be the settlor's
successors in interest." The logic behind a revocable trust
being used as a will substitute is premised on the standard for
mental capacity to make or revoke a will.
In order to make a valid will, the individual must be competent.
Pursuant to Probate Code Section 6100.5, "[a]n individual is
not mentally competent to make a will if at the time of making
the will either of the following is true: (1) The individual
does not have sufficient mental capacity to be able to (A)
understand the nature of the testamentary act, (B) understand
and recollect the nature and situation of the individual's
property, or (C) remember and understand the individual's
relations to living descendants, spouse, and parents, and those
whose interests are affected by the will[; or] (2) The
individual suffers from a mental disorder with symptoms
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including delusions or hallucinations, which delusions or
hallucinations result in the individual's devising property in a
way which, except for the existence of the delusions or
hallucinations, the individual would not have done."
Thus, if a person is competent to make a will or will substitute
but is unavailable to testify, hearsay evidence of the person's
statement about making or not making a will is sufficient to
qualify as evidence. Accordingly, this bill recognizes the
significance of a revocable trust as a satisfactory will
replacement and would make the necessary addition to provide for
the hearsay exception as it pertains to revocable trusts.
As introduced, this bill did not apply to amendments to
revocable trusts. The Executive Committee of the Trusts and
Estates Section of the State Bar (TEXCOM), a supporter of this
bill, noted that, "to ensure that the hearsay exceptions
applicable to wills and trusts are entirely congruent, TEXCOM
suggests that [the bill]be amended to apply to statements
regarding both revocable trusts and amendments to revocable
trusts." The sponsor agreed that evidence of amendments to
revocable trusts should be included as hearsay exceptions. As
discussed above, a revocable trust is a satisfactory will
replacement. It follows then that an amendment to a revocable
trust would be the replacement for a codicil to a will. Probate
Code Section 88 defines a will to include codicils. As applied
to the hearsay exception, evidence of codicils is allowed as a
hearsay exception. Since amendments to revocable trusts
function in the same way as codicils, the bill was amended to
add amendments to revocable trusts to the list of testamentary
documents falling under the hearsay rule exception.
The Proposed Hearsay Exception Compared To Federal Rules :
Evidence Code Section 1260 was based on Federal Rules of
Evidence Rule 803(3) which provides for a hearsay exception when
the statement relates to the execution, revocation,
identification, or terms of the declarant's will. The Notes of
Advisory Committee on Rules state that the hearsay exception as
it applies to wills rests on practical grounds of necessity and
expediency rather than logic. The courts needed a quick and
easy way to determine a decedent's intent of transferring
property. Although the Federal Rules of Evidence have yet to
provide for a hearsay exception for revocable trusts, this bill
will allow California courts to consider evidence regarding
revocable trusts for the same purposes that evidence regarding
wills is currently used.
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Related Pending Legislation : AB 1723 (Lieu, 2010) adds an
additional exception to the hearsay rule for statements offered
against a party that has engaged in, or knowingly approved of,
wrongdoing that was intended to, and did, procure the
unavailability of the declarant as a witness.
REGISTERED SUPPORT / OPPOSITION :
Support
Conference of California Bar Associations (sponsor)
Judicial Council of California
The Executive Committee of the Trusts and Estates Section of the
State Bar
Opposition
None on file
Analysis Prepared by : Drew Liebert / JUD. / (916) 319-2334