BILL ANALYSIS �
AB 1670
Page 1
ASSEMBLY THIRD READING
AB 1670 (Lara)
As Amended March 26, 2012
Majority vote
JUDICIARY 6-2
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|Ayes:|Feuer, Atkins, Dickinson, | | |
| |Huber, Monning, | | |
| |Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wagner, Jones | | |
| | | | |
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SUMMARY : Authorizes, until January 1, 2016, 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.
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 is not qualified to act as a personal
representative under specified circumstances, including if the
person is not a resident of the United States. However,
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.
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
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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)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 U.S. resident, who has
the right to be appointed as the personal representative and
administer the estate in court. When someone dies without a
will, 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.
Current law provides that an heir otherwise entitled to appoint
a personal representative cannot do so if he or she is not a
U.S. resident, even though a decedent could appoint a non-U.S.
resident to serve in that capacity. This bill, sponsored by the
Trusts & Estates Section of the State Bar, allows the
appointment of a person who is nominated by a non-U.S. resident
heir as administrator of a decedent's estate. The nominee would
still have to meet the qualification requirements of Probate
Code Section 8402, including, that the person is a resident of
the United States, of the age of majority, not under a
conservatorship or guardianship, not a surviving partner of the
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decedent if an interested person has objected, and not otherwise
incapable of discharging the duties of an administrator. For
example, if there is no surviving spouse and all the adult
children live in another country, this bill allows the children
to nominate a personal representative of their choosing to
administer their parent's estate.
This provision allows foreign heirs of who are not residents of
the United States and therefore cannot themselves qualify as
administrator of a decedent's estate to nominate a trusted
family friend, lawyer, or even an institution known to the
heirs, as administrator of the estate, rather than the public
administrator who would surely be a stranger to the heirs. If
so allowed, the nominee would take priority over the public
administrator for the appointment.
Cases interpreting the statutory scheme for appointment of an
administrator when the heirs are non-U.S. residents have been 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 heir's 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 under 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."
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(Id. at 82, footnote 5.)
The Damskog court however explicitly stated that "�w]hile it
makes 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.
In support of the bill, the Trusts & Estates Section of the
State Bar writes:
A nonresident heir is currently prohibited from nominating
an administrator when a decedent dies intestate (without a
valid will) in California. That is the case even though the
decedent could have named a nonresident to act as executor
or provided a nonresident with a nomination power in his or
her will. For example, suppose that a decedent had
immigrated to the United States from another country, was
financially successful and accumulated a significant
estate, then died as a resident of California leaving heirs
only in that other country. Those heirs would be
prohibited from nominating an administrator (even a United
States resident) to manage the estate, even though they
stand to receive all of the assets. The public
administrator would then be appointed, even over the
objection of the family members, and would take its fees
out of the assets to be received by the decedent's family
in that other country.
Redirecting assets that would otherwise pass to families
who reside outside of the United States, merely because the
decedent did not have a will, creates a fundamental
unfairness. Moreover, this deficiency in the law deprives
families of the right to select the person best suited to
manage the assets they stand to receive. While the
injustice of this result has been recognized by the
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judiciary, only the legislature can correct this problem.
The California State Association of Public Administrators,
Public Guardians, and Public Conservators opposes the bill. The
organization's chief argument is financial: They make money
administering larger estates, which helps fund their overall
operations, and this bill could potentially eliminate some of
their most lucrative appointments. As a result of these
concerns, the bill now sunsets in three years, to provide some
time to study its actual effect on the Public Administrators.
Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334
FN: 0003171