CONSENT  

Bill No: AB 328

Author: Maienschein (D)

Introduced: 1/31/19

Vote: 21

SENATE JUDICIARY COMMITTEE: 9-0, 6/4/19

AYES: Jackson, Borgeas, Allen, Caballero, Jones, Monning, Stern, Umberg, Wieckowski

ASSEMBLY FLOOR: 76-0, 3/18/19 (Consent) - See last page for vote

SUBJECT: Estates and trusts: undue influence

SOURCE: Executive Committee of the Trusts and Estates Section of the

California Lawyers Association

DIGEST:

This bill presumptively renders invalid donative transfers to caregivers who marry the dependent adult in their care, except in certain circumstances.

ANALYSIS:

Existing law:

1. Creates a presumption that a provision of an instrument that makes a donative transfer to certain disqualified beneficiaries is the product of fraud or undue influence and is thus invalid. Disqualified beneficiaries include certain persons who drafted the instrument and care custodians or individuals with close relationships to care custodians, as specified, if the instrument was completed within 90 days of the caretaker’s services to the transferor. (Prob. Code § 21380.)^[1]
2. Provides that the statutory presumption in 1), above, is conclusive as to the drafter and, as to a care custodian, rebuttable by a showing of clear and convincing evidence that the transfer was not the product of fraud or undue influence. (Ibid.)
3. Provides the statutory presumption in 1), above, does not apply if, among other things:
   1. the donative transfer is to a relative or cohabitant of the transferor (§ 21382); or
   2. the donative instrument is reviewed by an independent attorney who counsels the transferor about the nature and consequence of the gift and certifies that the gift is not the product of fraud or undue influence (§ 21384).
4. Defines a “care custodian” as a person who provides health or social services, as defined, to a dependent adult, but does not include a person who provided services without remuneration, if the person had a personal relationship with the dependent adult that began:
   1. at least 90 days before providing those services;
   2. at least six months before the dependent adult’s death; and,
   3. if the dependent adult was admitted to hospice care, before the dependent adult was admitted to hospice care. (§ 21362(a).)
5. Defines a “dependent adult” as a person who is unable to provide properly for that person’s personal needs for physical health, food, clothing, or shelter and/or due to one or more deficits in mental functions, as defined, the person has difficulty managing that person’s own financial resources or resisting fraud or undue influence. (§ 21366.)
6. Specifies that if a decedent fails to provide in a testamentary instrument for the surviving spouse who married the decedent after the execution of all of the decedent’s testamentary instruments, provides the omitted spouse with a share in the decedent’s estate, including community property, quasi-community property and separate property, as provided, unless:
   1. the decedent’s failure to provide for the spouse was intentional and that intention appears from the testamentary instruments;
   2. the decedent provided for the spouse by transfer outside of the estate passing by the decedent’s testamentary instruments; or
   3. the spouse made a valid agreement waiving the right to share in the decedent’s estate. (§§ 21610-11.)

This bill:

1. Applies the above-described presumption to a gift made to a care custodian who commenced a marriage, cohabitation, or domestic partnership with a transferor who is a dependent adult while providing services to that dependent adult, or within 90 days after those services were last provided to the dependent adult, if the donative transfer occurred, or the instrument was executed, less than six months after the marriage, cohabitation, or domestic partnership commenced.
2. Prohibits a surviving spouse from receiving a share of the decedent’s estate as described above if the spouse was a care custodian of the decedent who was a dependent adult and the marriage commenced while the care custodian provided services to the decedent, or within 90 days after those services were last provided to the decedent, and the decedent died less than six months after the marriage commenced, unless the spouse can prove by clear and convincing evidence that the marriage was not the product of fraud or undue influence.

Background

In 1993, a series of Los Angeles Times investigative articles exposed an Orange County probate attorney’s practice of drafting wills for elderly clients in which he or someone with a close relationship to him was a major beneficiary. The Legislature responded by adopting the Donative Transfer Restriction Statute, which established a statutory presumption that donative transfers to the drafter of the document are the result of fraud or undue influence. (AB 21 (Umberg, Chapter 293, Statutes of 1993).) This presumption was expanded to include gifts from dependent adults to their caregivers. (See AB 1172 (Kaloogian, Chapter 724, Statutes of 1997); SB 105 (Harman, Chapter 620, Statutes of 2010).)

This bill, which is sponsored by the Executive Committee of the Trusts and Estates Section of the California Lawyers Association (TEXCOM), expands the scope of that presumption to apply to paid care custodians who marry the dependent adults within 90 days of providing them with care if the donative transfer occurs, or the transfer document is executed, less than six months after the marriage. This bill excludes from the omitted spouse presumption care custodians who marry the dependent adults in their care if the marriage occurred within 90 days of the care custodian’s service to the decedent and the decedent died less than six months after the marriage commenced. However, in both cases, the care custodian may show by clear and convincing evidence that the marriage was not the product of fraud or undue influence. This bill is supported by the California Judges Association and has no known opposition.

Comments

1. Extends the presumption of undue influence to care custodians who marry the dependent adult they served

Existing law creates a presumption that a provision of an instrument that makes a donative transfer to certain disqualified beneficiaries—including care custodians—is the product of fraud or undue influence and is thus invalid. (§ 21380.) However, under Section 21382, a person that is a spouse, domestic partner, or a cohabitant of the dependent adult is excluded from the scope of this presumption. The sponsor of this bill, TEXCOM, argues that this exclusion opens up a loophole for care custodians who marry the dependent adult they served.

This bill seeks to close that apparent loophole by expanding the scope of the presumption to apply to paid care custodians who marry the dependent adults within 90 days of providing them with care if the donative transfer occurs, or the transfer document is executed, less than six months after the marriage. Because of the temporal proximity between the provision of care and the donative transfer, this provision covers circumstances that are highly suggestive of undue influence. However, if the marriage is genuine, this presumption can be rebutted by clear and convincing evidence showing that the transfer was not the product of fraud or undue influence.

1. Excludes care custodians who marry the dependent adult they served from the omitted spouse presumption

Additionally, this bill exempts spouses who were care custodians from the “omitted spouse” presumption. Section 21610 provides that if a decedent fails to provide in a testamentary instrument for the decedent’s surviving spouse, the omitted spouse receives an intestate share of the decedent’s separate property in addition to half of the community property and quasi-community property. Section 21611 provides that a spouse who is omitted from a testamentary instrument does not receive a share of the estate only if (a) the decedent’s failure to provide for the spouse in the testamentary instrument was manifestly intentional, or (b) the decedent provided for the spouse by another means that was intended to be in lieu of a transfer to the spouse via the testamentary instrument. TEXCOM points out that the omitted spouse presumption enables care custodians to inherit without changing the dependent adult’s estate planning documents.

This bill excludes from the omitted spouse presumption care custodians who marry the dependent adults in their care if the marriage occurred within 90 days of the care custodian’s service to the decedent and the decedent died less than six months after the marriage commenced. As above, the narrow tailoring of this provision likely limits its application to circumstances involving cupidity rather than Cupid. However, if the care custodian spouse can show by clear and convincing evidence that the marriage between the spouse and the decedent was not the product of fraud or undue influence, the care custodian would be eligible to inherit as an omitted spouse under Section 21610.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 6/3/19)

Executive Committee of the Trusts and Estates Section of the California Lawyers Association (source)

California Judges Association

OPPOSITION: (Verified 6/3/19)

None received

ARGUMENTS IN SUPPORT: The sponsor of the bill, TEXCOM, writes as follows:

Litigators and district attorneys find that marriage has increasingly become the tool used by Care Custodians to obtain the assets of their elderly or mentally incapacitated clients. With the passage of statutes in the 1980’s and 1990’s protecting elders, care custodians have found that marrying their charge is an efficient way to secure the dependent adult’s assets. A marriage is easy to enter into because the level of mental capacity required to marry is very low, and challenging a marriage is impossible, unless the dependent adult did not have the mental capacity to consent at the time of the marriage. The care custodian thereafter seeks to inherit via a newly executed testamentary instrument, or the “Omitted Spouse” rule.

Writing in support, the California Judges Association (CJA) states as follows:

CJA believes that AB 328 is a worthy narrowing of the “related” loophole in the existing statute and as a result will protect against the artful use of marriage to sidestep the “disqualified persons” statutes. Judges do see cases in which the alleged undue influencer … influences the testator or trustor to marry—motivated at least in part, we suspect, by a desire to avoid these statutes.

ASSEMBLY FLOOR: 76-0, 3/18/19

AYES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooley, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Arambula, Calderon, Cooper, Rodriguez

Prepared by: Josh Tosney / JUD. / (916) 651-4113

6/5/19 11:17:47

**** END ****

1. All further statutory references are to the Probate Code. ↑

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2019-2020 Regular Session

Bill No: AB 328 (Author:Maienschein)

Version: January 31, 2019

Hearing Date: June 4, 2019

Fiscal: No

Urgency: No

Consultant: JT

SUBJECT

Estates and trusts: undue influence

DIGEST

This bill would presumptively render invalid donative transfers to caregivers who marry the dependent adult in their care, except in certain circumstances.

EXECUTIVE SUMMARY

In 1993, a series of Los Angeles Times investigative articles exposed an Orange County probate attorney’s practice of drafting wills for elderly clients in which he or someone with a close relationship to him was a major beneficiary. The Legislature responded by adopting the Donative Transfer Restriction Statute, which established a statutory presumption that donative transfers to the drafter of the document are the result of fraud or undue influence. (AB 21 (Umberg), Ch. 293, Stats. 1993.) This presumption was expanded to include gifts from dependent adults to their caregivers. (See AB 1172 (Kaloogian), Ch. 724, Stats. 1997; SB 105 (Harman), Ch. 620, Stats. 2010.)

This bill, which is sponsored by the Executive Committee of the Trusts and Estates Section of the California Lawyers Association (TEXCOM), would expand the scope of that presumption to apply to paid care custodians who marry the dependent adults within 90 days of providing them with care if the donative transfer occurs, or the transfer document is executed, less than six months after the marriage. The bill would exclude from the omitted spouse presumption care custodians who marry the dependent adults in their care if the marriage occurred within 90 days of the care custodian’s service to the decedent and the decedent died less than six months after the marriage commenced. However, in both cases, the care custodian may show by clear and convincing evidence that the marriage was not the product of fraud or undue influence. The bill is supported by the California Judges Association and has no known opposition.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Creates a presumption that a provision of an instrument that makes a donative transfer to certain disqualified beneficiaries is the product of fraud or undue influence and is thus invalid. Disqualified beneficiaries include certain persons who drafted the instrument and care custodians or individuals with close relationships to care custodians, as specified, if the instrument was completed within 90 days of the caretaker’s services to the transferor. (Prob. Code § 21380.)^[1]
2. Provides that the statutory presumption in 1), above, is conclusive as to the drafter and, as to a care custodian, rebuttable by a showing of clear and convincing evidence that the transfer was not the product of fraud or undue influence. (Ibid.)
3. Provides the statutory presumption in 1), above, does not apply if, among other things:
   1. the donative transfer is to a relative or cohabitant of the transferor (§ 21382); or
   2. the donative instrument is reviewed by an independent attorney who counsels the transferor about the nature and consequence of the gift and certifies that the gift is not the product of fraud or undue influence (§ 21384).
4. Defines a “care custodian” as a person who provides health or social services, as defined, to a dependent adult, but does not include a person who provided services without remuneration, if the person had a personal relationship with the dependent adult that began:
   1. at least 90 days before providing those services;
   2. at least six months before the dependent adult’s death; and,
   3. if the dependent adult was admitted to hospice care, before the dependent adult was admitted to hospice care. (§ 21362(a).)
5. Defines a “dependent adult” as a person who is unable to provide properly for that person’s personal needs for physical health, food, clothing, or shelter and/or due to one or more deficits in mental functions, as defined, the person has difficulty managing that person’s own financial resources or resisting fraud or undue influence. (§ 21366.)
6. If a decedent fails to provide in a testamentary instrument for the surviving spouse who married the decedent after the execution of all of the decedent’s testamentary instruments, provides the omitted spouse with a share in the decedent’s estate, including community property, quasi-community property and separate property, as provided, unless:
   1. the decedent’s failure to provide for the spouse was intentional and that intention appears from the testamentary instruments;
   2. the decedent provided for the spouse by transfer outside of the estate passing by the decedent’s testamentary instruments; or
   3. the spouse made a valid agreement waiving the right to share in the decedent’s estate. (§§ 21610-11.)

This bill:

1. Applies the above-described presumption to a gift made to a care custodian who commenced a marriage, cohabitation, or domestic partnership with a transferor who is a dependent adult while providing services to that dependent adult, or within 90 days after those services were last provided to the dependent adult, if the donative transfer occurred, or the instrument was executed, less than six months after the marriage, cohabitation, or domestic partnership commenced.
2. Prohibits a surviving spouse from receiving a share of the decedent’s estate as described above if the spouse was a care custodian of the decedent who was a dependent adult and the marriage commenced while the care custodian provided services to the decedent, or within 90 days after those services were last provided to the decedent, and the decedent died less than six months after the marriage commenced, unless the spouse can prove by clear and convincing evidence that the marriage was not the product of fraud or undue influence.

COMMENTS

1. Extends the presumption of undue influence to care custodians who marry the dependent adult they served

Existing law creates a presumption that a provision of an instrument that makes a donative transfer to certain disqualified beneficiaries—including care custodians—is the product of fraud or undue influence and is thus invalid. (§ 21380.) However, under section 21382, a person that is a spouse, domestic partner, or a cohabitant of the dependent adult is excluded from the scope of this presumption. The sponsor of this bill, TEXCOM, argues that this exclusion opens up a loophole for care custodians who marry the dependent adult they served.

This bill seeks to close that apparent loophole by expanding the scope of the presumption to apply to paid care custodians who marry the dependent adults within 90 days of providing them with care if the donative transfer occurs, or the transfer document is executed, less than six months after the marriage. Because of the temporal proximity between the provision of care and the donative transfer, this provision covers circumstances that are highly suggestive of undue influence. However, if the marriage is genuine, this presumption can be rebutted by clear and convincing evidence showing that the transfer was not the product of fraud or undue influence.

2. Excludes care custodians who marry the dependent adult they served from the omitted spouse presumption

Additionally, the bill would exempt spouses who were care custodians from the “omitted spouse” presumption. Section 21610 provides that if a decedent fails to provide in a testamentary instrument for the decedent’s surviving spouse, the omitted spouse receives an intestate share of the decedent’s separate property in addition to half of the community property and quasi-community property. Section 21611 provides that a spouse who is omitted from a testamentary instrument does not receive a share of the estate only if (1) the decedent’s failure to provide for the spouse in the testamentary instrument was manifestly intentional, or (2) the decedent provided for the spouse by another means that was intended to be in lieu of a transfer to the spouse via the testamentary instrument. TEXCOM points out that the omitted spouse presumption enables care custodians to inherit without changing the dependent adult’s estate planning documents.

This bill would exclude from the omitted spouse presumption care custodians who marry the dependent adults in their care if the marriage occurred within 90 days of the care custodian’s service to the decedent and the decedent died less than six months after the marriage commenced. As above, the narrow tailoring of this provision likely limits its application to circumstances involving cupidity rather than Cupid. However, if the care custodian spouse can show by clear and convincing evidence that the marriage between the spouse and the decedent was not the product of fraud or undue influence, the care custodian would be eligible to inherit as an omitted spouse under section 21610.

3. Arguments in support

The sponsor of the bill, TEXCOM, writes as follows:

Litigators and district attorneys find that marriage has increasingly become the tool used by Care Custodians to obtain the assets of their elderly or mentally incapacitated clients. With the passage of statutes in the 1980’s and 1990’s protecting elders, care custodians have found that marrying their charge is an efficient way to secure the dependent adult’s assets. A marriage is easy to enter into because the level of mental capacity required to marry is very low, and challenging a marriage is impossible, unless the dependent adult did not have the mental capacity to consent at the time of the marriage. The care custodian thereafter seeks to inherit via a newly executed testamentary instrument, or the “Omitted Spouse” rule.

Writing in support, the California Judges Association states as follows:

CJA believes that AB 328 is a worthy narrowing of the “related” loophole in the existing statute and as a result will protect against the artful use of marriage to sidestep the “disqualified persons” statutes. Judges do see cases in which the alleged undue influencer … influences the testator or trustor to marry—motivated at least in part, we suspect, by a desire to avoid these statutes.

SUPPORT

Executive Committee of the Trusts and Estates Section of the California Lawyers Association (sponsor)
California Judges Association

OPPOSITION

None known

RELATED LEGISLATION

Pending Legislation: None known

Prior Legislation: See Executive Summary.

PRIOR VOTES:

Assembly Floor (Ayes 76, Noes 0)

Assembly Judiciary Committee (Ayes 11, Noes 0)

**************

1. All further statutory references are to the Probate Code. ↑

Date of Hearing: March 12, 2019

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

ABPCA Bill Id:AB 328

Author:(Maienschein) – As Introduced Ver:January 31, 2019

PROPOSED CONSENT

SUBJECT: DONATIVE TRANSFER: CARE CUSTODIAN SPOUSE

KEY ISSUE: SHOULD a donative transfer to a CAREGIVER WHO MARRies THE DEPENDENT ADULT IN the caregiver’s CARE BE PRESUMED to be the result of fraud or undue influence?

SYNOPSIS

In 1993, in response to an attorney in Southern California who had drafted wills for elderly clients that included large gifts to himself, his family and his business partners, the Legislature established the Donative Transfer Restriction Statute, which created a statutory presumption that donative gifts to the drafter of the document are the result of fraud or undue influence. That presumption was expanded in 1997, and clarified in 2010, to include gifts from dependent adults to their caregivers, generally limited to paid caregivers.

This bill, sponsored by the Trusts & Estates Section of the California Lawyers Association, seeks to expand that presumption to include paid care custodians who marry the dependent adults in their care if the donative transfer occurs, or the transfer document (will, trust, etc.) is executed, less than six months after the marriage. The presumption is just that; it can be overcome by clear and convincing evidence that the transfer to the caregiver-spouse was not the product of fraud or undue influence. The bill also exempts from the omitted spouse presumption, which presumes that all spouses want to provide for their spouses on their death, a spouse who was a care custodian for the decedent and the marriage commenced while the care custodian provided services to the decedent, or within 90 days after those services were last provided to the decedent, and the decedent died less than six months after the marriage commenced. Like overcoming the donative transfer presumption, the caregiver-spouse will still be entitled to a share of the decedent’s estate if that spouse proves, by clear and convincing evidence, that the marriage between the spouse and the decedent was not the product of fraud or undue influence. It is a delicate task to balance the strong interests in preventing financial abuse and protecting testamentary freedom, and this bill seeks to do just that. This bill has no reported opposition.

SUMMARY: Creates a presumption that donative gifts to care custodians who marry their dependent adults are the result of fraud or undue influence and that such care custodians do not take under the omitted spouse doctrine absent clear and convincing evidence that the marriage was not the product of fraud or undue influence. Specifically, this bill:

1. Presumes that a donative transfer to a care custodian, as defined, who commenced a marriage, cohabitation, or domestic partnership with a transferor, who is a dependent adult, while providing services to that dependent adult, or within 90 days after those services were last provided to the dependent adult, is the product of fraud or undue influence if the donative transfer occurred or the instrument was executed less than six months after the marriage, cohabitation, or domestic partnership commenced.
2. Exempts from the omitted spouse presumption a spouse who was a care custodian, as defined, of the decedent who was a dependent adult, as defined, the marriage commenced while the care custodian provided services to the decedent, or within 90 days after those services were last provided to the decedent, and the decedent died less than six months after the marriage commenced. Provides that the spouse may still be entitled to a share of the decedent’s estate if the spouse proves by clear and convincing evidence that the marriage between the spouse and the decedent was not the product of fraud or undue influence.

EXISTING LAW:

1. Presumptively invalidates any provision of an instrument that makes a donative transfer to certain disqualified beneficiaries as the product of fraud or undue influence. Disqualified beneficiaries include:
   1. The person who drafted the instrument and any relative, domestic partner, cohabitant, or employee of the person who drafted the instrument; and
   2. A care custodian of a dependent adult who is the transferor, but only if the instrument was executed during the period in which the care custodian provided services to the transferor, or within 90 days before or after that period, and any relative, cohabitant, or domestic partner of the care custodian. (Probate Code Sec. 21380. Unless otherwise indicated all further statutory references are to the Probate Code.)
2. Provides that the statutory presumption in 1), above, except as applied to the drafter of the instrument, can be overcome by clear and convincing evidence that the transfer was not the product of fraud or undue influence. Provides that the statutory presumption is conclusive as to the drafter. (Id.)
3. Provides the statutory presumption in 1), above, does not apply if, among other things, the donative transfer is to a relative or cohabitant of the transferor. (Section 21382.)
4. Provides the statutory presumption in 1), above, does not apply if the donative instrument is reviewed by an independent attorney who counsels the transferor about the nature and consequence of the gift and certifies that the gift is not the product of fraud or undue influence. (Section 21384.)
5. Defines a “care custodian” to be a person who provides health or social services, as defined, to a dependent adult, but does not include a person who provided services without remuneration, if the person had a personal relationship with the dependent adult that began: a) at least 90 days before providing those services; b) at least six months before the dependent adult’s death; and, c) if the dependent adult was admitted to hospice care, before the dependent adult was admitted to hospice care. (Section 21362.)
6. Defines a “dependent adult” to be a person who is unable to provide properly for that person’s personal needs for physical health, food, clothing, or shelter and/or due to one or more deficits in mental functions, as defined, the person has difficulty (or for those under 65, substantial difficulty) managing that person’s own financial resources or resisting fraud or undue influence. (Section 21366.)
7. Defines “cohabitant” as two unrelated adult persons living together for a substantial period of time, resulting in some permanency of relationship. Provides that factors that may determine cohabitation include (a) sexual relations between the parties while sharing the same living quarters, (b) sharing of income or expenses, (c) joint use or ownership of property, (d) whether the parties hold themselves out as spouses, (e) the continuity of the relationship, and (f) the length of the relationship. (Section 21364; Penal Code Section 13700.)
8. If a decedent fails to provide in a testamentary instrument for the surviving spouse who married the decedent after the execution of all of the decedent’s testamentary instruments, provides the omitted spouse with a share in the decedent’s estate, including community property, quasi-community property and separate property, as provided, unless:
   1. The decedent’s failure to provide for the spouse was intentional and that intention appears from the testamentary instruments;
   2. The decedent provided for the spouse by transfer outside of the estate passing by the decedent’s testamentary instruments; or
   3. The spouse made a valid agreement waiving the right to share in the decedent’s estate. (Sections 21610-11.)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: In 1993, in response to an attorney in Southern California who had drafted wills for elderly clients that included large gifts to himself, his family and his business partners, the Legislature established the Donative Transfer Restriction Statute, which created a statutory presumption that donative gifts to the drafter of the document are the result of fraud or undue influence. (AB 21 (Umberg), Chap. 293, Stats. 1993.) The presumption was expanded in 1997 to include gifts from dependent adults to their caregivers (care custodians) (AB 1172 (Kaloogian), Chap. 724, Stats. 1997), although that presumption was generally limited to paid caregivers. (SB 105 (Harman), Chap. 620, Stats. 2010.)

This bill seeks to expand that presumption to include paid care custodians who marry the dependent adults in their care if the donative transfer occurs, or the transfer document (will, trust, etc.) is executed, less than six months after the marriage. The presumption is just that; it can be overcome by clear and convincing evidence that the transfer to the caregiver-spouse was not the product of fraud or undue influence. Similarly, the bill exempts from the omitted spouse presumption, which presumes that all spouses want to provide for their spouses on their death, a spouse who was a care custodian of the decedent who was a dependent adult and the marriage commenced while the care custodian provided services to the decedent, or within 90 days after those services were last provided to the decedent and the decedent died less than six months after the marriage commenced. Like overcoming the donative transfer presumption, the caregiver-spouse may still be entitled to a share of the decedent’s estate if that spouse proves, by clear and convincing evidence, that the marriage between the spouse and the decedent was not the product of fraud or undue influence.

In support of the bill, the author writes:

Litigators and district attorneys find that marriage has increasingly become the tool used by Care Custodians to obtain the assets of their elderly or mentally incapacitated clients. With the passage of statutes in the 1980’s and 1990’s protecting elders, Care Custodians have found that marrying their charge is an efficient way to secure the dependent adult’s assets. A marriage is easy to enter into because the level of mental capacity required to marry is very low; challenging a marriage is impossible, unless the dependent adult did not have the mental capacity to consent at the time of the marriage. The Care Custodian seeks to inherit via a newly executed testamentary instrument, or the Omitted Spouse rule. Pitted against this desire to protect the dependent adult’s property, is the right of every person to marry and have companionship. A careful balancing of these fundamental rights must occur, and this proposal seeks to protect the dependent adult’s property without affecting his or her right to marry. (Footnote omitted.)

This Bill Seeks to Balance the Need to Protect Vulnerable and Dependent Adults From Financial Abuse and the Ability of Legally Competent Adults to Make Testamentary Gifts to Their Spouses: The statutory presumption that donative transfers from dependent adults to their caregivers are the result of fraud or undue influence, which can be overcome only by clear and convincing evidence, is designed to protect vulnerable adults from financial abuse by unethical caregivers, while still giving them the freedom to make donative gifts as they see fit. It is a delicate task to balance the strong interests in preventing financial abuse and protecting testamentary freedom. The task gets more difficult if the caregiver and the dependent adult are friends and the Legislature, recognizing that, created exceptions from the presumption for both small gifts and for friends and neighbors who take on the role of caregiver to help out their friend.

This bill addresses a related issue – caregivers who marry, or enter a domestic partnership or cohabitation with, those in their care and then seek to inherit from them. While caregivers are subject to the presumption that a donative transfer is the product of fraud or undue influence, if the caregiver is a relative of the person they are caring for, or with whom they are cohabiting, the presumption does not apply. This makes sense because most caregivers are indeed family members who provide care because of the family relationship and without any compensation. However, a caregiver who is employed to care for a dependent adult and who then marries that adult and shortly thereafter seeks to inherit from that person raises the very real likelihood of fraud or undue influence. While some of those marriages may be legitimate, this bill presumes them to be the product of fraud or undue influence, unless it can be established otherwise by clear and convincing evidence. This bill does not apply to all marriages between caregivers and their dependent adults, but only to those that began while the caregiver was providing services to that dependent adult, or within 90 days after those services were last provided, and where the donative transfer occurred or the instrument making the transfer was executed less than six months after the marriage, cohabitation, or domestic partnership commenced.

This bill does not eliminate inheritances to caregivers who marry their charges. It simply creates the presumption that if the marriage (or domestic partnership or cohabitation) is in very close proximity to the inheritance, it is the result of fraud or undue influence. The caregiver may overcome that presumption by proving the inheritance was not the result of fraud or undue influence, just as a family member can seek to invalidate an otherwise valid inheritance, which is not subject to the presumption.

The Bill Applies the Same Basic Presumption Scheme to the Omitted Spouse Doctrine. The omitted spouse doctrine presumes that all spouses intend to take care of their spouses after death. Thus, if one spouse dies before updating that spouse’s testamentary instruments that were created before the marriage and the surviving spouse is not included in those instruments, the law will presume that the deceased spouse intended to provide for the surviving spouse and simply forgot to update the documents. This presumption can be overcome by clear and convincing evidence that the marriage between the spouse and the decedent was the product of fraud or undue influence. Additionally, the presumption does not apply if the deceased spouse’s failure to provide for the surviving spouse was intentional and that intention appears from the testamentary instruments, the deceased spouse provided for the surviving spouse by transfer outside of the estate, or the surviving spouse made a valid agreement waiving the right to share in the deceased spouse’s estate.

This bill follows the same basic principles for the omitted spouse doctrine as for the presumption against inheritances to caregivers. Under the bill, a spouse who was a caregiver to the deceased spouse is exempted from the omitted spouse presumption if the marriage commenced while the caregiver provided services to the deceased spouse, or within 90 days after those services were last provided to the deceased spouse and the deceased spouse died less than six months after the marriage commenced. Again, this presumption is not conclusive. The former caregiver-spouse may still be entitled to a share of the deceased spouse’s estate if the caregiver-spouse proves by clear and convincing evidence that the marriage was not the product of fraud or undue influence. This follows the same scheme in the donative transfer to a caregiver-spouse and also follows the same basic odds – most of these relationships may be suspect, but certainly not all are.

REGISTERED SUPPORT / OPPOSITION:

Support

Trusts & Estates Section of the California Lawyers Association (sponsor)

Opposition

None on file

Analysis Prepared by: Leora Gershenzon / JUD. / (916) 319-2334