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SB-153 Estates and trusts: donative transfers.(2017-2018)



Current Version: 07/10/17 - Chaptered        


SB153:v97#DOCUMENT

Senate Bill No. 153
CHAPTER 56

An act to amend Sections 21380, 21384, 21386, and 21392 of the Probate Code, relating to estates and trusts.

[ Approved by Governor  July 10, 2017. Filed with Secretary of State  July 10, 2017. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 153, Anderson. Estates and trusts: donative transfers.
Existing law creates a presumption of fraud or undue influence, under certain circumstances, for any instrument that makes a donative transfer to specified persons, including, among others, a person in a fiduciary relationship with the transferor who transcribed the instrument or caused it to be transcribed.
This bill would recast this presumption to apply to a donative transfer to a person who transcribed the instrument or caused it to be transcribed and who was in a fiduciary relationship with the transferor when the instrument was transcribed.
Existing law creates exceptions to presumptions of fraud or undue influence for gifts where the donative instrument is reviewed by an independent attorney who counsels the transferor, as specified, about the nature of the transfer. Existing law specifies how gifts operate if they fail under the provisions providing presumptions of fraud or undue influence for donative transfers. Existing case law construes the term “donative transfer” to include, in addition to gifts, a transfer for inadequate or unfair consideration.
This bill would replace the term “gift” with the term “donative transfer” for purposes of these provisions.
Existing law states the intent of the Legislature that the above-referenced provisions regarding these presumptions supplement the common law of undue influence.
This bill would state that it is the intent of the Legislature that these rules also supplement the common law of fraud.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 21380 of the Probate Code is amended to read:

21380.
 (a) A provision of an instrument making a donative transfer to any of the following persons is presumed to be the product of fraud or undue influence:
(1) The person who drafted the instrument.
(2) A person who transcribed the instrument or caused it to be transcribed and who was in a fiduciary relationship with the transferor when the instrument was transcribed.
(3) A care custodian of a transferor who is a dependent adult, 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.
(4) A person who is related by blood or affinity, within the third degree, to any person described in paragraphs (1) to (3), inclusive.
(5) A cohabitant or employee of any person described in paragraphs (1) to (3), inclusive.
(6) A partner, shareholder, or employee of a law firm in which a person described in paragraph (1) or (2) has an ownership interest.
(b) The presumption created by this section is a presumption affecting the burden of proof. The presumption may be rebutted by proving, by clear and convincing evidence, that the donative transfer was not the product of fraud or undue influence.
(c) Notwithstanding subdivision (b), with respect to a donative transfer to the person who drafted the donative instrument, or to a person who is related to, or associated with, the drafter as described in paragraph (4), (5), or (6) of subdivision (a), the presumption created by this section is conclusive.
(d) If a beneficiary is unsuccessful in rebutting the presumption, the beneficiary shall bear all costs of the proceeding, including reasonable attorney’s fees.

SEC. 2.

 Section 21384 of the Probate Code is amended to read:

21384.
 (a) A donative transfer is not subject to Section 21380 if the instrument is reviewed by an independent attorney who counsels the transferor, out of the presence of any heir or proposed beneficiary, about the nature and consequences of the intended transfer, including the effect of the intended transfer on the transferor’s heirs and on any beneficiary of a prior donative instrument, attempts to determine if the intended transfer is the result of fraud or undue influence, and signs and delivers to the transferor an original certificate in substantially the following form:
“CERTIFICATE OF INDEPENDENT REVIEW
I, , have reviewed
(attorney’s name)
and have counseled the transferor,
(name of instrument)
, on the nature and consequences of any
(name of transferor)
transfers of property to
(name of person described in Section 21380 of the Probate Code)
that would be made by the instrument.
I am an “independent attorney” as defined in Section 21370 of the Probate Code and am in a position to advise the transferor independently, impartially, and confidentially as to the consequences of the transfer.
On the basis of this counsel, I conclude that the transfers to
that would
(name of person described in Section 21380 of the Probate Code)
be made by the instrument are not the product of fraud or undue influence.


(Name of Attorney)
(Date)
(b) An attorney whose written engagement, signed by the transferor, is expressly limited solely to compliance with the requirements of this section, shall not be considered to otherwise represent the transferor as a client.
(c) An attorney who drafts an instrument can review and certify the same instrument pursuant to this section, but only as to a donative transfer to a care custodian. In all other circumstances, an attorney who drafts an instrument may not review and certify the instrument.
(d) If the certificate is prepared by an attorney other than the attorney who drafted the instrument that is under review, a copy of the signed certification shall be provided to the drafting attorney.

SEC. 3.

 Section 21386 of the Probate Code is amended to read:

21386.
 If a donative transfer fails under this part, the instrument making the donative transfer shall operate as if the beneficiary had predeceased the transferor without spouse, domestic partner, or issue.

SEC. 4.

 Section 21392 of the Probate Code is amended to read:

21392.
 (a) This part shall apply to instruments that become irrevocable on or after January 1, 2011. For the purposes of this section, an instrument that is otherwise revocable or amendable shall be deemed to be irrevocable if, on or after January 1, 2011, the transferor by reason of incapacity was unable to change the disposition of the transferor’s property and did not regain capacity before the date of the transferor’s death.
(b) It is the intent of the Legislature that this part supplement the common law on fraud and undue influence, without superseding or interfering in the operation of that law. Nothing in this part precludes an action to contest a donative transfer under the common law or under any other applicable law. This subdivision is declarative of existing law.