For all of you that read my posts you know that I am fond of stories that illustrate the point I am trying to make. So here’s another one.

As I have stated many times in my posts none of this is to be taken as legal advice, be sure to see your attorney for that. There are lots of variables and circumstances are different from case to case.

A few years ago, before she became my client, a kindly lady made some changes to her estate plan. Specifically she added a beneficiary to her estate. That beneficiary happened to be a long time caregiver of my client. Unfortunately for my client and her caregiver neither was ever made aware of was California Probate Code 21380.

The beginning sentence of Probate Code 21380 is:

“(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:….” (I’ve added the highlighting.)

What this means is that if a person makes a gift of anything through their Will or Trust to certain people without first obtaining another document the gift is considered to have be acquired by fraud or undue influence of the person named to receive the gift.

The list doesn’t include everyone but it does include:

Probate Code 21380 cont’d
(1) The person who drafted the instrument.
This means anyone who wrote the Trust or Will not just an attorney.
(2) A person in a fiduciary relationship with the transferor who
transcribed the instrument or caused it to be transcribed.
This can include the person’s Professional Fiduciary, their accountant, financial advisor, insurance agent, tax preparer and more.
(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.
This includes the long term and short term care giver. The person doesn’t have to be an employee of an agency or an employee of the client. There are broad definitions describing a caregiver.
(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.
In very broad terms this means that the gift receiver has the burden to prove there was no 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.
Very simply, if you lose you pay!

Many of you may be yelling, “But, I want to give something to my caregiver or my long time attorney or anyone else on the above list.” Let me continue.

As the daily news will attest the incidence of elder abuse is on a dramatic rise. These statutes were enacted to provide safeguards. Safeguards for our dependent and aging populations. Too often these populations are vulnerable. Perhaps they are home-bound, there are no friends or relatives or at least none close by. They are dependent on the care or advice of those persons that are in the best position to take advantage. Because of illness, handicaps or loneliness they are convinced that they should leave something to the person providing services even though they are already paying for the services.

But, don’t despair. If you truly want to leave something to one of those listed above California Probate Code 21384 has that covered, a Certificate of Independent Review.

(a) A gift 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:

For those that clicked on the link the rest of the code section also includes a sample Certificate of Independent Review

Back to my original story. I have no idea whether the gift from my client to her caregiver was secured through fraud or undue influence. As I stated this was before she became my client. I do know that the client’s daughter filed objections with the court and the caregiver was not willing to spend the money and take the chance that the court would uphold the gift.

As with most things with estate planning it is better to ask the questions of your attorney while you’re still able to do something about the situation.