Los Angeles Probate Case Heard By California Supreme Court: The Possible Implications of Testamentary Transfers to Your Friend: Part I
Do you think there are any restrictions or limitations on whom you choose to receive your property at your death? Often when people execute a Living Trust or Will to designate who is to receive their property when they die, they don't give a second thought to the possibility that the intended recipient will not be allowed to take delivery of the property.
After all, isn't it logical to believe you can give what you own to whomever you desire? It's your property, you worked hard for it and you should be able to give it to anyone you want, right?
Well, the good news is, for the most part, absent a bequest that is illegal or harmful you can distribute your assets to anyone. The bad news is, if certain conditions exist, your intended beneficiary might not be allowed to accept your gift.
Consider the following example. Bob and Ken are life long friends. Both are widowers and until the death of their respective spouses, the two couples enjoyed a close relationship. And even now, Bob and Ken remain very close. Ken has three adult children but Bob has no family except some distant relatives back east that he barely knows.
One day, Bob suffers a stroke. Ken is the ever diligent friend and stays by Bob's side. He runs errands for Bob, picks up groceries, drives Bob to medical appointments, makes certain Bob takes his prescribed medications administer, assists Bob to and from the restroom and picks up around the house a little.
Bob hadn't changed his Last Will and Testament since his wife passed away so he contacted his estate planning attorney and changed the beneficiary of all his worldly possessions to Ken.
Unfortunately, Bob doesn't make it through this illness and passes away. The executor of Bob's Will files a petition for probate in the local probate court that title to Bob's home and other assets can be legally titled and transferred to Ken.
During the probate process, Bob's second cousin, twice removed who had never met Bob personally, inserts himself into the probate proceeding and contests the probate petition and particularly the distribution of Bob's estate to Ken.
You might be thinking, wait a minute, these guys have known each other for years and were the best of friends long before Bob's stroke. Ken was the epitome of a friend. How dare this stranger show up and attempt to thwart Bob's testamentary intent.
The cousin will allege that Ken is a Care Custodian as defined in the California Supreme Court in Bernard v Foley (2006) 39 C4th 794, 47 CR3d 248 and therefore be disqualified from receiving any of Bob's assets under California Probate Code §21350.
Probate Code §21350 codifies situations where donative transfers will be invalidated. One such situation is a transfer from an elder or dependent adult to a care custodian.
Welfare & Institutions Code §15610.17 includes in its definition of a care custodian those persons "providing care or services" for elder or dependent adults.
The Court in Bernard v Foley found that an unrelated person may be a disqualified care custodian if that person provides "substantial, ongoing health services" to a dependent adult. They further stated that it doesn't matter if the care-giving relationship naturally arose out of a preexisting friendship as in the case of Bob and Ken.
The friends of the decedent in the Foley case were found to be care custodians and therefore disqualified persons. The transfer of the decedent's property to them was invalidated by the court. The care and services provided by Foley and his girlfriend to the dependent adult was doing her laundry, lending assistance to and from the bathroom, administering oral medication, cleaning the bedroom and other such similar tasks.
Why would Bob's gift to Ken fail?