Who receives your property if you die without an estate plan, if your designated beneficiary(ies) predeceases you, disclaims their interest in your gift or is found to be a disqualified transferee?
Following our example in related postings on March 11,2009 and April 4, 2009 regarding California’s Custodian Care statute (California Probate Code Section 21350), Ken was found to be a disqualified recipient of his friend’s property and was not allowed to accept any property left to him by Bob, in Bob’s Last Will and Testament.
Who then would receive Bob’s property? Let’s assume Bob only provided for Ken and did not provide for a contingent beneficiary in the event Ken predeceased Bob. Or alternatively, Bob’s contingent beneficiary properly disclaimed any interest that the beneficiary might have in Bob’s estate.
Bob’s estate would pass to his heirs at law as determined by intestate succession. Bob’s blood line would be followed until the first level of relatives were identified and each heir at that level would share Bob’s estate. If an heir at that level is deceased, the issue of the deceased heir would take that share.
California Probate Code Section 6401 codifies to whom and in what share property will pass that is not otherwise effectively disposed of by Will or other estate distribution device as follows:
(a) As to community property, the intestate share of the
surviving spouse is the one-half of the community property that
belongs to the decedent under Section 100.
(b) As to quasi-community property, the intestate share of the
surviving spouse is the one-half of the quasi-community property that
belongs to the decedent under Section 101.
(c) As to separate property, the intestate share of the surviving
spouse or surviving domestic partner, as defined in subdivision (b)
of Section 37, is as follows:
(1) The entire intestate estate if the decedent did not leave any
surviving issue, parent, brother, sister, or issue of a deceased
brother or sister.
(2) One-half of the intestate estate in the following cases:
(A) Where the decedent leaves only one child or the issue of one
(B) Where the decedent leaves no issue but leaves a parent or
parents or their issue or the issue of either of them.
(3) One-third of the intestate estate in the following cases:
(A) Where the decedent leaves more than one child.
(B) Where the decedent leaves one child and the issue of one or
more deceased children.
(C) Where the decedent leaves issue of two or more deceased
As Bob did not have a wife, children, siblings, etc., the gift would continue down the line and in this case stop at Bob’s second cousin. Presumptively, these distant relatives will prevail over Bob’s intent and Bob’s property will pass to the second cousins that Bob barely knew.
The same statutory structure to determine the recepients of a decedent’s estate holds true for those who pass away without directing the disposition of their assets such as a Will.
There are anticipated changes to the California Care Custodian statute. Assembly Bill 2034 directed the California Law Revision Commission to look at the current law and its effectiveness in protecting a dependent transferor against abuses. The goal is to protect while at the same time preserve the rights of the transferor to make desired dispositions (absent coercion) without discouraging the altruistic person from providing services.
The Commission has issued a recommendation for improvement to Probate Code Section 21350.
Senate Bill 105 has been introduced to implement the Commission’s recommendation.