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California Probate and Trust Legal Summary Spring 2017

Catanese & Wells, A Law Corporation provides a quarterly newsletter to the California probate and trust professional community including lawyers, accountants, professional fiduciaries and insurance providers. www.cataneselaw.com.

This issue of the Probate and Trust Legal Summary focuses on Section 21380 of the California Probate Code. This section implements a measure adopted by the California Legislature intended to help families of those person who were the subject of fraud or undue influence prior to death.

Section 21380 is in many ways a unique and effective tool for a person who wishes to challenge the existence and validity of a will or trust, but the direct evidence needed to challenge the suspect document is little or nonexistent. The statute provides for a shifting of the burden of proof if the trial judge determines that a person receiving a gift or “donative transfer” is deemed to fall within a category of a disqualified person.

Section 21380 states that a donative transfer under an “instrument” is presumed to be the product of fraud or undue influence if the gift is given to a person who drafted the instrument, a person in a fiduciary relationship with the person who transcribed the instrument or caused to be transcribed, a “care custodian” of the person who made the gift and the person is a dependent adult (but only if the instrument was executed when the care custodian provided services to the person or within 90 days before or after that person and they received compensation for the services rendered such as health or social services), a person who is related by blood or affinity to any of the persons identified above, a person who is a cohabitant or employee of the persons identified above or the person is a partner, shareholder or employee of a law firm who made the instrument or caused it to be transcribed.

If a person is found to have drafted the subject instrument by the court, the presumption if fraud or undue influence is conclusive and cannot be rebutted. However, if the person is the subject of the other categories then the presumption may be rebutted by clear and convincing evidence that the donative transfer was not the product of fraud or undue influence. Recently, an appellate court found that the clear and convincing standard requires a finding of high probability so clear as to leave no substantial doubt – the evidence must be sufficiently strong to command the unhesitating assent of every reasonable mind. See Estate of Ben-Ali (2013) 216 Cal. App. 4th 1026, 1037. Accordingly, even though the statute allows the clear and convincing evidence presumption to be rebutted, the level of proof required is so high that it would be a rare case for the presumption to be rebutted since the evidence for rebuttal would likely have been produced in discovery and the case would likely be resolved prior to any Section 21380 hearing.

Cases which have reviewed the statute emphasize that it is intended for the protection of families and the court may make findings based upon the circumstantial or indirect evidence. In other works, the appellate courts acknowledge that direct evidence is very difficult to obtain in cases where the person who executed the instrument is dead and the persons involved with the instrument are the respondents to a court petition seeking to divest their interest in the estate. These cases include fiduciaries and non-fiduciaries alike. See Butler v. LeBouef (2016) 248 Cal. App. 4th 198; see also Estate of Swetmann (2000) 85 Cal. App. 4th 807.

To summarize , where the facts are difficult to obtain to show fraud or undue influence in connection with a will or trust and gifts to suspect persons, Section 21380 is a very powerful tool to obtain relief from the probate judge. Further, a motion to bifurcate any probate hearing to trial judge rule in favor of the petitioner who successfully prevails on a Section 21380 claim. Moreover the legislature also provided for the recovery of attorneys’ fees and costs at Section 21380(d) to a family who prevails on the claim and where the suspect beneficiary is unsuccessful in rebutting the presumptions set forth in the statute.

For further guidance regarding the above, the reader is encouraged to contact the legal offices of Catanese & Wells, A Law Corporation at www.cataneselaw.com or by telephone at (818) 707-0407.