California Gov. Gavin Newsom recently signed into law a number of bills that will affect Trust and Estate attorneys, and which are effective as of Jan. 1, 2020. In addition, three new laws make changes to civil discovery procedures that will also affect all California litigators this year.
This Holland & Knight alert highlights several of the most interesting developments.
For the first time since 2011, the maximum amounts for: 1) small estates to qualify for disposition without a full probate administration through a "small-estate affidavit," and 2) a surviving spouse to collect unpaid compensation from the decedent-spouse's employer have been increased by AB 473. AB 473 also makes several other modifications to the small-estate procedure.
AB 473 changes the small estate provisions of the Probate Code as follows:
This law also requires the Judicial Council to adjust the dollar amounts for these thresholds based on the Consumer Price Index, on April 1, 2022, and at each three-year interval ending on April 1 thereafter.
SB 303 amends Probate Code Sections 2640 and 2641 to prohibit guardians, conservators and their attorneys from receiving compensation from any funds of the ward or conservatee having their source in a government benefits program, unless deemed necessary to sustain the support and maintenance of the ward or conservatee up to the maximum permitted by federal laws and regulations.
This law also adds Probate Code Section 2541.5, which changes the evidence standard for a conservator to be granted authority to remove a conservatee from their personal residence. The evidence standard has been changed from a preponderance of the evidence to a clear and convincing standard of evidence.
Lastly, SB 303 amends Probate Code Sections 2591 and 2591.5 to require a conservator seeking to sell the conservatee's personal residence to now report any capital gains income and tax consequences and impact on access to governmental benefits.
SB 314 expands the Elder Abuse and Dependent Adult Civil Protection Act (EADACPA) to include acts of abandonment, in addition to acts of physical abuse and neglect, as a basis for awarding enhanced remedies to victims of such abuse under Welfare and Institutions Code Section 15657. Abandonment is defined in Welfare and Institutions Code Section 15610.05.
SB 496 expands the categories of mandated reporters of suspected financial elder abuse of an elder to include "broker-dealers" and "investment advisors" through the addition of Section 15630.2 to the Welfare and Institutions Code.
"Broker-dealer" and "investment advisor" are defined by Corporations Code Section 25004 and 25009, respectively.
As with other categories of mandated reporters, broker-dealers and investment advisors who observe or have knowledge of an incident related to the services the professional is providing and that the professional reasonably believes or suspects is financial abuse, are required to immediately report the abuse as specified. The mandated reporters can delay a transaction and/or refuse to honor a power of attorney under specified circumstances.
Mandated reporters acting in good faith and with reasonable care cannot be held civilly liable for reporting. Failure to report where required can result in civil penalties not to exceed $1,000 unless the failure to report is willful, in which case penalties can be as high as $5,000.
Under existing Family Code Section 721, when spouses enter into a transaction with each other, they are subject to the general rule governing fiduciary relationships, including a duty of the highest good faith and fair dealing, and a spouse is prohibited from taking unfair advantage of the other.
These transactions are subject to the same rights and duties of nonmarital business partners, and include a right to certain disclosures and accountings. Excluded from these provisions are situations involving waivers of spousal rights and duties related to the administration of a trust.
AB 327 adds Probate Code Section 21385, which provides thatan at-death transfer between spouses by will, revocable trust, beneficiary form, or other instrument is not subject to Family Code Section 721 or any presumptions of undue influence created by that section.
The bill clarifies that its provisions do not limit the application of other statutory or common law presumptions of undue influence that may apply to an at-death transfer between spouses.
AB 328 closes a loophole that allowed caregivers to obtain the assets of their elderly or mentally incapacitated clients by marrying them.
The presumption in both Probate Code Sections 21380 and 21611 must be disproven by clear and convincing evidence.
Several bills in 2020 alter discovery provisions in the Code of Civil Procedure that will also affect Trust and Estate litigators.
SB-370 amends California Code of Civil Procedure Section 2031.280 and eliminates the option to produce documents "as they are kept in the usual course of business" in response to a demand for inspection, copying, testing or sampling.
The law now requires that documents produced in response to a demand for inspection, copying, testing or sampling be "identified with the specific request number to which the documents respond."
SB 17 adds the following two sections to the California Code of Civil Procedure:
Under existing law, each response by the responding party to interrogatories and requests for admission is required to include the same number or letter, and be in the same sequence, as the corresponding discovery request, as specified, but is not required to repeat the text of the particular discovery request.
AB 1349 amends California Code of Civil Procedure Sections 2030.210 (interrogatories) and 2033.210 (requests for admission) and now requires the responding party to include the text of the discovery request immediately preceding the response. If requested by the responding party, the propounding party is also required to provide the document propounding the discovery requests in electronic format within three days.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.
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