Many California financial elder abuse cases we see involve caregivers. While the vast majority are honest, a caregiver who spends many hours alone with a vulnerable client has a unique opportunity to exploit the situation. A crafty and crooked caregiver may go so far as to marry his or her client as part of a scheme.
The California Legislature has closed loopholes in the Probate Code that allow abusive caregivers to marry their way into a dependent adult’s wealth. Assembly Bill 328, signed by Governor Newsom on June 26, 2019 and effective on January 1, 2020, creates a presumption of undue influence that applies in two scenarios. The Trusts and Estates Section of the California Lawyers Association sponsored the bill and the California Judges Association supported it.
Transfers to Care Custodians Who Marry Dependent Adults
The Legislation applies to “dependent adults,” who are defined as an adult of any age who cannot provide properly for his or her basic needs or who has difficulty managing his or her financial resources or resisting fraud or undue influence.
The “donative transfers” covered by the statute include lifetime gifts as well as beneficiary provisions in wills and trusts.
For about two decades, California law has presumed that a dependent adult who signs an instrument benefiting a “care custodian” (i.e., a caregiver who provides health or social services to a dependent adult) does so as a result of fraud or undue influence such that the instrument is presumptively invalid. However, the law has exempted spouses, domestic partners and cohabitants who receive gifts from dependent adults. The exemption rests on the reasonable assumption that people naturally are inclined to make gifts to those who are close to them.
The exclusion permitted an opportunistic care custodian to marry a dependent adult so as to avoid the presumption of invalidity.
Consider this example. Victor, age 85, lives at his home in Sacramento. He has paid caregivers around the clock who care for him. Victor’s family members stop by a few times a week, but the caregivers have close and unsupervised access to him. Caregiver Paula befriends Victor and one day takes him to the Sacramento County Clerk/Recorder’s Office to be married. A week later, Victor signs a will that leaves most of his estate including his house to Paula. Victor dies two months later. Is the will valid insofar as it benefits Paula? In probate litigation over Victor’s will, Paula’s status as Victor’s spouse may give her the upper hand.
AB 328 aims at caregivers like Paula by amending California Probate Code section 21380 and section 21382. The bill extends the presumption of fraud and undue influence to a care custodian “who commenced a marriage, cohabitation or domestic partnership with a transferor who is a dependent adult while providing services to that dependent adult, or within 90 days after those services were last provided . . . if the donative transfer occurred, or the instrument was executed, less than six months after the marriage, cohabitation, or domestic partnership commenced.”
Note that the presumption of invalidity is rebuttable. If Paula can prove by clear and convincing evidence that Victor’s will was not the product of fraud or undue influence (as defined in Welfare and Institutions Code section 15610.70), then a court will validate the gift to her. Yet the “clear and convincing” burden of proof is a high one such that Paula will have to convince a likely skeptical judge that her relationship with Victor was genuine and that he freely executed the disputed will.
Care Custodians Who Make “Omitted Spouse” Claims
A care custodian who marries a dependent adult can claim a share of the estate simply by waiting for the latter to die. California law presumes that spouses intend to provide for one another. Thus, if a person marries after creating a will or trust, and never updates the will or trust, the surviving spouse can claim a share of the deceased spouse’s assets equal to what the survivor would get if the deceased had died without an estate plan. The “omitted spouse” rule is codified in California Probate Code section 21610 and section 21611.
AB 328 amends section 21611 so that care custodians who marry dependent adults cannot make “omitted spouse” claims if the dependent adult dies less than six months after the marriage occurred.
Under current law, for example, if Paula marries Victor and he dies two months later without changing his estate plan, she would be entitled to at least a third of his separate property as an “omitted spouse.” Under the revised statute, however, Paula loses her status as an “omitted spouse” unless she can prove by clear and convincing evidence that her marriage to Victor was not the product of fraud or undue influence.
Jeffrey Galvin is an attorney with Downey Brand LLP, based in Sacramento. He litigates trust and estate cases in Northern California, including disputes involving trust and probate administration, contests of trusts and wills, and financial elder abuse claims.