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California Supreme Court Clarifies "Care Custodian" & Estate Gifts

Question

Heather H.
Almaden Valley

Dear Heather:

In the Bernard case, Carmel Bosco was a widow who had signed her living trust several years previously. She had no children. Three days before she died, she signed an amendment to her living trust, leaving one-half of her estate to each of her two good friends, James Foley and Ann Erman, and nothing to her blood relatives. James and Ann, boyfriend and girlfriend, had cared for the older woman in their home during her final two months of Carmel's life.

A niece, Angela Bernard, was not too happy about Aunt Carmel doing this, thereby leaving her nothing, so she along with other blood relatives filed suit. They said in their suit that James and Ann exerted undue influence over Aunt Carmel when Aunt Carmel was really out of it (i.e. lacked testamentary capacity) and that the trust amendment should therefore be set aside.

Angela and the relatives also argued in their suit that James and Ann were really "care custodians" under the California Probate Code. Under these provisions, restrictions apply to gifts to certain persons and institutions to protect those in need of help. If these restrictions apply, any gift would be "presumptively invalid."

The California Supreme Court upheld the Court of Appeal and held that James and Ann were in fact "care custodians" and that they failed to rebut the resulting presumption that Aunt Carmel's donative transfer was the "product of fraud, menace, duress, or undue influence." The basic holding of the case is that longtime friends can be bound by the restrictions placed on "care custodians" just like hospital or nursing home employees.

In the words of the California Supreme Court, "We conclude that when an unrelated person renders substantial, ongoing health services to a dependent adult, that person may be a care custodian for purposes of the statutory scheme at issue, notwithstanding that the service relationship between the individuals arose out of a preexisting personal friendship rather than a professional or occupational connection."

By the way, the column you referred to that I wrote a year or two ago dealing with these restrictions and care custodians can be seen at: Leaving Your Estate to Your Care Giver and Others May Create Issues. It pertains directly with this topic, discusses the limitations on donative transfers and covers other related points.

You can read the Bernard v. Foley case for yourself by going online to: http://login.findlaw.com/scripts.callaw. Some of the reading is a bit tedious, and as always, you will want to discuss this case with your own attorney to see how it may or may not apply to your particular situation.

Good luck, Heather. You and your mother may each want to see your own attorney about this topic. It can be a very difficult one. I hope it all works out for you.

Donald J. DeVries
Almaden Valley