Overcoming the presumption has required either a certificate of independent review or clear and convincing evidence that shows the gift was not the product of duress, menace, fraud, or undue influence.
The presumption of invalidity is meant to protect vulnerable (and usually lonely) dependent adults from predatory persons going after the dependent person’s estate.
Such predation often takes the form of substantial gifts at death in the dependent person’s will or trust. Presently, gifts exceeding $3,000 are considered substantial and so subject to the statute.
The presumption has often raised major concern with respect to even legitimate gifts made to genuine friends (who stepped in when their dependent friend needed help) due to uncertainty over the definition of “care custodian.”
This issue was recognized in 2006 by Chief Justice Ronald George and he invited the Legislature to amend the law to, “protect society as a whole.”
As a result, the California Law Revision Committee recommended that friends who became volunteer caregivers be excluded from the definition of “care custodian.”
Effective Jan. 1, 2011, section 21350 is amended in significant ways intended to protect gifts made to genuine friends who presently might be treated as care custodians.
Let’s examine the major law changes.
Most importantly, “care custodians” will exclude those who provide services without pay provided the care giver has a personal relationship with the dependent adult that began at least 90 days prior to when the volunteer services were provided and at least six months prior to the dependent adult’s death.
In addition, if the dependent adult is admitted to hospice care, such personal relationship must also begin prior to hospice care. Any gift instrument executed during the 90-day time period would make the gift presumptively invalid.
Furthermore, the definition of “dependent adult” is amended. With respect to persons over 65, a dependent adult means someone with “difficulty managing his or her own financial resources or resisting undue influence.”
Persons under 65, however, are only dependent adults if they have “substantial difficulty” in such areas.
Moreover, come 2011 the attorney drafting the gift instrument in question may now issue the certificate of independent review if he or she is truly independent; that is, not conflicted by an interest in the beneficiary of the gift (i.e., disinterested).
These law changes apply to gifts made in legal instruments that become irrevocable on or after Jan. 1, 2011.
Thus, instruments drafted prior to 2011 which become irrevocable after 2010 will be covered by the new 2011 law. Otherwise, the existing 2010 law still applies to gifts made before 2011.
Lastly, section 21350 supplements but does not replace the common law. Common law protections on undue influence still apply. Thus, predators who insinuate themselves into the lives of the vulnerable and use undue influence to coerce a dependent adult into making a gift should still beware.
Dennis A. Fordham, attorney (LL.M. tax studies), is a State Bar Certified Specialist in Estate Planning, Probate and Trust Law. His office is at 55 First St., Lakeport, California. Dennis can be reached by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it. or by phone at 707-263-3235.
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