Gifts to Friends and Care Givers

Friends and unrelated care givers are not treated the same as family in the California Probate Code; they are never one’s heirs. Nevertheless, people do leave gifts to friends and unrelated care givers.

Heirs are favorably entitled to inherit a deceased person’s estate in the absence of any will or trust. One’s heirs depends on one’s family circumstances. If one is married with children then one’s heirs are one’s surviving spouse and children. Otherwise, one’s heirs could be one’s surviving parents or else one’s siblings, and so on.

Also, California law does not disfavor gifts to a “cohabitant” who is not one’s heir. That is, a person with whom one lives and is in a relationship excluding marriage or domestic partnerships (i.e., “living together”).

The law, however, greatly disfavors gifts to “care custodians” of “dependent adults” and gifts to persons who draft the testamentary instrument. Gifts to care custodians of a dependent adult (e.g., person over age 55 or disabled) are presumed to be the product of undue influence if such gifts occurred while the care services were yet being provided or either within 90 days before or afterwards.

A care custodian is someone who provides health or social services to a dependent adult, but excludes persons who provide unpaid care services provided that a personal relationship (e.g., friendship) existed with the dependent adult at least 90 days before those services were provided, existed at least 6 months before the person died, and existed before the dependent adult was admitted to hospice. So a gift to a longstanding friend is usually not presumed to be the product of undue influence.

The presumption of undue influence protects dependent adults and their heirs from predatory persons who befriend the dependent adult and at about the same time provide care services, either with or without compensation, to insinuate themselves into the dependent adult’s estate planning.

Consider a friend who is not the centerpiece of a person’s estate planning goals. The main beneficiaries are the person’s immediate family who are the person’s heirs. These gifts generally do not result in will contests. Here a friend may receive a gift of money that is not unduly large or a gift of personal property, such as artwork, vehicles or jewelry. These gifts might be made in the person’s trust or will or using a designated death beneficiary financial account, e.g., a, “Pay On Death” (“POD”) bank account. Small gifts in the person’s will (and not in the trust) avoid inclusion inside the trust administration of the major assets.

Second, more importantly, consider the friend (often a neighbor) who is substantially involved in the dependent adult’s life activities, e.g., takes him or her shopping, to doctor visits, mow’s the lawn, and does house-keeping; sounds like a care giver.

That person may be the dependent adult’s primary or even sole estate planning beneficiary. This is especially true when the dependent adult has no spouse and has either no children or estranged children and no close ties to any other family member. The friend is essentially the only person who shows up in the dependent adult’s life. That person may receive the dependent’s home and bank accounts.

The foregoing may lead to a “will contest” by the dependent’s heirs – when they receive notice of the administration of the dependent’s estate — contesting the will or other testamentary instrument. That means a court trial in which the care custodian has the burden of proof to show the gift was not the product of undue influence.

The dependent adult does well to see an attorney and to document the nature of their relationships with the beneficiary and with their heirs. The presumption of undue influence can be overcome by the attorney drafting a, “certificate of independent review” to say that there is no undue influence. It is signed at the same time when the will, trust or other instrument is signed. It protects the gift.

The foregoing brief discussion is not legal advice. For legal guidance consult a qualified attorney. Dennis A. Fordham, attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at Dennis@DennisFordhamLaw.com and 707-263-3235.