For the season of giving...
Caregivers in California who receive last-minute bequests from those they care for are presumed to have exercised undue influence, even if they were close friends. That’s because of a controversial 1993 law that was recently upheld on appeal (Bernard v. Foley).
Probate Code Section 21350 was enacted following a scandal that involved an estate-planning attorney who named himself and his family as fiduciaries for, and beneficiaries of, clients’ estates. The law lists categories of people who can't inherit unless they can prove that transfers weren't the product of fraud, menace, duress, or undue influence. It includes those who draft wills and trusts and law firms, lawyers, and employees of law firms associated with them. And caregivers.
The suit involved 97-year-old Carmel Bosco, a widow who died childless in 2001, leaving an estate of around $448,000. Two months earlier, she’d moved into the home of an old friend, Ann Erman and Erman’s boyfriend, James Foley. Mrs. Bosco made the move at the urging of Erman, who had previously been married to Bosco’s nephew, Arthur Erman.
Erman and Foley took care of Bosco during the last months of her life, tending her bedsores, administering morphine, preparing meals, and helping to change her diapers. They went through her mail and handled her financial and investment affairs. During that time, Bosco amended her living trust several times, each time giving more to the couple– she'd originally left her estate to family members. A few days before she died, she changed it again, naming Foley and Erman each as 50% beneficiaries
Bosco's family, including nephew Arthur, sued, claiming that Foley and Erman had exerted undue influence over Mrs. Bosco, who was gravely ill and heavily sedated when she changed the trust the last time. The case got down to whether Foley and Erman were care custodians, and therefore, covered under the law. Foley claimed that he and Erman were simply “performing acts of kindness on a purely volunteer basis as good friends often do for others.” The trial court agreed.
But the family appealed, the court of appeal reversed, and the California Supreme Court agreed with the appeals court, writing that “a caregiver may be a personal friend, and in fact, personal friends are uniquely in a position to unduly influence the elderly for whom they care.” Chief Justice George agreed with the majority but suggested that the law be amended to differentiate between long–term caregivers and those who provide care for short periods of time.
In response, in September, the California Assembly passed AB 2034, sponsored by the State Bar Trusts & Estates Section, which directs the California law Revision Commission to study Section 21350. The Commission is expected to begin looking at the issue in March.
