Trusts and Estates

Ca. Trs. & Estates Quarterly 2020, Volume 26, Issue 3

CONTESTED NONPROBATE TRANSFERS: WHEN THE ESTATE PLAN TRUMPS

By Matthew R. Owens, Esq.*

MCLE Article

I. INTRODUCTION

The modern trend in California of bending title rules to accommodate evidence of the decedent’s testamentary intent opens wide the probate court doors to litigation over nonprobate transfers. Financial accounts not titled in the name of the trust historically passed to the account’s joint surviving owner, payee, or beneficiary, avoiding probate and bypassing the trust administration. Banks and other financial institutions simply honored their contractual obligation with the decedent and transferred the funds to the person named on the account’s signature card or other title document. But Probate Code section 5302 contains an exception to the default rules on nonprobate transfers, if a party contesting the nonprobate transfer can prove by clear-and-convincing evidence the decedent intended the account to pass to someone else. The question then becomes what exactly constitutes clear-and-convincing evidence of the decedent’s contrary intent.

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