Trusts and Estates

Sachs v. Sachs

Cite as B292747
Filed January 7, 2020, Second District, Sixth Division

By Matt Owens
Withers Bergman LLP
www.withersworldwide.com

Headnote: Lifetime Gifts – Satisfaction of At-death Transfers 

Summary: Where the decedent kept a “permanent record” listing lifetime gifts to his children, the gifts were properly treated as advances on inheritance and deducted from at-death transfers under the trust.

David created a trust to distribute the bulk of his assets equally to his two children, Benita and Avram.  David maintained handwritten papers he referred to as his “permanent record” reflecting certain lifetime gifts he made to his children over time.  David told his bookkeeper that maintaining the list of payments to his children was important so the payments could be deducted from their respective inheritances.  Avram received $451,027 more than Benita in lifetime gifts.  After David’s death Benita, now the successor trustee, petitioned the court for authority to treat the lifetime gifts as advances on inheritance and to equalize the trust distributions.  The court granted Benita’s petition and Avram appealed.    

The court of appeal affirmed.  Lifetime gifts will be treated as partial or complete satisfaction of at-death transfers under certain circumstances, including where the transferor declares in a contemporaneous writing the gift is in satisfaction of, or its value will be deducted from, the at-death transfer.  David’s permanent record satisfied this requirement since it was written contemporaneously and listed the dates and amounts of certain lifetime gifts to his children.  Keeping such a record seemed to serve no other purpose than to equalize distributions between David’s children.  Extrinsic evidence to prove the testator’s intent in making the record was admissible.  No special form of writing, or even David’s signature, was required.  Also, Avram acknowledged in an email to Benita that at least one of the payments would go on his record, evidencing his understanding the payments would be deducted from his inheritance.   

http://www.courts.ca.gov/opinions/documents/B292747.PDF

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