Gifts to Care Custodians: Traps for the Unwary
- Written by Chris C Jones
- Published: 10 May 2016
What does care custodian mean to you? A friend or acquaintance that visits, runs errands, pays bills, cooks, cleans, administers medications, and takes care of other pressing needs?
Probate Code Section 21350 provides that gifts to “care custodians” are invalid. This provision of the code was drafted and adopted in the early 1980′s as part of EDAPCA (Elder and Dependent Adult Civil Protection Act) when it became clear to lawmakers and lawyers alike that nurses, housekeepers and care givers were taking advantage of the impaired and the elderly. These laws were codified as Probate Code Section 21350 in 1997.
SO, WHO IS A CARE CUSTODIAN?
A care custodian for purposes of Probate Code 21350 is the same as the definition in Welfare and Institutions Code Section 15610.17. Welfare and Institutions Code Section 15610.17 provides a list of twenty-five different individuals who qualify as care givers. Included in that list is a catch- all provision that includes ANY person providing health care or social services to elders or dependent adults.
There are many cases that deal with this subject. The first is Estate of Shinkle. Ms. Shinkle left a gift to the long term care ombudsman of the facility in which she resided. The long term care ombudsman changed jobs just prior to the execution of the trust and therefore, he argued that he (and by way of he, he meant the facility) was not a care giver to Ms. Shinkle because he was no longer in that position when the trust instrument was signed. The court disagreed and held that the ombudsman was a fiduciary when he came in contact with Ms. Shinkle, learned of the information, and gained access to the financial information. Therefore, the gift was held to be invalid.
The next case to address this was Conservatorship of Davidson. In Davidson, Mrs. Davidson and her friend started their relationship as just friends. They frequented each other’s birthday and other celebrations. However, as Mrs. Davidson became more and more feeble, her friend began to cook, shop, and drive for her. She executed a power of attorney in favor of the beneficiary who received Mrs. Davidson’s mail, paid her bills and took care of her banking. Here, the court held that when an individual becomes a care custodian as a result of a pre-existing genuinely personal relationship rather than any professional or occupational connection with the provision of health or social services, that individual should not be barred by Section 21350 unless there is evidence of undue influence, fraud, or duress.
Then there is the case of Mrs. McDowell. In this case, Mrs. McDowell broke her hip and was hospitalized. She was an elderly retiree and had become friends with her beneficiaries who would bring her coffee and sometimes food. When she was hospitalized, her beneficiaries did not visit her there, but they visited often and brought her meals after she was released from the hospital. They billed her for the meals they provided. They eventually started “taking care of Ms. McDowell’s personal needs, i.e. bathing, hygiene, etc.” resulting in the court deciding that they were care custodians under the Code. The court of appeal reversed the decision and sent the case back to the trial court to uphold the gift.
The last case that we have is Bernard. In Bernard v. Foley, the court, in a footnote, reasoned that the most important part of the statute was to protect the person being cared for, protect them from undue influence, and ensure that there is no wrong-doing. Therefore, the Court indicated that the built in safe guards and procedures in the Code allowed for a person to give a gift to anyone they wanted, by following certain steps. Because of the procedural safeguards within the Code, a strict reading thereof is now followed.
When considering, devising, and discussing an estate plan with your lawyer, client or advisor, it is essential that if you are making a gift to a non-relative that you disclose all facts and circumstances regarding the gift. Thus, if you are giving a gift to anyone who is now or may become a care custodian in the future, the proper precautions can be taken. Additionally, it is essential to recognize the duties that result in the definition of a care giver so that inappropriate gifts can be spotted. While Probate Code Section 21350 may seem to be rigid, and at some times, unjust, the price to protect the elderly is never too great.
- The Estate Planning Law Team
Rogers Sheffield & Campbell, LLP
This article is not intended to provide legal advice. For legal advice on any of the information in this post, please contact us directly, use the form to the right or contact us by phone at 805-963-9721.