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In re Estate of Betz

California Court of Appeals, Fourth District, Second Division
Jul 15, 2010
No. E048889 (Cal. Ct. App. Jul. 15, 2010)

Opinion

NOT TO BE PUBLISHED

APPEAL from the Superior Court of Riverside County No. RIP094172. James A. Cox, Judge.

Christine Pente for Claimant and Appellant.

Law Offices of John Paul St. Clair and John Paul St. Clair for Petitioner and Respondent.

Holstein, Taylor and Unitt and Brian C. Unitt for Claimant and Respondent.


Richli, J.

I. Introduction

All statutory references are to the Probate Code.

This appeal concerns the estate of Mary Clayton Betz (Betz) who was survived by her four children: James E. Spence III (James); William Spence (William); Laura Horst (Horst); and Leanne Caldwell (Caldwell). Caldwell has appealed from a probate order, determining and directing that William should receive the net proceeds from the sale of real property. (§ 1303, subds. (f) and (g).)

William and the estate administrator have filed respondents’ briefs, urging this court to uphold the order of the probate court.

Stanley L. Sniff, Jr., Sheriff and Public Administrator, as Administrator of the Estate of Mary Clayton Betz.

We agree the distribution order was proper pursuant to section 21134. Betz was incapacitated when her daughter, Horst, sold real property which Betz had specifically given to William. Therefore, William was entitled to the net proceeds from the sale. We affirm the probate court’s order.

We reject Caldwell’s effort to raise issues regarding potential elder abuse claims which are not part of the record.

II. Factual and Procedural Background

Betz executed a last will and testament in January 1995, making the following dispositions. She gave her personal effects in equal shares to her four children. Regarding real property: “I give all of my interests in real property situated in California to WILLIAM.... I give all of my interests in real property situated outside the State of California in equal shares to [Horst and Caldwell].” The California real property was a Riverside residence that Betz had owned since 1980. Any cash was to be shared equally by the four children. James’s share was to be in trust for him.

Betz died on January 6, 2007, at age 77. The cause of death was heart disease and Alzheimer’s dementia.

At the end of her life, Betz was incapacitated, in a semi-vegetative state, and living in a care facility with a high monthly cost. In November 2006, when Betz’s liquid assets had been reduced to $40,000 or $50,000, her daughter Horst, acting under a special power of attorney, executed in February 1996, sold Betz’s California residence to cover costs of future care. The net amount for the sale was $282,014.80. The total assets when Betz died were $312,667.38. Any non-California real property had been sold previously.

In December 2008, the estate administrator filed a petition, seeking an order distributing to William the net proceeds from the sale of the Riverside property and dividing the remainder of the estate equally among the four siblings. William filed a response agreeing with the petition.

Horst filed an objection to the proposed distribution, arguing that the language giving California real property to William was not a specific devise but a general devise, causing an ademption by extinction when the property was sold. (Brown v. Labow (2007) 157 Cal.App.4th 795, 807-810.) Horst asked the distribution of the estate be made in equal shares to the siblings.

The probate court granted Horst’s application for a safe-harbor declaration, ruling that her objection to the proposed distribution would not violate the no-contest clause of the will. (§ 21305, subd. (b)(9).)

The probate court also granted the estate administrator’s petition for distribution, ruling that the devise to William was specific, not general, and section 21134 applies: “It is clear from the facts of this case that the decedent... was suffering from Alzheimer’s dementia for a number of years, that one month prior to her death, that her daughter [Horst] pursuant to a durable power of attorney, sold the decedent’s real property in California, which was the subject of a specific bequest of all real property located in the State of California, according to the will, to a particular beneficiary, and she sold that in order to obtain to funds to pay for the decedent’s care, and apparently, most, if not all, of that money was not used for that purpose because she died shortly thereafter.

“The public administrator filed a petition for determination of entitlement of the distribution of the estate, and the public administrator’s position is that the net proceeds from the sale belongs to the intended beneficiary because, one, the fourth paragraph of the will gave a specific bequest of the Riverside house to that beneficiary; two, under the case of [Estate of Packham (1965) 232 Cal.App.2d 847], ‘In the absence of proof that the testator intended an ademption, the sale by the guardian of an incapacitated testator does not adeem the property, ’.... Number 3, ‘the mere change in the form of specifically bequeathed property does not cause ademption where there is no proof that the testator intended to change to have such effect.’ [¶]... [¶]

“Lastly, since decedent was mentally incapacitated by her Alzheimer’s dementia, she did not nor could have had the requisite intent to change or modify her will.”

III. Analysis

Our review generally presumes the probate court’s order is correct. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133; In re Marriage of Hoffmeister (1987) 191 Cal.App.3d 351, 358.) But “‘[i]f the construction of the... will is based upon its terms without the aid of extrinsic evidence its construction is one of law and we are not bound by the trial court’s interpretation of it.’ [Citations.] Where extrinsic evidence is received, but there is no conflict in the evidence, the interpretation of the instrument is likewise a question of law and the appellate court is not bound by the trial court’s interpretation of it. [Citations.] Where, however, extrinsic evidence is properly received, and such evidence is conflicting and conflicting inferences arise therefrom, the appellate court will accept or adhere to the interpretation adopted by the trial court provided that that interpretation is supported by substantial evidence. [Citations.]” (Estate of Ehrenfels (1966) 241 Cal.App.2d 215, 222; Burch v. George (1994) 7 Cal.4th 246, 254.)

The issue on appeal is whether Betz made a general or specific bequest of the Riverside property to William. Horst contends section 21134 does not apply because the devise was general, not specific.

Section 21117 classifies at-death transfers as follows: “(a) A specific gift is a transfer of specifically identifiable property.

“(b) A general gift is a transfer from the general assets of the transferor that does not give specific property.”

Section 21134 provides that a transfer of specific property is not subject to ademption by extinction when sold on behalf of an incapacitated person:

“(a) Except as otherwise provided in this section, if after the execution of the instrument of gift specifically given property is sold or mortgaged by a conservator or by an agent acting within the authority of a durable power of attorney for an incapacitated principal, the transferee of the specific gift has the right to a general pecuniary gift equal to the net sale price of, or the amount of the unpaid loan on, the property. [¶]... [¶]

“(d) For the purpose of the references in this section to an agent acting with the authority of a durable power of attorney for an incapacitated principal, (1) ‘incapacitated principal’ means a principal who is an incapacitated person, (2) no adjudication of incapacity before death is necessary, and (3) the acts of an agent within the authority of a durable power of attorney are presumed to be for an incapacitated principal.”

A bequest of “all real property” is a general devise, not a specific devise. (In re Estate of Marinos (1940) 39 Cal.App.2d 1, 5, citing In re Estate of Woodworth (1867) 31 Cal. 595, 601-604, 610-614; In re Estate of Ratto (1906) 149 Cal. 552; and In re Estate of Painter (1907) 150 Cal. 498.) In Woodworth, the testator “made his will, by which he left ‘all’ his ‘personal property, ’ and ‘one half of all the real estate of which’ he might ‘die possessed, ’ to his brother, ... The remaining half of the real estate, he left to his mother, sisters and others....” (In re Estate of Woodworth at p. 599.) In In re Estate of Marinos, page 3, the decedent made a general bequest of “[a]ll my property, real and personal, of every kind and character, and wheresoever situated, is my own separate property.” In In re Estate of Ratto, the general bequest referred to the remaining one-half of all the decedent’s real estate acquired after marriage to his present wife. In In re Estate of Painter, the testator made a specific devise of land described by street and number and by boundaries to his children, even though a general devise was included, “together with all the real estate I may hereafter accumulate, as well as moneys at interest, etc., not otherwise appropriated.” (In re Estate of Painter at p. 502.)

Although “[t]here is a general presumption that a legacy is presumed to be general unless it clearly appears to be specific.... [w]here specifically described land is itself devised, or where the proceeds of particularly designated land are the actual subject of the bequest, the gift is generally considered to be specific. Regardless of statutory definitions, the fundamental and controlling factor is the intent of the testator at the time the will was drafted as expressed in the will when considered as a whole and in the light of the surrounding circumstances. [Citations.]” (Estate of Loescher (1955) 133 Cal.App.2d 589, 594.)

In the present case, Betz framed her bequest as “I give all of my interests in real property situated in California to William.” At the time the will was executed, the only California real property owned by Betz was her Riverside residence. Additionally, she gave other property, outside of California, equally to her two daughters. Finally, she divided the balance of her estate between the four siblings. The foregoing demonstrates an intention on the part of Betz to make specific devises to her four children. Three of her heirs were designated to receive real property, as described, plus a share of the remaining assets. One of her heirs was designated to receive only a share of nonproperty assets. The four heirs were not treated equally.

Based upon the Betz’s intent as expressed in the will and in light of the circumstances of its execution, we agree with the trial court’s interpretation of the bequest to William as a specific, and not a general, devise. The language used did not generally describe “all my property” or any property held at the time of death. Instead, the bequest to William described a particular California property, the Riverside residence. The gift of California property, which could only have referred to the Riverside residence, constituted a specific devise. There is no substantial evidence that Betz intended an ademption to occur. (Brown v. Labow, supra, 157 Cal.App.4th at p. 812.)

Estate of Packham, supra, 232 Cal.App.2d at pages 848-850, cited by the trial court, also supports the position that the sale did not cause an ademption. As set forth in section 21134, the sale of the property by Horst acting for the benefit of Betz, who was incapacitated, did not alter the specific character of the devise. William is entitled to the value obtained in the sale.

IV. Disposition

We affirm the distribution order of the probate court. Respondents shall recover their costs as the prevailing parties on appeal.

We concur: Hollenhorst Acting P. J., McKinster J.


Summaries of

In re Estate of Betz

California Court of Appeals, Fourth District, Second Division
Jul 15, 2010
No. E048889 (Cal. Ct. App. Jul. 15, 2010)
Case details for

In re Estate of Betz

Case Details

Full title:Estate of MARY CLAYTON BETZ, Deceased. STANLEY L. SNIFF, JR., as…

Court:California Court of Appeals, Fourth District, Second Division

Date published: Jul 15, 2010

Citations

No. E048889 (Cal. Ct. App. Jul. 15, 2010)