Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Monday, January 13, 2020

Lifetime Transfers Considered an Advance on Inheritance

Court2California’s second appellate district recently ruled in Sachs v. Sachs that lifetime transfers of property to a person can be treated as an at death transfer, and therefore as an advance on any inheritance. The transferor kept a record of when he periodically certain amounts to his children, and the court found that the writing satisfied California Probate Code section 21135.

David Sachs created a trust in 1980 and named his two children, Benita and Avram, as the main beneficiaries. He began to keep a written log of distributions under what he labeled "The Permanent Record" in 1989 and told the children about it. After a stroke that triggered cognitive issues, David had a bookkeeper maintain logging the distributions. The bookkeeper said David had mentioned "keeping the list was important so that payments made to his children could be deducted from their respective inheritances.”

David's care became expensive, and Benita became trustee. Avram was adamant about continuing distribution and that he was fine with it being put on "The Permanent Record." After David’s death, Benita filed a Petition for instructions to equalize the distribution of assets from the trust, claiming that the disparity in lifetime distributions and transfers in favor of the other beneficiary should be deducted from their distributive share of the Trust and considered an advance on his inheritance. The trial court agreed with Benita, and Avram appealed. The appellate court held that the permanent record was a writing that satisfied the requirements of section 21135 because:

  • It was in the testator's hand.
  • It was contemporaneous.
  • Had no other purpose other than to equalize distributions between the children.

See Lifetime Transfers Considered an Advance on Inheritance, Probate Stars, January 8, 2020.

https://lawprofessors.typepad.com/trusts_estates_prof/2020/01/lifetime-transfers-considered-an-advance-on-inheritance.html

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