Rice v. Clark
120 Cal. Rptr. 2d 522, 28 Cal. 4th 89, 47 P.3d 300 (2002)
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Rule of Law:
Under California Probate Code § 21350(a)(4), a fiduciary who "causes an instrument to be transcribed" is one who directs or is otherwise directly involved in the physical preparation of the donative instrument, not one who merely provides information, facilitates the process, or encourages the donor to execute it.
Facts:
- Cecilia M. Clare, an elderly widow with no close relatives, hired Richard L. Clark in 1988 as a handyman for her various properties.
- Over the next several years, Clark's role expanded significantly; he began managing Clare's properties for a weekly salary, assisting with her bookkeeping and finances, and became her close companion.
- In 1992, Clare executed a will that left the bulk of her estate to Allan Hancock College.
- In 1995, Clare, with Clark's active involvement, retained a new attorney, Michael Hardy, to create a new estate plan.
- Clark attended the meeting with Hardy, provided lists of Clare's assets, and was present when Clare stated she wanted to leave her entire estate to Richard and Janet Clark.
- After the initial meeting, Clark telephoned Hardy's office to ask that the documents be prepared promptly.
- On the day of the signing, Clare expressed reluctance and left the attorney's office, but she agreed to return and execute the will and trust after Clark told her that another attorney would just prepare the same documents for an additional fee.
- The new instruments, a trust and pour-over will, made the Clarks the sole beneficiaries of Clare's multi-million dollar estate, with Owen S. Rice as the contingent beneficiary.
Procedural Posture:
- Owen S. Rice, the contingent beneficiary, filed a petition in the superior court (trial court) seeking to invalidate the donative transfers to the Clarks under Probate Code § 21350.
- The trial was bifurcated, with the first phase addressing only whether the Clarks were disqualified persons under the statute.
- The superior court found that Richard Clark did not "cause" the instruments to be transcribed and entered judgment in favor of the Clarks.
- Rice, as appellant, appealed the judgment to the Court of Appeal.
- The Court of Appeal affirmed the trial court's judgment, agreeing with its narrow interpretation of the statute.
- The California Supreme Court granted Rice's petition for review.
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Issue:
Does a fiduciary who provides asset information to an attorney, schedules appointments, and persuades the donor to sign estate planning documents, but who does not direct or participate in the physical writing or typing of the documents, "cause the instrument to be transcribed" and thus become presumptively disqualified as a beneficiary under Probate Code section 21350, subdivision (a)(4)?
Opinions:
Majority - Werdegar, J.
No. A fiduciary who facilitates the creation of a donative instrument but does not directly participate in its physical preparation does not "cause the instrument to be transcribed" within the meaning of Probate Code section 21350, subdivision (a)(4). The court reasoned that the statute's legislative history indicates it was intended to be a narrowly targeted prohibition against fiduciaries who are in a position to subvert the donor's intent by directly participating in the physical creation of the instrument, such as by drafting or directing the transcription. The 1995 legislative amendment, which removed the phrase "caused to be drafted," further supports this narrow interpretation, clarifying that the statute does not apply to those who merely facilitate the process. Clark's actions—providing asset lists, arranging appointments, and encouraging Clare to sign—constituted facilitation, not direct participation in the transcription, which was performed by the attorney's secretary at the attorney's direction.
Analysis:
This decision significantly clarifies and narrows the scope of fiduciary disqualification under Probate Code § 21350(a)(4). By defining "causes it to be transcribed" as requiring direct participation in the physical preparation of a document, the court protects fiduciaries who assist donors with estate planning but are not in a position to physically alter the instrument's text. This ruling distinguishes the narrow, statutory presumption of disqualification from the broader common law presumption of undue influence, which remains available to challengers in cases where a fiduciary's influence does not involve the physical creation of the document. The decision emphasizes that the statute targets a specific type of potential misconduct related to the instrument's transcription, rather than all forms of influence.
