This question was answered in the recent California court of appeal decision in Robinson v. Gutierrez.
A provision of a dependent adult’s testamentary instrument that makes a donative transfer to the adult’s “care custodian” is presumed to be the product of fraud or undue influence if the adult executed the instrument during the period when the care custodian provided services to the adult or within 90 days before or after that period.
A “care custodian” is a person who provides health or social services to a dependent adult.
For purposes of Probate Code section 21380’s presumption, however, a “care custodian” does not include a person who provided services without remuneration if the person had a personal relationship with the dependent adult as established by criteria in the statute.
In this matter brought by a decedent’s intestate heirs at law, the trial court determined that defendant Elvira Gutierrez was not a care custodian for purposes of section 21380’s presumption.
Gutierrez was residing with the decedent receiving free room and board in exchange for providing care services when the decedent executed instruments transferring her entire estate to Gutierrez.
The trial court ruled that Gutierrez was not a care custodian because room and board did not constitute remuneration for her services and she had a prior personal relationship with the decedent that met the other criteria set forth in section 21362(a).
Plaintiffs contended on appeal that the trial court erred by determining Gutierrez was not a care custodian. They argue that Gutierrez’s receipt of free room and board in exchange for her services for decedent constituted remuneration. They also asserted that the record does not support the court’s finding that Gutierrez and the decedent had a prior personal relationship.
The appellate court reversed the trial court's ruling because free room and board in exchange for care services are remuneration for purposes of section 21362.
In 2015, the decedent, Gwyneth A. Robinson, expressed to an acquaintance her desire to have a housemate to assist her on an as-needed basis. The acquaintance arranged for the decedent to meet the acquaintance’s sister, defendant Gutierrez.
As a result of this meeting, Gutierrez moved into the decedent’s residence in 2015 and received free room and board in exchange for performing household duties of cleaning and laundry, and driving the decedent as needed.
When Gutierrez moved in, the decedent was able to maintain her personal needs, pay her bills and expenses, purchase her own food, prepare her meals, and administer her medications.
Gutierrez provided companionship, which the decedent needed. This relationship lasted for nearly three years. There was no evidence Gutierrez received remuneration for her services other than free room and board.
In September 2018, the decedent executed a joint tenancy deed naming Gutierrez as a joint tenant on the title to her residence. In October 2018 and while a patient in a hospital, the decedent directed an attorney to prepare her estate plan. She wanted her entire estate to go to Gutierrez and to have Gutierrez be the trustee of her trust.
The attorney prepared a trust instrument, a will, and an individual grant deed.
In the revokable inter vivos trust agreement, the decedent named Gutierrez as the trustee of the trust, and she transferred her property into the trust. Decedent transferred her residence by grant deed to Gutierrez as trustee of the trust. The trust and the will declared that upon the decedent’s death, all of decedent’s property passed to Gutierrez free of trust.
The decedent executed the estate instruments at her home on October 18, 2018. She died 10 days later.
Plaintiffs are the surviving children of the decedent’s brother, who predeceased her.
They brought this action in 2020 by petition in the probate court to determine the validity of the trust and the will.
In their first amended petition, they also alleged causes of action for elder financial abuse and undue influence. They sought a constructive trust and other forms of relief.
Following a three-day court trial, the trial court denied plaintiffs’ petition and entered judgment in favor of Gutierrez. The court stated that based on the evidence presented, Gutierrez was a “care custodian” unless the evidence showed that the exception under section 21362 applied: that she had a preexisting personal relationship with the decedent, who was a dependent adult, and she provided services to the decedent without remuneration. The court found the exception applied.
But the court ruled that Gutierrez’s receipt of free room and board did not constitute remuneration for purposes of section 21362 because room and board did not constitute taxable income. The court also found that the decedent and Gutierrez had the requisite personal relationship before Gutierrez began providing services. As a result of these findings, the instruments’ donative transfers were not presumed under section 21380 to be the result of fraud or undue influence.
The court also found there was insufficient evidence that Gutierrez exercised undue influence over the decedent’s execution of the instruments or that the donative transfers were the result of undue influence or fraud. There also was no financial elder abuse.
Plaintiffs on appeal challenged the court’s findings that Gutierrez did not receive remuneration for her services and that Gutierrez and the decedent had a prior personal relationship.
Plaintiffs argued that the free room and board Gutierrez received in exchange for her services qualified as remuneration for purposes of section 21362.
They and Gutierrez acknowledged that no statute or reported opinion has defined “remuneration” as it is used in section 21362. But plaintiffs argued that the trial court’s analogizing the decedent and Gutierrez’s relationship to a parent/child relationship is misplaced and defeats the statute’s purpose of protecting vulnerable dependent adults from exploitation while at the same time allowing them to make donative transfers to long-time friends who assist them for no compensation.
Plaintiffs relied on employment compensation and workers’ compensation cases where the Courts of Appeal determined that forms of noncash benefits in exchange for services qualified as compensation or remuneration to argue that “remuneration” as used in section 21362 encompasses noncash forms of compensation. In exchange for her services, Gutierrez could have received money and then rented a room and paid for food on her own, but she and the decedent made a different arrangement for remuneration.
“Remuneration” has been defined as payment; compensation, especially for a service that someone has performed. Remuneration is a reward, recompense; now usually money paid for work or a service; payment, pay.
To “remunerate” means to pay an equivalent for (as a service, loss, expense) or to pay an equivalent to (a person) for a service, loss, or expense.
In turn, “payment” can mean the performance of an obligation by the delivery of money or some other valuable thing accepted in partial or full discharge of the obligation, or the money or other valuable thing so delivered in satisfaction of an obligation.
“Pay” as a noun refers to compensation for services performed; salary, wages, stipend, or other remuneration given for work done.
And “compensation” means remuneration and other benefits received in return for services rendered; especially salary or wages.
These definitions show that the terms “remuneration,” “pay,” and “compensation” can be interchangeable. As used in section 21362, “remuneration” refers to a form of compensation given in exchange for the provision of care services. The dictionary sources indicate that “remuneration” refers to compensation in the form of money or some other thing of equivalent value. Thus, on its face, the term includes compensation in the form of room and board or other noncash benefits in exchange for the provision of care services.
A “care custodian” is defined in the statute as a person who provides health or social services to a dependent adult, except that care custodian does not include a person who provided services without remuneration if the person had a personal relationship with the dependent adult (1) at least 90 days before providing those services, (2) at least six months before the dependent adult’s death, and (3) before the dependant adult was admitted to hospice care, if the dependent adult was admitted to hospice care.
A dependent adult’s donative transfer to a care custodian is presumed to be the product of fraud or undue influence if the instrument was executed during the period in which the care custodian provided services to the transferor, or within 90 days before or after that period.
Because Gutierrez received remuneration in exchange for her care services, she qualifies as a care custodian, and the decedent’s donative gift to her is subject to the presumption of fraud or undue influence under section 21380.
Gutierrez argues that even if she was a care custodian under section 21362, there was no evidence of undue influence. While the trial court concluded there was no undue influence, it made that determination based on the preponderance of the evidence. That standard of proof does not apply when the transfer was made to a care custodian and the presumption of fraud or undue influence arises.
Because the donative transfer is presumed to be the result of fraud or undue influence under section 21380, the presumption may be rebutted by Gutierrez proving “by clear and convincing evidence” that the transfer was not the product of fraud or undue influence.
The trial court expressly did not apply that burden of proof or make that determination when it resolved plaintiffs’ claims. It will be obligated to apply that burden of proof on remand.
The judgment was reversed and the matter is remanded for further proceedings consistent with the opinion.
LESSONS:
1. As used in Probate Code, section 21362, “remuneration” refers to a form of compensation given in exchange for the provision of care services. The dictionary sources indicate that “remuneration” refers to compensation in the form of money or some other thing of equivalent value. Thus, on its face, the term includes compensation in the form of room and board or other noncash benefits in exchange for the provision of care services.
2. A “care custodian” is defined in the statute as a person who provides health or social services to a dependent adult, except that care custodian does not include a person who provided services without remuneration if the person had a personal relationship with the dependent adult (1) at least 90 days before providing those services, (2) at least six months before the dependent adult’s death, and (3) before the dependant adult was admitted to hospice care, if the dependent adult was admitted to hospice care.
3. A dependent adult’s donative transfer to a care custodian is presumed to be the product of fraud or undue influence if the instrument was executed during the period in which the care custodian provided services to the transferor, or within 90 days before or after that period.
