An individual changing their estate plan to benefit a non-relative caregiver can sometimes be a result of the caregiver taking financial advantage of an elder or a dependent adult. However, in addressing the possibility of financial abuse, the California Probate Code automatically presumes that all transfers from elders and dependent adults to non-relative caregivers are the product of fraud or undue influence. This can cause legitimate gifts from decedents to their caregivers to legally fail.
In his article “Gifts to Caregivers,” published in the Trusts & Estates section of Penton Wealth Management, Litigation Attorney Michael Fedalen discusses the benefits and drawbacks to the Probate Code’s presumption of fraud or undue influence, as well as the ways that this law can be overcome.
Given the rising numbers of non-traditional family relationships, in which individuals who consider each other family aren’t necessarily related by blood, marriage or adoption, it’s important to take proper measures to certify an estate plan. Though the presumption of fraud or undue influence can be a powerful weapon against potential exploiters, it can act as a trap to inadvertently defeat an otherwise valid gift, and must be treated carefully to avoid unintended harm.