General Provisions - Provisions Relating To Effect Of Death - Probate - CA

Section § 5000

This law states that certain written agreements or instruments that specify a nonprobate transfer on death, like insurance policies or retirement plans, are valid even if they don't meet the legal requirements for creating a will. These instruments can designate a person to receive money or property after someone dies without needing to be part of a will. The provisions can be included directly in the instrument or in a separate document, like a will.

Additionally, this law ensures that existing creditor rights are unaffected, meaning creditors can still pursue claims according to other laws.

(a) A provision for a nonprobate transfer on death in an insurance policy, contract of employment, bond, mortgage, promissory note, certificated or uncertificated security, account agreement, custodial agreement, deposit agreement, compensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, revocable transfer on death deed, marital property agreement, or other written instrument of a similar nature is not invalid because the instrument does not comply with the requirements for execution of a will, and this code does not invalidate the instrument.

(b) Included within subdivision (a) are the following:

(1) A written provision that moneys or other benefits due to, controlled by, or owned by a decedent before death shall be paid after the decedent’s death to a person whom the decedent designates either in the instrument or in a separate writing, including a will, executed either before or at the same time as the instrument, or later.

(2) A written provision that moneys due or to become due under the instrument shall cease to be payable in the event of the death of the promisee or the promisor before payment or demand.

(3) A written provision that any property controlled by or owned by the decedent before death that is the subject of the instrument shall pass to a person whom the decedent designates either in the instrument or in a separate writing, including a will, executed either before or at the same time as the instrument, or later.

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Section § 5002

This law states that if you hold property under a specific legal document, you don't have to follow instructions for transferring that property when the owner dies if certain conditions aren't met.

First, the person trying to make the transfer wasn't given the authority to do so by the document. Second, the way they want to transfer the property doesn't match what the document allows.

Notwithstanding any other provision of this part, a holder of property under an instrument of a type described in Section 5000 is not required to receive, hold, or transfer the property in compliance with a provision for a nonprobate transfer on death executed by a person who has an interest in the property if either (1) the person is not authorized by the terms of the instrument to execute a provision for transfer of the property, or (2) the provision for transfer of the property does not otherwise satisfy the terms of the instrument.

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Section § 5003

Property holders can transfer property according to a nonprobate transfer on death, even if the transfer doesn't align with the owner's or beneficiary's interests. This protection holds unless the property holder receives a court order or written notice of a conflicting claim (except for pension plan payments). Even with this protection, disputes about who really owns the property aren't affected. Additionally, if someone claims a conflicting interest in bad faith, they could be liable for legal costs and damages.

(a) A holder of property under an instrument of a type described in Section 5000 may transfer the property in compliance with a provision for a nonprobate transfer on death that satisfies the terms of the instrument, whether or not the transfer is consistent with the beneficial ownership of the property as between the person who executed the provision for transfer of the property and other persons having an interest in the property or their successors, and whether or not the transfer is consistent with the rights of the person named as beneficiary.

(b) Except as provided in this subdivision, no notice or other information shown to have been available to the holder of the property affects the right of the holder to the protection provided by subdivision (a). The protection provided by subdivision (a) does not extend to a transfer made after either of the following events:

(1) The holder of the property has been served with a contrary court order.

(2) The holder of the property has been served with a written notice of a person claiming an adverse interest in the property. However, this paragraph does not apply to a pension plan to the extent the transfer is a periodic payment pursuant to the plan.

(c) The protection provided by this section does not affect the rights of the person who executed the provision for transfer of the property and other persons having an interest in the property or their successors in disputes among themselves concerning the beneficial ownership of the property.

(d) The protection provided by this section is not exclusive of any protection provided the holder of the property by any other provision of law.

(e) A person shall not serve notice under paragraph (2) of subdivision (b) in bad faith. If the court in an action or proceeding relating to the rights of the parties determines that a person has served notice under paragraph (2) of subdivision (b) in bad faith, the court shall award against the person the cost of the action or proceeding, including a reasonable attorney’s fee, and the damages caused by the service.

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