No More Money!-2

It is not uncommon for one child out of many to receive gifts from a parent during the parent’s lifetime.  And as you might imagine, the other children who do NOT receive equal gifts are none too happy about it.

So naturally, once a parent dies the siblings attempt to reduce the gift-receiving child’s share by the amount of gifts received during life.  The claim is always the same: that child already received part of his or her inheritance.

When it comes to lifetime gifts, the rules are set out under Probate Code section 21135—called “satisfaction”.  Section 21135 provides that property given to a child during life does NOT reduce that child’s share at death UNLESS one of four conditions is met:

  1. The Trust or Will specifically states that lifetime gifts are to be reduced from that child’s share,
  2. The parent states in a writing at the time the gift is made that it is meant to reduce the child’s share at time of death,
  3. The child receiving the gift acknowledges in writing that the gift is meant to reduce his or her at-death share of the estate, or
  4. The property given to the child is the same property identified as a specific gift to the child.

There is one common theme to these four alternatives: certainty.  The law wants to be absolutely certain that the gift is meant to reduce the child’s share of the estate at death.  If there is no certainty, then the law presumes that the child’s share shall NOT be reduced.

In other words, the law has no problem with a parent favoring one child over the other during life.  In fact, it is presumed that parents will do so.  And without certainty of a contrary intent to reduce that child’s share of the estate, no reduction can take place.

The reason certainty is the legal rule in these cases is that it’s much easier to apply after the parent’s death.  With the parent gone and unable to clarify their intent, only a clear writing will do.  That makes it easy for the Court’s to determine that satisfaction simply will NOT apply unless a clear writing from the parent says otherwise.

And yet, that does not stop children from making this argument even without the necessary written support.  In fact, this may be one of the most common legally baseless arguments we face in our practice.  It can be difficult for children to accept that one or two favored children were just that—favored.  And so the argument is made that their share must be reduced.

Well Trust and Will law is full of unpleasant surprises.  So next time you feel like reducing your siblings’ share of the estate, be sure you have a writing from your parent to back you up.  Otherwise, you will never be satisfied.